The country’s Rs 1,229-crore wine industry has been through a churn over the past couple of years as a glut drove several small wineries out of business. But as the market stabilises, wine-makers are again hopeful of a return to the high growth rates they had witnessed a decade ago, encouraged by increasing retail sales and demand from new locations, including fast-growing cities such as Gurgaon, Thane, Chandigarh and Pune.
With annual volumes of about 1.6 million litres in 2011, wine in India is still a nascent industry. But it competes for shelf-space with the 2.2 billion litre market for spirits such as whisky because they are taxed on par, which makes selling wine a difficult proposition.
Market leader Sula, which expects to close the year with sales of 550,000 cases (each case is 9 litres) compared to 400,000 cases last year, said newer locations are coming up fast while traditional markets of Mumbai, Delhi and Bangalore are slowing down marginally. “The satellite cities of Gurgaon and Thane have witnessed very hectic growth over the last 5-6 years. Another city that's shown excellent growth is Kolkata while Kerala is growing massively,” said Rajeev Samant, founder and CEO of the Nashik-based Sula Vineyards.
The winemaker claims a marketshare of 60% in the still wine market, which excludes sales of fortified wine. “Sula’s been on different growth path to the industry. We have been gaining marketshare and we have been growing with a CAGR of 30%,” said Samant.
“In the last six months again there has been some slowdown in the industry, one of the reasons is that hotel occupancies have been hit quite badly and the whole business traveller traffic is down very significantly which does impact us.”
Still, he said the retail channel now accounts for half of Sula's sales, indicating that more people are now consuming wine at home.
Grover Vineyards, the second-largest player in the still wines category, too expects to ramp up sales to about 100,000 cases this year following its merger with Zampa Wines.
“We are planning for 30% year-on-year growth for the next 4-5 years. We have to make sure that