After two years of sluggish sales, the market for foreign wine in India is reviving this season as tourism picks up. While foreign wine sales saw 35% annual growth prior to the Mumbai terror attacks in November 2008, it has been steady at 10% over the past two years because of high inventories at hotels and fewer restaurant launches, according to some of India?s leading distributors. Growth this fiscal may rise to12% this year, they said.
Mukesh Sinha, general manager, sales, at Delhi-based distributor Brindco Sales said it may still take a while longer for the sales to touch the growth rates of 2008.
Industry estimates of India?s wine sales range between 1.2 million cases and 1.5 million cases annually, valued at Rs 400 crore, including sales of fortified wine.
Each case contains 12 bottles of 750 ml. Imported wines, which account for upto 25% of total sales, had taken a hit since the Mumbai terror attacks as hotel occupancy rates fell across India on lower tourist traffic. Hotels, which are the biggest consumers of foreign wine labels, were stuck with large inventories they typically raise as they finalise menus ahead of the peak season from October to February.
According to the tourism ministry, foreign tourist arrivals during November 2010 were 6.06 lakh, a growth of 14.7% over arrivals of 5.28 lakh the previous year. In November 2008, the figure was 5.32 lakh.
?Things have certainly turned around since 2008-09. I think next year should be at a decent level,? said Arun Kumar, director at Aspri Spirits, a spirits importer. ?People have started experimenting and changing their menus or improving their portfolio, he added.?
Domestic wine companies are, however, aiming at higher sales volumes, having seen demand recover in the previous year in cities like Mumbai, Bangalore and Delhi though India’s wine market is still nascent compared to global consumption patterns.
?Domestic wines did not collapse, it (sales) just reduced a little. In 2009-10, we were all back on our feet,? said Sunila Duggal, head-marketing at Nasik-based Sula Vineyards which claims to have widened its market share this year to 55% with sales of around 3.5 lakh cases.
Sales of domestic wines have been growing at least 30% in the lower price bracket of Rs 300 to Rs 500 a bottle, according to Alok Chandra, a wine expert who runs a consultancy Gryphon Brands Inc. in Bangalore.
Industry estimates suggest a 25% growth in the Indian wine market year on year as more Indian travel abroad and more women take to drinking wine, besides increasing urbanisation, said Abhay Kewadkar, business head (wines) and chief wine maker at United Spirits. which makes brands such as Zinzi and Four Seasons.
?There will be an exponential growth, and I am not even talking about the tier two cities,? said Kapil Grover, director of Bangalore-based Grover Vineyards . ?I am very bullish about it.?