A Sparkling Future

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December 18, 2014 7:25 PM

A niche within a niche, the champagne market in India has shown a slow yet discernible market growth over the past five years and with more consumers keen on tasting this finer drink, the future seems bright. By Rituparna Chatterjee

A niche within a niche, the champagne market in India has shown a slow yet discernible market growth over the past five years and with more consumers keen on tasting this finer drink, the future seems bright. By Rituparna Chatterjee

20141231eh22Coming from the Champagne region, 90 miles north east of Paris, champagne’s popularity has always rested upon its reputation of being a luxury product. Despite the high-value attached to it, consumers worldwide have always shown a keen interest in tasting this finer sparkling drink. And India, though still at a nascent stage in champagne consumption as against established markets like the UK and US, continues to show good growth potential. According to a 2012 report by TNS, a part of UK-based company Kantar, the greatest growth is likely to come from India and China, where current low shares of the champagne and sparkling wine market of 0.4 and 0.7 per cent could quadruple to 1.9 and 2.5 per cent respectively. In more mature markets like UK and the US the share could nearly double to 9.1 and 6.5 per cent respectively, as consumers buy into these drinks for their taste, sophistication and the indulgence they afford. The report further highlights that champagne and other sparkling wines could increase their overall share of total drinking occasions from 5.1 per cent to 7.8 per cent if all those who wanted to drink them were able to. “Like most imported wine styles in India, champagne is enjoying a slow yet discernible market growth. Figures indicate that somewhere in the vicinity around 3000 cases are being spread across the main markets of India,” states Craig Wedge, COO, FineWinesnMore. Reiterating the same, Nikhil Agarwal, sommelier and director, All Things Nice opines, “I think the amount of champagne imported into India on a yearly basis since the last five years may be around three to four times more than the base figure. The base figure albeit small. This is a still a sizable growth when you take into account the high duties in India. What is interesting for us to understand is that besides the high tariffs there are still people out there willing to spend money to appreciate champagne.”

20141231eh23Jackie Matai

There is a steady growth, however, in India the consumption of champagne still remains restricted to certain occasions. “The champagne market is growing at a gradual pace but needs to improve further. The culture of holding a glass of champagne (as opposed to still wines) is not very common and champagne continues to be the drink of choice during special occasions. The other issue is that the pricing of the same allows for other sparkling wine lines like prosecco and other cheaper options to take space in the category,” rues Jackie Matai, co-founder, Aspri Spirits. Hence for the champagne market to grow further, it needs to be broad based in terms of consumption occasions. “However, champagnes are gaining popularity during Sunday brunches and this is a growing trend. By the glass champagnes are also being made available by more and more outlets and this too shall help in the growth of this category,” predicts Matai.

Consumer profile

20141231eh25Nikhil Agarwal

As India continues to get richer, a growing percentile of upwardly mobile consumers have acquired a taste for champagne. Increasing international travel as well as cuisines from all over the world gaining popularity with Indian consumers have attributed to this evolution in the Indian palate. “You would imagine that it is the older lot that has high enough disposable income to consume champagne but you would be surprised as to how many young adults have now taken to champagne on a more regular basis. I think younger generations are more confident with money and are unafraid to spend,” points out Agarwal. Moreover, not only there is a rise in champagne consumption in the metros but also in smaller cities. “Though the knowledge on champagne is limited, the eternal optimist in me thinks it will not be long before a good percentage of consumers in India will know their Blanc de Blancs from their Blanc de Noirs,” predicts Agarwal.

Market domination

International champagne brands – Moet & Chandon Champagne, Dom Perignon, Veuve Clicquot – are presently dominating the India market when it comes to selling this luxury drink. Their dominance in the market is largely contributed by their direct representations in the country and their aggressive marketing campaigns. However, in recent years, India has also seen the entry of many smaller brands and a wider range of styles thereby providing more options to hoteliers and restauranteurs. “There has been a small increase in champagne brands available from the big marquee brands to smaller growers. On the hotel front you see a wider range of options than before with different styles of champagne making an entry. I think there is already a steadily growing number of people who are seriously into wine and champagne and are always on the lookout for something new. Herein lies the opportunity. Also hotels cater to a global audience that is familiar with other champagne brands and now that they are available, they will be consumed,” asserts Agarwal.

20141231eh24Craig Wedge

Whist there is demand for champagnes from within the market, it is the host of current bureaucratic impasse that will eventually determine the long term market success or failure of this and many other wine styles. “There is no shortage of producers or champagne houses vying for a slice of the India market. But the problem is that most don’t understand the convoluted process of getting to the market, and the subsequent pain and cost it extracts.,” mentions Wedge.

Promotional events

While wine and food pairing events, wine tasting sessions have become quite popular in the India market, festivals and tastings revolving around champagnes still have a long way to go. However, major champagne brands like Moet Hennessy and importers like Brindco have contributed significantly in promoting champagne in the India market. “Champagne tasting events are organised but given the restricted types of champagnes available in the country, it becomes far more difficult to do so. Instead champagne companies generally prefer to do champagne and food pairing events and special dinners,” points out Matai.

FineWinesnMore has its own purpose built tasting room as an adjunct to its Fine Wine & Beer boutique where it conducts a plethora of tastings. “We are still governed by the cost of licensing and in particular the cost of the products. As an importer of these wines as well, we understand this more than most. The problem is that most champagne costs in the vicinity of Rs 8000 – Rs 10000 a bottle, so this in itself is a primary consideration when it comes to the tastings you do and the cost you either sacrifice or charge on to the client. There is no such thing as free wine in this country unfortunately,” opines Wedge.

All Things Nice also does its share albeit on a more private level since the costs are high however its experiential event Wine Week encompasses every champagne brand available in the country. “But since wine is a broader market with champagne being a fraction of it, the number of wine tasting events against champagne tastings will always be skewed. There are plenty of wine dinners happening regularly where a lot of times champagne is served at the beginning of the dinner which itself lends to the creation of the champagne culture in India,” asserts Agarwal.

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