Wine Industry India

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Executive Summary

Imagine starting a winery for just $44,000 in a country where the wine industry is growing at a rate of 25% to 30%.

Yes, the Wine Industry of India is at the introduction stage of its life cycle and a small winery can be started in India with an investment of about $44,000. Required know-hows and machinery are available locally.

For the year 2008-2009, the wine consumption in India was only about 13.3 million litres or 1.5 million 9-litre cases at a value of $82 million. At a per capita level, the consumption was about 9 millilitres annually. In the same year, the world wine consumption was 2.6 billion cases. The size of the Indian wine market is small when compared to global consumption and annual per capita consumption of 70 litres in France and Italy, 25 litres in the US, 20 litres in Australia and 40 millilitres in China.

The prospects of growth for wine in India are quite high. About 600 million Indian’s are currently below the legal drinking age and 100 million will come of that age over the next 3 to 4 years. So, the consumption of alcoholic beverages such as wine is expected to increase. In spite of India’s high import tariffs on wine, this country was one of the world’s fastest growing wine markets. Until the year 2008-2009, growth was about 25% to 30% every year.  However, sales fell in the year 2009-2010 for the first time since 2001. Wine exporters blame the slump on the 26/11 Mumbai terror attacks two years ago that led to a dip in tourism in India. Despite the recent setback, consumption of wine in India is projected to increase to 2 million cases by 2011 and 4 million cases by 2015.

It is critical to note that, the level of tax burden for both local winemakers and importers of wine is high. Control over selling, distribution, and pricing of wine belongs to state governments. Each of India’s 28 states and 7 union territories has its own rules and regulations for sale of alcohol. In some states an imported wine may cost almost 4 to 5 times of its price, with over 50% of its revenue shared between various levels of government. A wine bottle that leaves France at three euros (under $4) is sold in India at approximately 15 euros (about $20).

However, states like Maharashtra, Karnataka and Himachal Pradesh have taken steps to encourage wine industry and given preferential treatments by liberalizing their excise regime and reducing excise duties.  Eighty precent consumption of wine in India is confined to major cities such as Mumbai (39%), Delhi (23%), Bangalore (9%) and Goa (9%).

The supply chain of the wine industry in India is fairly linear. Winemakers are the key to the supply chain and they record good profits. The key to success in the wine business is branding so, a substantial chunk of dollars are spent in selling and distribution. It is also critical to note that, promotion of alcoholic beverages is prohibited in India. So, winemakers use strategies such as surrogate marketing and creating economies of scale.

Success in the wine business in India is conceivable if you do the hard yards of government regulations and have the right marketing mix.


Table of Contents

Industry Definition

Wine Making Process

Key Statistics

Supply Chain

Segmentation

Market Characteristics

Industry Conditions

Key Competitors

Key Factors

Appendices

References


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  • KRSMA founders ascend new heights

    Krishna has had a life-long penchant for making home-made wines. It started with buckets of rotting fruit in his garage when he was twenty. Uma tells me that when they were married, they had a two-bedroom apartment, and one of them was Krishna's winery! A few years ago, when visiting the dry, gravelly, hard-scrabble 14th century heritage town called Hampi, not far from Bangalore, he wondered out aloud whether it would not be a good place to make high-quality wines. As usual, his friends greeted what was surely a hair-brained idea with hoots of laughter, so of course Krishna set out to do it.

    This is Hampi.
    Hampi Rock.jpg

    Hampi Rock 3.jpg
    And this is the winery Krishna and Uma built from local stone.
    KRSMA winery.jpg
    2.Uma & Krishna -winery.jpg

    They called their wines KRSMA. Two years after the launch in India in 2013, Krsma wines have climbed the ladder to the top of international-standard wines made in India. They will be launched in New York next week, but have already been well-received by several respected restaurants there.

    In blind tests in Bangalore, their Sauvignon Blanc came out on top of the most internationally-renowned versions from New Zealand. And their Reds (Sangiovese and Cabernet Sauvignon) are now the standard in India.

    Krishma and Uma are not only top-notch winemakers. Another of their hobbies got them into the Guinness Book of Records a few weeks ago as the first couple in the world to have run seven marathons on seven continents in seven days! Starting from Antarctica, they were the first to cross the Finishing Line in Sydney, Australia!

    Watch the video.

    And as if this isn't enough, their day job is as promoter-owners of Granules India, a $300 million company that makes medical products in India and the US for companies in the US.

    From the Editor
    Since the note above was written, KRSMA has been launched in New York City. KRSMA wines from India are now poured in more that 15 restaurants in New York and are available for sale at two stores in Manhattan - Sussex wines & liquors and Park Avenue Liquor shop. They are also available online in the City through https://www.parkaveliquor.com/wine/india

    "Uma and I met a few restaurant managers and everyone seems to be rating the wines very high. It looks like we sold 100 cases in the first three weeks! Says Krishna with justifiable pride.

    The US price for KRSMA Cabernet Sauvignon is $45 and KRSMA Sauvignon Blanc is $20.


  • Dheeraj Bhatia, Chief Sommelier at Peninsula Hotel, HK

    After working in New Delhi, Dubai, South Africa, the Seychelles and Beijing, he became Head Sommelier at Raffles Hotel in Singapore before moving to Hong Kong. He was nominated Best Sommelier of 2011 at the World Gourmet Summit in Singapore, and is a judge for Decanter Asia where Grover's Sauvignon Blanc recently won a gold medal.

    Bhatia's first interest was food, but upon realising he couldn't be a good chef, he developed a fascination and curiosity for wine and vineyards. "You must know how to differentiate and appreciate the characteristics of each wine before you can recommend one to a guest. It's a journey that never stops," he says.

    On his travels, he sources exclusives for the Peninsula's seven restaurants and two bars, though 90% of the 900 labels are bought locally. Hong Kong has only two hundred bottles of Philipp Kuhn's Riesling from Germany's Pfalz area and all of them are in Bhatia's cellars. While judging for Decanter Asia this year, he discovered a very good fortified wine from Bali and hopes to offer this for the first time in Hong Kong.

    Felix restaurant r.jpgWhile Burgundy, Rhône, Loire and Bordeaux wines are most requested, particularly by mainland Chinese guests, Bhatia has seen changes in drinking patterns over the past two and a half years. "People are more open-minded, willing to try new things," he says. He helps them by providing interesting wines by-the-glass from Greece, Hungary, Israel, Japan, and Austria. Felix restaurant overlooking Hong Kong island

    Bhatia believes that changes in wine preferences run parallel with changes in wine production - towards lighter more subtle wines with low alcohol content. 'Guests' tastes have become more flexible and they love pairing', so Bhatia provides plenty of half-bottles and by-the-glass options. In Felix, the hotel's more trendy restaurant, guests go for more exotic wines, and in the Felix Experience pairing menu Bhatia offers his 2012 Philipp Kuhn Riesling Alte Reben from Pfalz in Germany with duck liver; a Tavel rosé with olive oil-poached octopus and shrimp dumplings; the 2010 Bad Boy Garage, a Bordeaux find, with lamb; and a 1988 Armagnac with fresh cheese mousse complemented with anise vanilla ice cream.

    In general, Bhatia recommends a rosé wine to go with garlic flavoured dishes; Greek and Hungarian wines with fish and Armagnac with desserts to act as a digestif. He believes Port or Riesling go best with cheeses. The first lesson Bhatia learnt in sommelier school was to "make the chef your best friend". Acting on the lesson, he married a pastry and chocolate chef and enjoys hanging out with chefs after work.

    When dining out, Bhatia is always looking out for new ideas. Recently he came across a quirky Spanish blueberry liqueur aperitif in a bar and immediately photographed the bottle with his phone and sent the image to his chef. He has also discovered a sparkling sake for which his chef created a special recipe.

    Bhatia holds monthly training meetings for his staff of twelve, at which he discusses the wine list. To motivate his staff he conducts six-month-long programmes, with prizes of visits to the Champagne and Californian wine regions for the best pupils. Each night he tours the hotel's restaurants, checking that guests are comfortable with their wine choices. "You must treat them as if they were in your own home and offer them the best. Guests new to wine can be terrified of sommeliers." So he simply introduces himself by saying, 'I'm the wine guy', and moves away while they study the wine list.

    Bhatia believes the taste of wine has much to do with the weather. He likes to serve champagne in white wine glasses because "champagne deserves to be in such a glass, not a flute, so that it can breathe as other wines are allowed to do and the bouquet can be fully appreciated. It can be served as any time of the day and is a good cure for jet lag".

    This article first appeared in SI, Sommelier India February-March 2015


  • It's all about location, location, location - and microbes
  • UK Budget 2015: Drinks industry hails duty cuts
  • Not just peri-peri at Barcelos, Khan Market

    The name, Barcelos, recalls a Portuguese legend about a rooster named Galo de Barcelos, who saved a pilgrim falsely accused of stealing silver. India is the 18th country where "Barcelos" has set up shop after opening 120 outlets all over the world.

    Surprisingly, 40% of the menu at the Khan Market restaurant is vegetarian, despite the local preference for chicken. However, Rohit Malhotra, General Manager Operations pointed out that according to recent research they conducted, more and more Indians were consciously turning vegetarian.

    Vegetarian dishes on the menu include Peri-Peri Paneer, salads like avocado-pesto, and Portuguese specialities such as cataplana, trinchado and picantte besides other signature dishes. Chicken and fish loyalists are not forgotten in the menu which is vast but neatly divided between Appetisers, Dips and Salads, Share Around, Portuguese Perfections, World's Healthiest Burgers and so on.

    When asked about the obvious similarity between Barcelos and Nando's, the African hotspot serving peri-peri chicken in Delhi, Mazzis smiled, "We and Nando's are like teammates. But we have our own identity."

    Decorated in tones of brown and green with wooden flooring, Barcelos projects a hip yet warm and casual feel. Furnished with plants and bright paintings, it is ideal for famished youngsters and family groups.

    If you happen to be in Khan Market, hop over to Barcelos and try some Peri-Peri Chicken with a choice of tangy lemon, mild peri, veri peri and supa peri sauce. Spicy and succulent, it's as good a Peri-Peri Chicken as can be. The vegetarian Espetada or skewers of mushrooms stuffed with feta and chunks of paneer are also worth a shot.

    Steer clear of the overly syrupy mocktails as they are a mismatch with the food. Do visit Barcelos though, since the rooster crows in your city. If out of Delhi, keep an eye out for it - Barcelos has plans to expand into other metros over the next five years.

    Getting There
    Barcelos
    57, Khan Market
    Timings, 11 am-11 pm
    T 011 4350 5270
    Cost of a meal for two: 1,200 - 1,500.

  • Nagpur Wine Lovers visit Four Seasons Winery

    Sharad Phadnis, who is the founder, NWLC said, "From our initial days Abhay Kewadkar, Director and Chief Winemaker, Four Seasons Wines Limited, has supported the Club's activities. With his encouragement our members decided to visit the winery."

    The Nagpur Wine Lovers Club was started in 2010 with four members, and now has 162 members. "The Club regularly conducts wine tastings, promotes responsible wine consumption, conducts wine education sessions, organises an annual wine festival and wine related tours," said Phadnis.

    The grand Four Seasons Winery at Roti, 70 kms from Pune, Maharashtra.jpgThe visit organized by Manoj Karnwal, Sr Manager Accounts, unfolded smoothly. Near Roti Village the impressive complex with its château-style facade (pictured, right) came into sight offering a hint of the grandeur of the winery. A one-kilometre drive to the building, bordered with fountains and lawns, leads to the grand entrance of the building which houses offices, winery, cellar room, conference hall and wine and souvenir shop.

    There is also a restaurant, guest rooms, and a tower block that offers panoramic views of the countryside, swimming pool and party deck.... each aspect of the complex was greatly appreciated by the visitors.

    The members enjoyed an informative winery tour covering the winemaking process from crushing to oak-ageing to bottling, and an interesting structured wine tasting held by Raghunath Subramanian, Manager-Quality Control, who is very passionate and knowledgeable about wine. He offered several comparative tastings for the visitors to understand the nuances of different grape varietals, fermentation and barrel ageing. Executive Chef Kisan Mulik from Baramati Club and his team, presented a good buffet spread at all three meals, with lunch and dinner being accompanied by wine service.

    NWLC members tasted a wide range of Four Seasons wines: Chenin Blanc, Sauvignon Blanc, Viognier, Merlot, Shiraz, Cabernet Sauvignon, Blush and the premium Barrique Reserve Cabernet Sauvignon and Barrique Reserve Shiraz. One of the members, Shiraz K Doongaji, who had made orange wine at home (Nagpur being famous for its oranges) had brought some along and it was also tasted!

    The trip was such a success that Phadnis remarked he was sure to come again for the next harvest with another group of members from the Nagpur Wine Lovers Club!

  • Fendant wine, Fondue and Films - A First!

    The Festival took place in Cinema Rex, the name itself conjuring up images of a bygone era. Indeed, this classic old movie house had remained closed for many years, but with the gentle persuasion of local film aficionados, the 81-year old owner of the cinema agreed to let it be open for five days to host the Saas-Fee Filmfest from 19-23 March 2014.

    Innovative and idiosyncratic is a possible description of this collection of nine films in competition. Many were unbelievably low-cost, by young Directors, showcasing the thinking and direction of these individuals. From countries bordering Switzerland - Austria, Italy, France and Germany - the films were selected with the criteria that they should not have had a theatrical release. An interesting characteristic in some of the films was that the actors had the freedom to stray from the script as their heart and head allowed. Looking at real issues of the times - personal and autobiographical - perhaps reflecting current day angst...

    Passion and honesty dominated the discussion over an excellent fondue lunch hosted at the intimate one-room restaurant "dü- astrid's fondue hitta". Seated with Martin Blaney, member of the festival jury, Gabriel Zurbriggen, the Festival co-organizer, and Jessica Krummacher, director of Totem and jury member, made for an exciting exchange. Helped along, no doubt, by the excellent Fendant Molignon, Valais AOC 2012, generously poured by our hostess.Totem pushes boundaries and surprises you with its concluding message.

    My personal favourites at the Festival were the Italian movies - communicating political and historical messages with a touch of humour. Standing out among them was the moving The Mafia Only Kills in Summer directed by Pierfrancesco Diliberto. With all awards going to debut films, the official prize for best film was divided between the German production, Jacob Lass' Love Steaks and the Austrian Soldate Jeanette directed by Daniel Hoesl. The Critics Jury awarded Finsterworld, directed by the German Frauke Finsterwalder. The Audience Award went to Ivana Lalovic's Sitting Next to Zoe, a heart-warming story of fidelity between friends.

    The real laurels, however, must go to Festival Directors: Gabriel Zurbriggen, a child of Saas-Fee, now an actor in Berlin, and the eclectic Artistic Director, Stefan Fichtner, passionately committed to a "democratization of cinema". Saas-Fee made for an unforgettable experience for all who travelled to be there - Directors, Actors and the Jury. The late March gentle snowfall added to the romance.

    In the words of Stefan and Gabriel, "This small, no-car mountain village is unique. You walk everywhere and get to your destination in minutes. But most of all, it was the warmth and generosity of the local people, the numerous sponsors and hosts, the tourist office, which contributed to making this a memorable and successful event. Undeniably the invigorating climate and the clean, glacial air played its part in energizing us all! We firmly believe that Saas-Fee has the potential to develop a renowned annual film festival."

    Stefan and Gabriel met in the playgrounds of Berlin, ie, the ones with slides and sand pits, on outings with their young children. So, sorry ladies, both these charming, go-getting gentlemen are taken! However, the good news is that the co-Directors of the Dharamshala International Film Festival (DIFF), Tenzing Sonam and Ritu Sarin have been invited as special guests to the 2015 Saas-Fee Film Festival, which runs from 18 to 22 March this year. Undoubtedly, Stefan and Gabriel will attend the DIFF! Linking two mountain villages in a creative endeavour, not to be missed!

    More on this after the 2015 festival.

  • Soul Tree exceeds crowdfunding target
  • The Great Grover Wine Festival

    The spacious grounds of Bangalore's Bhartiya City with their expanse of green lawn and a light breeze blowing as the sun set formed the perfect backdrop.

    SUN_6301r.jpgThere were food stalls, gifts and handicrafts on sale, live music and attractions galore, not forgetting, a full complement of Grover Zampa wines. As dusk fell the tempo picked up with throbbing music while performances by artists like Swarathma, Ananth Menon & Trio and MadOrangeFireworks ensured that everyone was swinging.

    abc.jpgTalking about the festival, Sumedh Singh Mandla, CEO, Grover Zampa Vineyards (pictured with Reva K Singh, Bunty Singh & Alok Chandra) said, "We are delighted to create this grand wine and performing art festival and to showcase our award-winning wines to so many wine lovers.

    'The Great Grover Wine Festival' gives us an opportunity to celebrate our success with our patrons and provide a relaxed day out with an array of fun-filled activities aimed at rejuvenating visitors as well as providing a learning experience with wines."

    SUN_6613r.jpgGrover Zampa Vineyards owns wineries and vineyards in both the Nandi Hills in Karnataka and in the Nashik Valley in Maharashtra. Working with limited yields and sustainable viticulture practices the winemaking is carried out by a team of local oenologists under the direction of French wine consultant Michel Rolland and winemaker Mathias Pellisard. Grover Zampa Vineyards has won numerous international accolades for its wines and exports its wines to over 20 countries.