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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News - Wine India


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  • Global wine production set to drop by up to 4% in 2014, report warns
  • Should You Let the Sommelier Taste Your Wine?
  • Amar'e Stoudemire takes red wine bath to recover on his off day
  • Restaurant Review: Kiyan, Dusit Devarana, Delhi
  • Wine: the weirder, the better
  • Sommelier India Issue 5, Oct-Nov 2014 Released

    The hospitality industry is facing a severe shortage of wine and other premium alcohol beverages and speciality restaurants are finding it difficult to maintain a good wine list or offer their patrons authenti gourmet fare due to the paucity of quality imported ingredients.

    I'm told containers of wine and luxury foods worth crores of rupees have been turned back or are languishing in our ports awaiting clearance. The root of the problem apparently is the heavy-handed strictures of the Food Safety and Standards Authority of India (FSSAI). Wine importers say that the FSSAI's insistence on minutiae such as the format of manufacturing and expiry dates printed on labels or other "nonrectifiable labelling defects" even when they are in step with Codex - the global standard for such imports - has affected the supplies of premium alcoholic brands as well as luxury foods such as artisanal cheeses, foie gras, Swiss chocolates and so on.

    It's not all doom and gloom for consumers, however. After all, wine shops haven't downed shutters and it's still possible to plan wine dinners and enjoy a meal with a glass of good wine at a restaurant. Members of wine clubs around the country aren't complaining. The Sommelier India Wine Circle is doing well with a spate of high-end wine dinners recently. Many prominent international producers are staying the course and continue to export to India.

    Meanwhile, read the stories in this issue and you'll find lots to enjoy. You can indulge yourself when you travel. During a recent tour of Alsace, Steven Spurrier met many top producers whose wines are on par with Burgundy and sometimes equally expensive but price-wise there is something for everyone and it is rare to find a poor bottle (page 28). The Alsace Wine Route is the oldest wine route in France and extends for more than 170 kilometres. Autumn is the culmination of the growing season in Alsace. With the early harvest and tasting of new wine, many wineries open their doors and invite people for a tasting.

    Down under, Rochford Wines in Australia's Yarra Valley offers visitors a fun way to tour their winery (page 60). On the other side of the world, enjoy the wine bounty of the Golden State of California (page 38). There's no better time to visit than now. Finally, there's also plenty to read for the armchair traveller with suggestions of wines to try!

  • Prestige and Reveilo Wines in a win-win alliance for both

    Prestige Wines & Spirits Pvt. Ltd. (formerly TT&G Trading Pvt. Ltd.) is an Indo-European venture that promotes and imports premium wines and spirits into India. The personalities behind it are Mr. Gautam Thapar (Chairman, Avantha), Mr. Miguel A. Torres (President, Torres Group) and Mr. John L.S. Grant (Chairman, Glenfarclas). Vice president of Prestige Wines and Spirits, Sumit Sehgal, based in Delhi, heads the India operations.

    Reveilo is the only Indian wine to be distributed by Prestige. Considering the challenges distributors are currently facing in importing international wines, the addition of a respected Indian brand to the Prestige portfolio adds value to its operations and puts to more effective use its existing distribution and warehousing facilities across the country.

    Vintage Wines range of wines extends across a broad spectrum and includes a regular and reserve range with international varietals Cabernet Sauvignon, Syrah and Merlot in the reds and Chardonnay and Chenin Blanc in the whites as well as indigenous Italian varietals like Sangiovese, Nero d'Avola and Grillo. Reveilo also offers a top quality Late Harvest Chenin Blanc in its dessert range.

    Situated in Niphad about 50 kms from Nashik, Vintage Wines was incorporated in 2002 with technical collaboration from the Italian firm, Enofly. Its family land holdings consist of 215 acres of which 100 acres are under wine grape cultivation. With a 32,000 sq.ft., state-of-the-art winery at Niphad, where the grapes are vinified, the company sold 8,500 cases last year and aims to reach 10,000 cases with greater market outreach this year.

    A note from the producers, Yatin and Kiran Patil states, "Owing to enhanced viticultural practices and controlled yields, we had a harvest of great quality and in turn the wines have turned out to be beautiful."

    If what we hear comes to pass - and there's no reason why it shouldn't - the consumer has good reason to be optimistic.

    "The wines are fresh and cleaner than ever and there is something for everybody," say the husband and wife team. "We have our regular range for those who like their wines fresh and light. We have our Italian, Premium and Dessert wines for the experimental, who like to try new things. And we have our reserves for the seasoned palates."

  • Stunning 2015 Campari Calendar soon to be launched

    One of the world's most coveted calendars, Campari stars French actress Eva Green (Sin City: A Dame to Kill For and 300: Rise of an Empire) in a sexy strapless red gown with a thigh-high slit, posing against a Campari wheel of time to represent the Italian liqueur's 150-year history. Eva follows a long line of Hollywood stars that have previously served as Campari Calendar cover girls, including Uma Thurman (2014), Penelope Cruz (2013), Milla Jovovich (2012) and Olga Kurylenko (2010).

    To view the multimedia news release click here.

  • How do I keep an open bottle of bubbly fresh and fizzy?

    Keeping sparkling wine chilled also helps retain the bubbles. Since carbon dioxide is more soluble in cold liquids than in warm, making sure the leftover Champagne or sparkling wine is well chilled will keep your wine fresher with more bubbles than might otherwise be the case.

    Placing a metal spoon in the neck of the bottle is another way to keep the air in the bottle cooler. The bottle with the spoon gets a "cold plug" on top of the wine unlike the bottle without the spoon. The weight of this colder denser air means that less gas can escape so the bubbles are preserved.

    However, no matter what method you use, your bubbly will become flat once it's left open for more than a day or two.