“Club of Knowledge Hunters”

Imports add fizz to Indian wine market

Posted by superstar23 on September 17, 2008

The imported wine segment in the country is set to witness huge growth with several domestic and foreign players scrambling for a larger pie of the segment. While local players are including affordable imported wines in their portfolios to hook new consumers, foreign firms are trying hard to expand in the market.

United Breweries, the most recent entrant in the imported wine segment, is selling wines sourced from South African vineyards under the Bohemia Wine brand. Aiming to tap the price-conscious home-consumption market, it has priced its wines at Rs 500 and beyond. United Breweries, the owner of the largest lager brand in the country, Kingfisher, is planning to make use of its distribution network to promote Bohemia Wine.

“Home consumption is a big market in India with almost 80 per cent of the spirits being consumed at home. We aim to tap this segment by ensuring that our distributors have Bohemia in shelves besides the Indian offerings,” says United Breweries Deputy President Shekhar Ramamurthy.

Affordable pricing, he adds, is the key here: “There will be enough supplies of reputed imported wines costing between Rs 550 and Rs 700 which may eat into the sales of Indian wines.”

Indian producers are expected to either fight back by offering higher discounts or push their own portfolios of imported wines in an effort to lock in the customers. Just as Sula has done with the French Pierre Maison, and Vinner Wines with Italian Opera, United Breweries is importing wine and packaging it under its own label. It currently imports wine from Cape Floral Kingdom, South Africa, and the brand is not ruling out the possibility of adding more wines from New Zealand, Australia and even Chile.

United Breweries’ confidence is rooted in numbers. Rabobank International, a financial services provider that focuses on food and agricultural financing, suggests that the Indian wine market will grow to 1.7 million cases (one case has 12 bottles of 750 ml each) by 2010, with the present market being valued at $62 million. According to a study conducted by UK-based International Wines and Spirits Records (IWSR), in 2007, 7.6 million litres of wine was consumed in the country of which 1.5 million litres were imported wines.

France-based luxury goods conglomerate Louis Vuitton Moët Henessy (LVMH) is also trying to expand in the growing imported wines market. It has initiated a three-fold exercise to grow in the premium liquor market.

First, establishing its presence on retail shelves. Second, educating consumers, for which it has been regularly organising wine drinking sessions. Third, gaining business through appreciation programmes and co-promotion exercises at luxury hotels and restaurants.

Winemaker Diego Urra of Casa Lapostolle, a 14-year-old Chilean wine brand, says, “Indian wine drinkers have grown to love Casa Lapostolle’s reds and whites such as Merlot, Cabernet Sauvignon, Chardonnay and Sauvignon Blanc despite a heavy price tag of around Rs 2,000 a bottle.” He considers India as the market that could complete a winemaker’s portfolio.

Bernie Wood, winemaker and chief viticulturist of Australia’s Green Point Wines, points out that India is the second largest export market for his country in Asia. “According to estimates, total market for the imported wines last year stood at 220,000 cases and that’s encouraging,” he says.

With per head consumption of just half a teaspoon of wine as against 20 litres per head in Britain, the world’s second most-populous country is a promising wine market.

Sources:- Business Standard


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