How can the Indian wine industry grow?

Mumbai, India
People including me are optimistic about the wine market in India; the growth figures say so too. A two million case (9 litre) market with around 25 % of it being for imported wines, it is growing at almost 19% CAGR year on year. However when we look at the Indian beer scene standing at 275 million cases and the spirits at well over 300 million cases we know that wines have a long way to go.  India by the turn of this decade will turn into the youngest nation of the world with an average age of 29; this demographic dividend gives India the opportunity to let its market grow not by one or two but three digits.  In my opinion two factors can lead to exponential growth; pricing and knowledge.

Pricing:

I strongly feel the day we can buy a good bottle of table wine for less than 250 Rs, a price equaling two 650 ml bottles of beer, wine trade can flourish and capitalize on the growing middle class and urbanization in the country.  Currently most recognized or rather acceptable quality of Indian wines start at Rs 500; even higher in Maharashtra because of the taxes and go up to Rs 1700. Grover Zampa which sells its Chene at Rs 1700 also sell Sante a sub-brand at around Rs 400 and many other prominent wineries like Sula and Charosa have sub-brands at a lower price. What distinguishes Santé from many other sub-brands is that it comes in single varietals like Chenin and Shiraz than ambiguous blends and secondly it has a story to tell on its label and also otherwise.  A good part about these sub-brands is that it helps narrow the gap between a 330ml pint of beer and a 150 ml glass of wine in a restaurant  but  at most restaurants  the latter if twice the former.  Lastly the SKUs are mostly 750ml, we need more of 375ml and also 175ml bottles in retail firstly to get consumers to try wines  and secondly to cater to a large population who do not drink at home and like to buy drinks for the evening.  Indian wines are selling in the UK at 7 pounds including costs of export and margins; I do not see a reason why a winery can’t reach the said disruptive price point back home.

Knowledge:

The price without knowledge would be a half hearted effort. ATL marketing of any kind is banned for liquor in India and what works best is experiential marketing to get to know the product better.  Sula wines pioneered the wine trail in Nasik, people got acquainted to wines through experiencing the vineyards, wine festivals and events  across metros have got people the first hand experience to taste wines in the guise of a fun weekend afternoon or an employee engagement session at work. For a serious wine drinker lot of structured courses from WSET-London and the like are being offered in the country. But what will make sell wine more in a nascent wine market like ours is when the custodians, people at the consumer point of contact are trained well to share their opinions on wine.  Restaurant servers, floor staff in retail and the wine buying authority need to be well versed with what they sell,sadly most of them especially in wine retail are lagging significantly.  In a recent wine buying episode of mine, I was being upsold a rose wine at around Rs 3000 from the year 2004, this wine perhaps would have shown at its acceptable best in 2007 and I was being sold one in 2014. The retail employee from that very popular retail brand wasn’t trying to fleece but he was completely ignorant and went by the adage “Older the wine the better it is”.  Knowledge is the crux to people coming back to drink more wine after the first trial, I perhaps would never had gone to buy wine after drinking that 2004 rose.

Assuming quality and proper storage of wines is in order; the above two factors should be the calling for wine business’ in the country.

Santé