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| The rise and rise of wine in India |
| Alok Chandra / New Delhi Aug 22, 2009, 00:31 IST |
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Since 2001, India has possibly been the fastest-growing wine market worldwide, and one that is viewed with an enormous amount of interest by winemakers everywhere.
Sales of wine in India have shot up from a paltry 340,000 cases in 2001-02 to about 1.5 million cases in YE March ‘09 — a growth of nearly 25 per cent per annum. And since these numbers include volumes for “cheap” wines made from table grapes (Golconda, Goan wines), the actual increases for wines from wine grapes is even higher — their volumes grew six-fold, from 125,000 cases in 2002, to 775,000 cases last year.
Never mind that per capita wine consumption (including that for “cheap” wines) is still a meagre 9 ml, compared to 370 ml in China and 2.1 litres in Brazil. This merely indicates the potential for growth in the future. Conservative estimates forecast total wine volumes growing “10 times in 10 years”; by 2015, total wine sales in India should almost be 40 million cases. This is still a fraction of China’s present 54 million, but nothing to be sneezed at.
Growth in wine consumption is being driven by many factors: changing lifestyles, habits and attitudes (particularly of young adults and women), catalysed by the growth of TV and the Internet, and increasing disposable incomes. The growth is also being fuelled by a wider availability of decent-quality wines, both those produced in India and imported from abroad; by an increased number of people from overseas travelling to and staying in India; and the perceived social and health benefits of wine.
Also helping are changing government attitudes to the industry. A National Wine Board has been set up; the 2001 Maharashtra Grape Processing Policy has spawned some 50 new wineries in that state, while the 2008 Karnataka Wine Policy promises to do the same there.
A 2007 study by consultants McKinsey & Co predicts that the total number of households with incomes of above Rs 5 lakh per year will grow from 3.6 million in 2005 to 42.6 million by 2025. A significant number of these “strivers” and “global Indians” will want to drink wine. And no doubt some of the 95 million households in the next income bracket (“seekers”) will also be wine consumers.
There are, of course, many challenges to marketing wines in India, not the least of which are high prices due to high import tariffs and a bewildering multitude of state-level taxes as well as the high cost of both producing wine locally and marketing the stuff in the teeth of stiff competition from the spirit and beer majors for shelf space and listings on-premise.
But that will change. Higher volumes and investments in the industry will reduce the costs, which, in turn, will lower prices. This will stimulate investments and volumes further — a “virtuous upward spiral”.
As they say, “You’ve come a long way, baby!”
(al.chandra@gmail.com)
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