The year gone by

The past year saw few notable events in the Indian wine industry: no great fairs or tastings, no new state policies or rules that benefited any of the stakeholders, and certainly nothing that could be considered “news”. It was a singularly boring year.

Perhaps the only item of note was that the Indian Grape Processing Board or IGPB (it was going to be called the “Indian Wine Board” but someone got cold feet) helped some Indian wineries take part in wine fairs overseas: Provien Dusseldorf (March), Vinitaly Verona (April), the London International Wine & Spirits Fair (May), and Hong Kong Wine & Spirits Fair (November). Sula’s Dindori Reserve Shiraz and Four Season’s “Ritu” Viognier are now selling in some UK supermarkets. Hooray!

Overall the industry has been through another rough year. Maharashtra wineries still standing at year-end have emerged wiser and stronger from the recession of 2009/10, while units in Karnataka have largely been content to sell in the south.

Sula, of course, consolidated its position as industry leader in India with a forecast volume of over 400,000 cases this fiscal; in 2001-02 it had sold a mere 8,300 cases. The company’s growth history would make an interesting case study for management students.

Grover is still number 2, but has been in the red since 2008-09 and is struggling to find the funds required to stay afloat. The company’s association with India’s largest wine importer, Brindco, was terminated with effect from April 1 and there were rumours that Grover was merging with Deepak Roy’s Vallee du Vin (“Zampa”). But nothing has happened as yet and one hopes that the new year will see new funding to bring the company out of the woods.

Former industry leader Indage (“Chateau Indage”) has downsized massively and is selling its wines only in Maharashtra and some overseas markets. Its loss in 2009-10 was Rs 86 crore against a net income of Rs 29 crore, a stark reminder of the perils of expanding ahead of a recession which, of course, is devilishly difficult to predict.

Four Seasons (with wine division of Vijay Mallya’s United Spirits) continued to expand distribution. It is now available pan-India and is clearly number 3, as the company enjoys a high level of leverage with the trade and there are so many niches to fill — witness the brand’s availability at bars in Indian airports and duty free. Of course, given the restrictions on marketing and advertising in most states, the brand’s consumer franchise will take time to build, particularly since its early quality did not quite match that of the market leader.

Seagram’s Nine Hills wines also continued to expand distribution, albeit more sedately — in line with the company’s strategy of “Softly Softly Catchee Monkey”. Not for them several years of cross funding losses to gain market share. The company is now Pernod Ricard India whose French heritage will perhaps help continue the focus on what is undoubtedly a “promise” market.

Lastly there is Big Banyan whose admirable quality and unique business model has gained many die-hard loyalists. I sincerely hope the company is able to overcome the recent loss of sales and marketing head Kawaljeet Singh in a road accident near Ooty, and raise a toast to his memory.

So Cheers to 2012. Here’s to friends past and friends future, and may the industry “live long and prosper”!

Alok Chandra is a Bangalore-based wine consultant