WINE: Ravi Jain, an industry veteran, floats Vallee de Vin.
A new brand of wine called Zampa, red, white and sparkling, has hit the market. It is made in India from grapes grown around Nashik. The seed for the grape has been brought from vineyards in France. And the man behind Vallee de Vin (Valley of Wine in French) is Ravi Jain, a one time employee of the late Manu Chhabria and a business partner of Vijay Mallya.
Jain has had a long innings in the liquor industry. At one time, he had a distribution joint venture with Mallya. Then one day he sold the golden egg to Chhabria. Till the early 1990s, Chhabria’s Shaw Wallace was a hard liquor company. It sold what is paradoxically called Indian made foreign liquor in official jargon. Jain made a presentation to Chhabria and gave him a symbolic gold-plated egg — the beer market.
In a few short years, Shaw Wallace became a strongly placed number two in the beer market. (After Chhabria’s death some years back, his wife and daughters sold the beer business to SABMiller and the liquor business to Mallya.)
Before that, in the late 1990s, Jain had broken off from Chhabria and joined hands with his arch rival, Mallya, to set up Millennium Alcobev, a beer joint venture, into which some non-performing brands of United Breweries were parked. He subsequently bought brands like Sand Piper and Guru, started a brand new beer called Zingarro and subsequently got Scottish & Newcastle into the joint venture as an investor. Jain had also almost sealed a deal with Mohan Meakin to market its brands. But the deal fell through in the last lap.
In December 2005, he exited the company for “a substantial profit” as Millennium Alcobev was merged into United Breweries. At that time, Jain gave a commitment that for three years he would not get into any competing alcoholic beverage market. So, the next three years saw him play golf in Mumbai and make and subsequently lose money in the stock markets. The cooling off period got over in December 2008. And Jain is back in business, though this time with wines.
He has set up Vallee de Vin in collaboration with industry veterans Deepak Roy and Neeraj Deorah. But it is a far cry from the dog-eat-dog world of beer and whiskey. “It is not about big numbers. It has more to do with lifestyle,” says he. The world’s top wine makers, he adds, are family controlled enterprises and not liquor conglomerates.
For the grapes, he has tied up with over a dozen farmers around Nashik. Jain is not in favour of importing wines. His factory is up and running and the wines are available in select markets. The brand he has chosen is Zampa. Like his beer brand, Zingarro, it too starts with Z. “There is zing and pizzazz about Z,” says he.
It will be anything but a cakewalk for Jain. In the market, there are already three well-established domestic wine makers — Sula, Indage and Grovers — as well as three large liquor conglomerates —Mallya’s United Spirits, Diageo and Pernod Ricard. The market is small at about a million cases per annum and Jain knows that he needs to sell at least 100,000 cases before he breaks even. “Not in the first year,” he acknowledges.
Jain says that he has priced his wines at a premium of 10-15 per cent over comparable wines from Indian wine makers. And he is in no mood to cut prices to grab market share. But he expects wine prices to soften in the days to come. As wine is not seen as a social evil, state governments are more open to reduce excise duty.
At the moment, Jain says that people have cut back on lifestyle expenditure and consumption has shifted from expensive restaurants to cheaper clubs. And this is where he plans to promote his wines. His plan for that is simple: Create a connection between Indian food and wine. In other words, he plans to promote his wines as something that goes well with Indian food. “Why should wine be seen as something you drink only with French or Italian food,” says he. About half the wine sold in the country is at restaurants and clubs. Also on the drawing board is some sort of an association with fashion events.
Though in the liquor industry, Jain is best known for his strong knowledge of the distribution network, this seems to be the least of his current problems. Top eight cities account for almost 90 per cent of the wine consumption in the country. So, it is relatively easy to reach the customers. All he needs to do is convince the customers.