Domestic vineyards tighten hold on wine market
Sula Vineyards and Grover Zampa have taken control of the wine market in India ever since the UB Group exited the segment four years ago
Mumbai: Homegrown vineyards have strengthened their grip over India’s growing wine market ever since the UB Group, one of India’s largest alcohol makers, exited the wine business four years ago.
According to market research firm GlobalData, Sula Vineyards Pvt. Ltd and Grover Vineyards Ltd now rank No. 1 and 2, respectively, among top five wine makers by volume.
UB Group, which was India’s No. 2 winemaker, sold its wine brands to Diageo-owned United Spirits Ltd in 2013. The wine business, now owned by Diageo, includes entry-level wine Four Seasons and French wine Bouvet Ladubay.
“Growing urbanization, changing lifestyles, and developing taste of wine, particularly among the upper middle-class urban consumers is driving the sector,” Apoorva Nema, consumer markets analyst at GlobalData said. “Further, increasing local production and availability of affordable variants is also fuelling the growth as spirits became more expensive and less accessible.”
India’s wine market volume nearly trebled from 13.80 million litres in 2011 to 39.20 million litres in 2016, data from GlobalData shows.
Wine consumption is skewed towards women in India, meaning a growing population of working women is helping grow this market, Nema said. GlobalData estimates the wine market will grow 40% to touch 65.3 million litres by 2021.
Sula Vineyards, which sells red, white and sparkling wine, has retained leadership of the wine market since 2011 by volume. Apart from its own brands, Sula also imports nine wine brands to India.
Sula did not immediately respond to emails seeking comment.
Grover Zampa, ranked No. 2, rose from number 3 to take UB Group’s place in 2016. It sells 10 wines under the Grover Zampa brand.
Grover Vineyards, which owns vineyards in Bengaluru and Nasik, says it has retained leadership in the market by responding to rapidly evolving consumer preferences in India.
“For example, a noticeable wine trend currently is that the consumers who have been long standing wine drinkers are now demanding more premium and complex wines,” Grover Zampa’s chief operating officer Vivek Chandramohan said in an email. “Our response to this has been a quick adaptation to their demands which has subsequently resulted in us possessing the largest portfolio of the most awarded reserve and premium wines.”
The company declined to specify its market share.
Meanwhile, UB Group’s exit from the top 5 wine brands in India has helped French spirits maker Pernod Ricard gain a toehold in the Indian wine market. Pernod Ricard, ranked 5th among the top 5 wine makers in India, sells Nine Hills and Australian brand Jacob’s Creek.
Wine makes a small, “strategic” part of Pernod Ricard’s business globally with just four brands and 12.6 million cases sold in FY17, as per the company’s global annual report. Jacob’s Creek is the company’s largest wine brand.
Emails, messages and calls to Pernod Ricard India’s spokesperson remained unanswered. A spokesperson for United Spirits did not respond to an email asking for comments.
“Local producers continue to lead the market with affordable variants,” Nema said in his note. However, the market is still nascent, with India accounting for just 0.2% of the global market and per capita consumption in 2016 at 0.043 litres, compared to 6.25 litres globally. “Although the consumer base is small, India can expect a double digit growth in the upcoming years, the direction of which will mostly be driven by urban regions i.e. tier 1 and tier 2 cities,” Grover Zampa’s Chandramohan said.
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