Wine still has fewer takers in India than most other categories

Plenty of consumers in India experiment with wine, but there are very few hardcore loyalists, say analysts

Deepti Govind
Updated14 Aug 2018
Wine was a distant six out of nine alcobev categories (excluding beer) in terms of total volume sales in 2017, according to IWSR. Photo: Pradeep Gaur/Mint
Wine was a distant six out of nine alcobev categories (excluding beer) in terms of total volume sales in 2017, according to IWSR. Photo: Pradeep Gaur/Mint

Bengaluru: With its aspirational quotient, sales of wine in India should have risen sharply over the past decade in line with the nation’s growing affluent population constantly seeking new experiences. But most Indians, even the well-heeled ones, just haven’t taken to the grape-based alcoholic beverage. Sales of wine by volume, which is smaller than most other alcobev categories, fell as much as 9% last year, according to analysis of data from research firm International Wine and Spirits Research (IWSR).

Wine was a distant six out of nine alcobev categories (excluding beer) in terms of total volume sales in 2017, according to IWSR.

While that is not an apples to apples comparison, it indicates wine is not the choice of tipple for even affluent Indians, who prefer whisky, rum or gin.

“This is a question that all wine producers and importers grapple with—when you talk to consumers, everybody seems to say we love wine and are switching over to wine. Yet, the numbers don’t stack up,” said Sonal Holland, a Mumbai-based wine educator and consultant.

Granted, much of the sales decline of wines is attributable to the Supreme Court’s ban on all liquor sales along highways from April 2017. That ban led to the shutdown of several retail outlets and even temporarily impacted hotels and restaurants within city limits.

To be sure, the ban also affected other major categories like whisky—India’s favourite tipple and the largest category by far—but none, except gin and genever, were as badly hit as wine.

Sales of whisky, for instance, fell a marginal 0.1% in 2017. Vodka declined 3.2%; rum and brandy sales dropped over 4% last year. The fall in those categories, however, came off much larger bases in comparison with wine.

Most alcobev firms have said the hit from that ban has now dissipated. Wine, like other categories, has also bounced back.

Volume sales at Sula Vineyards Pvt. Ltd, India’s largest winemaker, rose 15% in 2017-18. They were flat in 2016-17.

“Wine is by far the fastest growing alcobev segment in India. People are moving away from spirits to wine every single day,” said Rajeev Samant, chief executive officer of Sula Vineyards.

“Of course, it is small, compared with other categories, but we started out being one-third of a per cent of alcobev consumption 10 years ago and today we’ve gone above 1%. You can say that’s minuscule, but when you talk in terms of CAGR of the overall industry it’s huge,” said Samant. CAGR stands for compounded annualized growth rate.

Wine was, on average, treading upwards in terms of growth rates over past five years before the steep fall in 2017. But a few challenges have ensured it continues to remain niche. And one of the biggest is steep prices.

“In Karnataka, for instance, consumers pay about 700 for a bottle of premium wine. People are obviously starting to travel and, therefore, experience wine. But younger consumers who want a bigger kick for their buck, for instance, find buying a bottle of whisky or vodka for the same rate as a premium wine is a better option,” said a marketing professional at another winemaker, on condition of anonymity.

A majority of Indians still drink with the intention of getting a high. But even among the gradually-growing part of the population that views it as an experience, wine hasn’t really caught on in a significant way.

Plenty of consumers experiment with wine but there are very few hardcore loyalists, said wine consultant Holland. This has made wine a very easily disposable beverage. For instance, if a consumer does not find a preferred wine brand at the closest retail outlet, or for some reason cannot access wine, he or she will quickly move on to another tipple, she added.

For consumers who do have an inclination to try wine, another big factor prevents the conversion—wine’s snob value. Many consumers feel intimidated about buying wine and feel they should be knowledgeable enough to pick up a bottle at a retail outlet. The stress that buying wine can generate is, in fact, one of Karishma Grover’s biggest pet peeves. Grover is chief winemaker at Grover Zampa, India’s second largest wine company.

“When consumers try a particular wine for the first time and they don’t enjoy it, they go off it as a beverage altogether. Or they don’t turn into loyalists. They will have it only occasionally and stick with either whisky or rum or cocktails for regular consumption,” said Holland. She said some consumers “want to see better availability of imported wines in retail outlets, which control 70% of wine sales”.

“It’s all these little issues that add up. Wine is the fastest growing beverage category but our base is so small that even a 15% growth rate is not much,” said Holland.

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