The business of wine

The Indian wine industry seems to be looking forward to acche din at long last. Wineries in Maharashtra, where the wine grape harvest starts by mid-January, are reported to be producing flat-out, with grape availability and prices being the only constraints.

"Demand seems to have caught up with supply this year," says Yatin Patil, president of the All-India Wine Producers' Association and director at Vintage Wines, a Nashik-based boutique winery whose Reveilo wines have established a niche presence in select markets.

Readers may remember that the "triple whammy" of the 2008-09 economic downturn, the impact of the 2008 terrorist attacks on Mumbai and the meltdown that industry leader Indage suffered actually reduced wine consumption in 2009 and left large unsold stocks with most producers in Maharashtra. It has taken seven years for things to normalise, caused by a combination of lower wine grape production and increasing demand for domestic wines.

The upturn has affected grape prices strongly: chenin blanc is selling for at least Rs 60 a kg, against a maximum of Rs 45 a kg last year. Other grapes are garnering higher prices too - and demand shows no sign of abating. Every day, the All-India Wine Producers' Association receives complaints from wineries about grape growers who are thought to be under long-term contracts being "poached" by competitors who are willing to pay higher prices - and there's nothing they can do to stop the practice.

So, will this result in higher wine prices in the market? It's difficult to say. Maybe a reduction in unhealthy discounts, such as the 1:1 offers, will offset the higher cost of production, which may also partly be set off by blending in wines made from table grapes (for example, Thompson seedless) for lower-quality wines.

Industry leader Sula is upbeat. Its owner, Rajeev Samant, talks of crushing 12,000 metric tonnes of grapes. That would be enough to produce about 1.2 million cases of wine, which would account for about 34 per cent of the total market of 3.5 million cases projected in 2016-17. Of course, this includes the entire range in Sula's portfolio, from its Port 1000, priced at Rs 125 a bottle, all the way to the Rasa reserve cabernet sauvignon, which sells for Rs 1,750 in Mumbai.

It will be interesting to see how this pans out for the smaller players. Grover-Zampa (150,000 cases) has made a comeback of late. Its volume has increased and wine quality is back to what it was before its travails began in 2008. Fratelli (100,000 cases) has gained ground in new markets and has been particularly aggressive in listings at star hotels. The future of Vijay Mallya's Four Seasons wines is uncertain since its current owner, Diageo, has divested its wine interests worldwide and is probably just waiting for the right price to sell the winery and its brands.

The only international players to have invested in wine production here are Seagrams (now Pernod Ricard, which owns Chivas Regal, Absolut vodka and Jacob's Creek wines), which had set up a winery near Nashik in 2005, and Moët Hennessy (champagne, cognac and Glenmorangie), whose Domaine Chandon facility at Nashik began operations in 2015.

Wines I've been drinking: A whole lot of Indian wines, actually, at the recent Wine Festival organised at the Bangalore Club. There were 15 stalls spread across the spacious lawns that included almost all wineries of note. Members could taste five wines for a paltry Rs 200. My picks: the Chandon brut rose sparkling (shiraz or pinot noir, Rs 1,400), Grover's Vijay Amritraj Reserve white (viognier, Rs 1,395) for the whites and Krsma K2 (cabernet sauvignon, Rs 750) as well as the SDU Reserve Syrah (syrah, Rs 900) among the reds. Try them all sometime.

Cheers. />

Alok Chandra is a Bengaluru-based wine consultant

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