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The Indian wine industry and its immense growth potential.

Good pickings: Indian wines are grabbing global attention.- M. PERIYASAMY
Good pickings: Indian wines are grabbing global attention.- M. PERIYASAMY

Gagandeep Kaur

We believe that the Indian palate is becoming more adventurous about wine, and the next two years will see a dramatic rise in the different types of wines produced domestically," says Rajeev Samant, CEO of Sula Vineyards.

The company, one of the pioneers in the country's wine industry, opened its first winery in 2000. Today it has more than 300 acres under grape cultivation and sells a variety of wines, including a sparkling wine, a Chenin Blanc, a Cabernet Shiraz, a Sauvignon Blanc and a blush Zinfadel.

India's wine capital

The Indian wine industry is on a high with the market recording a growth of 25 per cent every year. With 19 wineries located in Nashik, the city can easily call itself `India's Wine Capital'.

Though it was always known as the `grape city', with the region's soil and climate being congenial for grape cultivation, it was only in the past decade or so that the district has emerged as the country's vineyard.

The wineries have played a major role in promoting the wine culture in India and creating a market where there was none. Maharashtra already has over 1,500 acres under grape cultivation for wine production.

The main reason for the growth of wine consumption in the domestic market is the growing health consciousness among the Indian middle and upper class. "The domestic alcoholic beverage market has historically been dominated by beer and spirits, but with broadening world views and increasing disposable income levels, a growing number of Indians are turning to wine.

The new wine drinkers in the country broadly fall in two categories: first, people who are drinking alcoholic beverages for the first time, and second, people switching over from other drinks to wine. Health is a big factor for people in the second category," says Samant.

There are a lot of whiskey drinkers, who are being advised by their doctors to switch to wine, mainly red wine. New drinkers, in contrast, drink as much (or more) white wine, basically because a lot of these are women who tend to have a natural affinity for white wine.

Immense potential

The potential for wines in India is immense. According to estimates, the per capita consumption of wine in India is about 4.5 ml per year, which is abysmally low compared to France, which consumes 42 litres per person per year, and China, 375 ml per person per year. "Though export constitutes a sizeable chunk of the market, we are focusing on the domestic segment as well," says Vinod Devkar, Manager at ND Wines.

The wineries are actively organising wine festivals, wine-tasting sessions and vineyard tours across the country. For instance, ND Wines recently organised a wine festival in Bangalore. The company also plans to organise similar festivals at tier-II cities such as Pune, Bhopal and Jaipur.

However, the industry is also facing problems, which might affect its growth potential. "India has started manufacturing wines, but there are no cork manufacturers and we have to import cork for the bottles and the import duty on corks is 40 per cent on invoice value. This increases the price of wines manufactured by us, making it difficult to export," says Devkar.

However, the export segment is also recording a dramatic growth with the attitude towards `Made-in-India' wines changing from `OK' to `great'. "The Indian wine has come a long way, and things would only get better. Sula Wines has already started appearing on the list at some of the finest restaurants in France, Sweden Singapore, Italy, UK, US and Canada. The world is starting to take Indian wine seriously, mainly because it is a great-quality wine that is different, new and affordable," says Samant.

ND Wines, on the other hand, exports mainly to Hong Kong and plans to export to Europe as well. The overall turnover of wineries over the last year is estimated around Rs 35 crore.

It is not just the Indian wineries that are fast realising the potential of Nashik as a wine-growing region. Seagram, part of the French liquor major Pernod Ricard, also plans to set up a winery at Nashik and Australia's Foster Group also has its wine plans for the region.

These are indications that there is no stopping Nashik from representing India on the wine map of the world.

(This article was published in the Business Line print edition dated June 23, 2006)
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