Sula Vineyards to expand as Indage Vintners struggles

sulavineyards.jpgWith Indage Vintners in serious financial trouble (employee salaries haven’t been paid in nearly a year), Sula Vineyards hopes to take advantage of the gap in the market by expanding aggressively. Sula’s strategy has three parts – increase acreage under contract farming, increase capacity at its facilities and introduce mid-priced range to attract wine lovers.

According to Rajeev Samant in The Hindu, Sula Vineyards has a 30% market share (the largest) today which it wants to increase. The total size of the Indian market currently stands at 1.2 million cases. Around a quarter of the wine consumed in India is imported from France. Samant further said that Sula is looking to increase production from 45 lakh litre to 52 lakh litre annually driven by a Rs. 5 crore investment. Currently, Sula Vineyards has a 1,500 acres under contract farming and is targeting a 20% growth rate.
With the economic slowdown coming to an end, it is a smart move on the part of Sula Vineyards to expand. With growth in the Indian wine market heavily influenced by the distribution networks and having strong brand awareness, Sula is well positioned to expand its market share. It has both a strong distribution network and a well recognized brand. Two factors that few other Indian wine producers have with the exception of Grover Vineyards.
Sula’s growth plans present a sharp contrast to the challenges faced by Indage Vintners. With its bank account frozen by the sales tax department and employees demanding unpaid salaries, Indage is certainly in troubled times. In fact, Indage Vintners has stopped participating in wine competitions (it won’t be at the Sommelier India Wine Competition) and many of its wines aren’t available in retail.
We hope that Indage Vintners is able to recover from its current financial troubles quickly as there’s enough room in the Indian market for both brands to grow at a vibrant pace.

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