Cautiously optimistic, Indian wine industry looks to 2010

SIWC WinnersWhat a difference a year makes. At this time last year, India was reeling from the Mumbai terrorist attacks. The sudden drop in tourism-related revenue plus the downturn in the economy hurt the wine trade. And now industry insiders are projecting that the wine industry is poised to make a strong comeback. Shiv Singh reports on the changing landscape. (Pictured are SIWC winners who stand to gain as the demand bounces back)

In the last year, a major player in the Indian wine scene, Indage Vintners has found itself in a financial crisis. Other local producers have seen demand for their wines dry up as Indians have chosen to eat out less and drink fewer bottles of wine at home. Producers have even found themselves with significant surplus stock idling away in warehouses. In fact, barely six months ago, Sommelier India reported that a staggering 2.12 crore litres of wine was lying unsold across vineyards in Maharashtra. This was also because 800,000 litres of wine from the previous year remained unsold. Industry consultants who had earlier been hyping wine consumption trends suddenly turned on the industry itself. Times were bad.
But every cloud has a silver lining and it certainly seems that way today. In fact, some industry insiders whom we’ve spoken to believe that the clouds are dissipating. The recently published report, “Indian Wine Industry Forecast to 2012” indicates that once more wine consumption in India is expected to grow by 25-30% annually between 2009 and 2012. International producers who had stopped visiting India have started returning once more (Sommelier India has gotten as many calls in the last month for requests to partner for wine events with international producers than it had in the previous six months) and more winemakers than expected from across the world chose to participate in the Sommelier India Wine Competition largely because they now believe once more in the potential of the market (over 400 wines were entered).
Here are some other proof points – Jaideep Kale, technical co-ordinator for wine industry with the Maharashtra Industrial Development Corporation, told the Times of India that the production of wines fell from 2.32 crore litres in 2008 to 1.32 crore litres in 2009. He expects it to increase to 1.35 crore litres in the 2010 crushing season. He is quoted as saying, “This will balance the availability and demand in the market. This year’s wine grape plantation is 6,000 acres and the grape growers have an added opportunity to send grapes to four new wineries that opened this year in Karnataka and one in Tamil Nadu.” Keep in mind that those numbers are production numbers alone and do not account for existing stock or the importing of foreign wines.
In the same article, Ravi Jain, managing director of Valle De Vin, who launched a sparkling wine last week said, “With the economy improving, there is increased consumption of wine and the tourist inflow also seems to have improved,” adding that his company wants to produce 300,000 bottles of wine this crushing season, which begins early 2010.
In a different story for MINT, Rajeev Samant of Sula Vineyards said, “Although sales declined in the first four or five months of the year beginning April, the last two months have been superb”. The winery said it sold 30,000 cases of wine in October, up 50% from 20,000 cases sold last October. Grover Vineyards and Indage Vintners share similar optimism in their outlook for 2010.
One factor has fundamentally changed though. There is more interest in the below Rs 300 wine market than ever before. More Indians are trading down to cheaper wines and as with other purchases are getting more value conscious. This trend mirrors the US where the greatest growth in the last twelve months has been in the $3-$7 per bottle range.
A year certainly seems to have made a lot of difference. It is probably too early to pass judgement on the changing landscape (especially with taxation shenanigans that never seem to end). One thing, however, is for certain, wine producers and importers alike are much more bullish about the Indian wine scene today than they were a year ago.

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