Wine makers struggle to uncork sales amid falling demand
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 wellheeled 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 wine producers and importers grapple with—when you talk to consumers, everybody seems to say we love wine and are switching over to it. Yet, the numbers don’t stack up,” said Sonal Holland, a Mumbaibased wine 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 dissipated. Wine, like other categories, has also bounced back. Volume sales at Sula Vineyards Pvt. Ltd, India’s largest winemaker, rose 15% in FY18. They were flat in FY17. “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 onethird 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.