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October 2009 - Posts
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Twenty Six years back Grover Vineyards took it upon itself to revive the art of wine drinking in India. Unlike its competition, it shuns ordinary table grapes, preferring French wine grapes for producing one of the best Indian wines.
 With a portfolio comprising of- La Reserve, Cabernet Shiraz, Sauvignon Blanc, Viognior Clairette and Shiraz Rose, Grover Vineyards Ltd., is seeing its wines growing more and more popular each year. “La Reserve is not only our flagship wine but one of the most appreciated wines from the portfolio,” Says Kapil Grover, scion heading the eponymous firm.
Needless to say, wines have come of age in India more so among all age groups, stressing his passion for quality, says Grover, “Our objective is to become number one in both the red wine and white wines. It has been the general belief that Grover’s La Reserve is no. 1 in red wine and Sula wears the crown for the white Sauvignon Blanc (an opinion endorsed even by delWine till a couple of years ago before a few newer serious producers threw their hat in the ring too). I want to be the quality leaders for both red and whites.”
Asked about the fastest growing brands in his company’s portfolio at present, Grover informs, “We try to maintain that growth across all brands. Our largest in terms of volume is the Cabernet-Shiraz. I believe that if we went by market demand, the La Reservè would be the fastest growing brand in our portfolio.” However, he stresses, “We cannot grow at the rate demanded by the market, especially when it comes to the production of La Reservé, because we need to maintain the quality for which we are known.”
Grover Vineyards has already doubled fermentation capacity, which will thereafter be trebled to 1.8 million litres near Bangalore and 300,000 litres in Sangli, Maharashtra. The firm has invested Rs 4 crore at the main winery near Bangalore and Rs 1 crore at the unit in Sangli. On the issue of percentage growth coming along in the company in comparison to last year, Grover feels it is growing well. “We are trying to sustain the same growth year- on-year and we have grown by 25 per cent since last year.”
On the turnover of the company in terms of sales volume the winery produces 1,200,000 bottles a year. Moreover, 30per cent of Grover Vineyards production is exported to more than 10 countries and appreciated in some of the world best restaurants. A growth of 25-30per cent year-on-year is expected. “Very recently, we unveiled the Art Collection,” says Grover. “As you may be aware that Grovers believe in innovating itself from time-to-time. We thought of being creative and thus by applying-out-of –the box thinking, the wine-art labels were created. Each wine label is a work of art that is conveying the vision, story and character of the best winery.
Besides the Art Collection, we are working on improving our wines too. Other than the Art Chenin and Shiraz, there are no new products on the slate, says Grover. “We believe that we are quality players, and each year strives to produce a better quality than the previous year. We are focusing on our Vineyards, and upgrading the technology throughout, so as to produce grapes of better quality.”
Speaking about the expansion of production capacity in the near future, Grover is very bullish. “We have recently invested in a new barrel room and have increased productivity. I Do not think we are looking at any increase in the same in the near future.” The aim of Grover Vineyards is not to be a mass producer, in fact, we are a boutique, and familyowned winery with emphasis on quality.
The latest additions to the company’s portfolio include The Art Collection, which comprises of - Sauvignon Blanc, Viognier, Cabernet Shiraz, Shiraz Rosè and the company’s flagship wine- La Reservè packaged with new art labels is the latest addition. “Very soon, we would be introducing Chenin Blanc & Shiraz as an addition to the Art Collection, says Grover.
Commenting on the current trends that he sees in the Indian market relating to consumption of wine, Grover feels, wine has become famous as a culture with few states and as an entertainment in various part of the world. India, though, new with the age old wine culture is in its phase of transition. Winemakers of all sizes, from international spirit giants to home brewers see huge potential in India’s booming market. And, the current scenario only determines the success of wine in the Indian beverage industry in the coming years.
Stressing on the major constraints that the domestic wine industry is facing in recent times, Grover informs that there are few obstacles that the wine industry and wine-makers are facing at present.
The very first and foremost being- education on wine at all the levels of supply chain, on the product knowledge, storage, transfer, service and consumption of wine is lagging in a big way.
An inadequate knowledge in terms of technology used for the growth of superior quality of grapes leads to slow progress in this area which makes the process time consuming and cumbersome, feels Grover. Other than this, one needs to work even harder with the quality of grapes available in India. Last but not the least- the absence of uniformity in the laws, duties and taxes levied on the wine industry is very discouraging for the growth of this industry. Since alcoholic beverages are a state subject, each of India’s 29 states has its own rules & regulations and duties & taxes.
There seems to be a drop in sales in almost all industries at this time of recession, Grover urges. We are looking forward to the recovery of this global virus and hoping for a bright future of the Indian wine scenario. The company has increased production and has laid immense emphasis on giving its customers great quality wines. India is still at a very nascent stage as far as the wine economy is concerned. “I believe that it is most important to introduce entry level wines which are reasonably priced so that it attracts the new consumers and encourage them to adopt wines,” informs Grover.
“We use & cultivate the following grape varieties: - Cabernet Sauvignon, Shiraz, Sauvignon Blanc, Viognier and Chenin Blanc.”
Wine import in India is not an easy business, Grover feels. In fact, there are a lot of new entrants who have come and gone. The taxation policies along with the storage facilities are conditions that make it difficult to sell quality wines in India. There is a good future for imported wine brands in India, and with the support of the government we can hope to have a great wine market
http://www.ambrosiaindia.com
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With the company’s roots at the prime distillery plant in Bangalore that has vested in it a production capacity of 300,000 cases per month, John Distilleries Ltd, A Paul John enterprise, also has its own distilleries at Goa and Chhattisgarh. These apart, there are several associate plants including four plants in Andhra Pradesh, two in Kerala, one in Pondicherry and more at Haryana, Punjab, Bihar and Himachal Pradesh, thus heralding the Group’s recent entry into India’s northern states as well.
Constantly driven to endeavour new venues and achieve newer heights, Paul P John, the Chairman of the acclaimed Kumarakom Lake Resort, Kerala, India known for its finesse, is the brain behind this company. Undeterred focus has led him to venture into India’s lucrative wine market with Chateau de Banyan, a company that has forged international associations with renowned Italian winemakers to bring out premium wines into specific cities and high- end locations across the country.
On his company’s fastest growing brand portfolio, John informs that Chateau de Banyan currently has a single brand, Big Banyan Wines, which is doing well across South and Goa. “Under Big Banyan we offer 5 single varietals; 2Whites (Chenin Blanc and Sauvignon Blanc) and 3 Reds (Zinfandel, Shiraz and Cabernet Sauvignon,” says Paul.
Over the last year Big Banyan has grown at an impressive rate of 52per cent and the turnover of the company has been approximately INR25 million at retail market value for the financial year.
John stresses that Chateau de Banyan is committed towards providing international quality wines for our patrons. Towards this various initiatives like wine education/training/appreciation sessions, for both consumers and F&B service personnel, are regularly conducted. Big Banyan also identifies with a lot of platforms like Arts, Cuisine/Gastronomy, Theater, Music, etc. Several other initiatives like Home Delivery, Online sales, merchandising, wine event management, sommelier services, specialty pairings, wine gifting, etc have also been launched.
At present the wine industry is going through volatile times, John feels. There are certain recommendations pertaining to effective marketing and popularisation of wines, which are at Govt. policy draft stages with various state and central governments. As such we would wait and watch and would plan or invest once there is further clarity on the policies governing wines and their sale in India.
“As mentioned, Chateau de Banyan is committed towards creating a brand for our wines and thus a lot of effort and investment in establishing and creating a brand are under way, we do not plan to launch any other brand per se but more varietals under Big Banyan portfolio as and when the right fit and opportunity arises,” says John.
From the producers point of view; the Indian wine industry being in its nascent stages is undergoing a lot of interesting activity, whereas on one hand big names have entered the fray and a lot of smaller players have appeared and then vanished from the radar, he feels. The industry is a very intensive and serious one and only the most dedicated will stand here in the long run. We noticed that seeing exponential growth potential too many players entered the fray without having either the technical expertise, passion or the financial backing for a long haul and this resulted in a deluge of brands in the market for the short run which naturally upset the organic and balanced growth potential for serious brands, but again this is a short term phenomenon and a correction is imminent in the next 2-3 years.
From the consumer’s point of view, we think that the percolation of wine as a healthy beverage has still not happened to the 2nd level of the market pyramid, informs John. There are a lot of myths, misconceptions and unnecessary aura created around wines which naturally limits the willingness of nouveau wine drinkers to engage with this beautiful beverage. Wine education, as we have seen is a slow but a very effective mode of transformation only that it needs to be done on a much wider scale which is beyond the purview of any one single company and has to be taken forward as an industry only.
Since wine is an acquired taste with some much personalisation, if the noveau wine drinkers are not exposed to wines in a phased and a planned manner, chances are that she will not take to wines are quite high.
As far as marketing statistics are concerned, cheaper wines and ports still constitute a major chunk of the wine sales in India and that is probably why it inflates and exaggerates the overall potential for premium wines, a misleading statistic that we think has caused many a players to read the market potential wrong and burn their fingers.
Indian consumer is evolving and taking slowly to embracing wines, she just needs a little more time and authorities will have to do their bit by making it much more affordable than it presently is.
According to John the major constraints that the domestic wine industry faces in recent times include:
Lack of wine awareness amongst consumers; Improper market potential assumptions; Unwillingness to adopt a long term strategy; Wine producers are a fragmented lot, they need to rise as a fraternity; Impractical short term sales strategies like over the top discounts , trade schemes, freebies have started to erode the value of all concerned and the producers are forced to be played around by the trade just because of a handful players who are mostly in for a short haul; No uniformity nationally on taxation and levies; No laws or codes governing manufacture of wines and growth of grapes, resulting in India as a whole suffering from an identity crisis for its wines in the international arena. John emphasises that viticulture and enology should be brought under the ambit of agriculture ministry which will allow it many an advantages to establish and continue the growth.
Asked about the drop in sales, John stresses that there has been no drop in the sales of Big Banyan wines. However, overall, there has been a reduction in the volume of wine sales due to the increase of duties on wines, which has made a lot of quality wine unaffordable for the average consumer, says John. The consequent increase in spends and promotions by all companies, including ours, has lowered the profitability of the entire industry. However, with the quality conscious consumers opting for brands like Big Banyan, our sales have actually grown and that has offset the effect that we would have otherwise faced due to the extra spends.
The slowdown in the economy has made consumers more conscious on spends and there has definitely been an impact on the wine industry, which sadly is still considered as a luxury and has some time to percolate to the main stream beverages. In our opinion the momentum for wine growth should be maintained, as it is a relatively new concept in India and for these regulators will have a major role to play in rationalizing the duties and levies and in changing the perception of wine as separate from Spirits.
The major components of cost to consumer are the levies and duties. This places premium brands with a higher costing under pressure and some companies prefer to flank and hedge their portfolio with cheaper brands.
We are experimenting with a lot of grape varietals and quite a few grapes have the potential to be grown in India, reveals John. The grapes that are most popular and that seem to have taken to the Indian climate well are Chenin Blanc, Sauvignon Blanc, Zinfandel, Shiraz and Cabernet Sauvignon.
Imported wines already constitute approx 20per cent of the total wines in India. The market trends indicate year on year growth of approximately 20per cent for imported wines over the next few years and the future is surely bright. That being said, the current slowdown for the industry will most likely hit new importers, especially if they intend to import wines that are not global brand names.
Even though most of the imported wines are of bulk wine stature in their home markets, they offer higher perceived value to the consumer, due to the imported tag. Most of the premier wine labels are yet to make their way into India. The ideal way for importers, given the current industry scenario, would be to partner with existing market players, bring in high quality wines, and invest in the market today and to look for profits in the long term, he concludes.
http://www.ambrosiaindia.com
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