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August 2010 - Posts
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The situtation
But barring old favourites like Grover La Reserve and
Dindori I cannot imagine readily settling for an Indian option. So how can I
blame the restaurants for Aman Dhall’s second gripe: they stick Indian wines
right at the back of most wine lists, like after-thoughts. Or they put just
selections from the two 'veteran' labels left in India – Grover and Sula.
One can be churlish and blame the Big Two for keeping out newcomers
from the wine menus but we all know that if restaurants sniff a demand, they
will make sure they have it at hand. But it’s a chicken and egg conundrum.
If there is no liquor advertising, how will most consumers know how many Indian
labels are available in the first place? And if they don’t know what to
ask for, how will restaurants be persuaded to stock a wider range of Indian
wines?
What we as wine consumers should do... First, ask restaurants why they have so few Indian wines on the
list, and that too tucked away in a corner. Point out that every wine producing
region in the world gets the support of the hospitality sector: Californian
restaurants, for instance, list Napa and Sonoma wines first, rest of the US next
and the world after that.
Even a Johnny-come-lately wine producer
like Britain has its restaurants pitching in with the communication effort.
Then the second thing we can do comes into play: give a feedback to
the winemakers and restaurants about the wines. That would help them finetune
their product. The winemaker from Tarapaca, for example, told us how they are
going in for steel vat ageing for some of their wines keeping in mind what
today’s drinkers want.
Only when they hear from the consumers
will they know what tasted good, travelled well, and what didn’t; service
and storage issues will also be sorted out.
If enough people pose
that question and also give their verdict, restaurants might venture to stock
some labels from newer producers, see which sell, and then recalibrate
accordingly. And Indian wines would know that we care.
More: Economic Times
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Scientists at the Central Institute of Subtropical Horticultural
Research in Lucknow have produced wines using three types of mango
native to the local state of Uttar Pradesh -- the Dussehri, Langra, and
Chausa.
In Lucknow, institute director H. Ravishankar believes that it will
"surely be a big draw with all fond of good liquor," and hopes to ink a
deal with a commercial wine producer. Wine specialist and president of Delhi Wine Club, Subhash Arora, sniffed at the proposed new brew. "It
is certainly feasible to make wine from mangoes," he said. "The issue
is the quality, flavour, spoilage and marketing. This will be a niche
market at best and unless the basic wine market develops, there is not
much scope. "Himachal Pradesh (in northern India) already makes
fruit wines and barring apple wine, others are barely drinkable -- if at
all."
More: Google
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Rajeev Samant tells me that the richest rural areas in the world are the ones that
grow grapes! From South Africa to Argentina, from France to Germany. Power to the locals!
Most of our
workers come from backward classes. They used to sit on rubber tyres all
day and catch fish. We brought them over and taught them wine making.
During our first year, one of our guys left us to work in a petrol pump.
He came back within a month and from then on, no one from here has ever
gone to work away from home!” Last year, Sula Vineyards shipped 260,000 bottles. Today we employ 400 people. We
buy from 1,500 acres of vineyards that employ 2,000 people. This year we
will do about Rs. 100 crore in revenues. We will probably go to 5,000
acres within the next five years.
More: Forbes India
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 The state government has cut a sorry figure, going by the tough time Tamil Nadu's first domestic winery, Cumbum Valley Winery is going through. R Raghu, the winery's chairman has all but given up, given the government's penchant for putting up one hurdle after another for the state's fledgling domestic wine industry.
Raghu is primarily a major manufacturer of printing ink, and took to the wine industry after seeing a programme about wine production on BBC, some 17 years ago. Tamil Nadu's Cumbum Valley has a great climate for vineyards which allowed Raghu to nurture the dream of starting a winery in his native place.
He got a permission to start his winery when Jayalalitha was the Chief Minister of Tamil Nadu. Since then the government has changed twice, and not for the better in terms of support for the local wine industry.
Over the last 17 years he collected over 200 acres of land for the winery, engaged Frederic as his winemaker to manufacture world class wines and arranged for TASMAC outlets to market them, yet, none of this seems worth the effort given the government's current excise policy.
The liquor department is indirectly steering Cumbum Valley Winery to consider closing down:
- Tamil Nadu Liquor Department is the sole buyer for Cumbum wines and it has set the selling price as Rs. 180 per litre, even as the cost of production is Rs. 256 per litre. A non-sustainable business model, you would say.
- Label registration fee in Tamil Nadu is steep at Rs 2 lakh per bottle.
- Bottling for another state is not permitted.
Cumbum Winery will have its wines ready in 6 months, but the prospects of sustaining the winery look bleak. UB's Abhay Kewadkar wanted to help by bottling some of the wine, but state excise policy would have none of it. Selling to the govt. of Tamil Nadu means incurring a loss of Rs 76 per liter!
After 17 years of working towards the dream project, R. Raghu seems to have run against a dead end, thanks to the state government's apathy. Since he is a pioneer in his state, he has no local lobby and no local support. Chateau Indage helped him make a presentation to the liquor department about the potential of the domestic wine industry, yet the department is happy counting the money coming into its coffers from imported wines. Repeated visits to government offices have yielded nothing worth looking forward to. They present one roadblock after another to keep the pioneer winery from progressing.
Rumour has it that since the state government of Tamil Nadu makes lots of profit by controlled selling of liquor, other governments are ready to take a few lessons from it. Consequently, the government of Maharashtra which otherwise has a reputation for supporting the domestic wine industry might think of replicating Tamil Nadu's controlled liquor sales. We hope this remains a rumour only!
If state governments do not support local producers, it results in undermining the potential of the Indian wine industry. It took Sula to pioneer the wine industry in India, Maharashtra and Nashik. The governments of Bihar and Madhya Pradesh are encouraging the local wine industry. Tamil Nadu's Cumbum Valley could be developed as well as the Sahyadris of Maharashtra, or Nandi Hills of Karnataka.
What keeps Tamil Nadu shy of supporting domestic wineries even as they make profits from foreign imports, is a question that holds the answer to Cumbum Valley Winery's future.
for Indianwine.com
Venki
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The wine industry may not be the most
polluting industry in the world, but in Rajeev Samant's view, every
business should be thinking about how to minimise its footprint. Since its inception, Sula has been working
to integrate a wide array of measures at its own 240-acre vineyard and
winery to minimise the environmental impact of its farming, processing
and distribution practices.
These include the use of solar water-heating to meet the winery's hot
water requirements, insulation of its wine-chilling tanks and
energy-efficient lighting to minimise energy use, as well as greywater
recycling and water metering, with targets to cut down on water use
across all operations. Sula has an expanding bottle-recycling program
too, and a growing suite of water-harvesting and catchment structures
across the vineyard, which combined have a storage capacity of more than
30 million litres.
Similar efforts are being made to minimise use of pesticides. Having significantly reduced, and in some
cases removed, the need for artificial pesticides, the team uses natural
alternatives, such as copper, sulphur and biological pest control,
alongside a careful pest-monitoring system, where individuals are
assigned 15-acre blocks, which they monitor plant by plant for two hours
daily.
'Where there is a need for pesticide we keep it to a minimum, making
spot applications only on individual plants,' says Dr Neeraj Agarwal,
vice president of vineyard operations, and resident viticulturalist. Sula is now looking beyond its own vineyard
and winery to support the uptake of these sustainability measures by the
surrounding 200 growers, from whom it sources 80 per cent of its grapes
- another 1,000 acres of land. Although a number of growers in the region
have implemented some measures to reduce their environmental impact,
such as reduced pesticide spraying, nothing to date has been done in
terms of a concerted effort, which is what Samant wants to see happen
next. 'All of our growers should have a code of practice, and beyond
this we need to start looking at collaboration across the industry
through the Nashik Wine Association, or even the National Wine Board.'
More: The Ecologist
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Launched in Mumbai-Pune by Ideal Hospitality,
Aromas has opted for non-exclusive tie-ups with wineries and reworks its wine
list every six months.
"Wine is the main driver for customers. At our
Powai outlet, where the catchment has a large expat population, people frequent
the place because they know the Australian brand and are familiar with the
concept of wine at a coffee bar," said Jayant Mhaiskar, chairman and managing
director, Ideal Hospitality. While food and coffee are the maximum revenue
earners, the higher footfall is due to the presence of the wine, Mr Mhaiskar
added.
Aromas, which has three outlets in Mumbai and two in Pune,
plans to add two more to its Mumbai number and open its account in Delhi by
October. More: The Economic Times
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After the sluggish two years because of the Mumbai terrorist attack coupled with recession, the Indian producers are upbeat about growth this year despite no concrete steps taken by them or the government to take advantage of Commonwealth Games in October, with most admitting to a 50% growth in the Apr-July period, writes Subhash Arora.
‘We have achieved a growth of more than 50%,’ says Rajeev Samant, the CEO owner of Sula, the leading producer. It seems the set target of 350,000 cases as compared to last year’s 250,000 cases is quite achievable. Of course, Sula has the advantage of servicing a much wider base of wine drinkers, from the low end fortified ‘Port’ to the high end Dindori Reserve with labels for people on the budget, like Samara and Madera being a part of the portfolio.
After going through a rough patch, Grover Vineyards also appears to be on the growth trajectory with a growth of 51% already achieved during the period as confirmed by Aman Dhall of Brindco, a partner heading the domestic and export market. This has been despite an acute shortage of their signature La Riserva red 2007 which was released only last month. The target of 100,000 to 110,000 (that would be a record performance) cases is within their sight, if all eez well with their quality and they are able to avoid the shortages due to non supply.
Indage is also slowly getting out of hibernation after restructuring and infusion of capital. Although the company is avoiding issuing any fresh statement due to a heavy dent in their credibility earlier, reliable sources say that the preliminary work of getting wines into the market has started. It has suppliers with wine in the tanks, waiting optimistically for the last couple of years. Their own inventory has been gathering dust and it is a matter of weeks before they will be in the market. Despite financial and distribution glitches (eg., their Delhi distributor is already marketing Sula wines now ) they will soon make a comeback. The support from their Thachi winery in Australia would also play an interesting role in the comeback trail.
UB is also reinforcing their distribution strategy but are reluctant to give any estimates of growth. ‘We had just got our distribution system in place and started selling wine during the period last year, so the percentage growth would not be directly relevant. But yes, we are looking at a very good market and are confident to meet the internal targets set by the company,’ says Abhay Kewadkar, UB’s Head of Wine Division and the Chief Winemaker.
Vinsura, Zampa and other players in the over-10,000 case range are also quite optimistic about the current year with Vinsura announcing an aggressive plan to increase the sales many fold. Vintage, Miazma and York are working on the long term basis with an eye on the future rather than a major thrust on the growth this year, but the optimism shows in their body language. Chateau Banyan, despite the handicap of being a liquor company’s satellite company has the backing of funds and passion of its chairman Paul John and hopes for a growth of over 30-40%. Chateau d’Ori has been strapped for cash like other producers but finds a ray of hope during the current year with their CEO owner Ranjit Dhuru being upbeat after a couple of years of misery.
Newer players are also expected to add to the numbers-just like UB. Good Earth Winery is in the market for the first year and is satisfied with small numbers at higher prices-focusing on the dormant and invisible ultra premium wine market. A new relatively unknown Goan company Tonia winery with a huge market of fortified ‘ports’ and still wines, plans to sell over 15,000 cases of the newly added wines. Mario Sequeira the partner plans to enter the Capital on his very first attempt to conquer the northern market despite high excise duties and procedures and has set target of around 20,000 cases. The Indo- Italian JV, Fratelli wines plans to get a small piece of the action this year too as does Riona Wines which has been selling Italian wines but slow in the Indian wine production.
Karnataka may not be the dark horse anymore-besides its champion stud Grover; several wineries like Humpy and Kinwa wines are placing bets on their being successful in selling significant numbers with many new producers turning out a few thousand cases in the local market at lower excise duties.
With the increased optimism comes the requirement of funds to finance the growth. According to a media report Sula Vineyards which has raised funds from several investors, including the Private Equity firms GEM India Advisors and Haystack Investments Ltd, in the past, is already looking for funds to set up new wineries to add a few million liters of capacity. Rajiv Samant did not deny the report to delWine although he declined to share the details since the talks were still immature, he said. Grover has been reported to be also in touch with investment bankers to take the company to the next level as internal accruals or investments from own resources do not seem to be feasible. Even smaller companies like Chateau d’Ori are feeling the pinch of the recession and are looking for funds in order to pursue their expansion plans.
There are still a few producers like N D Wines, Flamingo and Renaissance who do not seem to have come out of the gloom, but Indage and Sula may change that scenario for them soon with their increase in demand-provided they are able to offer products of acceptable quality.
With an expected growth of around 35-40% as compared to last year, the producers may well be singing at the end of the year,’ happy days are here again! Let’s drink wine to say Cheers again!!
Subhash Arora
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 As the grape-crushing season began early February, expectations are that it will be about 10,000-16,000 tonnes, yielding 62.5 lakh to one litres of wine, according to an estimate.
With an estimated two crore litres of wine lying with wineries across Maharashtra, the country’s leading producer, it’s no surprise that sentiment among wine makers is subdued despite increased sales over the past couple of months. Turning adversity into an opportunity, some wine brands launched low or affordablypriced products, and expectations are that the positive sales trend will continue this year also. More low-priced offerings are expected to hit the market as wineries try to empty their tanks.
The unseasonal rains in the country’s major grape-growing area of Nashik during November have hit the harvest by close to 40 per cent. This will mean there will be fewer grapes to crush just when wineries are not too keen on crushing. With rates having dropped and output hit, more farmers might be able to sell their produce to wineries since the contracted grape growers could fall short. He added that the current situation of excess wine could translate in the next couple of years into a shortage.
India’s wine market for products priced over Rs 600 per bottle, including imports, covers 25 lakh bottles. The liquor-to-airlines conglomerate, UB Group, which has a winery in Baramati, expects to start crushing by the end of February.
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