India's wine market is all set to uncork the bubby and raise a toast to some sparkling growth. According to industry estimates, the wine market is all set to hit Rs 2,000-6,000 crore by '10-'15. For a segment that's currently clocking just short of Rs 400 crore, that's something to say cheers to.

Liquor analysts say the wine mart's growth graph, pegged at 30% last year, may double in the next four years and settle down to a still heavy 24% thereafter. In value terms the industry has grown from Rs 200 crore to Rs 300 crore in two years and is tipped to hit Rs 1,000 crore by '08 say liquor industry sources.

There's a reason why wine watchers are betting big on the Indian market maturing by '10. For one, the segment grew at a heady 25%-plus per annum over the last three years. For another the per capita consumption of wine in India is still fairly low 0.07 litre per annum.

So the growth graph, say sources, should continue. Says Rajeev Samant, MD, Sula Vineyards: “This year the market should hit 850,000-900,000 cases. But even thereafter we expect at least 25% plus growth for the next five years.”

That's a huge jump for an industry that moved up from 400,000 cases to 500,000 cases only last year in the Rs 200 and above segment. The lower priced wines comprised another 100,000 cases. Indeed the growth has been so giddy that a slew of MNC players are preparing for a local wine foray.

First Seagram India got into the wine business then private equity players made a beeline for local wine companies. Kyndal India, Whyte & Mackay's 100% wholesale trading subsidiary in India, has also entered the wine segment with a clutch of local as well as international brands in its portfolio.

And global liquor major Diageo, which has just allied with Radico Khaitan, has indicated it is looking at India's wine sector. Says Siddharth Banerji, director, Kyndal India: “We have already launched three brands with locally sourced grapes - 30th Lat, Flamingo and Trinity-spanning Rs 250-550 price range. And we have sold 20,000 cases in less than a year.”

However, not too many people expect the wine bubble to turn pricey overnight. Currently at least 50% of the growth in the industry is in the Rs 200-400 price range. And that, says Samant, should continue. Till the duty structure makes imported wines competitive price wise.

By
Nandini Sen Gupta & Chaitali Chakravarty

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Source: The Economic Times