Nilaya from Diageo dries up. Leaves Indian market
In another sign that the Indian wine market is contracting with the global economic downturn, Diageo has decided to exit the Indian wine market. They have taken their only brand - Nilaya off the retail shelves and are focusing on their hard liquor business in the country. Nilaya was launched in November 2007 less than two years ago amid much fanfare. Shiv Singh reports.
The question is whether this is an aberration or are we on the verge of seeing a major consolidation in the Indian wine market? At the time of the launch of Nilaya Diageo India MD Asif Adil, "We are proud to present Nilaya which is a bold, unique and an interesting wine meant for a contemporary India. Nilaya exemplifies a cherished lifestyle for everyday living. Nilaya is a celebration of individuality, everyday, everywhere." Since then Roland Abella has taken over from Adi and rumors have it that the decision followed the change of guard at the top.
According to the Economic times, Nilaya, sold less than 15,000 cases last year and was unable to make a dent in the Indian wine industry in a year when total cases sold exceeded one million. This year the market is seen to be shrinking to 900,000 cases. Diageo also had plans to bring Justerini & Brooks to the Indian market and has been selling the Thomas Barton range in Mumbai and Delhi. The question is whether those brands will stay on in the Indian market.
Nilaya wines stood for their wine label designs which were inviting, fresh and modern. In fact, Diageo used a professional design firm for the design of its identity and wine labels at the time. Nilaya focused on a clean international look that yet manages to retain a strong Indian identity.
While this is disappointing news, it is understandable given how much the market has contracted in the last one year. With the central and state governments discouraging the growth of wine in India, decisions like this one aren't too surprising for a new entrant. Regardless, it spells good news for the other wineries who compete at similar price points as Nilaya.
Comments
Another reason can be that the South African wines like Arniston Bay are conquering this market. Maybe the IPL did more for SA wines than people think
I think that Diageo's foray into trying to market 'Made in India' wines had a poor strategic fit with the rest of their portfolio and that the foray was doomed from the start:
* Little attention was paid to WINE QUALITY - there was nothing distinctive about the wines.
* The sales force was (and still is) focussed on their spirit brands, and while could initially gain listings and shelf-space for Nilaya, had little time for something they did not understand (and which got them little revenue).
In contrast, Seagram (now Pernod Ricard) has invested behind the category, so all company personnel are committed to making Nine Hills a success.