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India wine industry overview and outlook:

  • India was nowhere on the global wine industry map until the Sula winery off Nashik in Maharashtra caught the attention of wine connoisseurs in recent years and emerged to become the first Asian winery outside China to sell 1 million cases in a year
  • The country’s wine sector is more than a decade old with a total production is nearly 2 crore litres annually and consumption stands at 1.5 crore litres per year. Exports barely account for 10% of the total production; however going forward the potential for exports look favorable and is likely to grow at a faster pace. There are around 110 wineries in India, including 72 in Maharashtra.
  • While the domestic wine industry has an annual turnover of just Rs 600 crore now — global wine sales were to the tune of $327 billion in 2018 — Sula Wines accounts for over 60% of it.
  • In India, the FSSAI has been following codex specifications. While codex standards are regarding food safety, OIV standards are benchmarks for correcting the faults in wine and improving the quality of wines.
  • The new labelling standards for Indian wines come at a time the global industry is poised to enter a high-growth phase after several years of stagnant growth. Global wine industry grew at a CAGR of 2-3% during 2013-19; this is likely to increase marginally in the coming years.
  • The new norms would mean that there are proper definitions of red wine, white wine and wine producers would also be required to share details about the root stock that goes into the making of the wine, and is likely to bring in standardization in the industry.
  • Wine production in India may fall 20-25% in 2020 owing to the reduction in availability of grapes following the erratic monsoon in 2019 as well as due to COVID-19 related lockdown. For the larger players, wine sales have remained more or less constant while the rest of the industry saw declines in FY20.

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Market Growth Drivers and Trends:

Most primary factors driving the Indian wine industry are:

  • Increase in wine tourism; Sula Vineyards which makes over a million cases a year gets 350,000 visitors a year to its winery
  • Health benefits associated with moderate consumption of wines
  • Rising exposure to new cultures, western concepts
  • Demographic shifts – large younger population 

Potential Challenges: 

Key factors likely to restrain or slow down growth in the wines industry in India:

  • Slowdown in the economy and resultant lower discretionary spending
  • Government policies, treating it on par with liquor – higher taxes deterring large-scale consumption

Market Players Perspective:

  • Wine production in India is concentrated in the states of Maharashtra (85-90%) and Karnataka (5-10%), while Goa and Himachal Pradesh represent less than 5% of output
  • Sula Vineyards, which holds a 60% market share in the country’s wine segment, has introduced its eight-year-old brand Dia Sparkler in a 330 ml can
  • Industry leader Sula reported no growth in overall sales for the first three quarters of the current fiscal. Despite extending various schemes to push sales, wineries could not succeed much in getting consumers during the festive season.

India Wine Industry Research Scope: 

  • The base year of the study is 2019, with forecast done up to 2024. The report provides a detailed assessment of the Indian wine industry, including insights on the market dynamics, key drivers, challenges, regulations impacting the market, and value chain analysis.
  • We have also estimated the current market size in India and by wine type/segment, by region, by distribution channel etc.; 5-year outlook of the market, factors driving growth along with regional insights and trends
  • The study also presents a thorough analysis of the competitive landscape, considering the market shares of the leading companies. These provide the key market participants with the necessary business intelligence and help them understand the future of the Indian wine industry.

Author – Prasanth R Krishnan
Associate Director – Operations
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