Did Sula create a wine renaissance in India? || THE A TEAM ||
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When a company goes public via the IPO route, they publish something called the Draft Red Herring Prospectus or what’s commonly known as the DRHP. Typically, it’s a massive tome of around 500 pages. And it covers a whole host of things — the financials of the company, the risk factors, and industry dynamics. Honestly, it’s quite boring to pore through these documents, but sometimes, we pick up some really cool nuggets of information too.
Like this — Indians aren’t oenophiles — a fancy term used to describe people who love wine. Of the $30 billion alcoholic beverage market, wine only has a puny 1% share. Or put another way, the per capita consumption of wine is just 40 ml per year.
Yup, 40 ml!
For context, the world average is 5.45 litres of wine per person each year. Even the Chinese who aren’t really big wine drinkers gulp down 1.56 litres per year. So winemakers are hoping we’ll get close to that figure at least. But it’s quite unlikely that we’ll get there anytime soon. The country is pretty big on hard spirits such as whiskey and this category accounts for 70% of liquor consumption.
And there’s a reason why Indians tilt towards spirits — we can point fingers at colonisation.
See, when the Portuguese and French came over to India in the 16th century, they brought wine. But soon, the British turned up and brought their spirits along. Indians watched these folks sip on whiskeys and gin and it simply remained part of the system long after the Brits left. We just couldn’t get rid of this colonial hangover.
But then, the 1990s rolled around. And companies such as Grover Zampa and Sula Vineyards stormed into the scene. They wanted to change India’s drinking habits. And even though you might not think that a 1% share of a customer’s wallet is much success in 2 decades, it’s better than 0, right? Because back in 2000, all the wine was imported. People only sipped wine at 5-star hotels. That’s where 95% of the consumption took place.
Today, the numbers are very different.
84% of the wine is grown domestically. And just 25% of the wine is consumed at fancy hotels and restaurants. People prefer to pop up a bottle, settle down on their couch and sip it while enjoying a movie night with friends. Things have changed.
Sure, a part of it is because imports of foreign wines attract a tariff of 150% of their value. It’s exorbitant and it’s expensive to drink a bottle of French or Italian wine.