1. WINE INDUSTRY
SECTORAL ANALYSIS
SHASHANK SUBRAMANIAN, POOJA KHATIJA, KAREN DIAS
PGDM- BD 1

2. Table Of Contents
• Background History – Time Line
• Trends
• Consumption
• Competition
• Stakeholders
• Value parameters- Strategy Canvas
• Major breakthroughs
• Company Profiles
• Sources
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3. History of Wine (Time Line)
• Fossil vines, 60-million-years-old, are the earliest scientific evidence of
grapes. The earliest written account of viniculture is in the Old
Testament of the Bible which tells us that Noah planted a vineyard and
made wine.
• Starting about 1000 BC, the Romans made major contributions in
classifying grape varieties and colours, observing and charting ripening
characteristics, identifying diseases and recognizing soil-type
preferences.
• WORLD'S OLDEST BOTTLE of WINE
Unearthed during excavation for building a house in a vineyard near
the town of Speyer, Germany, it was inside one of two Roman stone
sarcophaguses that were dug up. The bottle dates from approximately
325 A.D. and was found in 1867.
• In 1863 the wine industry encountered the YANKEE VINE-KILLER BUG.
This happened because of species of native American grapes were
taken to Botanical Gardens in England. These cuttings carried a species
of root louse called Phylloxera vastatrix which attacks and feeds on the 3

4. • By 1865, Phylloxera had spread to vines in Provence. Over the next
20 years, it inhabited and decimated nearly all the vineyards of
Europe.
• Finally Thomas Munson, a horticulturist from Dennison, Texas,
realized that native American vines were resistant and suggested
grafting the Vinifera vines onto Riparia hybrid rootstocks thus
saving the European wine industry from extinction.
• 1900. Around the turn of the century, the quality of American
wines had reached excellence by international standards, as
testified to by the three dozen medals won by them at the 1900
Paris Exposition.
• In December, 1917, Congress passed the Eighteenth Amendment to
the U.S. Constitution, criminalizing the "manufacture, sale, or
transportation of intoxicating liquors“ and by February, 1919, 45
states had ratified it. New Jersey held out until 1922, and only
Connecticut and Rhode Island ultimately rejected it.
• There was an explosive demand for fresh grapes and a shortage of
refrigerated railroad cars in which to ship them caused prices to
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skyrocket.

5. • Planted acreage nearly doubled from 1919 to 1926. Vineyard land
prices climbed from $200 an acre in 1918 to $2,500 an acre in 1923.
• But this explosive growth was shortlived as in 1925, the railroads
finally had enough cars, too much fruit was shipped and it rotted on
the Eastern docks. In 1926, vineyard land fell back to $250 per acre.
• Before 1920, there were more than 2,500 commercial wineries in
the United States. Less than 100 survived as winemaking operations
to 1933. By 1960, that number had grown to only 271. California
had 713 bonded wineries before Prohibition; it took more than half
a century, until 1986, before that many were again operating.
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6. Global wine industry- trends
The global wine market grew by 3.4% in 2006 to reach a value of
$227.7 billion.
By the end of 2011, the global wine market is forecast to have a
value of $273.1 billion, an increase of 19.9% since 2006.
The global wine market grew by 1.8% in 2006 to reach a volume of
19.4 billion liters.
By the end of 2011, the global wine market is forecast to have a
volume of 21.3 billion liters, an increase of 9.8% since 2006.
(Source: Wine - Global Industry Guide) 6

7. Trends contd.
Still wine accounts for 73.5% of the global wine market´s value.
Europe accounts for 79.5% of the global wine markets value.
Supermarkets/hypermarkets form the most important distribution
channel, with 36.8% of the market´s volume distributed via this
channel.
Import wines gain market share. Wines from Italy and Australia,
now
represent 1 in 3 bottles sold in supermarkets.
The Super Premium category ($7-$14) is experiencing the highest
growth.
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8. Size of the Indian Wine Industry
• The size of the Indian wine industry - $ 26 billion
• Growth in India is at the rate of 25-30% every year in spite of
heavy custom duties (150%)
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9. Consumption
• 2009-2010 the wine consumption in India was only about 13.3
million litres or 1.5 million 9-litre cases at a value of $82 million.
• Annual Per capita consumption was about
• India- 9 millilitres.
• France and Italy- 70 litres, 25 litres in the US, 20 litres in Australia
and 40 millilitres in China.
(Source- cawg.org)
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10. Wine consumption as per Price Structure
Year Domestic Imports Total Growth Units
2003-2004 425,000 74,000 499,000 - 9 Litre cases
2004-2005 515,000 100,000 615,000 23% 9 Litre cases
2005-2006 652,000 137,000 789,000 28% 9 Litre cases
2006-2007 931,000 168,000 1,099,000 39% 9 Litre cases
2007-2008 1,250,000 224,000 1,474,000 34% 9 Litre cases
2008-2009 1,300,000 175,000 1,475,000 0% 9 Litre cases
Price per bottle Domestic Imports Total Units
Under $10 700,00 - 700,000 9 Litre cases
$10 to $19 468,750 48,600 517,350 9 Litre cases
$20 to $29 112,500 87,500 200,000 9 Litre cases
$30 and Over 18,750 38,900 57,650 9 Litre cases
(Source – Wineinstitute.org)
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11. 11

12. Competitors
UNIT LOCATION WEF CAPACITY KL KEY BRANDS
Grover Vineyards Bangalore 1992 500 Grover
Heritage Grape Winery Pvt Ltd Bangalore 2004 300 Heritage Port
Hampi Heritage Winery Bijapur 2006 - Kinvah
Pampasar Distillery Ltd Bangalore - 1000 Golconda ruby
Le Meredien Distillry & Winery Goa - - Donna Maria
Naveen Distillery Goa - - Vinho de Goa
Nita Industries Goa - - Port No 7
Oceanking Distilleries Goa - Mapusa - - -
Pinsons Wine Industires Goa - - Pinsons
Springfields (India) Distilleries Goa 2003 - San Andre etc
Vinicola Goa - Margao 1975 - Vinicola
John Distillers Goa (Cuncolim) 2004 - Goana's
Goa (Margao) &
Vinbros & Co 2005 - Globus, Vinho de Goa
Pondicherry
Associated Wines Pvt Ltd MHR - Baramati 2005 100 -
Baramati Grape Industries Ltd MHR - Baramati 1975 - Bosca
Malhar Winery Pvt Ltd MHR - Baramati 2005 110 Chateau d’Ori
Pyramid Wines Pvt. Ltd. MHR - Baramati 2004 100 Yellowstone
Chateau d'Ori MHR - Nashik 2007 200 Chateau D'Ori
Chaya Winery Pvt Ltd MHR - Nashik 2005 35 - 12

13. India-Major Competitors
• Chateau Indage (Indage Vintners)- 43%
• Sula Vineyards – 33% market share and growing
• Grover Vineyards – 11% market share
• Vinsura – 3% market share
• Vintage Wines
(Source – ImaginMor) 13

14. Source - ImaginMor
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15. Global Players
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16. 16

17. Stakeholders
• Grape Growers
• Fruit and vegetable processors
• Flour and Starch Manufacturers
• Solid Paperboard Container Manufacturers
• Glass and Glass Products Manufacturers
• Wine Manufacturers
• Logistics and Liquor Wholesalers
• Liquor Retailers
• Pubs, Taverns , Bars, Hotels and Restaurants
• Biotech R&D
• End Consumers
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18. Consumer- demographics
% of adults consuming different wines
Categories Domestic table wine Imported table wine Sparkling wine (%)
(%) (%)
18-24 years 13.20 4.70 9.20
25-34 years 20.50 6.30 12.00
35-44 years 23.60 7.50 12.00
45-54 years 24.20 9.00 12.20
55-64 years 21.50 7.10 7.70
65+ years 17.70 4.40 5.40
Females 21.80 6.90 10.90
Males 19.80 6.30 9.30
(Source- Euromonitor, 2009)
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19. Consumer Segments
Source : Nielsen

20. Types of Wine consumed
(Source – ImaginMor)
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21. Value parameters
• Cost, • alcohol content,
• brand/ quality, • location of produce,
• celebrations/ occassions, • preservation procedure,
• vintage, • automation,
• appearance • type of crop (location, GM),
• color, • Clarity
• taste/ flavor- sweet to bitter • Body and weight
• health benefits, • texture- dryness
• complementing foods,
• packaging,
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22. Strategy canvas
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23. Top Breakthroughs
• 1866: Pasteur worked with the wine growers of France, and developed a way
to pasteurize and kill germs. He was granted U.S. patent 135,245 for
"Improvement in Brewing Beer and Ale Pasteurization."
• 1870’s: Wine makers began changing the form of the glass bottle and started
to utilize the cork to seal these new bottles. This helped better storage and
transportation. The storage allowed wine makers to age the wine in individual
bottles rather than in large barrels, meaning that they could cut their
inventory and leave the storage up to the consumer and the merchants.
• Grover Vineyards along with Michel Rolland introduced a breakthrough
invention in wine bottling – the Stelvin Cap (S–Cap). This cap seal, is not just
the traditional cork seal but a prefect sterile seal, which cuts off any bacterial
contact with the alcohol content of the wine and thus ensures that the wine
is devoid of a musty wet odour. 23

24. Breakthroughs
Lean+Green® wine bottles
• 15- 28% weight reduction- better
packaging, and transport cost
reduction
• A 20% reduction in energy use to
produce the same number of bottles;
• A carbon dioxide saving of more than
11,130 tonnes of CO2 per annum;
• Overall water savings of 4,720kL or
the equivalent of 6.3 Olympic
swimming pools a year; and
• Lean + Green™ can allow 840 more
bottles to be packed into a 20ft
shipping container. This is an
efficiency increase of 6.25%. 24

25. Breakthroughs
Incubator Gondola
• Hanzell founder James Zellerbach
and his winemaker, Brad Webb, • Michael Martini includes on this
created an innovation incubator list the invention of the vineyard
at their little hilltop winery above wind machine using an old
Sonoma Valley. (1956) airplane engine based on his
• New cellar equipment and father, Louis P. Martini's,
techniques understanding of inversion
• Applied gentle but technical care layers; 2-ton grape gondolas that
to its wine could be pulled through
• vineyards; and the first planting
Temperature-controlled stainless
of Pinot Noir in Carneros in 1948.
steel fermenters, an early
nitrogen-sparged bottling
machine and other rarities such
as a custom stainless steel
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crusher-destemmer.

26. SULA
• SULAFEST 2011 also featured the ‘Sulafest Bazaar’ - art and craft shops, clothing,
eco-friendly gifts, and other food stalls. Other activities on-site included a tarot
card reader, jewellery stalls, grape stomping, tattoo, nail and caricature artists,
jugglers, fire spinners, lavani, pottery workshops and more! The Cointreauversial
bar whipped up some exotic cocktails prepared with the epic Cointreau liqueur.
Bournville fine dark chocolate and loads of fun, all in the enchanting setting of
India’s finest vineyard!
About Sula Vineyards.
• Over the years Sula has pioneered many classic grape varietals in India like
Sauvignon and Chenin Blanc in 2000, Zinfandel in 2001 and Riesling in 2008. In
2005, Sula launched its first reserve wine, the Dindori Reserve Shiraz, as well as
India’s first dessert wine, the Late Harvest Chenin Blanc.
• The company is also a leading wine importer under the umbrella of Sula
Selections, with a portfolio of prestigious brands from leading producers like Remy
Cointreau, Hardys, Chianti Ruffino and Asahi Beer.
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27. Grover
• The only wine manufacturer that develops French grapes in India.
• The 13th Grover Vineyards Inter-Club Golf Championship which was held
on 21st & 22nd February 2009, brought together players from the four
leading golf clubs in Western India: Bombay Presidency Golf Club (BPGC),
United Services Club (USC), Willingdon Sports Club (WSC) and Poona Club
–Golf, making it the biggest amateur -golf event in Mumbai. The
championship was co-sponsored by Parle Products. Jet Airways sponsored
prizes.
• Grover Vineyards launched the Art Collection at the French Embassy to
commemorate the 20th Anniversary of the winery. Famous Indian artists
were brought together under one umbrella to crown the labels of the best
Indian wine with their masterpieces.
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28. Gallo is the worlds largest winemaker.
Traditionally focused on lower price categories, particularly jug wines.
Newer brands such as Turning Leaf and Gallo of Sonoma are targeted
at higher priced segments.
2010 Revenues of $3.65 billion.
Major Brands: Carlo Rossi, Gallo, Gallo Reserve, Night Train, Ballatore,
Rancho Zabaco.
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29. Distribution Channel
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30. Flow of orders
• The supply chain of Wine Industry in India is fairly linear.
• The flow of orders comes from the bottom of the channel i.e. from
customers and goes to the top and the flow of products is from the
top to the bottom.
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31. % margins at the front end
• Agencies: 3-4%
• Wine shops: 9-12%
• Restaurants, hotels, bars, pubs, etc.: upwards of 20% to 200%
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32. Barriers to entry
• Interstate trading- high regulations due to varied state policy
• New entry- low barriers required for licence
• Restricted import and sale- Bihar, Daman & Diu, Jharkhand, Tamil
Nadu and Uttaranchal.
• Complete prohibition-Gujarat, Lakshadweep, Mizoram, Nagaland
and Manipur .
(Source: Ministry of Food Processing Industries (MOFPI), ‘Grape wine’)
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33. Taxation
Import duty:
• Open General Licence (OGL)
• Wine importer – registered Indian company with an Import Export
Code (IEC) issued by the Director General of Foreign Trade, Ministry
of Commerce.
• This can be stored in a Customs Bonded Warehouse (CBW) for up
to 3 months without having to pay customs duty.
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34. Taxation contd.
• Duty free
• Basic Customs Duty-150%
• All brands (whether imported or produced in India) have to be
registered with the Excise Department of each state
• A uniform 20% VAT is charged on the total cost of the product,
which is passed on to the consumer at the point of purchase.
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35. Value Added Tax (VAT)
•State of Maharashtra – 20%
•State of Delhi – 20%
•State of Haryana – 20%
•State of Chandigarh – 4%
•State of Karnataka - No VAT
•State of Tamil Nadu 53%
•State of Kerala – 12.5%
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36. • Bureau of Indian Standards (BIS) prescribes standards for various
alcoholic beverages. The Standards of Weights and Measures
(National Standards) Rules 1988 prescribe that alcoholic strength
be declared as % of volume .
• Standards for water used
• guidelines for hygienic practices
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37. Surrogate advertising
• No direct advertisement is permitted for promoting consumption of
liquor.
• However, in order to enable consumers to make an informed
choice and to promote responsible drinking, communication at the
point of sale/consumption could be permitted.
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38. Packaged Commodities Rules
• Affixing of labels incorporating following declaration:
• (i) Name and address of the manufacturer,
• (ii) Common name of the commodity
• (iii) Net quantity when packed,
• (iv) Month and year of manufacture,
• (v) MRP
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39. Contd.
• Safety holograms approved by the Excise Commissioners to be
printed on every bottle of liquor.
• Barcodes- security and prevention of imitation or reuse of the
packs of branded liquors.
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40. Support System
• States like Maharashtra, Karnataka and Himachal Pradesh
-liberalized their excise regime and reducing excise duties.
• Maharashtra has abolished excise duties on wine whereas; an
excise duty of USD 22 per case has been levied on other alcoholic
beverages.
(Source: Central Board of Excise and Customers – Government of India, Gryphon Brands Inc. and
Seth Associates)
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41. Licensing
• Resto bars- Rs 11000 pa ($ 210)
• Liquor licence for 5 star and above- 5 lakh pa.
• Beer and wine licence- 5000 to 37500 pa, varies with location.($94-
$700)
(Source- primary data, Maharashtra specific)
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42. Upcoming trends
• The site - CropWatch Online (CWOL), offers comprehensive
information on disease, pest and irrigation alerts, new research
findings and the latest localised weather reports.
• ‘Disease Diagnosis’ module- features detailed information in four
categories – insects, leaves, vines and grapeberries
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43. Upcoming trends contd
• Biotech R&D – developing newer, more viable, and resistant
varieties of Vitis vinifera
• Currently used pergola system- 1000 vines per acre
• Proposed Single Cordon Method- 2500 vines per acre
Source- Chateau d’Ori.com
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44. Wine shop data
• Wine shops get from Rs. 1000 ($ 22) upwards for branding visible
storage areas.
• On an average wine shops sell upwards of 200 bottles (in terms of
720 ml bottles) of alcoholic beverages per day.
• Customers are mainly youth and middle aged men.
• Female customers for wine is 1.3%, while for beer it goes upto
almost 8% 44

45. Segmentation Matrix
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46. Need Gap Analysis
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47. Back End
• Current grape vine procurement @ Rs. 35/kg
• Currently 6000 acres of land under grape cultivation.
• Manufacturers like Vinsura and Chateau d’Ori outsource only upto
20%
• Transportation damages fruit and causes wastage.In 2010- 21%
Grapes are sorted manually.
Source – Wine Society of India 47

48. Front end
• Most sales through retail stores.
• Women form less than 1% of this footfall.
• However they are the major consumers (Euromonitor, 2009)
• Wine buying culture for women.
• Wine and dine on wheels.
• Introducing the culture of using wine in cooking by targeting the
urban localities. 48

49. Front End Contd.
• Better trained sommeliers at fine wine restaurants.
• Insufficient information about the wines available. Sommeliers may
upsell certain brands.
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50. Recorded Responses
• 27% drink wine on a weekly basis.
• 22% have wine with their families at gatherings and at home.
• 78% still buy wines from retail stores and only 1% of these are
women.
• 35% of the wine drinkers do not know about the taste preferences
that wines are associated with.
• 43% of wine drinkers thought that having Red wine chilled was the
best preferred way.
• 85% of the wine drinkers are open to experimenting to wine being
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used in different mediums like cocktails etc.

51. Consumers
• Wine flavoured candy, confectionery
• Wine flavoured condoms
• Health wines- for heart and coronary diseases
• Sommelier application esp for restaurants.
• Edible Jewellery
• Wine baskets- for gifting-bottle, about it, pairing advice, paired
sample with recipe or could be customized based on research on
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type of wine person

52. Sources
• Euromonitor.com: Information concerning recent trends in sectors,
market segment data, forecasts, market share information,
customer demographics and company profiles.
• Business Source Premier article “Moving Forward”: Regional data of
US wine consumption
• History-of-Wine.com: Everything from the history of wine, wine
production around the world, the popularity of wine in various
regions
• Winebusiness.com: Retail wine sales information from the end of
September 2002.
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53. Sources
• Gallo.com: Company Information
• California Association of Winegrowers (cawg.org): Industry News,
per capita consumption statistics
• Wineinstitute.org
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54. Thank You
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