Selling Wine in India: Reality and Strategy

(This is an executive summary from an exclusive VitaBella report)(More wine news on www.vitabella.fr).
The ending of the second edition of the India International Wine Fair made wine producers understand how difficult it was to sell wines in such a big country. For wine estates, making business in India is extremely attractive. China, India, Brazil...these are the big markets
everybody is currently talking about. In fact, taking into consideration the number of unhabitants and year by year growth figures regarding wine consumption (around 20% annual growth rate over the last few years), India is a very attractive market. But reality is much more complicated and Wine estates should be aware it is a matter of time and persistence. To start networking and finding good partners in India, wine estates may consider making contacts through wine trade fairs. First problem: fairs are numerous and choices are not so easy to make.Early December, the 1st International Food & Drink Expo India occured in New Dehli. Mid January, the 8th edition of the India International Food & Wine Show (with a large presence of italian wine producers who want to make it a "Vinitaly bis".). And then, end of january, the second edition of the India International Wine Fair (IIWF) took place in Mumbai. Three wine fairs over 2 months... Second problem: Fairs are all boasting to have great contacts and attract decision makers from Hotels, Restaurants, Resorts, Government Officials, Catering & Technical Institutes, Gourmet Food Importers, Food & Beverage Distributors, Food & Beverage
Retailers, Suppliers of Hospitality, Supermarkets and Others. At this "discovery" stage, wine producers are already a bit confused about where and how to start making the first contacts. When you look at the current situation in India, Wine consumption is still very low given the huge population. With beer and other liquor on top of indian consumption,wine drinkers are negligible minority. Around 1.3 million cases of wine were sold over last year. But the Indian market is growing, expected to double in the next three-four years.The Indian middle class seems hungry for exciting food and drink experiences. So India is definitely a market that wine estates should look at. At such a still early stage, wine producers should consider the right strategy if they want to be successful.
1) India is a continent and focusing efforts on just one city such as New Dehli or Bombay is clearly not enough. Wine producers must travel in different cities in order to meet the right people who will develop sales efficiently. Partnering with multi-estate distributors with a strong local commercial presence is essential. To highlight this point, I would consider Aspri Spirits: leading importers and distributors of premium wines and spirits in India, they developed one of the largest sales and distribution networks. Not only are they active in New Dehli and Bombay but they also cover over 22 major states.
2) Wine shops should not be the major target. Wine producers should focus on the star category hotels, restaurants, bars, up market wine shops and airlines. In fact, there is a strong concentration among the major buyers. A short list of the companies they work for would include The Claridges, Trident, Oberoi, Ashok, Radisson, The Imperial, Aman Resorts, Air India, Reliance, Dominos, Café Coffee Day, Ikea, M&S, Carrefour. Then come some other hotels, restaurants, retailers and institutional caterers. Wine estates should focus on the quality, influential trade professionals from India’s food services and food retailing sectors.
3) Even if Wine consumption may seem low at present given the huge population, competition already exists on the indian market. Wines from France, USA, Chile, Argentina, Australia, Italy, Slovenia, Bulgaria, South Africa and others are already proposed. But, for wine estates, the real threat comes from the national production, the indian wine producers (for example, estates and associations for wines produced in the states of Maharashtra and Karnataka). This competition is made even more difficult when estates discover the retail price of their wines in India. Taxation is a major issue. India imposes customs duties of up to 150 per cent on bottled wines and spirits.
As a conclusion, India is a very attractive market and some great opportunities should now be considered by wine producers. Estates can not ignore a wine producing country with a huge population such as India. But they should define the right strategy to find good partners. If India shows a great potential for the future, reality is still complicated for Wine estates. In fact, it is a matter of time and persistence. (More wine news on www.vitabella.fr).