Wine Industry in India – The Road Less Travelled

Posted in Marketing & Strategy Articles, Total Reads: 3769 , Published on 30 December 2014

Wine is not just a drink; it’s a complete lifestyle drink, a survey into history, a gourmet adventure, a study in viticulture and experiencing different lifestyle. Until recently most of the Indian consumers were unable to relate themselves to wine but off late a few have been able to associate with it. Wine is directly related to health which is an extension of the consumer’s persona. Increasing health consciousness and spend on corporate and personal entertainment has given a boost to wine industry.


Indians, comparative to other Western countries, barely consume wine; they prefer to have liquor which has a higher percentage of alcohol. A report by the US Department of Agriculture's Global Information Network says that Indian wine production was at 4.7 million litres in 2004 and it will touch around 28 million litres (ML) by 2015. Indian wine market is growing at 30% per annum and metros like Delhi, Mumbai and Bangalore produce 80% of wine consumers in India. Another research report by London-based market researcher states that the Indian wine market is currently selling 1.2 million cases plus another 200,000 imported cases (a case has 12 bottles of 750 ml each) which is around 1% of IMLF market. The consumption of wine is increasing regularly and is predicted to grow in three-fold, reaching around 2.4 million cases by 2020.


Indian Wine Segment

The summation of wine consumers without the limitations is demonstrated in the chart below

Population Aspect Number of people


Number of people

Total Population



Those with no religious prohibition



Those of the Legal Drinking Age or Older



Those residing in States allowing alcohol consumption



Those with sufficient wealth to afford wine*



Those listed above and have also been Educated/Exposed to Wine



Potential wine consumers



This information was based on the 2001 Indian Census’ growth estimation for 2007

Outside India, wine drinkers are usually over 30 but in India wine enthusiast are younger and are about 25 to 30 year olds. Various factors have been projected for the rising consumption of wine in India, which include global travel, a great exposure and experience of western culture where wine drinking is a part of the lifestyle, rising disposable incomes among the urban people imply that a greater part of the population can afford such products and also many state governments have reduced duties on wine, relaxed restrictions on distribution permitting wine to be sold in supermarkets .

As per ASSOCHAM “The wine market in India is growing faster than that for any other alcoholic beverage, at the rate of 30% annually. It is becoming more acceptable among women to drink wine. More women are joining the workforce and they are economically independent”. No wonder the world’s biggest champagne house, Moet Hennessy, has launched Domaine Chandon India NV (non-vintage) Brut, its first “made in India” sparkling wine. With this it seeks to capture the urban youth between the ages of 25 to 35 who have become increasingly sophisticated market of wine drinkers in India. Moet’s Chandon India NV is made from a combination of Chenin Blanc, Chardonnay and Pinot Noir. The new winery is located in Dindori near western Maharashtra state’s Nashik region.


Indian Wine Maker

The per capita consumption of wine in India is only 0.07 liter/person/year as against 60-70 litres in France, Italy and German, 25 litres in US and 20 litres in Australia. Consumption of wine in India is low when we compare it with the consumption of other alcoholic beverages like whiskey, vodka, beer and rum. However, given the healthy status and growth of the alcohol beverage industry on the whole there is tremendous potential for wine. Currently the highest wine consumption is confined to major cities like Mumbai which has around 40% of total wine consumption in India followed by Delhi (23%), Bangalore (9%) and rest of India has only 20% consumption.

In India, Nashik in Maharashtra is known as the Napa Valley of India, most of the renowned vineyards of the country are located in this belt. Over two-thirds of the Indian wine estates are situated in Maharashtra. There are over 50 vineyards in and around Nasik with 40,000 hectares of grape cultivation and 1,100,000 tonnes of annual production out of which only 2% is used to make wines. The most famous vineyards in Nashik are Sula vineyards (One the most popular and profitable winery in India), York winery, Chateau d’ori, Reveilo, Mountain View, Zampa Valley, Fratelli wines and Four Seasons from UB Group.

Other popular wine growing regions are found in southern India, in the state of Karnataka (Grover Vineyards Limited, Bangalore) and a small number of vineyards are available in Andhra Pradesh, Tamil Nadu and Himachal Pradesh. Sauvignon Blanc, Chenin Blanc, Rose, Chardonnay, Sparkling Brut and Rose, Shiraz, Merlot, Zinfandel, Cabernet Sauvignon, Viognier, Reisling are the most common variety of grapes cultivated in India.


Biggest Roadblocks

There are still a lot of challenges that the winemakers face in India.

• Different taxes are levied on the wines such as the state tax and excise tax, adding to this, is the cost of real estate for on-premise outlets / license fees . This makes wine far more expensive and out of reach for the first time drinkers and the middle class which is a big segment of our population. In Delhi the tax on wine is at a rate of Rs. 200 per liter whereas in Karnataka the tax is around Rs. 630 per case of 9 liters. Such uneven tax rates pose a huge challenge for the smooth sale of wines across the country

• Demand-supply mismatch: As per Times of India that “In 2012, 50 lac liters of wine remained unsold in India.” Quality grape supply could become a major problem in a year or two. Farmers are already switching back to table grapes.

• There is a huge scarcity of local technical expertise and a lot of bottlenecks in marketing and distribution in wine Industry.

• Poor storage and transportation facility: Wine production is concentrated in and around Nasik region, so reaching to the distant markets like Delhi and Bangalore causes the wines' shelf life to reduce due to the poor transit condition. So the consumer does not always get the wine in the best condition

The Future

Wine industry in India is in the formative stage and is catching up with the Indian customers; the per capita consumption still needs to increase. This can be done by, educating the consumer on type of wine, year of harvest, grape variant, origin, and brand. One sign of the changes happening is the emergence of Wine Clubs in a number of cities like Delhi Wine Club, Indian Wine Academy, Mumbai Wine Clubs, Wine Society of India, Hyderabad Wine Club, Bangalore Wine Club, and Indian Wine Academy.

Apart from this, wine vineyards are creating an experiential journey for the customers with different mediums like events, sponsorships and tastings to promote wines and vineyard tours as they have realized that proper consumer knowledge serves as the primary sales trigger. The consumer buys what it sees in the menu, with the right marketing strategies and increased awareness Indian wine industry can conquer Indian hearts.


This article has been authored by Prajna Alva from TAPMI




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