The Indian Wine Market: a challenging sector where international producers have to be in.

Nymex Consulting puts your wine brands in the Indian market

The Indian consumer likes whiskey, vodka, gin, rum and beer. Preference for wine is emerging but is still a small market especially for highly priced wines. But you have to be in to win and now is a great time to invest in setting up a business in India – you get a lot for your dollar.

Your average Indian consumer is very price sensitive. It’s critical to price your product correctly – it’s a make or break! Does this apply to premium imported wine? As of now it does, cheap imported wine sells while it is a challenge to sell imported quality wine. However, as wine knowledge increases the Indian wine consumer will select wine based on brand, country and wine producer. All wine in India has a Maximum Retail Price (MRP) which is printed on the wine label.

Domestic Wine Industry

India has their own wine production industry, in fact they have produced wines for many decades. Recently French and Italian investors have seen opportunities in the Indian wine industry and have invested significantly both financially and by providing knowledge. Domestic wine sells for 80 rupees (US$ 1.30) to 1600 rupees (US$ 25) per 750 ml bottle for the best quality. Domestic wine producers also face import duties if they wish to sell their wine in another Indian state than their own, about US$ 5 per bottle (300 rupees). This year, Fratelli Wines became India’s first winery to win a bronze medal for its Chenin Blanc 2012 at IWC. The award is the winery’s hat trick win after winning a commendation medal at the IWC 2010 and IWC 2011. 93 % of all wine consumed in India is from domestic production.

Imported Wine in India

In 2012, India imported 275,000 cases of wine which is 7 % of all wine sold in India. Imported wine retails from Rs 700 to Rs 20,000 per bottle where most of the wine with good quality retails for between Rs 2,000 (US$ 32) and Rs 3,500 (US$ 56) per bottle. Imported wine can hardly be classified as FMCG. Distribution is challenging and controlled by local government plus the retail outlets that are willing to carry more imported wine are limited without having the required business relationships. There are around 40 wine importers (who also are the wholesale distributors) where three of these importers are the big players and who hold the relationships with major hotel and restaurant chains. Australia, France and Italy are the top 3 exporters to the Indian market where the Chardonnay, Sparkling and Cabernet Sauvignon Syrah blend are the most popular varieties.