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1. Chapter One - Introduction

1.1. Introduction to Dissertation Topic

The research proposal is to study and analyze the Indian Wine industry. In India, wine industry is now an emerging market. The manufacturing of wine and its consumption in India is insignificant in comparison to any other countries. Generally the wine production in India has arisen since the 1980s. In 1984 only the Champagne Indage's plant was set up in the Maharashtra State, to mark the manufacturing of wine on organized scale in India. Earlier the consumption of wine was low because of poor logistics and inventory problem including storage and transport facilities, lack of proper marketing and promotional activities of wine, unfavorable rules on domestic marketing of wines expects in few states, strict and regressive government policies with different taxation across various states. Over the last ten years wine industry in India started doing well because of the changing life style of the urban people. A person from urban areas, now adopting the western culture and drinking is now considered as a style statement for them. Now import tariff has been reduced in India significantly after joining the WTO enabling foreign companies to perpetrate the Indian consumer market in large. Due to increase in demand for consumption of wine in India, it is resulting in opening up the wine market in the country. The quantitative restrictions are now waived up, import duties are also reduced and the domestic regulations are done much simplifier. Due to the rising economy, the income capacity of a person in India is also going up and hence changing the standard of living. There is huge change in the demographic profile in India and exposing to the new culture which results in changing in consumption of drinking habits. Now the tourism industry is also rapidly growing through its promotional activities that “Incredible India”. The frequency of the flights has also increased to the overseas and attracting more number of foreign tourists to visit India. Considering all opportunities and demand in the market, government has given some relaxation in the regulation and policies for this business.

This main objective of this project is to explore the wine market in Maharashtra of Indian.

1.2. Objectives and Research Questions

The dissertation is carried out to analyze the growth in the wine industry in India, particularly in Maharashtra. A study has been done on the Maharashtra Wine Market.

Three research questions are to be addressed:

RQ1. To assess the current and future status of the Indian wine market

The current and future scenario in terms of products, product segmentation and distribution, suppliers and raw materials availability, major players and the competition level of the Indian wine market will be analyzed.

RQ2. To evaluate the opportunities and challenges for winemakers in India and especially Maharashtra

The major winemakers of India will be discussed. The opportunities and challenges will be evaluated for the wine industry and wine makers in India, especially in state of Maharashtra.

RQ3. To recommend growth strategies for winemakers in India and especially Maharashtra

Different growth strategies will be discussed. On the basis of analysis, strategies for growth of wine industry will be recommended and specifically for the Maharashtra market.

1.3. Overviews of Chapters

Chapter One

This chapter is to give an introduction about the Indian wine industry and its growth. The objectives of the research proposal will be explained in brief through three research questions.

Chapter Two

Chapter two is about the literature review. In this chapter, the definition of different models that used for market analysis is discussed. Market analysis of the Indian wine industry is done using various strategic models.

Chapter Three

In this chapter, Indian wineries and the major players are analyzed.

Chapter Four

Current and future Indian wine market data is analyzed in this chapter.

Chapter Five

Various research methodologies are explained in this section.

Chapter Six

In this chapter, data collected through the research methodology are taken for analysis.

Chapter Seven

This section is for conclusion and recommendation of the research proposal.

2. Chapter Two - Literature Review

2.1. Introduction

Literature concerning marketing analysis and growth strategies of wine industry will be reviewed. Documents will be collected from various sources such as wine manufacturers, star category hotels, wine shops, and distribution, industry associates, government institutions and the experts.

2.2. Definition

Marketing analysis: Market analysis is to analyze the market in terms of market size, growth rate, profitability, cost structure, distribution channels and other market related factors to take business decisions.

SWOT analysis: SWOT analysis is done to find the internal and external affecting forces to the industry. Strength and weakness are the internal factors and opportunities and threats are external factors of an industry. This is the micro environment study of the industry.

Porter five forces model: The health of an industry is affected by the five forces in the market comprises bargaining power of supplier, bargaining power of buyer, threat of the new entrant, substitution of the product and the rivalry in the industry.

PESTEL analysis: In the PESTEL analysis, the six factors including political, economics, socio - culture, technological, environmental, and legal aspects are analyzed that affecting the industry growth. This is the macro environment study of the industry.

2.3. Indian Wine Market

2.3.1. Current Scenario

The market of alcoholic beverage is changing globally. The distribution market behavior is changing due to the rising of retail industry and falling on trade consumption. Many new markets are emerging and redefining the distribution patterns and helping the wine market to reach the potential customers. The consumption of wine is now growing at a faster rate. The Indian middle class is burgeoning and going to be a great catalyst in the growth of the wine industry. Wine consumption has boosted by the exposure to the western trends and the growing acceptance of this culture. There is now growing level of social gathering and social drinking. Wide exposure to western culture through television, cinema, and travelling abroad at an early age is contributing towards growing of alcohol consumption. Indian wine industry is targeting these potential customers and organizing events for testing of wines and setting up wine clubs. These events and clubs are getting media converge to reach greater mass and to participate. These events have helped the industry to attract more number of customers. Average drinkers are getting knowledgeable about the different kind of wines and the correct combination of taking drink. Indian wine market is sensitive about the price hence the wine producers are trying to lower the price and to grab more customers. A range of products are offering by the players in the industry to tap potential customers from regular brands in affordable price to premium brands in premium price. The knowledge about the wine and food pairing are growing through the events and sessions and boosting the beverage consumption to greater extent.

Due to the fundamental changes have contributed towards growth of wine industry such as:

  • Government regulations
  • Consumer behavior
  • Higher incomes
  • Industry advancements
  • Media and
  • Increased globalization

From the figure 1, it is clear that the production of the wine in the country is steadily increasing. It has shown a tremendous growth from 2003(3,600,000 Liters) to 2010 (13,500,000 Liters).

After the export of the wine from the total production, they remain quantity is available for the consumption of the consumer. However it has shown a growth from 2003 to 2008.

Figure 2: Domestic Availability

2.3.2. Categories

There are three types of wine available in the Indian wine industry. These are as given below:

  1. Premium wines also known as still wines
  2. Sparkling wines
  3. Fortified wines

Premium wines are regarded as quality wines considering as largest and most important in the wines category. Again the premium wine is divided in two categories in the Indian market. These are:

  1. White wine ( sparkling wine is considered as the white wine by the most of the consumers)
  2. Red wine ( Most popular wine in current scenario)

Figure 1: Categories of Indian Wine

All above wines are again categorize in to three:

  1. Domestic Indian wine: In the domestic Indian wine, the domestics' wineries are producing grapes and bottled it by labeling as Indian.
  2. Foreign bulk wine bottled in India: Domestic producer are importing bulk wines from overseas and bottled in India.
  3. Foreign wine bottle in origin: In this category, domestic players are importing more than 200 brands from overseas and offering to the customers in the original labeling only.

2.3.3. Wine Grape Growing Regions

Vineyards in India range from northwestern state of Punjab down to the southern state of Tamil Nadu. For viticulture activity, the high heat and humidity of the far eastern half of the country are favorable place.

The larger wine producing areas are located in three places of India. It is in Maharashtra, Karnataka near Bangalore and Andhra Pradesh near Hyderabad. Vineyards are in Maharashtra region are on the Deccan Plateau and around Baramati, Nashik, Pune, Sangli and Solapur.

Western India:

Nashik Region and Sangli Region (Maharashtra State is the largest wine producing state with 40,000 hectors of grape cultivation and 1,100,000 tonnes of annual production. 85% of the country's total production is come from Maharashtra only): The climates of these two are extremely good for cultivation of grapes. The monsoon rains, rich fertile soil and cool climate are good for the making of vineyards. Due to its favorable climates, the two bigger Indian wineries, Indage and Sula vineyards are located in these regions.

South India:

Bangalore Region (Karnataka State): Because of its cool climate, the third largest wine producer, Grover, is located in this region at Dodballapur.

2.4. Indian Wine Market Analysis

2.4.1. Industry Attractiveness

There are eight factors identified for the industry attractiveness.

Figure 2: factors of Industry attractiveness

Market Size/Market growth rate

Form the industry reports it is mentioned that wine industry in India is growing rapidly having growth rate 25 to 30%.

Market Share

Urban population is increasing and more number of people are adopting the western culture and consuming alcohol beverage. This gives rise to increase in market share.

Demand Variability

Taste and preferences of people are changing with time. So there is a change in demand variability in positive direction. Indian wide demography is also a factor for the demand variability.

Industry profitability

For the wine business is a profitable business. One need limited setup and for one time only. ROI for the wine industry is very high.

Industry rivalry

The demand is growing for wine, offering great opportunities for industry growth without extreme rivalry. The competition in this industry is moderate.

Global opportunities

The global market for wine is growing. As the Indian wine market has great potential, foreign investors are also planning to enter the Indian market.

Macro environmental factors (PESTEL)

This is the external environment that affects the industry. These six factors including political, economy, socio - cultural, technology, environmental and legal are getting favorable for the Indian wine industry and contributing towards growth.

2.4.2. SWOT Analysis

SWOT model is used to analyze the internal and external factors affecting the industry. Strengths and weaknesses are internal factors. Opportunities and threats are external factors. SWOT model is often used in marketing analysis because it is quick, easy, and intuitive.

The Indian wine market has great potential and attracting the investors to invest in the domestic industry. The international firms are also willing to invest in Indian market, realizing the market potential. India is the second largest population country in the world. Now a small percentage of Indian total population has exposure to the wine. However this small percentage is also amounts to approximately 24 million people and there are more potential customers to tap.

The SWOT analysis provides insight knowledge about the industry.

Figure 3: SWOT Matrix

Strengths

  • Over a period of five years statistical data of the industry has announce that the wine consumption in Indian has grown 25-30% annually. It is a positive sign for the Indian wine industry.
  • From northwestern region to southern region, the climate of India is very good for the cultivation of grapes.
  • For the employment and education purpose, people from rural areas are moving to urban are resulting in increasing of urban population. In urban region, people are getting more exposure to the western culture in comparison to the people from rural area and which is leading to increase in consumption of wine. Youth are consuming the alcohol at an early age because of various reasons. They are craving an alternative to hard liquors and developing a more refined taste and switching to wine.
  • Now more number of women is part of the multinational corporation and they are also adopting the western culture. Wine is becoming more acceptable to women and youth because of its taste. India has very favorable demographics which are contributing towards the industry growth. Due to change in consumer tastes and preferences also the wine marketing is growing.
  • India is known for its incredible tourist locations. Tourism industry is growing because of low cost air fare and the marketing of the tourist places. Foreign tourists are getting attracted and visiting India. Foreign tourists are also contributing towards growth of the wine industry.
  • Tier I and Tier II Cities are expanding rapidly because of growth in infrastructure industry. More number of shopping malls and bars are coming up in the cities which are easy access to purchase.
  • Foreign Players are also investing in the Indian market because of high potential of the wine industry.

Weaknesses

  • Wine remains an elite taste and most of the people prefer hard liquor taste.
  • Due to lack of proper infrastructure, wine is difficult to store in India. Wine required cellars and refrigeration for storage purpose in which Indian wine industry is lacking.
  • In India, less than 50 percent of the total population is legally old enough to drink (25 yrs. old) as per the government rules in various states.
  • In India, 400 million persons are 18 years old or younger and they are legally not allowed to sallow wine.
  • Due to poor awareness of wine and infrastructure, people preferring other drinks.

Opportunities

  • In the next 5 years, 100 million persons will be legally allowed to drink alcohol (25 yrs. old). This will give rise to the consumption volume of wine.
  • In tire I, II cities, Supermarkets are emerging. This will give support to wine distribution in an effective way.
  • Domestic market is rising and because of increasing disposable income of people.
  • Growing tourism industry is also a factor which can contribute significantly towards growth of wine industry.
  • Through merger, joint venture, or strategic alliance the size of the market can be increased.
  • Market trends are changing and giving new opportunities to do more profitable business.
  • New technologies are coming up and improving in productivity.
  • Social changing is also an opportunities to tap more number of consumers for wine market.

Threats

  • India is known for its traditional cultures and values. These values of India do not allow taking wine and it consider as a bad habit. The Indian constitution discourages alcohol consumption.
  • Wine consumption is viewed as a “sin” by many people so it may hamper the business of wine market.
  • Indians still prefer whisky rather than wine.
  • Promotional activities for alcoholic beverages are banned in India and specifically in various states.
  • Domestic wine production is coddled by state governments.

Even though the Indian wine industry has a high growth rate but there are many challenges for its development. The biggest obstacle can be reforming government policies for the wine industry. Infrastructure limitations are also great issues in this sector that should be addressed.

2.4.3. Porter's Five Force Analysis

Porter's Five Forces model is basically used to analyze attractiveness of an industry structure. This strategic model provides analysis of competitive position of an industry. In this model, there are five forces including supplier, buyer, substitution, new entrant and competition which explain about the industry position. Now economists are considering government as the sixth force in this model.

The graphical representation of the Porter's Five Forces model:

Bargaining power of suppliers: Low to moderate

If winery owns on vineyards, then the supplier power is low (except in cases of fire, disease, drought, frost, etc.).If winery does not own vineyards, then the supplier power is moderate and there are risks of holdup. The bargaining power of supplier is subject to the supply and demand relation.

For an Indiana winery, the main supply decisions lies with the key raw material product ingredients—wine grapes and juice, which is required for wine processing. Wineries have several options. Either they can own a vineyard, purchase grapes and juice from the market.

The bargaining power of supplier in Indian wine industry is generally weakened. Indian wineries have lack of wine grape growing experience. Suppose a winery needs a particular variety of grape for making a specific wine, and then the supply and demand for the grape will be a great concern. If the supply of the grape becomes less, then the supplier's bargaining power gets increase.

Raw materials used in wine production are commodity items. These raw materials are very cyclical in price, quality, and availability. Sometimes high-quality grapes can be bought for low prices (over supply) and sometimes particular grape varieties or juices are almost non-existent in the market. This can have a significant effect on a winery.

Suppose due to bad weather the vineyards get spoiled and varieties of grapes cannot be supplied. During these situations small wineries face challenges because they do not have the leverage associated with volume that the larger wineries have. However, Indiana winery could decrease the effect by cooperating with other small players to make collective purchases. Contracts and positive relationships with suppliers and producers are another way a small winery can manage the uncertainty and power of suppliers. Recognizing the power of suppliers and the influence of outside factors (e.g., knowledge and weather) is an important consideration as a small winery finds a place in the market.

Bargaining power of buyers: Low (end buyers)

In the market, there are lots of different kinds of wine available. People have their own preferences and taste. There are low switching costs and there's no way to lock in individual buyers.

Wineries have three types of buyers—

Direct consumers

Direct consumers are mostly tourists. These buyers are out for the day, weekend, or even a weeklong vacation. In this situation, competition for those buyers is actually any travel destination in the area competing for their leisure time. Would the buyers rather visit a state park or a museum than a winery? A winery can reduce the bargaining power of these customers by offering unique products and events that offer high value.

Wholesalers

Wholesalers have a significant amount of bargaining power because they are few in number and have a considerable influence over the wines that are sold on the retail shelf. Thus, the bargaining power of small wineries is weak compared to that of the wholesalers.

Retail outlets

In Indiana, counteracting legislation allows small wineries to sell directly to retail outlets without using a wholesaler. While the bargaining power of one of these wineries with retail outlets is still weak, the winery has the benefit of offering a local Indiana product that is in demand with consumers.

Over all for Indiana wineries, buyers have more power than the entrepreneurs. This is due to the fact that direct consumers have multiple options for entertainment, and wholesalers and retail outlets have thousands of wine brands to choose from. Therefore, a small winery owner must be creative in dealings with consumers, usually by offering loyalty programs and increasing perceived value.

New Entrants Barriers: High

There is lots of knowledge required to make wine and new entrant are lacking in this specific knowledge. The threat of new entrants has a unique twist in the winery business. A winery is not an easy business to start because it is capital intensive and market entry can take multiple years due to licensing requirements and initial production time for vineyards and wine.

A strong knowledge base is required to make high quality wine and understand the complexities of the industry. Thus, there are significant barriers to entry. However, competitors are complementary for Indiana wineries. When several wineries exist in close proximity, it becomes beneficial for all wineries involved. Barriers to entry in the local wine market are high due to capital investments, licensing, and knowledge requirements. However, having competition close to a business does not necessarily have a negative effect on the bottom line. Therefore, some industries may actually encourage and support new entrants up to a point.

Substitutes: High

There are lots of options are available in the market like Beer, liquor, non-alcoholic beverages, wine coolers, etc. When considering substitutes, many would make the easy assumption that the substitute for wine is beer. There are many other options that need to be considered.

Due to the diversification of offerings in addition to wine, substitutes must be carefully considered and evaluated. Competing against the other travel destinations for limited customer leisure time is one of the biggest challenges. In order to decrease the threat of substitutes in the market and encourage customers, Indian wineries must carefully consider these alternatives and strategically address all the other options facing a prospective buyer.

Rivalry Determinants: Moderate

The bargain power of buyer is low in wine industry. Beer and spirits are more competitive, generally—customer loyalty is a great concern. For a winery, the various interactions with competition create a dynamic, multifaceted situation. It boils down to “how does a winery compete for business.” Porter's argument is that the more businesses compete on price, the lower the profit of the market. The Indian wine industry is similar in scope to other industries. There are a handful of large wineries with the majority of market share and many smaller wineries rounding out the industry.

There are currently 31 wineries in the state selling 1.8 million bottles of wine per year. A small winery would sell approximately 7,500 bottles per year. On a global scope, the wine industry is very competitive. Wineries compete for shelf space and “share of mouth” with regard to consumer tastes. In the state, however, competition at the local level is important to the industry's success. A small winery competes for customers through the winery tasting room, rather than on the external retail shelf. This means the winery competes against all other tourism destinations in the state offering similar entertainment, not just the other Indiana wineries. As a result, the overall quality offered to customers is very important. The first purchase is generally based on the look of the wine package and customer service. To retain these customers for the long-term, product quality is essential. Future purchases are based on consumers' perception of taste, not just how nice the bottle looks or the friendliness of the staff. A winery needs to offer a total package that goes above and beyond what others in the state are offering.

The Indian industry is not saturated at this point. There is still room for wineries to grow without having to capture customers from direct competitors. The demand is growing, offering opportunities for industry growth without extreme rivalry. However, staying ahead of the game—the rivals—are the key for future success.

External—High

The alcohol production & sales is highly regulated in India, difficult & expensive to sell wine in many places in the India. The weather can have significant impact on supply & quality of grapes growing. If the grapes plant is affected by disease, pests, fire, natural disasters, then it will hamper the wine business.

2.4.4. PESTEL Analysis

PESTEL model is to provide a framework for understanding the macro environment in which the drinks industry operates. PEST analysis identifies the political, economic, socio-cultural, technological, environmental and legal influences in the industry.

Figure 5: PESTEL Model

Political Factors

Political factors affect the way of doing business in an industry. The ruling party changes and so as the policies related to the business. Now the central government has changed the taxation policy to encourage the wine business. in some states, local government has also taken initiatives for funding and infrastructure supports to the wineries.

Economic Factors

The rising incomes of the middle class family in India and their growing exposure to the western culture are some of the important factors. In coming years, Indian middle class will be considered as a great contributor in the wine industry growth because of its growing consumption. Now young mass are earning at an earlier age and highly influencing by the western culture. At a young age they want to adopt a sophisticated life style and consuming alcohol for fun. The price fluctuation can be dictated by global commodity markets which gives multi-nationals an advantage to the wine market. Increasing price differential between on and off trade is also a factor for growth of Indian market. There are other factors which decided the growth of industry such as business cycles, GNP trends, interest rates, inflation, unemployment, disposable income, wage cost, and devaluation.

Socio - cultural Factors

In India, earlier wine was not considered as the first choice of drink because of the Indian traditional culture. But now the time has changed and so as the culture of the society in India. At current scenario, the rate of wine sales is increasing each year by 34 percent. The wine industry in India is an emerging market. Indians has adopted the habits of British people of having strong drink. Before the meals, Indian loves to enjoy a drink. Wine is now considered as a fashionable drink among young generation mostly in urbanites. The young executives working in the international corporations, they take wine through wine testing and classes. This is done to impress colleagues and clients at the time of corporate dinner. Now this practice has become the important part of the corporate people. Earlier, in our Indian culture, taking wine was acceptable for a male person only. But in the 21st century now more numbers of women are part of the corporations whether it is international or domestic. Young professional women are the significant art of the Indian wine market. Now drinking is built into the social fabric. The recent upsurge in café culture is also encouraging youth to consume alcohol. Increase in eating out and in holidaying overseas is also impacting on consumption of wine. Drinking wine is giving a great snob value.

Technological Factors

Packaging and bottling of the wine is very attractive. Influence of the Internet and ecommerce has affected the business of the wine in a positive way.

From the wine park people can order their preferred wine easily.

Environment Factors

Now there is increasing focus on the sustainability agenda and corporate social responsibility by the corporations. Environmental impacts affect the business of the wine. The other factors are environmental legislation, energy availability and cost, energy consumption which can affect the industry performance.

Legal Factors

There are various legal factors involved in the business of wine. After coming of licensing Act 2003, private Security Industries Act 2003, beer orders and other changes to Competition Law in the 1990s, the business of wine has become simpler. Advertising laws has become liberal in some extent. The other legal factors which affect the wine business are employment laws, competition laws, health and safety laws, regional legislation, taxation (VAT, Social), subsidy policy, and foreign trade and investment regulations.

2.4.5. Product

In India, the greatest growth occurred in both the still red and white wines. Light grape wine continues to be the fastest growing type of wine in the Indian market and is expected to remain the growth leader.

Volume sales are projected to increase 254.3% and value sales 260.9% from 2008 to 2013. Because of the marketing of the still light grapes as a drink for regular, every-day consumption it is becoming very popular and success in the market. Still light grape wine is widely accessible in the marketplace and can be found at all price-points at off-trade or on trade channels.

Although sparkling wine is projected to continue growth of around 150%, it is considered as special wine. It is not so popular among consumers. Fortified wine and vermouth are predicted to be the slowest growth rate of 100%. It is ranking close behind sparkling wine.

The numbers of labels of Indian wines have proliferated along with the emergence of new wineries in Maharashtra and Karnataka states following the announcement of the 'Maharashtra Grape Processing Policy (2001) and the 'Karnataka Wine Policy (2008). (Sources from http://www.gryphonbrands.com)

Indage Vintners Ltd. (formerly Champagne Indage Ltd) Narayangaon - between Pune and Nasik, Maharashtra state

Brand

Descriptions

Varietals

Marquise de Pompadour

Methode Champanoise sparkling white wine

Ivy Brut

Methode Champanoise sparkling white wine

Joie

Charmat method sparkling white wine

Ivy

Still wines - premium

Chardonnay Semillon, Malbec, Shiraz, Viognier, White Zinfandel

Chantilli

Still wines - regular

Chardonnay, Cabernet Sauvignon, Merlot, Sauvignon Blanc, White Zinfandel

Riviera

Still wines - economy

White, Red

Vin Ballet

Still wines - cheap

White, Red

Vino

Still wines (in pet bottles)

Figuera Port

Indian fortified wine

Nashik Vintners Pvt. Ltd. (Sula) Near Nashik town, Maharashtra

Brand

Descriptions

Varietals

Sula Brut

Methode Champanoise sparkling white wine

Sula Seco

Charmat method sparkling white wine

Sula Dindori Reserve

Premium red

Shiraz

Sula

Still wines

Sauvignon Blanc, Chanin Blanc, Red Zinfandel, Cabernet Shiraz, Blush Zinfandel, Late Harvest

Satori

Still red wine

Merlot

Dia

Sparkling wine (screwcap)

Mosaic

Still Wines - premium

Grenache-Shiraz, Chenin-Sauvignon

Madera

Still wines - Economy

Samara

Still wines - cheap

Port 1000

Indian fortified wine

Grover Vineyards Pvt. Ltd, Near Bangalore, Karnataka

Brand

Descriptions

Varietals

Grover La Reserve

Still Wine - premium

Cabernet Shiraz

Grover Art Collection

Still Wines - regular

Cabernet Shiraz, Viognier-Clairette, Shirez Rose', Sauvignon Blanc

Sante

Still wines - Economy

Chenin Blanc, Shiraz

Other companies offer brands:

Company

Winery Location

Brands

Varietals

United Spirits

Baramati, Maharashtra

Four Seasons

Chenin Blanc, Sauvignon Blanc, Cabernet Sauvignon, Shiraz, Blush Zinfandel, Viognier

Four Seasons Reserve

Cabernet Sauvignon, Shiraz

Zinzi

Red & White

Pernod Ricard

Nasik, Maharashtra

Nine Hills

Chenin Blanc, Sauvignon Blanc, Cabernet Sauvignon, Shiraz

Sankalp Wineries

Nasik, Maharashtra

Vinsura

Brut, Cab. Syrah, Chenin Blanc, Sauv. Blanc, Rose, Shiraz, Zinfandel

Velentino

Red, White

Vintage Wines Pvt. Ltd.

Nasik, Maharashtra

Reveilo

Chenin Blanc, Sauv. Blanc, Syrah, Cabernet Sauvignon, Reserve Cab Sauv, Res. Chardonnay, Res. Syrah

Big Banyan Wines

Goa

Big Banyan

Chenin Blanc, Sauv. Blanc, Syrah, Cabernet Sauvignon

Mandala Valley Wineries

Nasik, Maharashtra

Mandala Valley

Chenin Blanc, Zinfandel, Cabernet Sauvignon

Hampi Heritage Vineyards

Bijapur, Karnataka

Kinvah

Chenin Blanc, Sauv. Blanc, Shiraz, Cab. Shiraz

Valee du Vin Pvt. Ltd.

Nasik, Maharashtra

Zampagne

Methode Champanois Sparkling wines - white, Rose'

Zampa

Chenin Blanc, Sauv. Blanc, Syrah Cab., Rose', Syrah

Chateau D'Ori Pvt. Ltd.

Nasik, Maharashtra

Chateau D'Ori

Sauv. Blanc, Merlot, Syrah, Cab. Sauv, blends

Positioning within Alcoholic Beverages

Wine has been gaining an increasing presence in India's social culture. This is happening because of its considerable growth in wine bars, wine shops and wine tourism. The development of higher quality wines and the integration of wine into consumer palates and lifestyles have increased the volume of consumption. In comparison to other types of liquor, wine consumption is still low, comprising only 0.14% of total liquor consumption compared to beer which represents 52.56% of consumption and distilled spirits 47.3% (The Hindu Business Line, 2009). However, evolving attitudes regarding the distinctiveness of wine compared to other types of liquor is creating unique perceptions among consumers. It is visible in the pie chart that the wine consumption is almost negligible in compare to the other drinks.

2.4.6. Price Segmentation

According to Gryphon Brands Inc, price of India is generally varied as given:

Table 1: Price of wine

Description

Price

Imported wine

Over Rs. 700 per bottle

Domestic premium wines

Ranges from RS.150 - 700 per bottle

Cheap domestic wine

Rs. 150

Traditionally, Indian wines have been in the sale price range of Rs350-550. Cheaper wines are ranging from around Rs280-300. After 2009 price has reduced to around Rs200. A growing number of wine varietals, such as nrand like Chenin Blanc and Shiraz are also expected in the market at prices lower than Rs300 (Arora, 2008, and Samant, 2009).

With regards to wine type, the still red wines priced between Rs300 and Rs499.99 while still white wines priced between Rs300 and Rs599.99. Sparkling wines priced from Rs750 (Euro monitor, 2009).

Low pricing and other promotions have been significant factors in fuelling sales. Future growth may be somewhat diminished if rising costs are passed on to consumers.

2.4.7. Promotion

Promotional communication at the point of sale is very important for growing awareness and brand consumption. Because of government policy advertising of wine or any other alcoholic beverages are not allowed in the media.

In off-trade channels, sampling and promotional discounts such as buy-one-get-one-free are popular. While promotions such as wine and food pairings are more common in marketing wines at on-trade channels. In the planning of promotions that involve food-pairings, companies should be mindful of the prevalence of vegetarians and the seasonal availability of fresh foods. The government of India has banned direct or surrogate advertisement like sponsoring major sport events, brand related promotions, etc. in the mass media for promotion of consumption of liquor including wine. Most liquor and wine promotions are done through organizing on-premise promotions such as wine tasting events, sponsoring.

2.4.8. Consumer Segmentation

Taste, Preferences, and Presentation

The Indian consumers are increasingly shifting towards drinking red wines in comparison to white wine. According to the market reports it indicates that 72% of the still wines consumed in 2009 were red, 27% being white and a miniscule 1% Rosé. And further chances of switch of 6% to red wine by 2013 by the consumer.

Figure 7: Consumption of wine by categories (source: http://indianwine.com)

Table 2: volume of wine consumption

Wine type

Volume of wine consumed in 2009

Volume of wine projected to consume in 2013

Red wine

1.05 million cases

2.23 million cases

White wine

3,95,000 cases

6,25,155 cases

Rose wine

13,000 cases

17,000 cases

According to Robert Beynat, CEO of Vinexpo has forecast the total consumption in 2013 will be 2.869 million cases, a growth of 97.15%. Red wines consumption will be 2.23 million cases in 2013, recording higher consumption proportion at 77.62% as compared to the 72% in 2009. White wines are forecasted to find at only 21.79%. The Rosé is projected increase of only 4000 cases in four years, at the estimated consumption of 17,000 cases.

Upper Class Indians as Wine Consumers

Upper middle class people have high level of disposal income and they experience a sophisticated life style. They have international exposure and lifestyle either through studies, travel or work that they have brought back to their country. This level of growth in the Indian wine market is in large part which is widely understood to be 2% of the population and therefore approximately 20-25 million people. The changing tastes and preferences, coupled with higher levels of disposal income and the increasing availability of domestic and imported wines fuelling India for a viable wine market.

Wine Consumption in Relation to that of spirits and Beer

Indian alcohol consumption has traditionally focused on spirits and beer instead of wine. Annually, Indians consume alcohol as given below:

Table 3: consumption of alcohol type

Alcohol type

Volume consumed by Indians

whiskeys

50 million cases

brandy

14 million cases

rum

25 million cases

beer

110 million cases

country liquor

200 million cases

imported spirits (400,000 bottled imports and 600,000 bulk imports which are bottled in India

1 million cases

This long standing dominance of spirits and beer as the alcohol beverages of choice among Indians has made it difficult for wine take a place in the market; however, despite this structure wine is becoming more accepted, sought - after, and available.

Indian Wine Consumption by Location

Figure 8: Indian Wine consumption by location (source: http://indianwine.com)

Delhi and Mumbai are the two regions where the consumption of wine is high. Then Bangalore and Goa have same 9% of the total consumption in the country. In Goa because of the foreign tourist there is demand for wines.

2.4.9. Distribution

Wine is to be marketed either through an approved wholesaler/distributor (FL-1 license) or through approved hotels/restaurants (FL-2 licensee) or retailers (FL-3 licensees).

The distribution structure is divided into four broad categories:

Open Markets:

Private sector sales are allowed subject to a retail license. (It happens in the states of Maharashtra, West Bengal, Goa, Assam, Meghalaya, Arunanchal and Tripura).

Auction Markets:

Licenses are auctioned to the highest bidder. (It happens in Uttar Pradesh, Rajasthan, Madhya Pradesh, Bihar, Punjab, Haryana and Chandigarh.

Government Controlled:

It happens in the states of Tamil Nadu, Delhi, Kerala, Andhra Pradesh and Karnataka.

Prohibition States:

Sales of alcohol are prohibited in the state of Gujarat, Manipur, Mizoram and Nagaland.

Upon receiving an order from a buyer (hotel or retailer), the licensed wholesaler/distributor places a request for a transport permit or order with the excise department to allow transfer of the specified quantity (number of bottles/ cases) of the product from the customs bonded warehouse to the retailer/hotel.

The state excise department will issue the transport permit after receiving the payment of the state excise duty, vend fee, and other taxes as applicable in that state. Upon presentation of the transport permit, the bonded warehouse will release the specified quantity of wine to the retailer/hotel and the licensed distributors will transfer the product to the retailer/hotel after paying the sales (value added) tax.

Imported wines in India are marketed to retailers, hotels and restaurants directly by an importer and/or through approved distributors. The importer or distributor need to regularly coordinate wine orders from his customers and plan well in advance because it takes between 6 to 9 months in shipping and clearance times for imported wines. Based on the total orders for a specific period, an importer or distributor will issue a purchase order to the custom bonded warehouse, pay customs duty and receive a custom delivery order, pay state excise taxes and obtain a transport permit from the state excise department. The wine is then moved from the custom bonded warehouse to the state excise bonded warehouse for distribution to hotels, restaurants and retailers.

Imported wines and all other alcoholic beverages must be stored at a government approved custom bonded warehouse or excise department bonded warehouse. Importers can keep the imported wine in an excise approved warehouse after paying the import duty. Imported wine is often kept in a customs bonded warehouse for up to six months without payment of the import duty. Importers are charged interest on the duty if the product is cleared after six months. Wines can be released from the bonded warehouse for distribution only after the importer/distributor meets all the mandatory requirements of the state where they plan to market the product.

2.5. Summary

In this chapter, it is explained about the market analysis of the Indian wine industry. The strategic tools like Industry attractiveness, SWOT model, Porter five forces model, and PESTEL model are used to study the inner and outer environment of the industry. Price segmentation, promotional activities and distribution channel are also discussed in this section. From the analysis it is shown that the Indian wine industry is in favorable condition and growing at a faster rate.

3. Chapter Three - Market Players and Indian Wineries

3.1. Major Players in wine production and Competition

In India, wine imported from the overseas such as France, Italy, Australia, Spain, Chile, USA South Africa, Argentina, United Kingdom, Japan, Canada, China, and South Korea. Apart from this, In India also there are significant vineyards for the production of wine. With time, in the international market Indian wines are getting increased recognition. The wine exports from the country are increasing at rapid pace, with the aggregate rise being somewhere around 9 percent. Of these, the maximum exports are being made to the European countries, including France. The wine brands of India are slowly gaining an entry into the list of the good wine brands in the foreign markets. Standing as a testimony to this is the fact that Grover Vineyards' (a Bangalore based Winery) premier red wine, La Reserve, has been named as one of the top-ranking wine brands in the world market by the Decanter magazine. Given below are the best wine brands of India. Indian wine industry is dominated by three players and enjoys the major shares of the market.

Chateau Indage

Chateau Indage is the pioneering of the quality wine industry in India. Sham Chougule, an investor from Mumbai, started producing sparkling wines in the 1980s. It was mainly for the exporting purpose. Their 40% sales figure is come from the exporting. It is based in Narayangaon - on the Pune-Nashik road. Chateau Indage has emerged as the India's largest wine producer in a given time. It offers two sparkling wines, two white wines and a pair of reds (Cabernet Sauvignon blended with indigenous varietals). It has hired Piper Heidsieck, the French Champagne House for technical support in operations. It provides technical expertise for site selection, choice in grape variety and the process of wine making. Due to its technology, enable it to offer India's most famous sparkling wine called “Omar Khayyam”. Marquise de Pompadour' brand of Indage was launched in 1986, while the famous ‘Chantilli' came out in the year 1989. The wine brand was the first to make wines that were ‘bottled in India', though the practice has now been discontinued. To expand globally, Chateau Indage has acquired wineries in Australia and a distributor in the UK.

Sula Vineyards

Sula Vineyards has overtaken Chateau Indage to become India's largest wine producer. Sula Wines, launched in the year 2000, was the brainchild of Rajiv Samant. It was the first marketing- savvy wine company in India and had initially positioned itself in the premium segment, giving high quality and selling at high price. However, with time, the wine company has entered all the price ranges and product segments in the wine industry. Amongst the numerous wineries based in Maharashtra, Sula is the one of the few worth writing about. This plan includes vineyards, wine production and wine tourism. Sula is expanding its business at a faster rate. Its line of products is also increasing with increasing demand in the Indian and overseas markets. Sula is adding 1000 ares of new vines to its current 1200 acres. Sula is enjoying 70% of market share in Indian market. Sula has adopted modern marketing which help it to attract mainstream middle class customers. The capital raised will primarily be used to boost sales and marketing efforts, and constructing a new ecologically friendly, state-of-the-art winery with a capacity of four million litres in Maharashtra. “Sula aims to engage in sustainable agriculture in the Nashik region and to support the local rural economy,

Grover Vineyards

Grover Vineyards, the Bangalore-based winery, was established in the year 1989. Grover Vineyards is collaboration between Kanwal Grover and French wine maker George Vasselle. The first wine under the wine brand came out in 1992 and since that time, the company has endeavored to maintain its excellent quality. One its premier red wine brands, La Reserve (a Cabernet Shiraz), was declared the best new world red wine in the August 1995 issue of Decanter magazine, by Steven Spurrier. It also a low-cost wine, known as Sante. The goal of these wineries is to offer French varieties of wine in India. Grover's offer signature red wine called “La Reserve” has received an international reputation. This wine is developing with the help of flying winemaker Michel Rolland. The company's vineyards are spread over 400 acres. Its winery has annual production capacity of 1.195 million bottles of 750 milliliters each. GVL sells its products under the Grover brand.

Fourseasons Vineyards

The lush undulating hills of the Western Ghats offer not just a breathtaking landscape but are also endowed with perfect natural conditions to nurture fine varieties of wine grapes. These hills are blessed with gravely soils that are rich in iron and have good drainage. Not so warm sunny days and cool nights ensure a good temperature variance - a must for quality wine making grapes. Set amidst this environment, near the village of Rotti, in the Baramati district, is the Four Seasons Winery, where this exquisite range of Four Seasons Wines is produced.

The Four Seasons Winery, with a planned capacity of one million cases, is built over a plot of around fifty acres. An additional 300 acres is being planted around the winery under long term contract with farmers from the village. All critical plants and equipment, including crushing and bottling lines have been imported from Italy to ensure hygiene and quality of international standards.

The winery is modeled on the French chateau style, housing fourteen suites. A large party deck overlooking the vineyards that can accommodate a thousand people, a swimming pool, a spa offering vinotherapy and a wine tasting room are also in the offing.

Vinsura Wines ( Sankalp WineryPvt. ltd )

Vinsura Vineyards is formed by a passionate band of horticulturists who brought a dream from France to Vinchur Wine Park. Located in MIDC Vinchur, A central part of fertile grape growing area in Nashik Valley, this is the first winery-Park is situated on Mumbai-Aurangabad highway.

ND Wines

ND Wines, situated in the suburbs of Nashik, claims the distinction of being amongst the five largest wineries in India. However, the winery sells majority of its produce to Sula Wines. Only a small portion of the wines are sold under its own label. With growing demand from the customers, crushing capacity was enhanced from 200 tonnes to 1400 tonnes. N. D. Wines is geared up to fulfil the rising demand of today's international wine market.

Chateau de' Ori Vineyards

TheChateau d'Oriestate is situated about 22 km from Nashik on the Nashik-Dindori Road. This ultra modern winery is an adaptation of the latest concept in winery designs in Bordeaux, France. It is a huge circular building that can accommodate 72 large stainless steel tanks for fermentation and storage. The wine making process is not restricted to just "gravity flow" and some of the latest trends in oenology are being used to create great quality wines. Besides the winery, it houses a laboratory, a 3000 bottles-an-hour bottling and labelling plant, a testing room with a state of the art laboratory, a temperature controlled cellar accommodating over 500 French oak barrels for fermentation and maturing of high end wines and an elaborate berries sorting room.

3.2. Domestic Wine Industry Support from the Government of India

The government of India provides support to the nascent Indian wine industry in the following ways:

  • Direct subsidies for winery development - payment for to 25-33% of the startup costs for capital investments of wineries
  • Capacity building initiatives - technical training on viticulture, enology, and winery development
  • Research assistance- rootstock trials, variety selection, pest/ disease management research
  • Laboratory development assistance- for wine analysis
  • Proposed formation of a National Wine Board, which will be arranged as a private - public partnership that will support growth initiatives for the Indian wine industry.

3.3. Export

Indian wine companies are travelling to other countries and are corresponding with various distributors in order to understand the respective country's governmental policies and distribution channels. At present, India exports about 10 lakh bottles a year. Wines: Exports from India 2003-04 Rs. 107 lakh 2004-05 Rs. 158 lakh India a minnow in the world of wine Wine Production of India is only 5 million litres.

There are number of factors that may lead to failure, of an export venture of a winery and some of them may include:

  • Many Indian wineries do not have a good understanding of EU labeling regulations.
  • Indian vintners have little experience in pricing for export markets and expect domestic retail prices in target exports markets.
  • Overseas consumers seek a better price to quality ratio; a new label is not enough; product differentiation is crucial.
  • Lack of financial strength — US importers usually seek companies expecting to sell in excess of 10,000 cases to provide 10-20 percent of the gross invoice value in cash for brand development and marketing; many small wineries cannot afford to do so.
  • Lack of scale — the global market place is rapidly filling with brand names of small ‘niche' companies that are too small to satisfy demand; they require unrealistic returns simply to cover costs of marketing and logistics.
  • Poor agent selection — many small wineries are tempted to appoint the first agent that makes contact with them, without determining its credentials.
    One more thing the new entrants should remember is most wine companies regard securing a solid domestic presence as a pre-requisite to tackling the export market. However, as with everything in the wine industry, there are exceptions.

There are lots of other factors which contribute to the winery entertaining the export concept. Queries from foreign countries add to the initial enthusiasm and stimulate export conception. A realistic evaluation should not take away any of the excitement but legitimize, through a step-by-step planning process, and a course of action to take. Reluctance to export can be for many reasons, including lack of a plan for marketing your wine, fears of after sales servicing, payment recovery risks, language, packaging, shipping/labeling issues and just plain lack of information.

Sales motivational factors may include surplus inventory due to the falling sales in domestic markets, forcing a winery to explore foreign sales. Building a brand across borders demands required patience and long-term planning with vision even under pressure to generate sales. Wineries may be surprised to learn that in some countries obtaining regulatory approvals can be a six -month process even before the initial sale is made. This is particularly true for the European Union. China is an emerging market with huge potential but developing a right contact is a primary concern besides fixing language problems.

It is advisable to Indian vintners to explore South East Asia rather than expecting a breakthrough in EU and other highly competitive markets. If excessive capacity in a temporary domestic cycle does play an important role in the decision process then management needs to realize that discontinuing exporting in an upward domestic market may actually create adverse long-term effects. A viable long-term strategy includes allocating wines to the international market once that commitment by management has been reached. Depending on the size of your winery, keep in mind that extra human resources are required to service the procedural regulations required by the country of importation. An example is compiling customs invoices, special labels in a foreign language and, in some instances, promotional materials that do not offend or in any way distort true meaning in a foreign country. There are many stories of companies whose marketing efforts were backfired due to lack of understanding of the cultural habits resulting in embarrassing situations.
Role of Cost and funding

If export expertise is newly acquired to begin, then a number of intermediaries are in place that can assist in market research, foreign traffic, credit checks and collections, carry promotional campaigns in target countries. Important is the understanding that these costs are fixed and, at small to medium business volume, likely to be more cost effective than to hire and train internal staff and carry a permanent overhead costs. Since initial sales may be erratic and small, guidance for entry into a marketplace through these channels offers the winery the opportunity to explore a new market more readily.

Partnerships and foreign opportunities

Foreign markets may require special labeling procedures including modification or translation of labels into the foreign language. In some countries the government warning must be excluded. Strip labeling on bottles may be a requirement as is the case in Canada and Mexico. These factors may export into a limited marketplace as a more concentrated strategy may increase cost effectiveness.

Pricing may escalate when exporting

The market competitiveness of any wines may be impacted by local duty structures, special labeling etc. In some cases, if an intermediary is involved, the price must be lowered. Longer distribution channels and the necessity of engaging companies that know export procedures market or sell into the foreign market increase pricing but can minimize risk factors. Currency fluctuations also impact selling methods. The regulatory practices of a foreign government could impact the prices a winery may charge, as will product preference factors. Determining a promotional budget to reflect these factors is essential when developing the export business plan.
Promotional programs that are perfectly legal in the United States may be considered illegal in a foreign country. Representative in the foreign country or with agencies qualified to answer those questions first. The stories exist of wines being exported only to be held up in customs and the winery fined for non-compliance of governmental regulations. Check to see if an import license is necessary regarding the product for exporting. Considerations include market size and general health of the market. Competition from other local wineries of country, it impacts the price to a great extent. Local preferences and pricing must be considered. Accordingly wines need packaging or label re-designs for export purpose.

3.3.1. Major Export Destinations

Indian wine is gaining greater acceptance in countries like US and France. Potential markets for Indian wines are China, Singapore, Japan, Nepal and Bhutan. Indian wine industry need to exploit countries like Australia, Chile and South Africa for export. Major Destinations for exports are UAE, Thailand, Nepal, Maldives, Ghana Opportunities for exports World class quality of wine. Proximity to markets in East and West Asia and Europe High Delivery Costs Erode Advantage of Low Cost Production Improvement in Logistics Investment in Supply Chain Infrastructure Negotiating better freight rates with advance shipping schedules Develop Brand India.

3.4. Summary

In this section, the wineries of India are mentioned and their locations. Earlier only three wineries were ruling the market but now there are many more has come up in the market. Due to favorable climate condition in India this market is now growing. Although in this field, Indian wineries are not so experienced enough to grow grapes but there is lots of opportunities. India is importing wine from overseas mainly from France. Indian wineries are keeping their eyes on the export of wine to various destinations. But in the export business India is still need to explore the foreign market and to improve business skills.

4. Chapter Four - Indian Wine Market Data

India has emerged as one of the fastest growing markets for wine on the global map. Despite the country's vast population of over 1.1 Billion, the consumption of wine remains extremely low. The per capita consumption of wine in the country was estimated at around 9 Milliliters in 2008, indicating huge potential for growth in the coming years. Various factors such as favorable government policies, increasing disposable income, amplified wine marketing and influence of western culture are helping to drive India's wine consumption. According to our latest research report, “Indian Wine Industry Forecast to 2012”, wine consumption in India is expected to grow by 25-30% annually between 2009 and 2012.

The wine market data is given as below:

Indian Domestic availability of wine ( 1,000 liters)

2003

2004

2005

2006

2007

2008

2009

2010

( June)

Production

3,600

4,725

5,850

8,550

11,250

11,700

12,600

13,500

Imports

446

874

1,421

1,836

3,067

3,307

1,795

1,013

Annual Supply

4,046

5,599

7,271

10,386

14,317

15,007

14,395

NA

Less:

Exports

423

280

483

752

1,048

1,636

2,078

411

Equals

Domestics Availability

3,623

5,319

6,788

9,634

13,269

13,371

12,317

NA

Availability (1,000 cases)

403

591

754

1,070

1,474

1,486

1,369

* Import and export data are through June 2010

Trade data are official Indian Statistics; remaining data are Office of Agriculture Affairs estimates.

It is found that various policies by the state level governments are encouraging domestic wine producers to set up their own wineries in the country, giving a boost to the domestic industry. Efforts by the Maharashtra and Karnataka governments remain far-fetched in this regard. However, such measures have raised concerns to WTO which states that India is adopting protectionist policies for its domestic wine industry meanwhile curbing growth of imports. While local players are including affordable imported wines in their portfolios to attract new consumers, foreign firms are trying hard to expand in the market owing to high rate of tax levied. Research indicates that the premium wine segment in the country is dominated by imported wines. This is because domestic wines are still unable to demand a high price, largely because of low brand awareness and lack of quality taste. Meanwhile, total consumption is dominated by domestically-produced cheap wine. “Indian Wine Industry Forecast to 2012” provides extensive research and rational analysis on the wine market in India. Research gives deep insight into India's wine consumption in terms of domestically-produced and imported wines, price structure, sales by location, type of wine consumed and a possible regional segmentation. Our research also highlights the market trends and developments that are expected to play key role in the growth of Indian wine market over the forecast period. Besides this, the report provides thorough analysis on the wine production, wine exports and wine imports of the country.

Indian wine consumption by volume:

year

Total

Domestic

Imported

( Number of 9 Liter cases)

2004

550,000

470,000

80,000

2005

620,000

520,000

100,000

2006

750,000

630,000

120,000

2007

900,000

750,000

150,000

2008

1,100,000

920,000

180,000

2009

1,400,000

1,180,000

220,000

2010

1,700,000

1,440,000

260,000

2011

2,000,000

1,700,000

300,000

2015

4,000,000

3,400,000

600,000

Note: Figures excluded regional flavored fruit wines. Figures are consumption estimated

The above figures are projected for overall consumption by 2015. The market share for imports is considered as 15%. The given market share is depends on the regulations of federal and state governments.

4.1. Indian Wine Market Categories - Wise, Volume and Revenue

Now the Indian wine industry is experiencing growth rate approximately 25 - 30 % annually). The size of the Indian market in 2009 was approximately 1.5 million liters. The downturn of global economy in 2009 has impacted the Indian wine industry. The domestic consumers have traded down and also the hospitality and tourism industry has experienced a downturn. But economy downturn hit these industries for a short time only and again recovered with a positive signs. The estimation of sales figure projected to reach 38 million liters by 2013.

5. Chapter Five - Methodology

5.1. Introduction

There are several research methods out of which one method is to be chosen to achieve the research objectives. So, in the first section, all type of research methods (Experiment, Survey, Action research, Case study, and Ethnography) is discussed. Chosen research design is discussed in the second section and the rational for choice is justified. In the next section where it is explain about sampling size, questionnaire and other details. Ethical and moral issues are explained in the last section.

In this research paper there is mainly two stages. In the initial stage (chapter two), the available literature has analyzed. In this chapter the basic concept on theories of definition and growth strategies of Indian wine industry has reviewed. At first stage, it has already explained about the market analysis of the Indian wine market.

In the second stage, growth strategies are recommended for the future of the industry. Interaction with organizations such as Sula Wines, Vinsura Wines, Flamingo Wines, Vintage Wines and certain government agencies, it can be explored about the current trend. The use of semi structured interviews is considered to explore the current and future market scenario of wine industry.

Type of Research Methods

Researchers are guided by undertaking various research methods to meet their research objectives. According to Saunders et al (2007, p. 135), it is explained that these research methods are very important to take business decisions. Experiment, survey, action research, case study and ethnography are the major research methods adopted by the researchers to collect data and then analyze.

5.1.1. Experiments

Experiment is a very systematic and scientific method where the researcher used to manipulates one variable and randomizes the other variables to understand the phenomena. Experimental research is mainly used where there is time priority in a casual relationship, the magnitude of the correlation among variables is great or where, there is consistency in a casual relationship.

5.1.2. Survey

This research method involves the questionnaires approach or statistical surveys to collect data. In this method, insights of customer are collected including their thoughts and behaviors. According to Tharenou et al (2007, p.47) explained that the survey approach direct to measure the relationship between a dependant variable and several independent variables.

5.1.3. Action Research

Action research has a short cyclic action and this method is explained as spiral.

5.1.4. Case Study

According to Saunders et al (2007, p. 139), it stated that:

“Case study is a strategy for doing research which involves an empirical investigation of a particular contemporary phenomenon within its real life context using multiple sources of evidence.”

Casestudy is very useful when a firm is going for merger or acquisition, or downsizing its business. It is a fundamental process and very helpful for the management to take business decisions

5.1.5. Ethnography

This method is adopted by researcher when they investigate an integral culture group who are sharing common social knowledge, experience or other social feature of interest. This is a quantitative method includes interview technique to get insights of customers.

5.2. Research Design and Rationale for choice of Research Method

There are various research methods that already been discussed in the methodology of research techniques. This dissection required mostly qualitative method to meet its objectives. Qualitative approach is to investigate the point of view of organization, wineries, restaurants, government agencies, and consultant. The common methods to collect the data are interviews, group discussion, case study, and ethnographic studies. According to Saunders et al (2007, p. 135 - 143) stated that survey strategy is frequently linked with the deductive method. It is a general strategy in business research. The secondary data, such as journals, articles, books, existing studies and etc. will be used to support the analysis result.

5.3. Ethical Issues

The survey researches are considered to be risk of harm because the participants are subjected to the breach of confidentiality and the consequences. For an example, employee of a firm will always give a positive statement about his/her organization. It may be because of the fear of losing the job or losing the reputation or the risk of civil prosecution. Employee of a firm generally avoid from such breaches. The staffs of the firm are bound to follow the rules and regulation and to keep folded about certain confidentiality data. They are supposed to project the company image positively in the public place. So the data collected from the employees may be manipulated. Such kind of data may not be reliable for the research objectives.

6. Chapter Six - Finding and Analysis

6.1. Finding and Analysis

India has emerged as a country with immense potential for wine industry at the global front. Despite the country's vast population of around 1.2 Billion, the consumption of wine remains extremely low. The low per capita consumption level indicates a huge potential for growth in the Indian wine market in the coming years. Changing life style patterns and drinking habits will further boost the growth of the Indian wine industry.
According to latest research report “Indian Wine Industry Analysis”, wine consumption volume in India is expected to grow at a CAGR of around 30% during 2011-2013. The major factors responsible for growth in the Indian wine market are favorable government policies, increasing disposable income, and the availability of foreign brands. Research indicates that imported wines dominate the premium wine segment in the country as they are heavily priced. However, the total consumption is still dominated by the domestically produced cheap wine. To cater to the growing demand for foreign wines, local players are including affordable imported wines in their portfolios to attract new consumers. Further, report provides insight into India's wine consumption in terms of domestically produced and imported wines, price structure, sales by location, type of wine consumed, a possible regional segmentation, major wine producing areas, distribution channels and leading wineries in India, consumer taste and preferences, wine imports and exports.

Besides, the report analyzes factors critical to the success of the wine industry in India. It has also identified key players in the market and included their business description along with their recent activities. Additionally, the report sheds light on the emerging industry trends and discusses the market structure, current and past market performance of the Indian wine industry. Forecasts for potential wine consumption have also been presented to provide better understanding of the Indian wine industry. This report analyzes the worldwide markets for Wine in Millions of Liters by the following Product Segments: Still Wine (Still Red, Still White, & Still Rose), Sparkling Wine, Fortified Wine, Vermouth, and Others (include non-grape wine, wine coolers and ice wine).

6.1.1. Survey

Semi structured Interviews is conducted with organizations such as Sula Wines, Vinsura Wines, Flamingo Wines, Vintage Wines and certain government agencies. Research questions have been prepared wine manufacturers, wine cellars (wine shops & hotels) and people consuming wine.

7. Chapter Eight - Conclusion and Recommendations

7.1. Introduction

This chapter will conclude overall outcome of the research. In this section, the theoretical and managerial implication will be discussed. Managerial implication is to provide suggestions to the hotel industry will be taken care up. Limitation and future direction of the study will be discussed in this chapter and at the end this research proposal will be completed by the summary.

7.2. Theoretical Implications

This section is to summarize the answers of the research questions related to the current and future status of the industry and also the opportunities and challenges, as mentioned below:

RQ 1.

To assess the current and future status of the Indian wine market

RQ 2.

To evaluate the opportunities and challenges for winemakers in India and especially Maharashtra

The wine industry of India is growing at a rate of 25-30 %. Through various strategic models it is mentioned that there are several factors which is contributing towards its growth rate. From northwestern region to southern region, the climate of India is very good for the cultivation of grapes. For the employment and education purpose, people from rural areas are moving to urban are resulting in increasing of urban population. In urban region, people are getting more exposure to the western culture in comparison to the people from rural area and which is leading to increase in consumption of wine. Youth are consuming the alcohol at an early age because of various reasons. They are craving an alternative to hard liquors and developing a more refined taste and switching to wine. Now more number of women is part of the multinational corporation and they are also adopting the western culture. Wine is becoming more acceptable to women and youth because of its taste. India has very favorable demographics which are contributing towards the industry growth. Due to change in consumer tastes and preferences also the wine marketing is growing. India is known for its incredible tourist locations. Tourism industry is growing because of low cost air fare and the marketing of the tourist places. Foreign tourists are getting attracted and visiting India. Foreign tourists are also contributing towards growth of the wine industry. Foreign Players are also investing in the Indian market because of high potential of the wine industry.

Wine remains an elite taste and most of the people prefer hard liquor taste. Due to lack of proper infrastructure, wine is difficult to store in India. Wine required cellars and refrigeration for storage purpose in which Indian wine industry is lacking. Due to poor awareness of wine and infrastructure, people preferring other drinks.

In the next 5 years, 100 million persons will be legally allowed to drink alcohol (25 yrs. old). This will give rise to the consumption volume of wine. In tire I, II cities, Supermarkets are emerging. This will give support to wine distribution in an effective way. Domestic market is rising and because of increasing disposable income of people. Growing tourism industry is also a factor which can contribute significantly towards growth of wine industry. Social changing is also an opportunities to tap more number of consumers for wine market.

India is known for its traditional cultures and values. These values of India do not allow taking wine and it consider as a bad habit. The Indian constitution discourages alcohol consumption. Wine consumption is viewed as a “sin” by many people so it may hamper the business of wine market. Indians still prefer whisky rather than wine. Promotional activities for alcoholic beverages are banned in India and specifically in various states.

7.3. Managerial Implications

This section is to summarize the answer of the research question related to the managerial decisions.

RQ 3.

To recommend growth strategies for winemakers in India and especially Maharashtra

Maharashtra has favorable climates for growing grapes. In this area one can find maximum vineyards. The largest vineyard of Sula is also located here. Government of Maharashtra should more supportive towards the business of wine. Wineries should provide by proper training for growing of varieties of grapes for wine. Government should help wineries in terms of direct subsidies for winery development, capacity building initiatives, research assistance, and laboratory development assistance- for wine analysis.

The consumption level of wine in Maharashtra is high in comparison to any other states. Maharashtra is highly populated states and people from this state have great exposure to western culture due to presence of more number of international corporations. Wineries should arranged more number of events for testing of wines and teach them for paring of foods with particular wine. Wine club are also should encourage in the state for convenient people.

7.4. Limitations of Study

The survey researches are considered to be risk of harm because the participants are subjected to the breach of confidentiality and the consequences. Organization and wineries are presented their brand image in a positive manner. Customers are also biased to any particular product then their answer is not correct value for the evaluation of research proposal.

7.5. Recommended Strategies

Wine manufacturer are now trying to find different promotional activities to grow and develop the market in domestic and overseas. Wine makers should adopt various strategies such as participation in domestic and international exhibitions to promote Indian wine with Indian cuisine, smart advertising quotes, promotional events and associated brand building activities.

  • Promoting Indian wine with Indian cuisine can help to grab market in the overseas.
  • Advertising, promotional events and associated brand building exercises should be encouraged so that people get awareness.
  • Taking part in international wine exhibitions can help the Indian wine industry to grow.
  • Organizing wine festivals so that wine will get popular among peoples.
  • Opening wine bars in the states that permit it
  • Organizing wine tasting sessions at exclusive restaurants to help wine lovers familiarize themselves with the nuances of wines
  • Collaborating with restaurants owners and vineyards to organize wine appreciation courses
  • Training staffs to enable them to assist customers in pairing wine with food
  • Introducing India to the concept of wine tourism which entails allowing people to say in vineyards, taste different types of wine and understand the wine making process

7.6. Summary

For wine industry in India there are lots of scopes to grow. Government is taking positive steps to make industry competitive to the global market. This research has carried out successfully by investigating three research objectives. Business strategies has introduced in this research proposal for further growth of the industry. In addition to this, support of government in various aspects is very essential to this industry growth.

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