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19-04-2017

Wine in India

Thanks to growing affluence and an increase in the number of pubs and hotels that serve wine, the wine drinking population continues to grow. Over the review period, many wine bars, clubs and restaurants organised wine-tasting tours/sessions, which promoted the consumption of wine. Manufacturers also organised wine-tasting tours and introduced innovative concepts, such as wine tourism, which generated awareness of wine in India.
The 15% growth in 2014 volume sales was higher than the review period CAGR of 12%. This was mainly due to an increase in the wine-drinking population resulting in a wider consumer base. Moreover, the wider availability of wine through on-trade channels promoted wine consumption even further.
Fortified wine and vermouth continued to record the fastest volume growth at 23% in 2014. As fortified wines were comparatively cheaper than red and white wine, new consumers and first-time buyers continued to prefer them. Consumers also continued to appreciate the sweeter taste of fortified wines compared to red and white wine.
The average unit price of wine rose by 2% in 2014 mainly due to the increased uptake of higher priced wine varieties, such as red and white wine. Furthermore, most manufacturers resisted increasing their retail prices in a bid to encourage new consumers to experiment with red wines.
Amongst products other than fortified wine, red wine continued to record the fastest volume growth estimated at 10% in 2014. The wide availability of red wine in on-trade outlets, especially fine-dining restaurants and bars/pubs in 5-star hotels, contributed to making red wine more popular amongst consumers. In addition, the easy availability of various red wine brands, coupled with the perceived health benefits associated with the consumption of red wine, made red wine even more popular.
The off-trade or retail remained by far the largest channel for sales of red wine and continued to record faster volume growth than the on-trade channel. While the on-trade channel remained popular for socialising, the majority of consumers, including the younger population, continued to consume wine more frequently at home. Off-trade channels including pubs and restaurants started to adopt extensive wine menus as awareness of wine continued to grow rapidly.
Shiraz/Syrah and Cabernet Sauvignon were the most popular red wine grape varietals, accounting for 48% and 35% volume shares, respectively, in 2014. Chenin Blanc and Sauvignon Blanc were the most popular white wine varieties sold in India, accounting for 41% and 43% volume shares, respectively. Most of the wine drinkers in India are not very aware of the different varietals of wine. Most consumers are not aware of the different grape varieties but do buy wines based on the taste and pricing.
Off-trade wine volume sales of still red wines were dominated by wines priced between INR300 and INR500 per litre in 2014. Red wines priced between INR300 and INR500 contributed to 50% of the total off-trade volume sales, while white wines priced between INR300 and INR500 contributed 44% to the off-trade volume sales of white wine. While manufacturers continued to introduce expensive wines in India, the majority of wine consumers bought wines priced at under INR500 per litre.
New World wine, which includes Indian wine, dominated sales as it is more accessible to the average Indian wine consumer. This type of wine is cheaper, sweeter and less complex, and is more widely available in off-trade outlets. New World wines are sweet and fruity in taste and preferred by first-timers. While Old World wines are becoming popular, wines from countries including France, Italy and Australia accounted for more than half of the Old World wines in volume terms.
Glass bottles remained the most popular packaging format in 2014. However, cheap fortified wine varieties available in cities, such as Goa, were available in plastic bottles with screw cap closures.
As of 2014, affluent women aged between 25 and 50 remained the main consumers of wine in India. However, thanks to rising awareness of wine and a realisation of the health benefits of drinking wine, younger women have also extended the wine-drinking consumer base. Most of the wine-drinking population continued to frequent premium on trade outlets in tier I cities, such as Bangalore, Mumbai and Delhi.
Wine drinking is considered a sign of status and sophistication. However, with the increase in awareness and people starting to realise the health benefits of drinking wine, a few men have also started to join the wine-drinking bandwagon.
Source: Euromonitor International