In last week's DBR case, there was a mention of the Indian wine industry and the challenges that entering this market would pose. I was born in the coastal city of Chennai in the state of Tamil Nadu in South India, and though I didn't grow up there, I visit my extended family frequently. From my personal experience, at least in parts of South India, the drinking culture is quite conservative. In Tamil Nadu, restaurants are not allowed to serve alcohol at eating establishments unless they have lodging attached to the restaurant. Thus, only hotels can realistically serve alcohol with meals. Additionally, the cost of manufacturing and consuming wine in India was greater than that of spirits, and there were strict rules regarding taxation of wine and domestic marketing of wine. Furthermore, there's historically been a stigma (in Tamil Nadu and in other parts of the country) about women drinking. Given this information in tandem with our knowledge from multiple cases that women generally prefer wine more than men, it's not surprising that the wine industry in India hasn't, until recently, taken off.
Now, with increased tourism, drinking becoming more socially acceptable, and the influence of the millennial generation, the wine industry in India is expanding rapidly. There are over 300 wine importers, upwards of 475,000 cases of wine imported per year (this was 2016-2017), and a CAGR of 25% from 2013-2018. Domestic production began with Sula Vineyards in the year 2000, which, with Grover Vineyards, has now come to own 90% of the market share for wine in India. People in India are becoming more exposed to and adopting the cultures of other parts of the world, which includes drinking wine at the dinner table and opening champagne bottles on special occasions. There are also more young people in India than anywhere else in the world, and these people are now beginning to earn enough money to afford wine, which, with the high import duties of wine from abroad, was previously limited to older, upper-class city dwellers. A major social change increasing wine consumption in India is women consuming more alcohol. Women drinking has become more accepted, and in fact, a societal norm. Furthermore, women are working more and becoming more affluent, and they're purchasing wine for themselves and in social settings.
Opportunities in the Indian wine industry are plenty for all categories of wine, and it seems India is a nation to consider as a potentially dominant player in the global wine industry in the very near future.
Sources:
https://www.prnewswire.com/news-releases/india-wine-market-analysis--forecasts-2011-2018-to-2023---emerging-wines-white-sparking--rose-are-forecast-to-grow-higher-than-the-dominant-red-wine-300677710.html
https://www.financialexpress.com/industry/indian-wine-looks-for-stronger-presence-in-global-market/1545754/
https://www.thedrinksbusiness.com/2018/06/indias-wine-market-is-like-china-15-years-ago/
https://www.researchandmarkets.com/research/8cb9t4/india_wine_market?w=5
https://www.entrepreneur.com/article/341991
https://timesofindia.indiatimes.com/india/womens-increased-alcohol-consumption-contributing-to-indias-growing-love-for-alcohol-survey/articleshow/70960088.cms
I felt the same impression when I was traveling across India and Sri Lanka; it was pretty difficult to get alcohol in the suburbs. In one restaurant, for example, they would secretly procure alcohol upon customer's request (since they cannot store), and when we drink, we had to keep the bottles under the table so it was not obvious!!
ReplyDeleteI think another fascinating component of the expanding wine industry and South and South East Asia is wine pairings and how it complements the food. I spent six months living in Bangalore and while friends and I were craving wine, the appeal of a heavy Red wine with dinners of curry or spicy cuisine was not very high—especially when the wines within your price range were YellowTail marked up to $25-30 dollars. Sometimes at higher end hotels or restaurants they would advise on what whites were best for spicy foods, but as wine becomes more mainstream I think there is a huge opportunity to highlight different varietals and educate new wine drinkers, specifically as they pair with different types of Asian food.
ReplyDeleteAs regions in Asian from India to China develop new wine regions, I think it would be fascinating to double down on wineries (e.g., those with high acidity or fruity flavors) that are producing wines that are natural pairing candidates —assuming the geography supports those types.
https://www.vivino.com/wine-news/how-to-pair-wine-with-asian-food