Its a Presentation on a case study based on Sula Wines, How it works, what are the Wine making steps, what is contract farming and who was the founder behind this great success.

1. A CASE STUDY PRESENTATION ON
SULA Wines
Presented by:
B-25 Manthan Chauhan

2. From Stanford to Nashik:Introductory Stage!
 Sola wines was the brain child of Rajeev Samant
who was born and brought up in Mumbai
 After 12th he went to Stanford University in California
where he completed his graduation in economics
and then changed his track to do a masters in
industrial engineering
 In 1990 Rajeev joined ORACLE within a year he was promoted as a finance manager
at company HQ
 In 1992 he Quit his job at ORACLE to venture out on his own
 The Samant family owned 30 acres patch on the banks of the Godavari river and
Rajeev wanted to do something on that land

3. Contd …
 In 1993 he started growing Alphonso mangoes on that patch but that venture did not take
off as desired
 As Nasik was largest grape growing region Rajeev decided to grow table grapes and
thought of venturing into wine grapes
 Wine making was still in infancy in India and very little wine was being imported into India
 As Rajeev was not technically equipped to handle the cultivation of grapes and making
wine from it
 He went back to California and located Kerry Damskey one of the renowned wine maker
and convinced kerry to join him

4. Wine and Grapes: Introductory Stage !
 The Vineyard should ideally be located in
a place with fertile soil, climate with good
variation between night and day
temperatures, dry weather and controlled
rainfall
 The first harvest is never used for making
wine and crop is pruned away for the first
few years to enhance the quality of entire
crop
 Once matured grapes are ready to
harvest, though it can be done through
machines but premium winemakers go
for manual harvesting

5. Steps involved in wine making
For red wines the grapes are crushed to break
open and then they are fermented in tanks
Primary fermentation where sugar and yeast
are added at specific temperatures
The fermented mesh is pressed to separate the
skin and pulp from juice
Heat and cold stabilizaion processes aimed at
getting rid of sediments
Further wine is stored in oak barrels for
secondary process of sedimentation

6. The Start
Rajeev and Kerry decided on two white wine Varieties,the Sauvignon Blanc which
Is a classic from Bordeaux region of France and Chenin Blanc which is a classic from
Loire Valley also in France
He started with Interesting Decision of Contract Farming
There was a problem with the climate as weather was dusty and dry in summer
With a monsoon between June and September,, so it was decided that grapes
Would be grown in winter and harvested by hand at night in March and arrangement
Were made to use water from nearby Lake
Sula’s first wine was released in 2000 and was widely acclaimed as India’s finest
White wines

7. Early Challenges
 The government had not allowed any new wineries to come up in Maharashtra
For 15 years and it took Mr. Rajeev two years and a file about two feet thick to
Persuade the government to let him set up the winery
Production is subjected to:- Indian standards Specification for wines(IS 7058),
Prevention of food Adulteration Act 1954 and stock and sales licenses are needed
For warehousing or distributing
 No banker was willing to lend for such a risky Venture but after a lot of persuation
A bank agreed only after securitizing the loan by mortgaging almost everything
From typical customer reaction-why should I pay so much for an indian wine?
Patiently, Rajeev was able to change the mindset and his Indian customer takes
Pride in consuming a quality Indian Product

8. Brand Building
Sula had positioned itself as an Indigenous wine made to international
standards With international techniques and know how.
A number of consumables are procured overseas and also adopted to the
sub-tropical Indian conditions.
The wines, Rajeev chose to produce were well chosen for India, White wines
are a Natural match for India’s spicy cuisine
Sula celebrated the harvest season of 2005 by opening a 1st wine tasting
room in India in its Nashik winery atop a hill giving 180 degree views
The winery and vineyards are open to public for educational tours also there
‘Beyond’, a 23 room resort with a beautiful view of Gangapur Lake
Sula had invested a lot in designing and then promoting its logo .Its
distinctive solar Logo was designed by Jaideep Mehrotra and well recognized
by consumers

9. Success: Development Stage !
Sula has rapidly established itself as India’s Leading Premium wine brand.
Sula wines has helped spark a wine revolution in India that has seen consumption grow at
over 25% annually .
In November 2002, Wine Spectetor, which is acclaimed as the world’s leading wine magazine,
did a full length feature on sula wines.
In 2003, Sula Produced India’s 1st Zinfandel Rose wine(variety of red grape) .
In 2005, Sula released Dindori Reserve Shiraz, as well as India’s 1st dessert wine, the Late
Harvest Chenin Balnc.
•The company doubled its grape production from 700 tones to 1300 tones.
•In the very same year Sula reached the magical annual sales figure of 1 million bottle

10. Contd …
By 2006, it was a time for the 3rd winery to start operations, which was having a huge capacity
of million litters.
Company is having several awards in its portfolio of success.
•from the Brands of it, 2 brands Cabernet Shiraz got 2nd and Dindori Reserve shiraz got 5th
positions on the list of the greatest quality wines in the wine Asia report 2007.
By 2008, the four wineries of sula have a combined capacity of over 5 million liters.
•Company has expanded its area from 30 acres to about 1200 acres.
With all these success efforts, sula vineyards is now India’s number 1 premium wine
company, with sales going over 2 million bottles in 2007-08 and over all 2nd largest producer of
wines in India.

11. Contract Farming: Implementation Stage !
Rajeev’s vision of spreading prosperity has been realized , as contract farming model has
been a great success for prosperity of farmers even.
Typically contract is for 5 years.
It starts with the selection of varietals
Each farm has its own characteristics relating to its proximity to water, soil quality, etc
which makes it suitable of certain kind of grape
After that the right planting material has to be used, which was usually identified and
procured by Sula.
Sula also trains their farmers for harvesting methods, storage, plant care and other
important aspects.
Sula was also providing credit to their farmers for procurement of inputs like
probotics,equipment, fertilizers etc…
Prices offer to farmers are also competitive to the market rates.

12. Contd …
For the different category of wine company has given different contracts to respective
farmers.
Company took over the ND wines with the 10years of contract which allowed him to use
its facilities to make sula wines.
In 2006, sula bought Jaulke-based company Pimpen co-op India Ltd, for 5.51 crore.

13. Growth Stage !
 Wine making is a capital intensive business and even Sula’s phenomenal sales have not
been enough to fund their growth.
 Demand has continued to grow and to satisfy this demand Rajeev had borrowed heavily
to start his venture and the idea of borrowing more was making him feel uncomfortable
 GEM India Advisors picked up a 30% stake in Sula for Rs. 15 crore.
 Then Rajeev went in look for other investors, Indivision picked up a 20% stake in Sula
wines for Rs.50 crore.

14. Contd …
• GIA is also divesting a part of its holding to Indivison, after which GIA will keep a 20%
stake in Sula.
• Sula has appreciated five times in valuation over last two years, so this turned out to be
a great investment for GIA.
• Sula is likely to go for an IPO in near future.
• Rajeev decided to go with Indivision, since the group’s retail chain Big Bazaar offered “
excellent Synergies for distribution ”.
• Earlier only a few states like Karnataka,Goa and Chandigarh had allowed sales of wine in
supermarket, but now other states like Maharashtra and Haryana have also followed
suit. Delhi is very likely to open up soon.

15. Competition
 Its main competitors were Chateau Indage and Grover, both of which were primarily based
in Maharashtra, close to Sula’s operations
 There are about 45 wineries in India, the major competitive threat looming over wine
makers is that posed by the entry of large liquor companies like UB, Seagrams and Diageo
 Seagrams released range of wines with ‘9 HILLS’ label
 Diageo is going to launch its products very soon
 UB’s Vijay Mallya tied up with Union Minister, Sharad Pawar family to launch their range
of wines
 Sula wines launched ‘value’ wines priced at Rs. 240 to Rs. 400

16. Contd …
 By 2015 the wine production may increase to 40 lakh cases
 To promote wine drinking as a habit Sula procures and presents an
impressive array of international wines for the Indian customer by
importing them from Australia, Italy ,New zealand, Chile and France
 Sula’s indigenous production has been accepted abroad ,it is available in
many leading wine consuming nations of the world including Italy, France
and Italy

17. Questions & Answers

18. Question 1
Q. What are the advantages and disadvantages of growing through Contract Model ?
Ans.
 Advantages
1) Contract farming provides farmers with production inputs (such as seeds and fertilizers),
quality control, and advice on new production methods
2) For investors and contractors, contract farming overcomes land constraints, quality is
controlled by the investor and crop risks are shared with the farmers
3) Reduced transaction costs for
(i) Coordination due to agreed arrangements for regular and stable
supplies
(ii) Procurement owing to scale economies, higher productivity

19.  Disadvantages
1) The term of contract is much longer typically the contract period is for over 5 years
2) Farmers make a long-term investment, for example by building a special drainage
system, over a short term contract early termination of the contract by the
contractor will translate into a loss
3) If the crop is lost, the risk falls on the farmer and often no compensation is
provided
4) Investments in training and know-how, farmer discontent and disputes, are risks to
be supported by the contractor

20. Question 2
Q. What are the elements of Sula’s branding strategy ? Will it help them in the emerging
competitive scenario in the Indian Wine Industry ?
Ans.
 Sula has positioned itself as an indigenous wine made to international techniques and
know how
 Consumables like – Barrels from France, corks from Portugal, yeast from Australia and
foil from Spain
 Its distinctive solar logo is now quite well recognized by consumers throughout the
country

21. Contd …
 White wines were produced which were a natural match for India’s spicy cuisine
 In 2008, Sola introduced ‘value’ wines priced at Rs. 250 to Rs. 400 and these wines were
doing well
 Clever branding of Sula through wine tourism, Sula Fest and its wine bar, Vinoteca
 It has also set up a wine import division due to the onslaught of foreign wines

22. Thank you !