Analysis of India's Wine Industry Focus on Sula Vineyards

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ANALYSIS OF WINE INDUSTRY IN INDIA
SULA WINEYARDS
(Sub. Strategic Management)
Project Submitted to
Ket’s V.G.Vaze College of Arts, Science & Commerce
Mumbai University
For the Degree of Master in Commerce
By
DISHA . M . RANKA
M .COM (PART – I)
ROLL NO. 45
Under the Guidance of
Dr.Adhir V. Ambavane
M.Com, M.Phil, M.B.A., LL.B., Ph.D
Prof.Chitra Subramaniam
M.Com.,M.Phil.
2014

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DECLARATION
I hereby declare that the Project titled ‘A Study of ANALYSIS OF WINE
INDUSTRY’ Submitted by DISHA . M . RANKA is based on actual work
carried out by me under the guidance and supervision of Dr.Adhir V.
Ambavane/Prof.Chitra Subramaniam.The contents of project are not copied
from any other source such as internet, earlier projects, text book etc. It is
further to state that this work has not been submitted for any other degree
of this or any other university.
Date: ______ DISHA . M . RANKA
M .COM (PART – I)
ROLL NO. 45
Place: Mulund
Dr. Adhir V. Ambavane
Prof. Ms. Chitra subramaniam
Guide
Guide
M.Com, M.Phil, M.B.A.,LL.B.,Ph.D.
M.Com, M.Phil.

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CERTIFICATE
This is to certify that the project Titled ‘A Study of ANALYSIS
OF WINE INDUSTRY’is being submittedby DISHA . M . RANKA
in partial fulfillment of the course in Strategic Management at
M.Com. Part I during 2014-15
Date: Signature
DISHA . M . RANKA
Guiding Teacher___Dr.Adhir V.Ambavane
Signature____
___________
Guiding Teacher___Prof. Chitra Subramaniam
Signature______________
External Examiner _________________________
Signature______________

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SR
NO.
TOPICS PAGE
NO.
1. INTRODUCTION 5
2. WINE TASTING 10
3. USES 14
4. OBJECTIVE OF MY
STUDY
19
5. INDIAN WINE INDUSTRY 21
6. CONSUMPTION OF WINE
IN INDIA
22
7. SULA WINEYARDS 28
8. MARKETING STRATEGY 36
9. SWOT ANALYSIS 38
10. CONCLUSION 39

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Introduction
Wine is an alcoholic beverage made from fermented grapes or other fruits. The natural
chemical balance of grapes lets them ferment without the addition
of sugars, acids, enzymes, water, or other nutrients.[1] Yeast consumes the sugars in
the grapes and converts them into alcohol and carbon dioxide. Different varieties of
grapes and strains of yeasts produce different styles of wine. The well-known variations
result from the very complex interactions between the biochemical development of the
fruit, reactions involved in fermentation, terroir and subsequent appellation, along with
human intervention in the overall process.
Wine has been produced for thousands of years, with the earliest wines being drunk
c. 6000 BC in Georgia.[2][3][4] It had reached the Balkans by c. 4500 BC and was
consumed and celebrated in ancient Greece and Rome. It has been consumed for its
intoxicating effects throughout history and the psychoactive effects are evident at
normal serving sizes.
Wines made from produce besides grapes include rice wine, pomegranate wine, apple
wine and elderberry wine and are generically called fruit wine.
Wine has played an important role in religion. Red wine was associated with blood by
the ancient Egyptians and was used by both the Greek cult of Dionysus and
the Romans in their Bacchanalia; Judaism also incorporates it in
the Kiddush andChristianity in the Eucharist.
Etymology
Some scholars have noted the similarities between the words for wine
in Kartvelian ,Indo-European languages (e.g. Armenian gini, Latin vinum, Ancient
Greek οἶνος, Russian вино [vʲɪˈno]), and Semitic (*wayn;Hebrew ‫יין‬ [jaiin]), pointing to
the possibility of a common origin of the word denoting "wine" in these language
families.[18]The Georgian word goes back to Proto-Kartvelian *ɣwino which is probably
borrowed from Proto-Armenian *ɣʷeinyo-,[20][21][22][23] whence Armenian gini. On the
other hand, Fähnrich considers *ɣwino- a native Kartvelian word derived from the verbal
root *ɣun- ('to bend').
Wines from other fruits, such as apples and berries, are usually named after the fruit
from which they are produced combined with the word "wine" (for example, apple

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wine and elderberry wine) and are generically called fruit wine or country wine (not to be
confused with the French term vin de pays). Besides the grape varieties traditionally
used for winemaking, most fruits naturally lack either a high amount of fermentable
sugars, relatively low acidity, yeast nutrients needed to promote or maintain
fermentation or a combination of these three characteristics. This is probably one of the
main reasons why wine derived from grapes has historically been more prevalent by far
than other types and why specific types of fruit wine have generally been confined to
regions in which the fruits were native or introduced for other reasons.
Other wines, such as barley wine and rice wine (e.g. sake), are made from starch-based
materials and resemble beer more than wine, while ginger wine is fortified with brandy.
In these latter cases, the term "wine" refers to the similarity in alcohol content rather
than to the production process. The commercial use of the English word "wine" (and its
equivalent in other languages) is protected by law in many jurisdictions.
HISTORY
Archaeological evidence has established the earliest-known production of wine from
fermenting grapes during the late Neolithic or earlyChalcolithic in the Caucasus and the
northern edge of the Middle East. The earliest chemically attested grape wine in the
world was discovered at Hajji Firuz in the northwestern Zagros Mountains of Iran, ca.
5400 B.C. However, both archaeological and genetic evidence suggest that the earliest
production of wine may slightly predate this, and the earliest wine making likely have
taken place through a region between Eastern Turkey, Trans-Caucasia (including
Georgia, Azerbaijan and Armenia), and North West Iran.
A 2003 report by archaeologists indicates a possibility that grapes were mixed
with rice to produce mixed fermented beverages in China in the early years of the
seventh millennium BC. Pottery jars from the Neolithic site of Jiahu, Henan, contained
traces of tartaric acid and other organic compounds commonly found in wine. However,
other fruits indigenous to the region, such as hawthorn, cannot be ruled out. If these
beverages, which seem to be the precursors of rice wine, included grapes rather than
other fruits, they would have been any of the several dozen indigenous wild species in
China, rather than Vitis vinifera, which was introduced there some 6,000 years later.
The spread of wine culture westwards was most probably due to the Phoenicians who
spread outward from a base of city-states along theLebanese and Israeli coast. The
wines of Byblos were exported to Egypt during the Old Kingdom and then throughout
the Mediterranean. Evidence includes two Phoenician shipwrecks from 750 BC
discovered by Robert Ballard, whose cargo of wine was still intact. As the first great

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traders in wine (cherem), the Phoenicians seem to have protected it from oxidation with
a layer of olive oil, followed by a seal of pinewood and resin, again similar to retsina.
Literary references to wine are abundant in Homer (8th century BC, but possibly relating
earlier compositions), Alkman (7th century BC), and others. In ancient Egypt, six of 36
wine amphoras were found in the tomb of King Tutankhamun bearing the name "Kha'y",
a royal chief vintner. Five of these amphoras were designated as originating from the
king's personal estate, with the sixth from the estate of the royal house of Aten. Traces
of wine have also been found in central Asian Xinjiang in modern-day China, dating
from the second and first millennia BC.
The first known mention of grape-based wines in India is from the late 4th-century BC
writings of Chanakya, the chief minister of EmperorChandragupta Maurya. In his
writings, Chanakya condemns the use of alcohol while chronicling the emperor and his
court's frequent indulgence of a style of wine known as madhu.
The ancient Romans planted vineyards near garrison towns so wine could be produced
locally rather than shipped over long distances. Some of these areas are now world
renowned for wine production. The Romans discovered that burning sulfur candles
inside empty wine vessels keeps them fresh and free from a vinegar
smell.[37] In medieval Europe, the Roman Catholic Church supported wine because the
clergy required it for the Mass. Monks in France made wine for years, aging it in
caves.]An old English recipe that survived in various forms until the 19th century calls
for refining white wine from bastard—bad or tainted bastardo wine.
Grape varieties
Grape vineyard
Wine is usually made from one or more varieties of the European species Vitis vinifera,
such as Pinot noir, Chardonnay, Cabernet Sauvignon, Gamay and Merlot. When one of
these varieties is used as the predominant grape (usually defined by law as minimums
of 75% to 85%), the result is a "varietal" as opposed to a "blended" wine. Blended wines
are not considered inferior to varietal wines, rather they are a different style of

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winemaking; some of the world's most highly regarded wines, from regions
like Bordeaux and the Rhone Valley, are blended from different grape varieties .
Wine can also be made from other species of grape or from hybrids, created by
the genetic crossing of two species. V. labrusca (of which the Concord grape is
a cultivar), V. aestivalis, V. ruprestris, V. rotundifolia and V. riparia are native North
American grapes usually grown to eat fresh or for grape juice, jam, or jelly, and only
occasionally made into wine.
Hybridization is different from grafting. Most of the world's vineyards are planted with
European V. vinifera vines that have been grafted onto North American species'
rootstock, a common practice due to their resistance to phylloxera, a root louse that
eventually kills the vine. In the late 19th century, most of Europe's vineyards (excluding
some of the driest in the south) were devastated by the infestation, leading to
widespread vine deaths and eventual replanting. Grafting is done in every wine-
producing region in the world except in Argentina, the Canary Islands and Chile—the
only places not yet exposed to the insect.
In the context of wine production, terroir is a concept that encompasses the varieties of
grapes used, elevation and shape of the vineyard, type and chemistry of soil, climate
and seasonal conditions, and the local yeast cultures. The range of possible
combinations of these factors can result in great differences among wines, influencing
the fermentation, finishing, and aging processes as well. Many wineries use growing
and production methods that preserve or accentuate the aroma and taste influences of
their unique terroir . However, flavor differences are less desirable for producers of
mass-market table wine or other cheaper wines, where consistency takes precedence.
Such producers try to minimize differences in sources of grapes through production
techniques such as micro-oxygenation, tannin filtration, cross-flow filtration, thin-film
evaporation, and spinning cones.
CLASSIFICATION

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Wine grapes on a vine
Regulations govern the classification and sale of wine in many regions of the world.
European wines tend to be classified by region (e.g.Bordeaux, Rioja and Chianti), while
non-European wines are most often classified by grape (e.g. Pinot noir and Merlot).
Market recognition of particular regions has recently been leading to their increased
prominence on non-European wine labels. Examples of recognized non-European
locales include Napa Valley, Santa Clara Valley and Sonoma
Valley in California; Willamett Valley in Oregon; Columbia Valley in Washington;Barossa
Valley in South Australia and Hunter Valley in New South Wales; Luján de Cuyo
in Argentina; Central Valley in Chile; Vale dos Vinhedos in Brazil; Hawke's
Bay and Marlborough in New Zealand; and Okanagan Valley and Niagara
Peninsula in Canada.
Some blended wine names are marketing terms whose use is governed
by trademark law rather than by specific wine laws. For example,Meritage (sounds like
"heritage") is generally a Bordeaux-style blend of Cabernet Sauvignon and Merlot, but
may also include Cabernet Franc,Petit Verdot, and Malbec. Commercial use of the term
Meritage is allowed only via licensing agreements with the Meritage Association.

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European classification
France has various appellation systems based on the concept of terroir, with
classifications ranging from Vin de Table ("table wine") at the bottom, through Vin de
Pays and Appellation d'Origine Vin Délimité de Qualité Supérieure (AOVDQS), up
to Appellation d'Origine Contrôlée (AOC) or similar, depending on the region.
Portugal has developed a system resembling that of France and, in fact, pioneered this
concept in 1756 with a royal charter creating the Demarcated Douro Region and
regulating the production and trade of wine Germany created a similar scheme in 2002,
although it has not yet achieved the authority of the other countries' classification
systems Spain, Greece and Italy have classifications based on a dual system of region
of origin and product quality.
Beyond Europe
New World wines—those made outside the traditional wine regions of Europe—are
usually classified by grape rather than by terroir or region of origin, although there have
been unofficial attempts to classify them by quality.
Tasting
Judging color is the first step in tasting a wine.
Wine tasting is the sensory examination and evaluation of wine. Wines contain many
chemical compounds similar or identical to those in fruits, vegetables, and spices.
The sweetness of wine is determined by the amount of residual sugar in the wine after
fermentation, relative to the acidity present in the wine. Dry wine, for example, has only
a small amount of residual sugar.
Some wine labels suggest opening the bottle and letting the wine "breathe" for a couple
of hours before serving, while others recommend drinking it immediately. Decanting (the
act of pouring a wine into a special container just for breathing) is a controversial
subject among wine enthusiasts. In addition to aeration, decanting with a filter allows

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the removal of bitter sediments that may have formed in the wine. Sediment is more
common in older bottles, but aeration may benefit younger wines.
During aeration, a younger wine's exposure to air often "relaxes" the drink, making it
smoother and better integrated in aroma, texture, and flavor. Older wines generally
"fade" (lose their character and flavor intensity) with extended aeration. Despite these
general rules, breathing does not necessarily benefit all wines. Wine may be tasted as
soon as the bottle is opened to determine how long it should be aerated, if at all
When tasting wine, individual flavors may also be detected, due to the complex mix of
organic molecules (e.g. esters and terpenes) that grape juice and wine can contain.
Experienced tasters can distinguish between flavors characteristic of a specific grape
and flavors that result from other factors in winemaking. Typical intentional flavor
elements in wine—chocolate, vanilla, or coffee—are those imparted by aging in oak
casks rather than the grape itself.
Vertical and horizontal tasting involves a range of vintages within the same grape and
vineyard, or the latter in which there is one vintage from multiple vineyards.
Banana flavors (isoamyl acetate) are the product of yeast metabolism, as are spoilage
aromas such as sweaty, barnyard, band-aid (4-ethylphenol and 4-ethylguaiacol) and
rotten egg (hydrogen sulfide) Some varieties can also exhibit a mineral flavor due to the
presence of water-soluble salts as a result of limestone's presence in the vineyard's soil.
Wine aroma comes from volatile compounds released into the air.[62] Vaporization of
these compounds can be accelerated by twirling the wine glass or serving at room
temperature. Many drinkers prefer to chill red wines that are already highly aromatic,
like Chinon and Beaujolais.[63]
The ideal temperature for serving a particular wine is a matter of debate, but some
broad guidelines have emerged that will generally enhance the experience of tasting
certain common wines. A white wine should foster a sense of coolness, achieved by
serving at "cellar temperature" (13 °C [55 °F]). Light red wines drunk young should also
be brought to the table at this temperature, where they will quickly rise a few degrees.
Red wines are generally perceived best when served chambré ("at room temperature").
However, this does not mean the temperature of the dining room—often around (21 °C
[70 °F])—but rather the coolest room in the house and, therefore, always slightly cooler
than the dining room itself. Pinot noir should be brought to the table for serving at (16 °C
[61 °F]) and will reach its full bouquet at (18 °C [64 °F]). Cabernet Sauvignon, zinfandel,
and Rhone varieties should be served at (18 °C [64 °F]) and allowed to warm on the
table to 21 °C (70 °F) for best aroma.[64]

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Collecting
Outstanding vintages from the best vineyards may sell for thousands of dollars per
bottle, though the broader term "fine wine" covers those typically retailing in excess of
US$30–50.[65] "Investment wines" are considered by some to be Veblen goods: those
for which demand increases rather than decreases as their prices rise. Particular
selections have higher value, such as "Verticals", in which a range of vintages of a
specific grape and vineyard, are offered. The most notable was a Chateau d'Yquem 135
year vertical containing every vintage from 1860 to 2003 sold for $1.5 million. The most
common wines purchased for investment include those
from Bordeaux and Burgundy; cult wines from Europe and elsewhere; and vintage port.
Characteristics of highly collectible wines include:
1. A proven track record of holding well over time
2. A drinking-window plateau (i.e., the period for maturity and approachability) that
is many years long
3. A consensus among experts as to the quality of the wines
4. Rigorous production methods at every stage, including grape selection and
appropriate barrel aging
Investment in fine wine has attracted those who take advantage of their victims' relative
ignorance of this wine market sector.[66] Such wine fraudsters often profit by charging
excessively high prices for off-vintage or lower-status wines from well-known wine
regions, while claiming that they are offering a sound investment unaffected
by economic cycles. As with any investment, thorough research is essential to making
an informed decision.
Production
In 2012, Italy was the top producer of wine in the world, followed by France, Spain, the
United States and Argentina
Wine grapes grow almost exclusively between 30 and 50 degrees latitude north and
south of the equator. The world's southernmost vineyards are in the Central
Otago region of New Zealand's South Island near the 45th parallel south,[70] and the
northernmost are in Flen, Sweden, just north of the 59th parallel north.[71]
Wine production in the European Union in 2005 and 2006
2005 Estimate (thousands of hectoliters)
1. Italy: 60,562
2. France: 52,105

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3. Spain: 34,789
4. Germany: 9,256
5. Portugal: 7,266
6. Greece: 3,997
2006 Estimate (thousands of hectoliters)
1. Italy: 52,036
2. France: 51,700
3. Spain: 39,301
4. Germany: 8,995
5. Portugal: 7,390
6. Greece: 3,908
The top 5 countries for wine production in 2008
Country Wine Production 2009 Percentage of World Total
1 Italy 4,994,940 metric tonnes 18.42%
2 France 4,552,077 metric tonnes 16.79%
3 Spain 3,250,610 metric tonnes 11.99%
4 United States 2,250,000 metric tonnes 8.30%
5 China 1,580,000 metric tonnes 5.82%
Sources: FAOSTAT data 2008 (last accessed by Top 5 of Anything: Nov, 2010)
The Wine Institute, a nonprofit group, tracked that the U.S. has been the largest wine
consuming nation in the world since 2010, with residents individually consuming a total
of 2.82 gallons a year in 2013, up from under 2 gallons in 1979.[74] Wine shipments
within the U.S. from California alone were 215 million cases in 2013, up 3% from the
previous year, with an estimated retail value of $23.1 billion, up 5%.[75] All American
regions produce wine however, 95% comes from four regions with California as the
most prolific producer, followed by Washington, Oregon and New York.
Consumption
Wine-consumption data from a list of countries by alcohol consumption measured in
liters of pure ethyl alcohol consumed per capita in a given year, according to the most
recent data from the World Health Organization. The methodology includes persons 15
years of age or older.[76]
Wine consumption

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Country
Liters per
capita
France 8.14
Portugal 6.65
Italy 6.38
Croatia 5.80
Andorra 5.69
Switzerland 5.10
Slovenia 5.10
Hungary 4.94
Moldova 4.67
Argentina 4.62
Uses
Wine is an alcoholic beverage used as food drink, psychoactive drug, and sometimes
intended for use as medicine.
Wine is a popular and important beverage that accompanies and enhances a wide
range of cuisines, from the simple and traditional to the most sophisticated and
complex. Wine is important in cuisine not just for its value as a beverage, but as a flavor

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agent, primarily in stocksand braising, since its acidity lends balance to
rich savory or sweet dishes. Wine sauce is an example of a culinary sauce that uses
wine as a primary ingredient.[77] Natural wines may exhibit a broad range of alcohol
content, from below 9% to above 16% ABV, with most wines being in the 12.5%–14.5%
range. Fortified wines (usually with brandy) may contain 20% alcohol or more.
Religious significance
Ancient religions
The use of wine in ancient Near Eastern and Ancient Egyptian religious ceremonies
was common. Libations often included wine, and thereligious mysteries of Dionysus
used wine as a sacramental entheogen to induce a mind-altering state.
Judaism
Wine is an integral part of Jewish laws and traditions. The Kiddush is a blessing recited
over wine or grape juice to sanctify the Shabbat. On Pesach (Passover) during the
Seder, it is a Rabbinic obligation of adults to drink four cups of wine.[79] In
the Tabernacle and in the Temple in Jerusalem, the libation of wine was part of the
sacrificial service.[80] Note that this does not mean that wine is a symbol of blood, a
common misconception that contributes to the Christian myth of the blood libel. "It has
been one of history's cruel ironies that the blood libel—accusations against Jews using
the blood of murdered gentile children for the making of wine and matzot—became the
false pretext for numerous pogroms. And due to the danger, those who live in a place
where blood libels occur are halachically exempted from using red wine, lest it be
seized as "evidence" against them."[81]
The bishop elevates thechalice while the deacon fans the gifts.
Christianity
Jesus making wine from water in The Marriage at Cana, a 14th-century fresco from
theVisoki Dečani monastery
All alcohol is prohibited under Islamic law, although there has been a long tradition of
drinking wine in some Islamic areas, especially in Persia.
In Christianity, wine is used in a sacred rite called the Eucharist, which originates in
the Gospel account of theLast Supper (Gospel of Luke 22:19)

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describing Jesus sharing bread and wine with his disciples and commanding them
to "do this in remembrance of me." Beliefs about the nature of the Eucharist vary
amongdenominations (see Eucharistic theologies contrasted).
Islam
Alcoholic beverages, including wine, are forbidden under most interpretations
of Islamic law. Iran had previously had a thriving wine industry that disappeared
after the Islamic Revolution in 1979.[84] In Greater Persia, mey (Persian wine) was a
central theme of poetry for more than a thousand years, long before the advent of
Islam. Some Alevi sects use wine in their religious services.
Certain exceptions to the ban on alcohol apply. Alcohol derived from a source other
than the grape (or its byproducts) and the date is allowed in "very small quantities"
(loosely defined as a quantity that does not cause intoxication) under the
SunniHanafi madhab, for specific purposes (such as medicines), where the goal is
not intoxication. However, modern Hanafi scholars regard alcohol consumption as
totally forbidden.
Health effects
Red table wine
Nutritional value per 100 g (3.5 oz)
Energy 355 kJ (85 kcal)
Carbohydrates 2.6 g
Sugars 0.6 g
Fat 0.0 g
Protein 0.1 g
Other constituents
Alcohol (ethanol) 10.6 g

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10.6 g alcohol is 13%vol.
100 g wine is approximately 100 ml (3.4 fl oz.)
Sugar and alcohol content can vary.
 Units
 μg = micrograms • mg = milligrams
 IU = International units
Although excessive alcohol consumption has adverse health
effects, epidemiological studies have consistently demonstrated that moderate
consumption of alcohol and wine is statistically associated with a decrease
in cardiovascular illness such as heart failure.[87] Additional news reports on
the French paradox also back the relationship.[88] This paradox concerns the
comparatively low incidence of coronary heart disease in France despite relatively
high levels of saturated fat in the traditional French diet. Some epidemiologists
suspect that this is due to higher wine consumption by the French, but the scientific
evidence for this theory is limited. Because the average moderate wine drinker is
likely to exercise more often, to be more health conscious, and to be from a higher
educational and socioeconomic background, the association between moderate
wine drinking and better health may be related to confounding factors or represent
a correlation rather than cause and effect.[87]
Population studies have observed a J-curve correlation between wine consumption
and the prevalence of heart disease: heavy drinkers have an elevated prevalence,
while moderate drinkers (up to 20g of alcohol per day, approximately 200 ml
(7 imp fl oz; 7 US fl oz) of 12.7% ABV wine) have a lower prevalence than non-
drinkers. Studies have also found that moderate consumption of other alcoholic
beverages is correlated with decreased mortality from cardiovascular
causes although the association is stronger for wine. Additionally, some studies
have found a greater correlation of health benefits with red than white wine, though
other studies have found no difference. Red wine contains more polyphenols than
white wine, and these could be protective against cardiovascular disease. A
chemical in grapes, red wine, peanuts and blueberries called resveratrol has been
shown to have both cardioprotective and chemoprotective effects in animal
studies. Low doses of resveratrol in the diet of middle-aged mice has a widespread
influence on the genetic factors related to aging and may confer special protection
on the heart. Specifically, low doses of resveratrol mimic the effects of caloric
restriction—diets with 20–30% fewer calories than a typical diet. Resveratrol is

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produced naturally by grape skins in response to fungal infection, including
exposure to yeast duringfermentation. As white wine has minimal contact with grape
skins during this process, it generally contains lower levels of the
chemical. Beneficial compounds in wine also include
other polyphenols, antioxidants, and flavonoids. Sipping slowly when drinking may
result in optimal absorption of the resveratrol in wine. Due to inactivation in the gut
and liver, most of the resveratrol consumed while drinking red wine does not reach
the blood circulation. However, when sipping slowly, absorption via the mucous
membranes in the mouth can result in up to 100 times the blood levels of
resveratrol, according to Stephen Taylor, Ph.D.
Red wines from the south of France and from Sardinia in Italy have the highest
levels of procyanidins, compounds in grape seeds which could be responsible for
red wine's heart benefits. Red wines from these areas contain between two and four
times as much procyanidins as other red wines tested. Procyanidins suppress the
synthesis of a peptide called endothelin-1 that constricts blood vessels. A 2007
study found that both red and white wines are effective antibacterial agents against
strains of Streptococcus . In addition, a report in the October 2008 issue of Cancer
Epidemiology, Biomarkers and Prevention posits that moderate consumption of red
wine may decrease the risk of lung cancer in men.
While evidence from laboratory and epidemiological (observational) studies suggest
a cardioprotective effect, no controlled studies have been completed on the effect of
alcoholic beverages on the risk of developing heart disease or stroke. Excessive
consumption of alcohol can cause cirrhosis of the liver and alcoholism
, the American Heart Associationstates that "the American Heart Association
cautions people NOT to start drinking ... if they do not already drink alcohol. Consult
your doctor on the benefits and risks of consuming alcohol in moderation." Wine's
effect on the brain is also under study. One study concluded that wine made from
the Cabernet Sauvignon grape reduces the risk of Alzheimer's Disease. Another
study found that among alcoholics, wine damages the hippocampus, a brain area
involved in memory processes, to a greater degree than other alcoholic beverages.
Sulfites in wine can cause some people, particularly those with asthma, to have
adverse reactions. Sulfites are present in all wines and are formed as a natural
product of the fermentation process; many winemakers add sulfur dioxide in order to
help preserve wine. Sulfur dioxide is also added to foods such as
dried apricots and orange juice. The level of added sulfites varies; some wines have
been marketed with low sulfite content.

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A study of women in the United Kingdom, called The Million Women Study,
concluded that moderate alcohol consumption can increase the risk of
certain cancers, including breast, pharynx and liver cancer. Lead author of the
study, Professor Valerie Beral, asserted that there is scant evidence that any
positive health effects of red wine outweigh the risk of cancer. She said, "It's an
absolute myth that red wine is good for you." Professor Roger Corder, author of the
bestselling bookThe Red Wine Diet, countered that two small glasses of a very
tannic, procyanidin-rich wine would confer a benefit, although "most supermarket
wines are low-procyanidin and high-alcohol No professional medical association
recommends that people who are nondrinkers should start drinking wine
Packaging
Most wines are sold in glass bottles and sealed with corks (50% of which come
from Portugal) An increasing number of wine producers have been using alternative
closures such as screwcaps and synthetic plastic "corks". Although alternative
closures are less expensive and prevent cork taint, they have been blamed for such
problems as excessive reduction]
Some wines are packaged in thick plastic bags within corrugated fiberboard boxes,
and are called "box wines", or "cask wine". Tucked inside the package is a tap
affixed to the bag in box, or bladder, that is later extended by the consumer for
serving the contents. Box wine can stay acceptably fresh for up to a month after
opening because the bladder collapses as wine is dispensed, limiting contact with
air and, thus, slowing the rate of oxidation. In contrast, bottled wine oxidizes more
rapidly after opening because of the increasing ratio of air to wine as the contents
are dispensed; it can degrade considerably in a few days.
Environmental considerations of wine packaging reveal benefits and drawbacks of
both bottled and box wines. The glass used to make bottles is a nontoxic, naturally
occurring substance that is completely recyclable, whereas the plastics used for
box-wine containers are typically much less environmentally friendly. However,
wine-bottle manufacturers have been cited for Clean Air Act violations. A New York
Times editorial suggested that box wine, being lighter in package weight, has a
reduced carbon footprint from its distribution; however, box-wine plastics, even
though possibly recyclable, can be more labor-intensive (and therefore expensive)
to process than glass bottles. In addition, while a wine box is recyclable, its plastic
bladder most likely is not.
Storage

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Oak wine barrels
Wine cellars, or wine rooms, if they are above-ground, are places designed
specifically for the storage and aging of wine. In an "active" wine cellar, temperature
and humidity are maintained by a climate-control system. "Passive" wine cellars are
not climate-controlled, and so must be carefully located. Because wine is a natural,
perishable food product, all types—including red, white, sparkling, and fortified—can
spoil when exposed to heat, light, vibration or fluctuations in temperature and
humidity. When properly stored, wines can maintain their quality and in some cases
improve in aroma, flavor, and complexity as they age. Some wine experts contend
that the optimal temperature for aging wine is 13 °C (55 °F), others 15 °C
(59 °F) Wine refrigerators offer an alternative to wine cellars and are available in
capacities ranging from small, 16-bottle units to furniture-quality pieces that can
contain 400 bottles. Wine refrigerators are not ideal for aging, but rather serve to
chill wine to the perfect temperature for drinking. These refrigerators keep the
humidity low (usually under 50%), below the optimal humidity of 50% to 70%. Lower
humidity levels can dry out corks over time, allowing oxygen to enter the bottle,
which reduces the wine's quality through oxidation.
OBJECTIVES OF MY STUDY
1. To analyse the Wine industries in India.
2. To study the market share of Sula WINEYARDS
3. To know the strength and weakness of Sula Wineyards Industry
4. To know the opportunites and threats to the company.
5. To learn how export import takes place in this company.
6. To learn about wine types and its procedure.

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INDIAN WINE INDUSTRY
Indian Wine Industry India is not traditionally a wine drinking country. Due to earlier
period of prohibition in India and higher price compared to spirits like whisky and brandy
manufactured in the country, the manufacture and consumption of wine in India is
insignificant when compared to other countries. The setting up of Champagne Indage’s
plant in 1984 in the state of Maharashtra marked the manufacture of wine on an
organized scale in India. Commercial wine grape production in India has only been in
existence since the 1980s. The following factors have contributed to India’s low wine
consumption: · Poor storage; · Poor transport facilities; · Lack of promotional activities
for wine consumption in the country; · Unfavourable rules for domestic marketing of
wines except in few States; · Stringent and regressive government rules with different
taxation across various states. The Indian wine industry has been steadily growing over
the last ten years. Wine is gradually becoming a part of urban Indian life style. Since
India joined the WTO, import tariffs in the country have been remarkably reduced, thus
enabling foreign exporters tap into India’s vast consumer market. The wine market is
gradually opening up as quantitative restrictions are being lifted, import duties are being
lowered and domestic regulations are being simplified. The following factors are adding
to the higher consumption of wine in India: · Rising incomes of Indian population; ·
Changing demography; · Exposure to new culture; · Growth in the foreign tourists; ·
Loosening of Government regulations and policies
Types of Wines available in India:
There are basically three types of wine available in the country: · Premium Wines (Still
wines): In this category the Indian market is divided mainly into two major categories -
White and Red wines; · Sparkling Wines: This wine is generally considered to fall within
the White wine category by many consumers; · Fortified wines: This is not yet made or
regarded as quality wines. Further all the wines available in the above categories is
divided in following three categories: · Domestic Indian Wine: This is the wine, which is
produced from Indian grapes and bottled in India by the domestic wineries. · Foreign
Bulk Wine Bottled in India: A few large domestic producers import bulk wine and bottle it
in India. · Foreign Wine Bottled in origin: More than 200 brands are currently available in
this category and they are imported by Domestic players, Importers and Foreign
players. Production of Wine in India: India has 123, 000 acres of vineyards, of which
only 1% are used for wine production. The following three wine companies are currently
producing wines in India: ·
1. Chateau Indage Limited, Pune ·
2. Grover Vineyards Limited, Bangalore ·

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3. Sula Wineyards, Nasik.
These units produce approximately 150,000 cases, each case comprising of 12 bottles.
In addition, they also import about 20,000 cases of wines in bulk and bottle them in their
plants. The small local winemakers produce about 100,000 cases of inferior quality
wine.
Consumption of wine in India:
The 'domestic wine consumption touched more than 10 million litres in 2007, and may
go up to 15 million litres for the current year, from a mere 1 million litres in 2001.
Nearly 80% of the demand for wine centres in the following major cities of the country -
New Delhi, Mumbai, Chennai, Kolkata, Pune and Bangalore. The consumption pattern
is as follows: Mumbai (39%), Delhi (23%), Bangalore (9%) Goa (9%), where as the rest
of India has only 20% consumption. The overall consumption of wines in India is about
400,000 cases a year of which 85 percent are table wines and the remaining are the
expensive varieties. Out of the 400,000 cases, about 50,000 cases are imported from
various sources. Today, the consumption per head is roughly 0.0030 litre per annum.
Market trends :
India ranks 77 in terms of wine consumption in the world. The country accounts for 0.8
per cent of the total wine consumed in Asia as compared to China which accounts for
more than 62.7 per cent market share. India's wine market is currently equivalent to
around 200 people sharing one bottle but it is likely to grow at projected 22% in next
three years due to the rise in domestic consumption. The current consumption is 5m
bottles a year. Contrary to popular belief that only imported wines are mainly consumed,
most wines consumed in the country is locally produced, accounting for 75 per cent of
the total volume. Around a quarter of the wine consumed in the country is imported and
France accounts for 41.7 per cent of wines imported by India. In 2006, Indian
winemakers sold roughly 940,000 cases of wine domestically and 60,000 cases
overseas, up from 530,000 domestic cases and 30,000 overseas in 2003, according to
industry figures. In 2007, the wine sales were 7, 20,000 cases.
The wine industry has witnessed a CAGR of over 25% over the last 3 years in the
premium wine segment mainly fuelled by the strong growth in the domestic wine
consumption. The Indian wine market currently stands at 4.6 million litres in volume
terms and Rs 450 crore in value terms. The wine market is expected to grow to 8.3
million litres by 2010. The domestic wine consumption touched more than 10 million
litres in 2007, and may go up to 15 million litres for the current year, from a mere 1
million litres in 2001. Nearly 80 per cent of wine sales are accounted for by the major
cities, especially New Delhi, Mumbai, Chennai, Kolkata, Pune and Bangalore. West

23
India accounts for over 41 per cent of total volume sales of wine in India, followed by
North India, which accounts for 29 per cent of volume sales. Nearly 90 per cent of wine
sales are for still (that is, red and white) wines. Around 63 per cent of the volume sales
of wine are through off-trade channel in five-star hotels, pubs and bar-restaurants.
There are 54 wineries across the country out of which 52 are in Maharashtra.
Maharashtra accounts for almost 94% of the country’s wine production. In the fiscal
year 2006-2007, the total wine production of grape wine in India was 1.42 crore litres,
out of which Maharashtra’s share was 1.32 crore litres. Investment in Maharashtra’s
wine industry has increased by 74.31% to Rs. 247.71 crore in the fiscal year 2006-2007.
Sula Vineyards sold 129,000 nine litre cases in 2007, plans to market over 190,000 in
2008 and hopes to continue growing at over 35% annually for the next three years.
Grover, which sold 60,000 cases in 2007, plans to reach the 90,000 this year. Chateau
Indage, the biggest producer, has already crossed the 200,000 case mark.
Duty Regime: Custom Duty / Excise Duty:
The customs duty on wine has been increased from 100% to the maximum permissible
rate of 150%. · India scrapped additional customs duty on imported liquor, wine, and
beer following a complaint by the European Union and the US in the World Trade
Organization. So the excise duty has been waived on wine. · The education cess
applicable on the imports of wine has been scrapped in 2007. Local Taxes: · The
Central Government has prescribed a maximum state excise of 25% for wine in various
states. · In Kerala, the rate of Import fee for imported wine is Rs. 2 per bulk litre. ·
Maharashtra has removed excise duty on wine. · Haryana has reduced the excise duty
for wine to Rs.20.50 per proof litre from Rs.32.25 per proof litre. In addition it has
reduced the export duty to 50% for the domestic industry.
Value Added Tax (VAT):
State of Maharashtra – 20%
State of Delhi – 20%
State of Haryana – 20%
State of Chandigarh – 4%
State of Karnataka – No VAT
State of Tamil Nadu – 53
State of Kerala – 12.5%
Foreign Direct Investment Policy:

24
The policy for distillation of alcohol has been announced vide Press Note 4 (2006)
according to which FDI up to 100% is permitted on the automatic route for distillation &
brewing of alcohol subject to licensing by the appropriate authority. Key Wine Importers:
The most sought-after imported wine brands in India are from France, and French wines
account for almost half of the total imports in value terms. Italian wines are the second
highest imported, followed by Australia. Though French wines are the largest imported,
wines from Australia and California are making strong inroads. 72,000 wine cases are
imported mainly by ITDC, Sansula, Brindco, E & J Gallo and other private companies.
The number of wine importers in India is growing at the rate of 30% with the list of
importers increasing every year. The following are the key wine importers in India: ·
Sonarys Co-Brands Pvt. Ltd. (Mumbai) · Brindco Sales ltd. (Delhi) · Mohan Brothers RR
(Delhi) · International Global Tax (Delhi) · Kiara Wines (Mumbai) · RR International
(Delhi and Mumbai) · Fairmacs Shipstores Pvt. Ltd. (Chennai) · Star X wines (Delhi)
Government Initiatives:
Setting up of a National Wine Board at Pune by the Government: In response to the
requirements of international wine exporters, the Indian Government has finalised the
setting up of a National Wine Board (NWB) at Pune. The Union Ministry of Food
Processing Industries (MFPI) will be its administrative ministry and has defined its
mandate. The National Wine Board will promote co-operative efforts among growers of
grapes, apples, plums, apricots, manufacturers of raisins, juice and wine and encourage
contract farming and promote grape, apple, plum, apricot processing and wine industry
in general. The mandate for the Wine Board is as follows: · Promote co-operative efforts
among growers of grapes, apples, plums, apricots etc., manufacturers of raisins, juice
and wine and encourage contract farming. · Promote Grape, Apples, Plum, Apricot etc.
processing and wine industry in general. · Undertake research and development in new
technologies, products and processes for continuous modernization of the grape &
other fruits processing and wine industry. · Conducting courses and programmes to
develop highly skilled manpower for the grape & other fruits processing and wine
industry. · Monitor cultivation and production of desired variety of grapes & other fruits
and disseminate best viticulture practices. · Identify and develop appropriate rootstock
of grapes & other fruits for different geo-climatic regions of the country through
research, training and extension. · Coordination with Agriculture Universities and
research institutions. · Promote marketing and export of wine through various measures
including workshops and trade shows. · Fix grade/standards of juice, raisins and wine. ·
Provide quality testing facilities for wine to meet global standards. · Collect statistics
from growers, manufacturers, traders and other persons concerned with grapes & other
fruits/wine and bringing out publication of statistics so collected. · Advise Central and
State Governments on various policy issues, viz, excise policy, taxation, etc. relating to
grapes & other fruits/wine. · Advise farmers, industry and Government on commercial

25
and technical issues relating to grapes & other fruits/wine. · Such other matters relating
to wine industry as may be prescribed by the Central Government from time to time.
Maharashtra Government: State Excise Holiday: No Excise Duty, i.e. 100% remission
for manufacturing wines for a period of 10 years, provided not to use alcohol in wines to
increase strength of wine.
Sales Tax Holiday: Sales Tax will be applicable at the rate of 4% same as that of
agriculture produce.
Octroi Holiday: Refund of Octroi is available to all units for a period of 7 years or the
value 100% of the total fixed investment whichever is lower in ‘C’ zone. Special Capital
Incentive: At rate of 20% of fixed capital investment with monetary ceiling of Rs. 10
Lakh for SSI unit in ‘C’ zone. Interest subsidy: No interest subsidy for wine unit.
Electricity Duty Exemption: 100% exemption to all new units for a period of 15 years.
Stamp Duty Exemption: 100 % exemption to all new units.
Maharashtra's wine industry received a major thrust with the new Maharashtra grape
processing industrial policy being set up in 2001. Moreover, the Government of
Maharashtra has nominated Maharashtra Industrial Development Corporation (MIDC)
as a nodal agency for establishment of grape wine parks in the state and would
coordinate efforts of various organizations from central and state agencies and the
stake holders such as farmers, processors, service providers etc. MIDC has established
two wine parks under the "Food Park" scheme of the Ministry of Food Processing
Industry of the Govt. of India viz. one at Palus near Miraj known as "Krishna Grape
Wine Park" and the second one at Vinchur near Nasik known as "Godavari Valley Wine
Park". In addition a Grape Processing and Research Institute (GPRI) at Palus under the
Bharati Vidyapeeth Deemed University has also been established. The Director General
of Foreign Trade (DGFT) has declared both districts as "Agri Export Zones". The Govt.
of Maharashtra has also declared a special incentive package for the grape processing
industry. Thus, a number of promotional schemes are available. There are around 20
grape wine producing units in the state and many are likely to come up. Maharashtra
has imposed an additional excise duty of 200% on wine and 150% on spirits. The local
wine manufacturers are exempt from excise duty, at least till 2011, according to the 10-
year policy effective from 2001. Out of the 62 wineries across the country, 58 wineries
are in Maharashtra alone with the total investment adding up to around Rs 328.97 crore
(48.77 million Euros; 77.31 million US$).
Out of which 30 wineries in Nashik district, 11 in Pune, 10 in Sangli, 3 in Solapur, 3 in
Buldhana and one in Usmanabad. Seven new wineries, one in Buldhana, two each in
Nashik, Pune and Sangli were set up this year. These wineries are - York Winery
(Nashik), Valle De Vin (Nashik), Grape City Winery Co-op Institute (Sangli), Ape Wines

26
(Sangli), Deccan Plateu Vineyards (Pune), Indapur Taluka Grape Processing & Winery
Co-op Institute (Pune) and Ambrosia Winery (Buldhana). More than Rs 81.26 crore has
been invested in these seven wineries. The wine industry in Maharashtra is increasing
by 32.80 per cent in the financial year 2007-08, against Rs 247.71 crore (36.72 million
Euros; 58.21 million US$) in the previous year. The total investment in the state wine
industry has grown four times since the last five years from Rs 77.75 crore (11.52
million Euros; 18.27 million US$) in 2004 to Rs 328.97 crore (48.77 million Euros; 77.31
million US$) in 2008. Investment made in the state wine industry was Rs 110.17 crore
(16.33 million Euros; 25.89 million US$) in 2005, Rs 160.31 crore (23.76 million Euros;
37.67 million US$) in 2006 and Rs 247.71 crore (36.72 million Euros; 58.21 million US$)
in 2007. Today, out of total grape wine production in India, Maharashtra accoounts for
almost 97 per cent of India's total wine produce. In FY08, the total wine production in
India was 22.5 million litres, out of which Maharashtra's share was a whopping 21.1
million litres.
Localisation of the Wine Industry:
The following are the major wine producing regions in the country:
1. Nashik Region (Maharashtra)
2. Sangli Region (Maharashtra)
Most of the Indian wineries are located in these two regions including the largest
Chateau Indage and Sula Vineyards. Chateau Indage is a winery located in
Narayangaon, which is located close to Pune. Sula Vineyards is situated in Mumbai.
There are 54 wineries across the country. Out of them, 52 wineries are in Maharashtra,
including 28 wineries in Nasik district, 8 in Sangli, 9 in Pune, 3 in Solapur, 2 in Buld hana
and 1 in Usmanabad. The Maharashtra Industrial Development Corporation has set up
two Wine Parks in the State: Vinchur, near Nasik (151.36 Hectares) and Palus, near
Sangli (53.70 Hectares).
3. Bangalore Region (Karnataka) The third largest wine producer of India, Grover
Vineyards has its winery situated in this region
4. Himachal Region (Himachal Pradesh) Chateau Indage has planted merlot, cabernet
and sauvignon blanc grape varieties in Kullu and Manali where it is planning to get into
production in three years.
Major Indian Wine Companies:
Most of the wineries in are located in Nashik in the state of Maharashtra in the south
west of India. At present, India has about 60 wineries with an estimated investment of

27
about USD 60 million. The following three wine companies are the major wine
producing companies in India:
· Chateau Indage Limited, Pune: This is the largest, both by volume as well as
valuation. They are the pioneers of the wine industry in India with their wineries at
Narayangaon (on the Pune – Nashik road), Indage launched the sparkling wine
Marquise de Pompadour in 1986, Riviera soon after, and Chantilli in 1989. They were
also the first to make ‘Bottled in India’ wines which has since been discontinued.
· Grover Vineyards Limited, Bangalore: This was set-up near Bangalore in 1989 after
the promoters tested soil and climatic conditions in various locations – including their
native Maharashtra – and settled on the area north of Bangalore as being ideal. Their
first wines were launched in 1992 , and the company has remained remarkably focused
on delivering good value wine. ·
Sula Wineyards , Mumbai: This was the first marketing-savvy wine company. Sula is
also the only Indian wine company to be present in all price and product segments. The
following are the other top Indian wine companies: · Sankalp Wines: Their Vinsura
wines (launched in 2003) are now available throughout India. They are based in the
Vinchur Wine Park outside Nashik. ·
Renaissance Wines: This is located outside Nashik and has excellent packaging and
very drinkable wines. ·
ND Wines: This is also located outside Nashik. ·
Vintage Wines: They produce the best wine in India today – while their production is tiny
(some 100,000 litres in 2006) their regular range (Chenin Blanc, Syrah, Chardonnay & a
Cabernet Sauvignon) sold under the Reveilo label has won critical acclaim. ·
Mandala Valley: This is a Bangalore-based company that has produced its first wines in
2006 under contract in Maharashtra, at the Solapur-based Mohini Wineries. The
company has also set up vineyards in Karnataka. ·
Flamingo Wines: This is the second winery in the Vinchur Wine park outside Nashik,
and produces a reasonable range of wines – but has been struggling to establish sales
& distribution and has sold little of their wines so far.
· Vinicola: This is in Goa, and it makes a wide range of wines using traditional
techniques, and sells the resulting product largely in Goa, with a volume exceeding
75,000 cases annually. Other Wineries: ·

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SULA WINEYARDS
Girana Valley Wine Yard · Situated 180 km northeast of Mumbai, Nashik is India’s
largest grape-growing region, but had traditionally never been used to grow wine
grapes. Wondering why, an enterprising, Stanford-trained engineer named Rajeev
Samant quit his hi-tech Silicon Valley job in 1993 to do some investigating.
A little research quickly showed that the Nashik climate was not only perfect for wine
grapes, but was also on par with winegrowing regions in Spain, California, and
Australia. His determination doubled and Rajeev returned to California in search of a
winemaker. In Sonoma County he found Kerry Damskey, an eminent Californian
winemaker, who enthusiastically agreed to help start a winery on Rajeev’s 30 acre
family estate.
In 1997, the duo took the revolutionary step of planting French Sauvignon Blanc and
Californian Chenin Blanc, varieties that had never before been planted in India. The first
Sula wines, released in 2000, were widely acclaimed as India’s best white wines.
Since its inception, Sula has rapidly established itself as India’s Leading Premium Wine
Producer, helping spark a wine revolution that has seen consumption grow at 25%
annually and several new wineries come up in the Nashik area. In November 2002,
Wine Spectator - the world’s No.1 wine magazine - did a five-page feature on Sula, a
proud first for an Indian winery.
A second winery with three times the capacity of the first was completed in late 2004 to
keep up with demand, and a third million litre winery started operations in 2006. Sula
has expanded from the original 30 acre family estate to about 1,800 acres (owned and
contracted) under plantation, both in Nashik as well as in nearby Dindori, India’s
upcoming wine region. Varietals planted include Cabernet Sauvignon,
Shiraz, Zinfandel and Merlot along with Chenin Blanc, Sauvignon Blanc, Viognier and
Riesling. In addition to having a wide distribution network within India, Sula also exports
its wines internationally, as well as importing and distributing wines from leading
producers worldwide. In 2005, Sula proudly launched its first reserve wine,
theDindori Reserve Shiraz, as well as India’s first dessert wine, the Late Harvest Chenin
Blanc.
The winery and vineyards are open to the public for educational tours, and the beautiful
Tasting Room invites visitors to enjoy their favourite Sula wines amidst spectacular
views of the vineyards and surrounding lakes and hills. The nearby Sula amphitheatre is
an impressive location for events and social gatherings and is available for bookings.

29
Visitors can now spend a few nights in paradise at BEYOND, Sula’s new exclusive
accommodation on the vineyards with a beautiful lake view.
Firmly committed to remaining at the forefront of Indian wines, Sula continues to
experiment with new varietals, engage in sustainable agriculture, support the local rural
economy, and, of course, make wines of outstanding quality and superb value
A market leader in the Indian wine industry, Sula Vineyards’ rise to the top has been
impressive. And behind the brand’s success is its founder and CEO, Rajeev Samant,
who has been instrumental in setting a vision for his company. Sula was the first to
establish a winery at Nasik and today, the region has up to 35 wineries. Even as
Samant strives to enhance the taste of his indigenous wines, he is thinking ahead in
terms of wine tourism and setting up wine bars. It is this lateral thinking that has
ensured his brand has captured the attention of India
That’s the secret formula to a perfect life, according to Rajeev Samant. As founder and
CEO of Sula Vineyards (Sula), Samant enjoys the luxury of unwinding at a vineyard that
showcases the country’s first Sauvignon Blanc and Chenin Blanc grape varieties,
planted in 1999. And it’s hard not to agree to Samant’s point of view as you battle past
the traffic and waterlogged roads of Mumbai’s monsoon to the pristine hill tops en route
to Nasik, the town of Sula. From having sold its first wine bottle in 2000, Sula has
leaped in these 12 years to become a prominent player in the winemakers’ scenario.
Today, Sula’s brands enjoy better positioning when compared to more established
players and Samant states that Sula holds close to 65 per cent of the available market
share in India. According to Rabobank India, a leading food and agribusiness bank,
Sula presently has the largest market share while other key players in the wine industry
are Grover Vineyards, United Spirits’ wine division and Indage Vintners.
Currently, the company has 1,800 acres in vineyards (own and contract farms) spread
across the states of Maharashtra and Karnataka, and is looking to touch sales of 7.5
million bottles (about 6,50,000 – 7,00,000 cases with each case holding 12 bottles or
nine litres of wine) across its own 25-odd brands, this fiscal. Its red wine Cabernet
Shiraz and white wines Chenin Blanc and Sauvignon Blanc are among its best selling
brands. For FY 2013, the company is targeting revenues of Rs. 200 crore up from Rs.
140 crore in FY 2012. So, what has been the push behind Sula’s quick rise to
prominence? The brand has taken its sheen, in part, from its founder who is often seen
as cool, sophisticated, well networked and fairly young as the 40-something Samant.
“Rajeev has understood the market well and has got his distribution right. Two of his
closest competitors, Grover Vineyards and Four Seasons by UB Group together have
sold fewer number of cases than Sula last year,” shares Subhash Arora, well-known

30
wine writer, founder of the Indian Wine Academy and president of the Delhi Wine Club.
Arora believes Samant has been Sula’s perfect brand ambassador.
Samant has also been astute in making some critical business decisions that helped the
company see through the recessionary phase of 2008-09. In this period, the wine
industry was amongst the first to be impacted. Sales of Sula’s premium brands had hit
an all time low and with wines stuck in its wineries, the company was unable to service
debt. It was then that Samant decided to introduce affordable wines under the brand
names of Samara and Port Wine 1000 at Rs. 200 per bottle. What was meant to be a
temporary business solution has now assumed significance in Sula’s portfolio as the
brands contribute to 30 per cent of the company’s volumes and 15 per cent to 20 per
cent of turnover value. “While it is good to be a premium winery, the Indian market has
not completely developed to survive only on this model. Hence, our business model
evolved to what most global wineries do now; that is to have both premium and value
brands. It is necessary to be active in all ends of the market,” says Samant.
In the frontline
In Nasik, Samant prefers to be informal, sleeves rolled up and in floaters, spending his
mornings and evenings at the vineyards. When I question him on Sula staying ahead of
its competition that is struggling with issues of visibility or bankruptcy, Samant’s answer
presents a contributing factor to its success. “I have always been focussed. Wine is a
very personal business – you need to interact with your growers and spend time at the
winery, not glued to your office,” he says.
That same focus saw Samant spending three months at Kerry Damskey’s winery in
California prior to starting operations in India. Damskey, who runs a consultation
business called Terroirs Inc., is Samant’s business partner, friend and the master
winemaker at Sula. At the time, Samant admits he was more of a gin and beer drinker
and his knowledge on wines was limited. Though his then girlfriend introduced him to
the Napa Valley scene, it was from Damskey that he learnt the ropes. “It was exciting to
be on the frontline and work like a cellar worker, understanding the nuances. It gave me
a good perspective of how things work,” shares Samant.
Currently, Sula has two main wineries in Nasik and Dindori, Maharashtra while it has
taken over three other custom crush facilities (where grapes can be vinified) in Nasik
and one in Karnataka. So far, Sula has gone through three private equity (P.E) rounds,
where the funds have been used for building new winery capacity. The wineries have a
total capacity of seven to eight million litres with 100 per cent capacity utilisation, but
Samant is acutely aware that he needs to add a million litres a year to keep up with the
market growth. He realises that owning a winery and a vineyard, and making branded

31
wines and marketing them is not the only model to follow to remain sustainable in the
long run. “We took over smaller wineries that were not doing well, which is a win-win
situation for both the parties involved rather than focusing only on investing in building
more wineries as they are very capital intensive. If we had continued expanding in an
organic way, then we would have gotten stuck during a downturn,” he says. Samant
believes the industry has matured enough to experiment with different working models.
Using others’ facilities, blending of wines from different wineries and subcontracting the
production of lower priced wines to wineries that could not build their own brands are
some of the ways. This was not conceivable when Samant set up production in 1999 as
there was no discernible wine industry then, save for one company in Pune and another
in Bengaluru. A winery licence had not been given out for 15 years by the Maharashtra
government when he procured it for Sula. Nasik now has about 35 wineries. It isn’t
surprising considering that Nasik, recognised as a region where farmers grew table
grapes, is now known as India’s wine capital making its state the biggest producer of
wine in India.
The initial struggle
While Samant’s business acumen is propelling Sula’s growth in newer territories, there
was a time when he was a satisfied professional. A full-paid scholarship to study
economics and engineering management from Stanford University and a comfortable
job at Oracle saw him leading a privileged life but he was keen on making a calling of
his own. Even then, neither grapes nor wine were on top of his mind when he got back
to India. He considered his father’s business of stevedoring instead. He then came
across his family’s 30-acre plot in Nasik during a family wedding. In 1994, the area was
virtually deserted with no houses, electricity or phone lines and just grasslands all
around. Organic mangoes were Samant’s initial idea and some of the trees he planted
still stand. But it was not long before he realised the region was ripe for growing grapes.
“I collected the necessary soil and climate data, and headed to the University of
California, Davis to consult with the professors. They were sceptical but intrigued and
suggested the type of varieties I could plant,” says Samant.
It was around this time that Samant met Damskey, who was advising a number of
smaller high-end wineries. Though Samant could not afford his fees, Damskey came
onboard as a partner in 1997 and soon, the duo laid out the framework to build Nashik
Vintners Pvt. Ltd. (parent company of Sula). He then raised an amount of Rs. 4 crore to
Rs. 5 crore from Saraswat Cooperative Bank, family and friends. The biggest challenge,
however, was to obtain an excise licence and that took close to two years. It took three
signatures of successive excise ministers and change of governments before he
chanced upon an enlightened bureaucrat, whom he convinced about the benefits of the

32
agro industry and rural employment. Meanwhile, interim permissions to setup a winery
ensured that work progressed. The first grapes to be planted were French Sauvignon
Blanc and Californian Chenin Blanc.
In the first three years, Sula had 15 to 20 contract farmers on its roll. “We had to first
plant and show to them that these varieties can grow here and also yield a good price.
Once they came onboard, they were very supportive.” The company now works with
300 contract farmers in Maharashtra and Karnataka with whom Sula engages
constantly through seminars and conferences, and as Samant takes pride in the fact
that there have been no disputes thus far. As the farmers came onboard and the winery
was being built in 1998, Sula harvested its first grapes and crushed them the next year.
“I still remember tasting the first raw wine; it was yet to be filtered, but tasted fabulous. It
gave us a lot of hope and courage. Even our investors were thrilled,” shares Samant.
But the excessive duties that year made it impossible to make any profit. The tax alone
for each bottle went up to Rs. 100 – Rs. 125. In the initial six months, only 600 cases
were sold. In 2000 – 01, Sula took that number to 4,000 cases. The company also had
to head back to its investors for a second round of financing of Rs. 2 crore as Samant
did not anticipate the rising cost of inventory holding, working capital and marketing
expenses. And that was the only year that Sula did not make a profit. The turning point
came when the Maharashtra government decided to support the local wine industry by
levying zero excise duty on grapes grown and sold locally. Sula’s finances changed
overnight and there was no turning back.
Initially, it was a struggle to find consumers for Sula wines. The presence of many
cheap French wines and Sula’s own pricing strategy meant that very few were willing to
experiment. Samant decided to price his wines at Rs. 450 per bottle, which was
considered fairly steep in 2000 but he was convinced about the quality of his wines.
“People would question me on my pricing strategy. I simply told them, ‘Taste it and
compare it to the cheaper wines and you will realise it costs more to produce our
wines’,” says Samant. But to really break past the mindset of Indian wine drinkers,
Samant had timely help from Jamshed Lam, then head of purchase of food and
beverage of the Taj Group. Though sceptical at first, Lam agreed to ‘audition’ the wines
before a select group of wine connoisseurs at a dinner party – a night Samant refers to
as the longest night of his life. Sula passed with flying colours and was included on Taj
Mumbai’s wine list. That set the ball rolling. Though Samant was looking after sales and
marketing by himself and Sula was confined to Maharashtra, by its second year it was
available in Goa as well and then accelerated fairly quickly to other states.
Growing with the market

33
Samant refers to the first three years of Sula as its nascent phase. Pretty much then on,
the company has been able to take confident strides, partly thanks to the strong
distribution network it has set up. It has 80 distribution points across the country and
170 of its own sales executives constantly pushing the brand. According to Samant, the
early start was crucial in building a significant distribution network, which is key in an
alcoholic beverage market. “About 95 per cent of Indian alcoholic beverages, apart from
a few exceptions, are consumed by the middle class and not necessarily by the upper
classes, which prefer foreign brands. I believe we got it right with a unique and a
sophisticated Indian wine that appealed to wealthy Indians as well. And once we were
placed in hotels like the Taj Group and popular restaurants like Indigo in Mumbai, the
distributors were also keen on pushing a brand that would allow them entry into such
places,” says Samant.
This strong network also prompted Samant to import foreign wines and push them
through Sula’s distribution channels. Early on, when Sula was making white wines and
sparkling wines, it found making a good red wine quite difficult. Samant and Damskey
had the idea of bringing in a good, cheap Chilean wine, available in bulk. In 2002, they
launched Sartori – a Chilean Merlot that was successful. Three years later, once
Samant was confident about a strong sales and distribution team, he decided to import
more wines and launched Sula Selections. Under this umbrella, Sula now has a
portfolio of about 30 wine brands such as Hardys and Remy Cointreau from countries
like Australia, France, Italy and Argentina, selling half a million bottles.
Though only five per cent of Sula’s own wine brands are exported, the company has
slowly been gaining an international presence. While present in 15 countries, Samant is
not expecting overseas markets to contribute much to revenues since they are very
competitive. And it is just as hard to make the constant trips abroad to be seen in the
right circles, at the right events and venues. “It is tough to turn profitable overseas but it
is very important to be seen as a global brand. When Indians travel abroad and see
Sula on a wine list, it gives them a sense of validation,” says Samant. He is happy that
his wines have been well received and appreciated abroad. “People first saw it as
something niche but now they consider it as good wine from a different region,” he
adds.
Indian at heart
One of Sula’s open secrets has been its clever approach to marketing. At the core of
any of its marketing exercises is the pride in being known as an Indian wine. “We are
proudly Indian and while others claim to be French in nature, we were clear we wanted
Sula to stand out as wine that took pride in being Indian. We were the first ones to put
the region on the bottle labels and use an Indian logo – the sun signifying wine from

34
warmer regions, and it clicked. I also think it was the right time when Indians were
expressing their affinity for all things Indian,” says Samant. Even the name Sula came
from home as it is short for his mother’s name, Sulabha.
Samant also built a good buzz around Sula. During the dotcom boom in 2000, Samant
was keen to associate Sula with that euphoria. So, he arranged for a monthly Sula e-
Tuesday club that got professionals, investors, bankers and media tied to the software
industry to congregate at a club in Mumbai. His Stanford education and network
ensured that the guest list comprised all the right people. Everyone in attendance had a
chance to taste Sula’s wines and the word spread about the ‘cool’ new wine. As the
event saw fantastic response, big names such as Merrill Lynch and Yahoo turned
sponsors. The concept ended with the dotcom lull but as Samant says, the work was
done.
Another regular feature by Sula has been its tasting sessions. It gets new groups
together in hotels or restaurants and serves them its wines, a practice that is useful
when new wines are being launched. Initially, Samant relied on his network to arrange
such tastings but he has now tied up with Crazeal (erstwhile Groupon India) that signs
up people for these. This year, Sula plans to do 1,600 tastings in various cities with 10
trained sommeliers who guide the tastings.
Wine tourism is another concept that Samant thinks will grow in India in the coming
years. Sula’s 2,000 sq.ft. tasting room at the winery is expected to get 1,60,000 visitors
this year. “The rest of the world is doing it and it was in the offing in India. When I visited
a tasting room in Napa Valley, I wanted to build one for Sula too,” shares Samant. In
2005, he turned that dream to reality with the help of architects Andy Roth and Laurel
Roth. The other touch points for Sula have been its quaint vineyard resort, Beyond and
of course, its very own SulaFest – an annual two-day music, wine and food festival in its
fifth year running that attracted 8,000 visitors this year. All these efforts stem from
Samant’s belief that a quality product needs to be branded and more importantly,
marketed smartly.
Raise your glass
According to Nitin Kalani, vice president of food and agribusiness research and
advisory, Rabobank, wine in India is enjoyed only by a small population. “The Indian
wine industry is at a nascent stage and mass consumers are yet to develop a taste for
it. It may take several years before wine gets popular in India. But it is expected to grow
substantially in the range of 15 per cent – 20 per cent in the near term as more and
more consumers take to it and given that, at present, the industry has a low volume
base,” says Kalani. But winemakers such as Samant see a lot of potential in the region
when compared to mature markets. Samant believes India will be the fastest growing

35
wine market for the next two decades. While wine consumption is reducing in most
European markets, India’s wine industry is yet to fully mature. India’s per capita
consumption of wine is miniscule at 12ml – 15ml while China is at 800ml and U.S. and
U.K. stand at 15 litres. India’s total sale of wine has been 15 million bottles, which is
small compared to other spirits and beer. “I don’t see any reason why India cannot
reach 100ml in the coming decade which is nearly 10 times the market size now.
Besides urbanisation, the main driver for this has been the quantum shift of women
seen enjoying alcohol in just one generation. They will be a huge demographic in the
future. And wines are healthy too,” explains Samant.
However, with every opportunity that comes knocking, a challenge is not far behind. For
Samant and Sula, one of the biggest challenges to surmount is the rising prices of
grapes and farming them, which constitute a significant percentage of its expenditure.
For this, he openly criticises the government’s NREGS (National Rural Employment
Guarantee Scheme) plan. “Though it was a good concept, it was deeply flawed in
execution. It has ended up increasing farm labour cost and reducing labour availability
making it unviable for growers. We have to increase our prices a minimum of 10 per
cent – 15 per cent every year else farmers refuse to plant the crops,” shares Samant.
Climate irregularities are another cause for worry. For instance, Sula’s harvest in 2010 –
11 was 50 per cent less than the usual but the 2009 recession ensured that the reduced
production was not a major cause for worry. Now, more sophisticated yield prediction
and management, and diversifying its supply away from Nasik to southern Maharashtra
and Karnataka will insulate it to an extent.
But what binds companies like Sula are the arcane state regulations and taxation on
interstate wine movement. According to Kalani, regulatory or political hurdles and
taxation uncertainties could be one of the biggest risks against the growth of the wine
industry. Taxation on interstate movement of alcohol is also a dampener. “The
compounding effect of multiple layers of taxation is an important reason for such a poor
per capita consumption level in India. The ongoing talks on cutting customs duties on
wine imported into India as a part of Free Trade Agreement with the European Union is
a key thing to watch. A reduction in duty is expected to help many international firms in
importing their popular wine brands, which is positive from the consumers’ point of
view,” adds Kalani.
Samant refuses to be bogged down by these challenges and is confident that he can
sustain Sula’s double digit growth in the coming decade. He finds the market growing so
fast that he does not set targets beyond a year. As the leading player, Sula is seeing 35
per cent sales growth annually (except during the recession), including in its first quarter
this year. Samant, whose family group owns 50 per cent of Sula while the balance is
held by the three P.E investors, does not plan to raise more funds at present as further
capital expenditure would be funded with internal accruals and bank debt. And he is not

36
looking to increase his portfolio any time soon but only improve on the quality of wine
every year. However, he is branching out into other avenues that could take the
company forward. In April this year, Samant launched Vinoteca, a wine bar to showcase
affordable wines, in Mumbai. This is again to enhance Sula’s brand experience, much
like the SulaFest. It is now easier and cheaper to get a wine bar licence than a complete
alcohol bar licence. The wine bar, of which Samant hopes to open more across the
country, will also ensure that newer wines get promoted. “Winemakers are often at the
mercy of retailers, who push wines with better margins in their restaurants and not
necessarily the best wine,” he says.
In the near future, Samant hopes for Sula to be known as one of Asia’s greatest wine
producers. “I would like to see double the size of Sula now and take acreage up to
3,000 acres. We would also like to open another facility in Karnataka. I want to make
Sula sustainable and as close to organic as possible. It is the way to go forward,” he
says. For a guy who believes he has been there at the right time and at the right place
with the right connections, Samant has understood the curious blend of art and science
that goes into winemaking and is unwilling to compromise on either.
MARKETING STRATEGY
Nashik Vintners Pvt Ltd (Sula Vineyards) is best known for creating homegrown
wine brands in India and claims to control around two-thirds of the market which is
growing in double digits as consumers move beyond spirits to try premium beverages.
Sula Vineyards also has a liquor distribution business for global brands such as
Glenfiddich and some time back formed a joint venture with Remy Cointreau for the
production and marketing of premium and super premium grape-based brandies. The
firm, which is backed by private equity investors such as Everstone Capital, GEM India
Advisors and Verlinvest, is amid capacity expansion. In a chat with VCCircle, Rajeev
Samant, founder and CEO of Sula Vineyards, talks about market growth, how Sula is
faring, its strategy of creating value segment wine brands and more. Edited excerpts:
The domestic wine market stands at Rs 500 crore; it grew 15 per cent last year. Wine is
a growing market compared with other spirits. The price point for wine has not
increased as much as other spirits. A bottle of vodka saw a 50 per cent price rise over
the last two years; it is not the case with wine. It is an emerging segment and is seeing
a lot of investor interest too.

37
ECONOMIC CONDITIONS:
For the year ended March 31, 2013, we saw a 27 per cent growth in top-line. Our
revenues are at Rs 200 crore. In the wine segment, we have been growing at 20 per
cent for the last three years. We also have a distribution business which is seeing close
to 30 per cent growth. We distribute brands like Remy Cointreau and Balvenie whisky,
Hendricks Gin and Glenfiddich in India.
Due to diversification into value brands and the distribution business, we have strong
EBITDA margins.
We have captured almost 65 per cent of the Indian wine market and any other player
wanting to enter the market at this point will have to invest a lot in marketing and
branding.
BRAND PORTFOLIO
We have divided our wine business into two segments—value brands and premium
brands. Value brands are wine bottles costing less that Rs 400 and premium brands are
above this price point. Currently, 25 per cent of the sales happen through value brands
and this will only increase in the future. Two years ago, value brands were only 15 per
cent of the sales. We introduced these less expensive brands in the slowdown period of
2008, keeping the economic conditions in mind.
The growth of value brands could be attributed to the macro-economic conditions where
people do not want to spend much. We would not be surprised if we see a split of 70: 30
between premium brands and value brands in the near future.
Earlier we saw prices of wine range from Rs 400 to Rs 1,200; but now it is Rs 200-1,200
per bottle.
ACQURING COMPANIES IN INDIAN MARKET
Land prices have gone up tremendously over the last 10 years. Owners have too much
expectation for buyouts. Thus we have decided that lease is the best option in this
situation; it is the middle path. It makes sense to grow grapes in somebody else’s real
estate which is leased.

38
EXPANSION PLANS :
We have a pan-India presence and are present in 25 states. Our production takes place
in Karnataka and Maharashtra. We want to increase our capacity, especially in the
Nashik region. At present, we produce 8 million litres a year and this year we will add 1
million litres more and reach 9 million litres by March 2014. We plan to spend Rs 20
crore of capex in 12 months.
FUNDING FOR EXPANSION :
No; we are not actively looking for raising private equity funds at this time. We would be
expanding through internal accruals and we have easy access to credit. Thus, debt
could also be an option. However, we are seeing a lot of interest from PE investors in
our company as wine is an emerging segment.The promoter’s stake at present is shy of
50 per cent. Everstone Capital owns 15 per cent, GEM India Advisors has 10 per cent
and 20 per cent is with Verlinvest SA, a Belgian investment holding company. When
Verlinvest SA came in 2010, it acquired stake of both Everstone and GEM. The
remaining 5 per cent is held by individual investors and friends.
It is irrelevant to talk about PE funding (or exits) as we have not raised any in the last
three years and are not actively looking to raise any PE money at present.
Number at a glance
No. of bottles to sell this year - 8 million of both own and imported brands
Acreage - 1,800 acres
Total capacity of wineries - 7 million – 8 million litres
Target for FY 2016 - Rs. 250 crore
No. of visitors to SulaFest this year - 8,000
SWOT ANALYSIS
Strengths:
Sula’s founder – well-networked with a knack of reading the market pulse spot on
Grown through inorganic expansion of building production capacity
Clever branding of Sula through wine tourism, SulaFest and its wine bar, Vinoteca
Efficient distribution network

39
Urbanisation and changing demographics, especially with more women seen enjoying
alcohol
Challenges:
Dealing with arcane state regulations and taxation on interstate wine movement
Rising prices of grapes and the cost to farm them
Climate irregularities
WEAKNESS:
Poor awareness of wine
Wine has an elite taste
Drinking age (42% of population is 23years of age
THREATS
Religion : some view drinking as a sin
Wishkey is preferred as alcoholic beverage
Advertising is banned for alcohol
CONCLUSION
In regards to the aims set out at the beginning of the study, thefollowing results
wereOb tai ned f rom t he researc h t he c ruci al acti vi ti es, a nd t hus
the most significant impacts were identified.The conclusions that are drawn from
the results are outlined asfollows:
Fossil fuel impact category has, by far, the most significantimpact.
Recycling produces a positive effect.
The t hree stages ( wi ne prod ucti on, g lass prod ucti o n a nd t ransport)
have similar overall impacts.Transportation creates the largest impact between the
threestages. However, impacts from transportation are relative todistances. In this
case, wi ne bottles are transported fromF rance to S weden, but t hi s does
not al wa ys ho ld t r ue i nevery case but only for the gi ven specifications.
Therefore,t r a n s p o r t s h o u l d n o t b e o u r m a i n g o a l w h e n t r y i n
g t o decrease the wine’s life cycle impacts.
I n c o nc l us i o n , e f f o r t s s ho u l d f o c us o n e n vi r o n m e nt a l i m p a c t s
a s s o c i a t e d w i t h t h e w i n e p r o d u c t i o n ( g r a p e harvesting and
winery activities).

Analysis of India's Wine Industry Focus on Sula Vineyards

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Analysis of India's Wine Industry Focus on Sula Vineyards