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Posted: Monday, 20 December 2010 15:49

Wine Consumption Push through Retail

Organised Retail in India is expanding fast and it is expected to give a big boost to wine consumption as the laws in different States become more liberal and the customers get into the habit of shopping for wines at the Retail stores where the storage and variety are better with the added advantage of getting guidance from the sales experts, writes Subhash Arora.

Thirty years ago, Kathmandu used to be a favourite destination for Indians for its casinos and inexpensive 5-star hotels leading to great shopping experience. One of the highlights used to be a visit to the Bluebird department store where the main attraction was wine.

That was the time when one could buy only Golconda and Bosca from the ‘English wine’ shops in India selling liquor primarily. Wine import was not allowed except by hotels, diplomats, bootleggers and smugglers, who were the de facto wine retailers. Only licensed liquor shops could trade Indian wine.

The government de-controlled wine import in 2002. Thereafter, a few imported varieties of wine started tickling in, adding to the Indian stable of Indage, Grover and Sula at the liquor shops. With Chandigarh in the lead, various state governments gradually started loosening grip over the last 5 years and wine retailing is now allowed in supermarkets of Maharashtra, Haryana, Punjab, Karnataka and Delhi, among others. Karnataka started by allowing wine sales through cash-and-carry outlets like Metro, where small retailers can buy from wholesalers. This model is being followed now in other cities too, the latest beneficiary being Kolkata.

Wine drinking on a rise

Due to poor storage, location disadvantages and limited availability of wine at traditional liquor shops, the sale of the commodity has been restricted. However, now with the younger generation preferring to drink wine, the new retail centers are helping the market share of this segment grow from the present estimated share of 20% to an internationally accepted norm of 40-60%.

Spencer’s Retail took the lead in introducing exclusive, air-conditioned wine corners across Indian stores. Godrej-owned Nature’s Basket from Mumbai sells a wide range including the top-end Barolos, Brunello di Montalcino and even Super -Tuscans like Tignanello. Raheja Group-owned Hyper City selling wine in Mumbai has also started selling the drink at its Hyderabad store. The recent entry of Reliance Retail is expected to raise the bar in terms of promotional selling. There has been a good response in the cash and carry segment too.

Road ahead

The current Indian wine market of 1.5 million cases (9-litres) annually is growing at over 30%; by 2012-13 it is expected to touch 3 million cases. At a conservative estimate, 25% of this market will be through sales in the supermarkets, translating to 7,50,000 cases, which would be very lucrative addition to the revenues for these retail outlets, even at this nascent stage.

The growth of Indian wine and low-end imported wine is expected to be more since import duties make varieties such as Barolo and Brunello too expensive and beyond the reach of most consumers. Moreover, wine varieties under private labels are likely to soon make entry in the supermarket chains. Once these channels prove beneficial to the top and bottom lines of the current retail chains selling wine, others will also be tempted to promote the commodity more aggressively.

It is only a matter of time that good quality wine would be available in retail stores across the country at competitive price range, much wider than one saw in the sole Bluebird department store in Kathmandu. The role of different states allowing retail wine sale through supermarkets and department stores will play a vital role in this regard, not only to increase visibility and availability of wine, but also to help de-link wine from liquor and give wine drinking culture the respect it has earned universally as a food product.

Subhash Arora

The article was written specifically for Retailing 360, an online magazine owned by Times of India and was published on October 21 in the Retailing Guest Column Section. The original article may be viewed by clicking HERE

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