Wine and Hospitality Industry

Excerpts from the Presentation by Ms. Malini Rajendran, Deputy Secretary General, Federation of Hotel and Restaurant Associations of India, at the Inaugural Session of INFOWS2004 at the Taj Palace on 8th January

When I think of the food and wine industry, I am reminded of Maurice Chevalier's song " Love and marriage". You can't have none and you can't have one without the other". Our hospitality industry is the stage on which this romance is played out, which is why we refer to this department not as the Food department but the F&B, i.e., food and beverage department. But beverage is a rather broad term, which covers wines, and other alcoholic and non-alcoholic beverages. In India wines form a very small niche in the beverage segment.

Why have wines not found their rightful place in the Indian market? Is it cultural, is it the cuisine, awareness, education, availability and above all is it the price? Or is it that in India wines are competing with other hard / white liquors for its market share.

Personally I believe all these issues have kept wines in India from establishing a position of strength. I would like to look at the levels of awareness of wines. For an industry segment to grow and sustain its self in the market, it needs to create enormous product awareness. Unfortunately wines are a complex range of products and need a lot of demystifying, they need to be made comprehensible to the average public. People feel comfortable ordering a product they know or understand. Knowledge about wines still remains the forte of the elite. That needs to change. The changing demographic profile of the country clearly shows that is the younger generations who not only have the money to spend but also are also willing to experiment and spend it on changing lifestyles.

The research we have done in FHRAI shows that young entrepreneurs are a growing market. They are better informed, more cosmopolitan and international in their cultural inclinations, and are not sexist. We find an increasing number of women in this segment accompanying their male partners, to dinners, cocktails and night-outs. There is also a predominate shift from hard liquor to trying cocktails and wines. This is the market where the wine industry needs to invest in creating awareness.

It must be understood that like love, wine is a concept and require a different sort of nurturing, marketing and positioning. This means educating not only the customer but also the industry personnel. We must start with the positioning of wine on the menu cards, select suitable wines to match, train the staff in stocking, presenting and serving the wines.

We often forget that the cupid in this love story is the waiter who takes the order. He is also your most potential salesman, who, if trained can push your product. I am sad to say a very small percentage of waiters are equipped with this skill. A classic example is how red wine is served in some places. Guys at most outlet have been told that white wine is served chilled and red wine is served at room temperature. To share a story " On one occasion- After placing the food order I asked the waiter what wine would he recommend with the meal, pat came the answer, 'Red madam, you see I can get that at room temperature'. Now this was summer with the mercury hitting 43 degrees and by wine standards room temperature is what it is in Europe.

In the course of researching information for today's presentation I contacted a few people who are considered F&B experts and every one of them told me "I can tell you about liquor but on wines I am sorry."

But there is another segment I contacted- the wine fans and they all tell me wines are the future in this country. But positioned as I am in the hospitality Industry I cannot see how this future is going to materialize if the wine industry does not invest in education and awareness heavily today to secure a position tomorrow.

Regrettably I must mention that any wine awareness event has only been a glorified page 3 PR event with no one benefiting. I take this opportunity to appeal to your excellencies that a concerted program of training of Hospitality industry personnel, particularly the first point of contact with the guest - the waiters, and Chefs, the F & B stores managers, through experts and sommeliers from your country is urgently needed.

Culture and cuisine are inter-linked: Although ancient India did have its on repertoire of wines. Current Indian culture and cuisine seems to have been overtaken by beers, rums and whiskys. Wine is often plonked on the same menu or tent card as other liquors and not linked to the cuisine or type of food that is being served in the outlet.

Like love is a concept and marriage is culmination, wines are a concept that needs to be married into the menu and cuisine. Needless to say more research needs to go into Indian food and wine matches (not as sporadic hobby findings) but in systematic coordination with the Indian hospitality industry. Usage of wines in food production is another potential area, for a huge wine market. Unfortunately the Indian food segment seems to be plagued by traditional dogma. An adventurer, innovator and experimenter in every chef needs to be encouraged to pioneer using wines in Indian cooking. Wine food labs need to be set up in food craft, catering and hotel management institutions. Young minds are the best to try out innovative concepts. Thankfully, there is a new group of individuals who are moving away from classic wine theories and promoting a "you drink what you like" culture.

Last but not least, The Indian Hospitality Industry is plagued by the price and very often non-availability of good wines. It must be understood that the future of Hospitality business is in the expanding middle segment that would like to buy wines at reasonable rates or get value for money. For hotels this is an impossible situation. Liquor is a state subject and full of statutory and regulatory controls. Most states have projected revenue figures to international funding agencies for loans. And liquor is one of the major sources of revenues.

Hotels are dealing with exorbitant annual bar licenses - which can vary from Rs.30,000 to Rs.800,000 depending upon the state and category of the hotel or restaurant. Then you have CV duties, Import duties, sales tax, excise vending fee - which can vary from Rs.15 to Rs.300 per bottle or litre of liquor sold, and needless to say wines imported attract the highest rates in each segment.

Based on analysis of our member- establishments we find that in the four regions of our membership, the states that have the highest license fee also have the largest number of hotels and restaurants with bars. These states are Orissa and West Bengal in the east, Delhi, Rajasthan, Himachal and Uttar Pradesh in the North, Tamilnadu and Karnataka in the south and Maharashtra in the west.

So the wine industry needs to look at the Indian market as 26 individual markets. Select their target market (State) and establish an intensive training program at different levels on wines, build awareness levels within and without the industry and bring about capacity building, to sustain a growing wine drinking culture.

Taxation being what it is, price is very often a determining factor in stocking, selling and placing of wine on the menu. It would also be wise for wine manufactures to reverse integrate and network with agricultural universities to develop their own brands locally and create local expertise.

Despite high license fee the metros of Mumbai, Bangalore and Delhi still remain the favourites, but it would be worth your while in making inroads into cities like Pune, Chandigarh, Hyderabad, Vishakapatnam, other emerging industrial towns, emerging High-tech corridors, and Hertitage hotel segments: that's where we are seeing the hospitality and F & B industry going.

There is a lot of chemistry and a lot of synergy between the hospitality industry and the wine industry and I am sure IFOWS 2004 is not only an excellent platform to showcase the finest products in the world but also a breeding ground for further opportunity and growth of this dynamic industry in India.

Malini Rajendran

Email to Friend




Developed & Designed by Sadilak SoftNet
© All Rights Reserved 2002-2007