INDIA'S GROWING WINE MARKET: Old Wines could scare off New Customers

When I went to India in the fall of 2008, I drank the wines that the locals drink. Bottles open, glasses clinking at fine restaurants at the Taj, the Oberei, and Indigo. I slunk into liquor stores near market areas to see what they offered, and sauntered into the wonderful wine selection at the Nature's Basket markets. A trip to the Nashik Valley meant tastings on winery premises of Sula, and Reveilo (aka Vintage Wines).

I came home very optimistic about the prospect of increasing wine sales, both imports and domestic wines, in India. A week later, the terrorists rampaged through Mumbai. It's looked for several months like the market might disappear. But ... no.

(photo at left, wineshop manager at Mumbai Nature's Basket market)

Eric Pope, who does a wonderful job of overseas market development for The Wine Institute, has kept a running dialogue open with me on this topic. It's impossible to go to India and not fall in love with this vibrant country and its open and friendly people. We are all cheering for this market to develop for the wine business!

The latest industry buzz could deter the weak-hearted. In a February 15 post on Sommelier India-the Wine Magazine, the article titled "Triple whammy for wine in India" cited three not-so-great market factors: "a slowdown in consumer spending due to the worldwide economic recession, the impact of the Mumbai terror attacks on travel and tourism, and the weakening Indian rupee."

One reader, Harshal Shah, in a follow-on comment, noted "I hazard that because of this triple whammy, many importers, especially the big players, would have struggled to have met their sales forecasts with their winery principals around the world. What wineries must insist upon, therefore, is an accurate inventory position to know exactly how much of their stock in sitting, unsold, in importers' warehouses. As far as wine in India goes, then, it may be that we will eventually see a lot of old, badly stored imported wine being released into the market."

The spectre of old imported wine being released to this market is not a good one.

As USA wine market developers look at the pros and cons of entering India, it might behoove someone to find out what amount of California wine, for example, IS sitting in warehouses. Anyone who has kicked around the wine industry in India (I have, by the way, so trust me on some of these things!) knows that refrigeration/climate control in importer warehouses is not uniform. Assessing this impact ahead of time would be useful to US wineries who have their eye on the Indian market.

And you should have your eye on the India market!

There are as many 25-35 year olds in India as there are people in the USA. And they are the up-and-coming wine drinkers, educated, have money. Maybe they don't have money for expensive California and other US wines -- adding on all the tariffs no doubt makes US wines expensive. But somehow there is a big offtake of wines from Australia, Chile, Argentina. And winemakers in those countries have the tariff thing to deal with too.... so.... do I hear the words "value" here?