heavy on the growing wine market in India, its biggest
wine producer, Chateau Indage is undertaking a big retail
expansion in the country, with plans to open more than
1,000 outlets and sell more than 4.5 million litres
in 2007-2008, report sources quoting PTI.
With the wine consumption in India
growing at a rapid pace, the company is expecting
a turnover of over Rs 100 crore (US $ 25 million)
in this fiscal year 2007-08, according to a company
official who did not want to be identified. "The
outlets will specialise in selling and educating consumers
about wines," he said.
He, however, declined to comment
on investment planned for the retail expansion which
would be a mix of franchise and company-owned outlets
and would be branded as 'IVY Wine Bars'.
The company would showcase a wide
range of wines in these outlets, including Chateau
Indage's own brands and imports from Australia (where
it had bought Tandu winery earlier and reported in
delWine), and South Africa. To boost its sales, the
company is also revamping its marketing strategy with
more intensity given on below-the- line activities.
It would host Wine Fests in 25 cities
across the country in a period of two months coinciding
with its silver jubilee celebration this year.
The official claimed that the company
already has more than 70 per cent share in country's
total wine market and 75 per cent in the premium segment.
Chateau Indage has a total wine production capacity
of 65 million litres across five countries. It is
also making two more wineries in India, one each at
Baramati and Nashik.
The report is quite confusing,
to say the least. A simple calculation shows that
per bottle the recovery would be about Rs. 220. With
their Chantilly, Ivy and MDP all selling between Rs.
400-550,(even though inclusive of duty and VAT) and
even Riviera at around Rs.350, the volumes must include
the low end Vino which sells for around Rs.95. and
all other entry level wines. This does not make it
feasible for them to have a 75% share in the premium
segment, dominated by Sula and Grover (in fact Sula
often claims to be the market leader in premium wines
with Grover running the same lap.
Wine bars are coming up in Maharashtra
and other states quite fast. But one is not sure,
if they are allowed to retail wines from the bars.
If it were so, the wine bars would be springing up
everywhere. Places like Delhi do not even encourage
opening of bars alone as the taxes are extremely high.
Why would the company officials
not like to be identified? A news agency like PTI
surely would have easy access to the Chougules who
are quite affable - editor.
'Outperformer' Report by
a Research house
In the meantime, some clarification
can be seen from the Research report of a Mumbai based
brokerage and research firm of Prabhudas Lilladhar
ad reported in moneycontrol.com about the working
of the company.
Bullish on the future performance
of Indage with a verdict of ‘Outperformer’
the report says, ‘ Champagne Indage’s(parent
company)Q1 FY08 results excelled our expectations.
Net sales jumped 186% yoy (our expectation: 264%),
operating profit shot up 146% and net profit rocketed
94% (our expectation: 94%). The operating margin dropped
380bp—from 26.4% to 22.6% (our expectation:
14.6%)— due to the change in product mix.'
The consolidated results include
those of Seabuckthorn Indage, Indage UK and Thachi
' Most of growth came from the rise
in volumes, as there has been no major price change.
The company has initiated several retail measures
like the opening of wine bars, shop-in- shop, display
at shopping malls, etc. The Maharashtra Government
has allowed wine as a “food” item and
relaxed storage and distribution norms. It has also
abolished excise duty on wines. These steps have helped
boost sales growth.
The acquisition of Thachi Wines
(TW), Australia, has given Champagne Indage a global
footprint. TW has contractual arrangements for vineyards
and a winery in Australia, and processes 2.7m litres
of wine a year. At present, TW markets its products
in Australia, China and Europe under the brand name
Broken Earth. Most of this wine is sold unbranded.
The acquisition would provide a ready-made market
for CIL to hawk its own brands in these countries
through TW’s distribution channels.
CIL plans to bring TW’s bulk
wine to India and bottle it at its plant here. This
is likely to be marketed domestically as a wine of
Australian origin. This would generate additional
The company’s economy brand,
Vino, has reported healthy growth in FY07 and brings
in about 12% of revenue. CIL expects beer drinkers
to migrate to Vino due to the latter’s attractive
price of Rs 99 a bottle.
The company has set up a 100% subsidiary
in the UK under the name Indage (UK) to market its
products to Indian restaurants in the UK and Europe.
This is likely to enhance its exports.
CIL’s established brands come
at all price points. It has more than an 80% market
share in the home market. With the national wine
policy under implementation and the relaxation of
distribution norms, the company is likely to benefit
Sale of wine in supermarkets is
now allowed in Maharashtra, Karnataka, Chandigarh,
Goa and Haryana. This is likely to widen and deepen