Professional Documents
Culture Documents
Section
2 Taittinger SA 6
Section 1
Indian Wine Industry
1
Indian Wine Industry
2
Indian Wine Industry
% Total
Established in 1982 Volume Brand Company 2003 2004 2005 2006
Located in Narayangaon, Pune Sula Vineyards Samant Soma Wines Ltd 10.9 13.7 13.9 15.7
32 labels spread in 2500 hectors
Chantilli Champagne Indage Ltd 4.9 6.4 10.4 11.8
Production capacity : 15 million liters
Market share: 44% Riviera Champagne Indage Ltd 9.5 12.3 13.3 11.5
Key Brands: Marquise de pompadour, Ivy, Joie, Grover Vineyards Grover Vineyards Ltd 12.4 11.4 10.5 10.4
Chantilli, Figueira, Riviera, Vino Sparkling, Vin
Vino Champagne Indage Ltd 4.9 6.5
Ballet, Hammer
Vin Ballet Champagne Indage Ltd 4.0 5.1 5.9 5.8
SWOT ANALYSIS
4
Indian Wine Industry
STRENGTHS WEAKNESSES
Favorable demographic conditions coupled with rapid urbanization and Production of wine in India is characterized by small holdings which is a
improved customer attitude and lifestyle is increasing wine consumption major constraint in economies of scale for processing
The government in India is protective towards the wine industry, as it is In wine distribution, logistics is the most difficult challenge in India,
labour intensive, adds a lot of value to the primary agricultural product, especially for temperature for storing sensitive products like wine
and is an attractive source for taxes and duties Around 80% of wine consumption is confined to major cities like Mumbai
In India, the cost for setting up a wine plant is quiet low, between Rs.10 (39%), Delhi (23%), Bangalore and Goa. The non urban areas still
15mm ($0.2$0.3mm) with a capacity of 100,000 liters account for only 20% of the market
Organized retailing of wine has now been introduced in the state of Quality wines are priced relatively high
Maharashtra. Wines can now be sold in supermarkets and grocery Land ceiling regulation imposed by the government restricts the
stores with a license companies to purchase agricultural land more than 10 hectares, limits
Good Climate for growing wine grapes wine companies in expansion
Five-star hotels, pubs and bar-cum-restaurants are the primary wine Packaging costs account for another 35% of the production cost which
selling outlets in the country as 63% of the sales are through these are approx. 40% higher than international benchmarks
channels. The government has allowed hotels to purchase imported
goods duty free, up to a limit of 5 to10% of their foreign exchange
earnings
OPPORTUNITIES THREATS
Indias economy grew by an average of 6.6% annually between 2000 Global warming is expected to cause problems for coastal wine grape
and 2006 and is expected to grow by 6% to 7% over the next 10 years. growers, and is expected to make any sort of viticulture impossible
There is a large potential consumer segment that could take to wine The wine industry is low capital intensive which has made easier for the
drinking new players to enter the market. This is expected to increase competition
There is an emergence of lounge bars and gourmet restaurants coupled between the domestic and foreign players
with the new concept of wine bars Wine substitutes like beer and spirits are expected to negatively impact
Wine tourism and wine tasting is becoming popular in the state of the wine market due to better availability and affordability
Maharashtra, which contributes 97% of total wine production in India The wine industry in India has always faced the threat of prohibition to
Organized retailing of wine has now been introduced in the state of drinking alcohol. Despite the increase in awareness, many states still
Maharashtra Wines can now be sold in supermarkets and grocery stores face the prohibition imposed by the government
with a license The unit prices of wine are expected to increase in future due to increase
Indian government through its policies, encouraging the growth of wine in input prices of raw materials and increasing overheads like
industry Key policies include, transportation and storage costs
License to set up wine bars and permission of wine sale in beer bars
Licensing procedure for setting up wine units simplified
100% exemption from excise duty for 10 years for the state of
Maharashtra
Foreign direct investment (FDI) with no approval from government /
RBI
Provision of infrastructure facilities such as wine parks and wine
institutes
Source: Rabobank research dated February 2008, press 5
Indian Wine Industry
Outlook
6
Indian Wine Industry
Commentary
Wine consumption in India is expected to triple within the next three years. Lifestyles in urban areas and some semi-urban pockets are developing. By 2011,
Asia will account for 4.8% of world wine consumption.
The Indian wine market is expected to reach $661.9mm in value and 32.8mm liters in terms of volume by 2012, posting a growth of 32.2% and 32.1%
respectively over 2007
The sales of wine through on-trade channels are expected to be marginally faster than off-trade sales. On-trade volume sales are expected to be driven by the
establishment of exclusive wine shops while off-trade sales will be driven by non-specialist stores like supermarkets
Organic wine is unlikely to take a significant place in the market, given the total absence of organic wine till 2007. Moreover, no major domestic vineyards are
involved in organic farming and the high prices of organic wine further discourages its demand
With the entry of new players such as Seagram and United Spirits in 2007, and a number of other players such as Diageo said to be keen to enter the market,
competition is expected to intensify
Indian companies like Champagne Indage and United Spirits through acquisition of foreign companies are trying to set up production facilities in countries like
Australia, Argentina, France, Italy and South Africa, where domestic consumption is strong
Support measures from the government in policy and infrastructure provision will be an incentive for more investments particularly from liquor players who have
established distribution networks
Currently the wine market is expanding with new entrants and increasing awareness among consumers. The highly concentrated industry dynamics are set to
change with the entry of several spirits majors and foreign entities. More fragmentation is expected in the industry with several competitive groupings
comprising many players entering the market
The positioning of Indian wine as a high-quality product is a critical factor in making wine more popular in India. However, mass marketing could lead to a
situation where the brand image of Indian wines is lowered to just an alcohol substitute, whereas imported wines served in elite restaurants and homes have a
higher value perception
Source: Euromonitor, Rabobank research dated February 2008, press
7
Section 2
Taittinger SA
8
Taittinger SA
Taittinger SA
Company Country Sales (mm) Assets (mm) 2003 2004 LTM (June 2005)
Moet & Chandon France $1,777 $2,316 Revenue $1,020.2 $1,108.4 $1,123.5
Champagne Vranken France 300 628 Net Income 31.6 51.4 36.4