Indage Vintners Ltd (IVL), established in 1982, is India? oldest & largest multinational wine company. Within India, it produces more than 1.5mn cases (of 9 liters each) of wine from 4 state-of-the art wineries and has complete backward integration from nurseries, biotech to its own estate vineyards of more than 2,000acres. The company controls more than 70% market share of wines produced in India utilizing a product portfolio of more than 40 brands in every price point and product type in the industry which has given it the recognition of more than 70 International awards of quality from IWSC, Decanter and IWC. Globally, IVL owns a 3.5mn cases winery called Thachi Wines in South Australia that produces a large range of Australian and New Zealand wine brands such as Red Sky, Broken Earth and South Bay. In India, IVL is listed on the BSE and is part of the Indage Group that has interest in Restaurants & Leisure, Construction & Retail.
Ranjit S Chougule, Managing Director, Indage Vintners Ltd., has introduced the much-needed fizz into the Indian wine market. He is one of the board members of the Indage Group. With an MBA in Finance from Citi University in the UK, he joined his father, the legendary wine-maker Shamrao Chougule at Indage in 1997.
Replying to Anil Mascarenhas of India Infoline, Ranjit Chougule says, ?Wine presents tremendous value addition transforming a bunch of grapes into a globally reputable and most hygienic beverage in the world.?
Are you raising a toast to the UPA at the Center? What impact do you see for the industry? With the new Congress-led government at the Centre bringing stability, we hope to continue the formation work of the Central Wine Board, formed a few months before the elections, which will continue to boost the wine industry.
There is considerable interest in wine as a category from almost all aspects of the supply chain- vineyard growers to producers to consumers even up to policy makers both at a central and state level. Everyone has realized the tremendous value addition that wine presents transforming a bunch of grapes into a globally reputable and most hygienic beverage in the world. The market has grown more than 150% in the last 4 years and will continue to do so as long as significant value is created in the consumer?s mindset both tangibly and intangibly.
What are the opportunities and challenges for companies such as yours?The present situation is full of challenges and opportunities. Continuing in our path of growth, we continue to expand globally looking at avenues for further growth and each step we take in this direction will help create the building blocks of a strong, global beverage company. We will continue to introduce new brand portfolio of wines under different price points. In our quest for growth and excellence, we have always placed consumer satisfaction as our top most priority. More and more wine consumers now seek greater value which we always aim to provide. India remains poised for continued growth in the wine field and we seek to deliver the best.In India do you see a lot of upward migration to quality beverages?The Indian consumer has become more aware of his choices and today wants value for his purchase. This in turn has encouraged companies to introduce brands under different price points. Today in the market, we have budget as well as high priced brands based on reaching every consumer?s needs. Premium brands continue to be in demand as they are more of an ?aspiring brand category.? Therefore, today in every product or service sector, we witness the existence of such high-end brands, though the frequency of its purchase is comparatively less.Brief us about your brand strategy. Which are the largest selling names in your portfolio?The company has over the years has introduced several brands under its wine portfolio. The company?s main domestic brand portfolios are Chateau Indage and Indage Vineyards. Chateau Indage brands such as Marquise De Pompadour, Riviera and Chantilli have been at the forefront of the revival of India?s glorious wine heritage. Indage Vineyards features a portfolio of new world wines created as a celebration of its 25 years journey of excellence in oenology and viticulture in the tropics. Globally, IVL is expanding in UK and Australia and focusing on introducing further international brand portfolios such as Broken Earth. We have recently introduced a range of value-for-money wines from our domestic brand portfolios such as Mojo, South Bay, Silverton and Trio.
What kind of pressures have you felt in recent months? What are the steps taken to mitigate the same?To be specific to wine companies, the need is a lower cost base which offers great efficiency in producing wines and flexibility in making adjustments to changes in the market. In the UK there has been a massive shift in consumption. There are great pressures on margins. I think, for the moment, consumption of wines in restaurants may go down and retail purchases may increase. The bottom and top end of the market has not been hit; it is the mid-level wine market that has been affected. As a result of this and the overall money market position, liquidity has come under pressure.To mitigate this, we have grown as a business over the last 2 years in terms of capacity and output from 6-7mn liters to 70-80mn liters as well as driving a lower cost of operations, both upstream and down stream. We are also looking to infuse further capital into the business to deleverage the global balance sheet.What is the current size of the industry? At what rate is it growing?Wine consumption is growing at a very fast pace in India and the growth rate of 25-30% per year continues. The consumer drinking hard liquor is now also giving preference to wine. Wine has gained popularity due to its social acceptance, health benefits and also regarded as an apt drink for occasions. Current industry size in India is approximately 2mn cases while developed markets in the world in which the company also operates such as the UK are at 110mn cases annually.What are some of the triggers, which could boost growth for companies such as yours?The Wine industry has shown positive trends inspite of the current global economic slowdown. In such times, having a combination of branded and service provider operations tends to hedge against any adverse market impact. Therefore, it is essential to continue growing the capacity of the company?s operations to ensure one remains a reliable and consistent provider of wines to both Indian and international buyers. What are your total exports? Do you see the international business growing? Indage had total exports of approximately 5,25,000 liters in FY2008 and this is growing at 20-30% per annum. We export to several parts of the world including US, UK, Europe, Middle East and Asia and with our international business growing in size, this will grow at a faster rate.Your message to shareholders?The current phase of global recession calls for laying down further strong business fundamentals and we continue to provide great value to our stakeholders. Our shareholders have been very supportive and they have shown tremendous enthusiasm for our company, our brands and products. We will overcome any challenges to our business and successfully convert them into opportunities to profit for the business.