In the Indian alcohol market, wine has been seen gaining popularity over the years. Sula Vineyards in India’s wine capital Nasik since 1999, which was also the first to set up a winery, is one of the biggest players. With 65% market share in India, wines are now exported to 30 countries. Cecilia Oldne, VP – marketing, Sula, spoke to Collin Furtado on advertising restrictions for the brand and the wine market.
What is Sula’s growth in terms of revenue in past one year?
We saw a 30% increase in sales last year. We have been growing at 65% in the domestic market and will continue holding that market share. The growth will be at around 20% over the next two years as well. We are putting more efforts into other similar collection portfolios as we have some imported spirits as well. We expect its sales to grow by about 20-25%.
Why does Sula only depend on experiential marketing?
When it comes to wines, the best way to market the product is for someone to actually taste it; when you put a glass in front of a consumer and take them to a winery, it is for the first time that they get to taste wine for many at these activities and events. Sula Fest is a property that we have created. People can come to the vineyards and experience it. It is about the location, the feel and the whole package that comes with it.
Do you see a sudden surge in sales post Sula Fest?
Indeed. After the Sula festival, our brand and products get a boost in sales. Not only at the festival, but after the festival too. We have around 2,000 people that come for the festival and see sales at the festival itself go up.
What are its ad spends?
A lot of revenues go to the marketing activities. A big chunk of our marketing budget goes to Sula Fest because around 3 or 4 months are spent on planning activities around it. But speaking about revenue, around 5% of the company’s revenues goes towards these kind of activities.
How is the Indian wine market growing?
Looking at both domestic and imports, the wine market in India would be around 1.5 million cases from the current 1 million. This goes from wines that are priced at Rs 200 and champagnes worth Rs 10,000 a bottle. Imports to India are around 200,000 cases.
How large do you expect the wine market to grow?
We have been experiencing a 20% growth each year in India and I don’t see a reason why it shouldn’t continue to grow on the same rate for the next decade. We see at least two thirds of sales coming from women. Many of them are now becoming independent and taste wine before others. This because they are more sophisticated and more health conscious than men. It is not only the people from tier I cities who consume wine, but also tier II.
Are the rules surrounding marketing alcohol an issue?
It is an issue with alcohol brands in India and China, in particular, that restricts what we can do in terms of advertising. In many countries like France or Sweden, there are more relaxed rules for advertising wines unlike the hard liquors. All this because they are aware of the fact that wine is a healthier option than a hard liquor and are more encouraged to promote such products.
What is the impact of demonetization on your sales?
We, as wine producers, are not affected, but the farmers are. We are trying our level best to support them.