LANDSCAPES October 2018 Report

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India 1 Landscapes Copyright © Intelligence 2018

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India 2 Landscapes India Landscapes 2018 Report Deliverables

Insights to help your business flourish

The India Landscapes 2018 report includes:

INDIA LANDSCAPES October 2018 Report

India Published in conjunction with Sonal Holland MW 1 Landscapes

• Report with the latest information regarding the • User-friendly data table with all the measures from Indian wine market, supported by: Vinitrac® India showing significance testing, cross tabbed • Wine Intelligence Vinitrac® India with: • Sonal Holland MW and Wine • All Indian semi-annual wine drinkers in 2018 Intelligence market experience • Gender groups • Secondary sources • Age groups • Trade interviews • Key cities for imported wine consumption • Consumer focus groups Our team is always available in case you need guidance on how to use our data tables India 3 Landscapes Introduction to India Landscapes 2018 Report

India is an enigmatic and rapidly changing nation. On the one When it comes to the on-trade, Millennial wine drinkers in India hand, is a land of opportunity, a country of over one billion are also the most frequent wine drinkers spending, on average, people, nearly half a billion above the legal drinking age, the most amount on a bottle of wine when out. They report that boasting a young demographic that’s open to experiment. On the they do not find the process of ordering wine in a restaurant a other hand, India’s AlcoBev industry is shackled by cripplingly daunting experience, but do express some frustration that wine high taxes and a dense regulatory system of antiquated laws. In doesn’t receive the same service levels and attention as they this paradox lies significant future opportunity for the wine experience with other alcoholic beverages, in particular whiskey. industry. As one of the fastest growing economies in the world, with a GDP In this first edition of India Landscapes, Wine Intelligence has expected to grow at over 7% in 2018, India with its thriving collaborated with Sonal Holland, MW and her 2nd edition of middle-class population, the country’s current wine consumption India Wine Insider 2018. One of the key developments figures serve to illustrate that the wine market is still in its infancy, documented in this report is that, for the first time in India’s a fact demonstrated by the lack of knowledge about varietals, AlcoBev industry, female wine drinkers in India are on par with regions and countries of wine amongst regular drinkers of both their male counterparts in terms of consumption frequency, domestic and imported wine. propensity to spend on a bottle and attitudes towards wine drinking in general.

In addition, a positive opportunity for the industry is explored – Millennial wine drinkers. These younger men and women make up over 50% of wine drinkers in India in 2018. Wine occupies a definitive place in these Millennial’s overall drinking repertoire. From the Millennial’s point of view, they report that to them, wine is sophisticated, classy and palatable. They currently have a lower level of wine knowledge than their older counterparts, yet drink wine more frequently than them. In additional, they are Sonal Holland, Lulie Halstead significantly more likely than older drinkers in India to Master of Wine Chief Executive Founder Director - Wine Intelligence experiment with new and different wine styles on a regular basis. India Wine Insider India 4 Landscapes Management summary Key findings in the Indian wine market 2018

The Indian wine market had experienced steady volume growth, but volume has 1 recently declined whilst value has increased, due to a shift towards both imported and higher end domestic wine

Domestically produced wine has a greater reach in the market, whilst imports are 2 seen as being of a greater quality. Although, this perception is narrowing

Indian wine drinkers are primarily brand focused buyers, due to a lack of experience 3 with the category

On- and off-trade channels developing through the opening of more specialised and 4 wine focused retailers, bars and restaurants

Millennial wine drinkers in India embracing wine, showing willingness to experiment 5 with new and different styles

India 5 Landscapes Management summary #1. THE INDIAN WINE MARKET HAD EXPERIENCED STEADY VOLUME GROWTH, BUT VOLUME HAS RECENTLY DECLINED WHILST VALUE HAS INCREASED, DUE TO A SHIFT TOWARDS BOTH IMPORTED AND HIGHER END DOMESTIC WINE Growth of the wine industry is lower than what ▪ The volume of wine sold in India has recently declined, following years of producers would be hoping, especially steady growth. However, the value of wine sales has increased as consumers compared to GDP growth of India Producer are moving towards both higher priced domestic and imported wine ▪ Strong wine trade consensus that the extent of the growth of the category is hindered by increasing regulation Where the wine industry was in 2008 and ▪ The knock-on impact of this regulation has been a reduction in the where it is now in 2018 is completely different. range of different wine labels / brands available in India, which in turn, It has expanded hugely. Wine is much more prominent in India today reduces the availability of different styles of wine Hotelier

The Indian wine market is slow but growing, but there are too many government regulations that is stifling growth with the duties being very high Importer India still wine volumes and price per bottle (total and by country of origin) Retail price per 0.75L Thousands of 9 CAGR CAGR Market 2013 2014 2015 2016 2017 CAGR CAGR litre cases 13-17 16-17 share 2017 (US$) 13-17 16-17 Total 1,200 1,260 1,475 1,670 1,600 7% -4% 100% 14.31 8% 12% Domestic 925 1,005 1,150 1,300 1,200 7% -8% 75% 9.43 8% 12% Imported 275 255 325 370 400 10% 8% 25% 28.95 6% 3% Australian 78 78 98 126 143 17% 14% 9% 23.82 7% 4% Italian 34 35 43 48 52 11% 9% 3% 33.28 3% -2% French 54 42 45 48 51 -2% 6% 3% 35.16 5% 4% Chilean 37 39 46 49 40 1% -19% 2% 27.68 10% 4% Spanish 10 11 15 20 27 30% 37% 2% 28.39 7% 6% India US 23 IWSR 17 2017 29 22 23 1% 6% 1% 29.92 8% 0% South African 16 ©Copyright 14 2018 20– The IWSR 22 22 9% 1% 1% 28.06 7% 8% 6 Landscapes Source: Wine Intelligence, trade interview programme in India, July 2018 Argentinian 8 9 12 15 16 21% 10% 1% 27.41 6% 13% Management summary #2. DOMESTICALLY PRODUCED WINE HAS A GREATER REACH IN THE MARKET, WHILST IMPORTS ARE SEEN AS BEING OF A GREATER QUALITY. ALTHOUGH, THIS PERCEPTION IS NARROWING

Imported wines come with a stamp of approval for the consumer, and domestic producers have ▪ Whilst awareness of wines from India and are similar amongst wine to work harder to establish that stamp drinkers in India, a higher proportion of drinkers consume domestic wine Producer ▪ There is a perception in the market that domestically produced wine is inferior to imported wine in terms of quality, although this gap is narrowing Indian producers have really made progress in due to the increasing quality of domestically produced wine which is the quality of their wines and we very much beginning to command an increased price-point enjoy working with them Hotelier

With the popularity of new world wines in recent times, confidence in their wine knowledge has increased as the names are easier to say, compared to classic French words that are difficult to pronounce Country of origin awareness and respective consumption level Producer Base = All Indian urban SEC A semi-annual wine drinkers (n=1,000)

France 38% 59% Indian wines were traditionally of poor quality, but they have recently improved the quality but are still below the wines we get India 52% 58% from other countries Male, 21-35 years USA 34% 54% % who know the following countries produce wine Australia 29% 52% % who have drunk wine from the Italy 29% 52% following countries in the last 6 months

Spain 51% India 23% Wine Intelligence, Vinitrac® India, Jul’ 18, n=1,000 Indian urban SEC A semi-annual wine drinkers, resident in 5 key regions 7 Landscapes Source: Wine Intelligence, trade interview programme in India, July 2018 Germany 19% 40%

Portugal 11% 25%

New Zealand 11% 25%

South Africa 8% 25% Management summary #3. INDIAN WINE DRINKERS ARE PRIMARILY BRAND FOCUSED BUYERS, DUE TO A LACK OF EXPERIENCE WITH THE CATEGORY

▪ Based on its stage of development as a New Emerging wine market, wine drinkers in India have a relatively low awareness of varietals and regions / countries of origin ▪ Beyond domestically produced wine, Indian wine consumers are more aware of wines originating from France and the US, despite Australia Wine consumers buy the wine label. Especially contributing the largest volume share amongst imported wine origins in India, we are a very brand focused market ▪ Well known brands are seen as a reassuring signal of quality for Indian wine Hotelier drinkers and are the key choice cue

Varietal awareness and respective consumption level Base = All Indian urban SEC A semi-annual wine drinkers (n=1,000) Brand extensions are quite easy to launch in 27% 45% The awareness India as brand plays so strongly into the market percentage of the Importer 20% 40% top five varietals in the Indian 21% 38% market is relatively low 21% 38% compared to other Grenache 19% 38% Emerging wine markets Shiraz / Syrah 22% 37% % who have heard of the followingMalbec wine varieties 17% 36% Viognier 17% 33% % who have purchased or consumed the Sauvignonfollowing Blancwine varieties in the14% past 6 months32%

IndiaChenin Blanc 16% 31% Wine Intelligence, Vinitrac® India, Jul’ 18, n=1,000 Indian urban SEC A semi-annual wine drinkers, resident in 5 key regions 8 Landscapes Source: Wine Intelligence, trade interview programme in India, July 2018 Pinot Grigio / Pinot Gris 15% 31% Gamay 16% 30% 15% 30% Pinotage 14% 30% Tempranillo 13% 29% Sangiovese 11% 27% Carménère 11% 26% Grüner Veltliner 12% 25% Nebbiolo 9% 21% Management summary #4. ON- AND OFF-TRADE CHANNELS DEVELOPING THROUGH THE OPENING OF MORE SPECIALISED AND WINE FOCUSED RETAILERS, BARS AND RESTAURANTS

▪ The traditional wine shop is still the most popular outlet for Indian wine drinkers to purchase wine in 2018 The retails experience in different to ▪ More recently, more specialist wine stores are opening in India, including other markets as it is a counter store. You need Godrej Nature’s Basket and Foodhall, where more attention has been turned to to know what you want before you go and their wine offering often people will send their housekeepers or their drivers. Its very transactional ▪ An emergence of wine focused venues opening in the on-trade, altering the Producer position of wine and the experience and experimenting opportunities for consumers

In recent years, standalone restaurants have greatly improved their lists so hotels have had to update their offering to attract these consumers Hotelier Channel usage % who have bought wine from the following channels in the past 6 months Base = All Indian urban SEC A semi-annual wine drinkers (n=1,000) I mostly buy from wine shops and Nature’s Baskets. I really like Nature’s Basket Female, 21-35 years Wine shops 81%

Duty-Free shops (at airports) 53% The local wine shops don’t have a very good range of wine, not like the specialist shops Supermarkets / hypermarkets 51% Male, 21-35 years

Wine clubs 40%

India Wine Intelligence, Vinitrac® India, Jul’ 18, n=1,000 Indian urban SEC A semi-annual wine drinkers, resident in 5 key regions Directly from wine estates during wine travels 9 Landscapes Source: Wine Intelligence, trade interview programme29% in India, July 2018

Other 1% Management summary #5. MILLENNIAL WINE DRINKERS IN INDIA EMBRACING WINE, SHOWING WILLINGNESS TO EXPERIMENT WITH NEW AND DIFFERENT STYLES

▪ Millennial wine drinkers in India are embracing wine as part of a broad repertoire of beverages We don’t have the options to learn about ▪ They are more likely than older drinkers to experiment with new and different wine wine in an exciting way. We just go to the styles, yet their wine knowledge is lower than that of older, more experienced wine store and get the brand that we know drinkers Male, 21-35 years ▪ In addition to being the more frequent wine drinkers, Millennials typically spend more on wine than older drinkers I would like to see more wine tastings. We ▪ Whilst not finding the process of ordering wine in a restaurant daunting, they don’t see them here as much as in other express frustration that wine doesn’t receive the same service as other alcoholic countries, like in stores and restaurants beverages such as whiskey in the on-trade Female, 21-35 years ▪ Desire to learn more about wine, particularly through tasting opportunities 4% Total wine consumption frequency (off-trade and on-trade) 7%* (5%)

(10%) H G I H

FREQUENCY LOW

All Indian MILLENNIALS wine INDIAN WINE drinkers DRINKERS Knowledge level 89%*

H G I H (85%)

KNOWLEDGE LOW

I enjoy trying new and different styles of wine on a regular basis MILLENNIALS All Indian INDIAN WINE wine I don't mind what I buy so long as the price is right DRINKERS drinkers I know what I like and I tend to stick to what I know India Wine Intelligence, Vinitrac® India, Jul’ 18, n=1,000 Indian urban SEC A semi-annual wine drinkers, resident in 5 key regions Source: 10 Landscapes Wine Intelligence, trade interview programme in India, July 2018 Management summary CONSUMER BEHAVIOUR IN THE INDIAN WINE MARKET

Top wine types Top countries of origin % who have drunk the following wine types in the past 6 months % who have purchased or consumed wine from the following places in the past Other 6 months Red wine White wine Rosé wine India 52%

France 38%

USA 34%

Australia 29% 91% 58% 57% 32% 24% Italy 29%

Top red varietals Top white varietals % who have purchased or consumed the following varietals in the past 6 months % who claim to have purchased or consumed the following varietals in the past 6 months

1 Merlot 27% 1 Chardonnay 20%

2 Shiraz / Syrah 22% 2 Viognier 17%

3 Cabernet Sauvignon 21% 3 16%

4 Pinot Noir 21% 4 Riesling 15%

5 Grenache 19% 5 Pinot Gris/Grigio 15%

India 11 Landscapes Source: Wine Intelligence, Vinitrac® India, Jul’ 18, n=1,000 Indian urban SEC A semi-annual wine drinkers, resident in 5 key regions Management summary PURCHASING BEHAVIOUR IN THE INDIAN WINE MARKET

Off-trade location Top wine brands: Purchase % who have bought wine using the following channels in the past 6 months % who have bought the following brands in the past 3 months

1 Wine shops 81% 1 31%

2 Duty-Free shops (at airports) 53% 2 24%

3 Supermarkets / Hypermarkets 51% 3 17%

4 Wine clubs 40% 4 17%

5 Direct from wine estates during wine travels 29% 5 16%

Off-trade choice cues On-trade choice cues % who quoted the following as one of the top three most important cues when % who quoted the following as one of the top three most important cues when selecting wine in the off-trade selecting wine in the on-trade

1 Brands that I am aware of 45% 1 Brands that I am aware of 43%

2 Country of origin 31% 2 Wine style (red/white/rosé/sparkling) 38%

3 Vintage 30% 3 Price 29%

4 Price 28% 4 Vintage 28%

5 Recommendations from family/friends/co-workers 28% 5 Country of origin 28%

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