Subhash Arora –Indian Wine Academy
, 19th June 2010
While most wine producers blame the recession at the slowdown, tight liquidity and their financial plight Sula has been racing ahead with only one pit stop last year, with the company performing better than the 40% target to achieve the sale of 350,000 cases this year according to the official statistics released by the company.
Subhash Arora takes an overview of the factors towards their success.
When delWine broke the story of its achieving the no.1 position, Sula was not happy about the report- not only because Rajeev Samant wanted to first look at the official figures of the company as well as their nearest competitor, Indage which started going developing a snag in the engine and still has not gotten back to the track. The other reason was the inference drawn by the online newsletter that the goalkeeper had hit its own goal, giving Sula the winning score.
Sula crossed prediction made by delWine of its reaching the 250,000 case mark last year, at the growth rate of 25% over the previous year. While achieving the target the winery had set for itself, its share has gone beyond 50% in the premium wine sector (wines costing over Rs.250-300).
Sula detractors take refuge in the fact that it has been able to achieve the numbers by introducing and pushing cheaper wines like Samara and Nashik Port which may have its roots in the route that Indage had taken till a couple of years, thus trying to convince the world at large that it had 70-80% of the market share.owever, Sula seems to have sniffed the opportunity in the lower end of the market and fill the gap created by Indage while the other producers were happy merely criticizing it- UB seems to be the only exception and brought out Zinzi at Rs.200-300, even before releasing the signature label Four Seasons.
But widening the spectrum, Sula also introduced Riesling, Dindori
Reserve Viognier and Rasa Shiraz
Reserve which at its debut at an international Shiraz
competition, scored a goal with a silver medal, the only wine making the trii-colour fly at the competition. Having learnt its lesson around five years ago when the quality dropped due to the early stage of buying grapes from contracted farmers, it had quickly bounced back and started giving importance to the quality his wines deserved and desired.
Today, when an infant producer claims to have the best wine in the world as a rookie, Rajeev is satisfied with the international acclaim of being the most consistent quality producer. But where he scores even more over the rest of the players is his capacity and passion to play the double role of the CEO and the brand ambassador. In fact he has become a celebrity in his own right-(and perhaps the most eligible bachelor). If 80s and 90s were the decades of Marquis de pompadour, this millennium shared by Grover’s La Reserve and MDP which continued its rein on the strong brand image, Rajeev Samant and consequently Sula have taken the lead and the 10s could well be the decade for Sula.
Grover’s La Reserve had been India’s best red wine and a great value for money. It has lost out on both counts during the last few years, with the fall being harder in the previous two years. The prices were raised to fall in line with Sula, but the quality suffered a setback and when it recovered due to the timely action of the management, it slipped badly in supplies. Even now, it has been out of stock in Delhi for the last one month and it is not likely to be available till at least the middle of next month. At a survey conducted by delWine in Gurgaon, the Santé is priced at a ridiculous price of Rs.500- with the comparable Madera from Sula and Zinzi from UB at Rs.300-350. While many of the smaller producers are raising funds for the excise license and debating whether to enter Delhi market, it has walked out with a 60% month-on month growth this year and has no inclination to slow down.
Therefore, beyond quality, it has also entered the critical mass. No wonder, when Grover plans to have the biggest increase in numbers-of 20,000 over its last year’s 80,000 and when most other producers seem to be satiated by the modest planned growth of a few thousand cases even though it might translate to 50% growth (Indage continues to be an enigma; the Four Seasons does not want to act like the rich cousin trying to be dominant, but also plans a hefty increase of over 50% although some hyped up media reports would have you believe almost 80-100% ), the total growth on the other side of the line almost pales in comparison with the growth of 100,000 cases planned for the year by Sula.
In Q1 of the current financial year, Sula has widened its lead even further with over 55% market share according to a Press Release which adds that Sula now has over 70% market share in Delhi.
Exports to UK and other markets are also booming. The company did exceedingly well at the London wine Show and in the current quarter, exports are expected to rise 50% from a year ago, This is due to a sharp increase in demand in UK and Germany, their two key export markets.
One area where Sula has been a laggard is imports where its performance has been lackadaisical at best. It has shredded many premium labels in the past and the competitors feel it could have done a lot better. Perhaps, this was due to the mental make up of its sculptor Rajeev who believes that due to the uncertain and unfavourable policies of the government, the import industry is not profitable and has not been able to keep up with the growth. Of late, the company appears to have changed its strategy and seems to put its weight behind imports too.
The recent tie up with the iconic luxury label Remy Cointreau on an exclusive basis for India, would be a real test for Rajeev Samant to prove whether he charmed the drinkers into making Sula the market leader by default or he has an exceptional business acumen to continue swimming against the tide and achieve the same rate of growth for imports as it has projected for the domestic and export market.