Emerging Indian Wine Market


Published Date : Jul 11, 2014

Wine Production in India

Currently, the Indian wine market [http://www.marketresearchreports.biz/analysis/174221] is an emerging market. Rising demand for wine has increased the sales of domestic and imported wines. Even though, foreign wine brands are gaining popularity and enjoying climbing sales in the Indian wine industry, the domestic wines currently hold the major share of the market. Winemaking has existed in India since many years, and it was especially encouraged during the time of British and Portuguese colonization of the subcontinent.

In India, there are vineyards in the North and South regions of the country. Vineyards exist in the Northwest Punjab state till the Southern state of Tamil Nadu. Some of the largest vineyards are found in the state of Maharashtra, Karnataka, and Telangana. Districts such as Nashik, Pune, Sangli, and Solapur are well known for their vineyards in the state of Maharashtra. However, the high heat and humidity in the Eastern region of the nation limits viticulture.

Some of the common native varieties of grapes used for wine production are Arkashyam, Anabeshahi, and Arkavati. Popular non-native grape varieties include Gulabi (Black Muscat) and Bangalore Blue (Isabella). The Turkish variety of grape called Sultana is the most widely planted grape in India. There are also some French varieties of grape such as Zinfandel, Sauvignon blanc, Clairette Blanche, and Chenin blanc.

Driving and Restraining Factors

During the past few years the Indian wine industry experienced a downfall. However, things are again looking up. During the past few years there was a slide in the production and consumption of domestic wine. However, in the next five years it is expected to grow at a steady rate. The Indian wine market faces various challenges which restrain its growth. India is a densely populated country and half of the population is below 35 years of age, which gives wine producers a huge opportunity. There are around thirty million potential wine drinkers, even though at present the number is only two million. But, as the younger generation reaches adulthood, it is projected that they will add to the consumer base.

The constitution of India discourages consumption of alcohol and each state has its own policies regarding the production, procedure, distribution, and pricing. This is a complication for the consumers and producers. During the year 2001, reforms in the wine policy in the state of Maharashtra resulted in a spate of new wineries. Currently, Maharashtra boasts the largest number of wineries in India. The rest of the wineries are found in the Karnataka state, which announced a similar policy in 2008. Due to the influence of recession the growth of wine industry was lukewarm, but now new wineries are coming up.

Market Overview

The wine production of India is low compared to the total grape output. Majority of the grapes are used to make raisins while only around ten percent of the total grapes are used for producing wines. The Indian wine market is divided according to the wines into still wine (premium), sparkling wine, still wine (cheap), and other wines. Even though, the foreign wines are managing to attract the consumers, Indian wines are not far behind. Many Indian wine companies provide quality wines at an affordable price.

It is estimated that the local wines will continue to hold the major share of the market for the next decade at least. Also, the Indian wine retail markets are prospering with the foreign wines. The wine retail market in India can be categorized broadly into the Old World wines and the New world wines. The Old World wines are from countries like Italy, France, and Portugal. While the New World wines are from countries such as South Africa, Argentina, Australia, and New Zealand.

The wine industry in India is not yet firmly established, hence, retailers are trying to understand the need of Indian consumers and what appeals to them. Once the retailers have convinced and satisfied the consumer with the taste, quality, and price of the wine, it will help the retailers build a brand image.

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