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Sula to retail its wines through Food Bazaar
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Saturday, 04 November, 2006, 08 : 00 AM [IST]
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Dhwani Pandya, Mumbai
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Following the Maharashtra government's decision to allow supermarkets and modern format retailers to sell wine, Sula Wines has entered into a tie-up with Food Bazaar to push its retail sales. Sula, clearly the second largest wine producer in India, has rapidly established itself as India's leading premium wine brand after launching its first wine in 2000. It produces Red, White, Rose, Sparkling and Dessert wines. The Stanford-trained engineer Rajeev Samant, who quit his hi-tech Silicon Valley job to make wine in his family estate in Nashik under Sula brand, spoke in detail about the Indian wine industry, increasing consumption, the company's achievements and the future plans at a press conference at the company's tasting room in Mumbai.
The company expects to see its brands on the supermarket shelves within the next two months. Samant informed Food & Beverage News, "In order to give customers a wide range of choice, almost all our brands will be displayed in the Food Bazaar. The price will range from Rs 100 to Rs 1500. With the rising trend of healthier and cosmopolitan lifestyle, retailing of wine will definitely boost the sales."
Food Bazaar, promoted by the Pantaloon Group, has six supermarkets in Mumbai and more than 30 across the country. The group was looking for three preferred partners in spirit, beer and wine, which led to the tie-up with Sula Wines. Samant said the company would have more such tie-ups with other leading retailers such as Reliance Retail and Spencers.
Sula is also in talks with a leading US-based private equity company for a strategic investment. It is expected to divest 5-10% to the US firm. Samant said a few private equity players including a US major had shown interest for a strategic investment in the company. "But so far no proposals have been short.listed as the company's financial position is comfortable at the moment," he added.
The Indian wine industry is growing at the robust rate of 30%. Sula has 400 acres of vineyard in Nashik and in nearby Dindori and plans an additional 500 acres this year. Sula is also sourcing grapes for its winery through contract farming. Besides, the company is setting up a world-class nursery for grape saplings at Nashik through a French joint venture. The 150-acre nursery will involve an investment of nearly Rs 5 crore.
Apart from increasing the production of grapes, the company is also looking for increasing the crushing facility. Sula recently acquired Pimpane co-operative's sparkling wine facility near Nashik for about Rs 6 crore. An additional Rs 3 crore will be invested for revamping the old winery. It will enable crushing of 3000 tonnes of grapes during the harvest season in 2007.
Pimpane, Sula's fourth winery, has a capacity to produce 3.5 lakh litres of wine. Launching its first wine in the year 2000 from a small winery on Rajeev's 30-acre family estate, Sula set up its second winery with three times the capacity of the first in 2004, taking the annual production to 7.50 lakh litres. Sula's third winery with a capacity of 10 lakh litres is ready for commissioning. Together with Pimpane winery, Sula's annual wine production would touch 19.50 lakh litres.Sula sources 20% wine grapes from its own vineyards, while the rest through contract farming. The company is expecting a growth of 25% in the next three years.
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