Food & Beverage News: Interview - Grover wine adjudged the best new world red wine

Grover Wines is the largest player in the premium segment and its 'La Reserva' in the super premium category has been adjudged as the best new world Red Wine by a prestigious magazine Decanter beating entries from Australia, Chile, New Zealand and Argentina.

Grover Vineyards was set up in 1988 on 40 acres of land at the foothills of Nandi Hills in the outskirts of Bangalore when Kanwal Grover along with Kapil Grover took on the task of wine drinking in India. Here, nine varieties that responded well to Indian conditions were planned on an industrial scale. Grover Vineyards shuns ordinary table grapes and uses only French wine grapes selected from the original 35 varieties of the 'Vitis Vinifera' species.

The Grover range includes Cabernet Shiraz-Red Wine, the most acclaimed red wine in India (blend of Cabernet Sauvingnon and Shiraz); Viognier Clairette, the noble Indian white wine (perfectly clear bright white wine made from Viognier and Clairette grapes), Rose-Dry, the Pride of India (an attractive salmon pink colour made from fully ripe red grapes and fermented slowly at low temperature). The latest variety from Grover Vineyards was the well-received Sauvignon Blanc, a delicate bright golden white wine from its stable of fine wines. It is a product of 10 years of experiments and well received by wine connoisseurs and critics.

In an interview with Nandita Vijay of Food & Beverage News, Abhay Kewadkar, vice-president and wine maker, Grover Vineyards, gives an overview of the industry. Excerpts:

What are the trends in the wine industry today?

Wine is considered to be healthy and awareness of the benefits of wine drinking is on the rise and wine is gradually becoming a part of the urban Indian lifestyle. Rising disposable incomes of the Indian population and exposure to new cultures are adding to the growing consumption. Even on a conservative basis, we expect the industry to maintain the growth rate at current levels. Hence, in terms of value, the industry has been growing at 25 per cent annually, over the last ten years. The Indian wine industry is in its nascent stage and the per capita consumption of wine in India is only 10 ml per annum compared to 100 litres a year in Argentina and 65 litres a year in the European countries.

What are the challenges in maintaining vineyards that wine makers face?

The grapes need to be grown in climatic conditions similar to that in France. The foothills of Nandi Hills in Dodballapur, 45 km from Bangalore, is an ideal region to cultivate grapes. We have imported 35 varieties of cuttings from France and planted in our vineyards and from this we have short-listed seven types. Grapes are the key raw material in the production of wines and for a wine manufacturer uninterrupted supply of grapes is a must to ensure smooth production. The biggest challenge is water, which is a problem if monsoon fails resulting in low levels of water tables. There have been instances when land was vacated for want of water. Another task is to control insects that attack the vineyards. In this regard, preventing insects is preferred over spraying insecticides as it might leave residue in the wine.

Could you give us an overview of Grover Vineyards?

Grover has had the expertise of growing and maintaining vineyards for the last eight years. We can assess the quality of wine looking at the crop and vice versa. In 1989, we commercialised the production on three acres and in 1990 we expanded to 20 acres and now our vineyards span over 250 acres. Besides, 100 acres of vineyard is under contract farming practice.

The company does not believe in importing foreign wines nor does it launch new wines at a frantic pace. Instead, the company is constantly focussed on developing the Indian wine market and promoting excellent quality wines abroad. A New Delhi-based company, that operates Tulleeho Portals for drinkers has tied up with Grover Vineyards in Karnataka and launched its 'Tulleeho Wine Trail'-a day-long visit to the Grover Vineyards, which includes a tour of the vineyards and production facilities, sample and purchase Grover wines.

What are the investments made by Grover in recent years?

In 1993, we upgraded the winery plant and equipment at an investment of Rs 4.5 crore. The winery is located close to the vineyards. In 1995, Grover Vineyards took on the expertise of the world-renowned oenologue, Michel Rolland who is affiliated exclusively to Grover Vineyards. In 1996, the world leading champagne house Veuve Clicquot Ponsardin of France took a minority stake in Grover Vineyards and this joint venture resulted in extending technical support to Grover Vineyards through their wineries in Australia and New Zealand. In 2001, Grover Vineyards accomplished selling wine to France after which it entered UK and US. Recently, the company signed an agreement with Luxembourg Fine Wines, which sources the best wines from across the world to markets of Europe and Asia.

What has been your performance in the market so far?

Grover Wines is the largest player in the premium segment and 'La Reserva' in the super premium category has been adjudged as the best new world Red Wine by a prestigious magazine Decanter beating entries from Australia, Chile, New Zealand and Argentina. In 2004-05, we generated sales of 6.2 lakh bottles with a growth rate of 30 per cent and in 2005-06, we expect to sell 8.2 lakh. In 2005-06, we expect a turnover of Rs 16 crore and exports form 30 per cent of it. The growth has been steady going by the demand for products. Grover Vineyards received the Agriculture and Processed Foods Products Exports Award (APEDA) for the company's excellent performance in 2003. The following year, we bagged a bronze from APEDA. In addition, we also received the Global Best performance award for excellent performance in achieving the highest sales in the year in the category of 'Still Light Wines'. This award was declared after reviewing the brand and in conformity with the All-India Distillers Association as per the IWSR (UK) report. It got the International Food & Wine Society

Silver Award at WINPAC in 2003. At the Wines of Pacific Rim, the vineyard also won accolades for their Cabernet Sauvignon Shiraz.

What are the plans for the future?

We aim to register a growth rate of 40-50 per cent in the coming years. In fact, our performance would commensurate with the growth of lifestyles, exposure by customers who travel abroad and associate themselves with the wine culture contacts and increase in wine connoisseurs among women in professional positions who are now exposed to the multinational company culture.

What are the current wine import and export regulations?

The wine sector has been attracting basic customs duty of 100 per cent and additional customs duty as per the following details:
n >US $25 per case* is 75 per cent of landed value.
n >US$ 25<$40* is 50 per cent or minimum of $37 of landed value
n >$40* 20 per cent or minimum of $40 of landed value.
(* Price for one case of 12 bottles, 750 ml each.)

In May 2003, a circular from the Director-General of Foreign Trade stated that the hotel industry was allowed to import spirit and wine up to 5 per cent of their foreign exchange earnings which was a blow to the domestic wine industry. Moreover, such imported wines and spirits for supply to the hotel industry do no attract any state excise duty whereas the domestic wine industry has to pay excise duty, making imported wines 3 to 5 times cheaper. The wine industry had represented to the government to provide relief. But no exemption was made in the Union Budget of 2005-06.