By Prithvi Durai
Deal activity in the Indian wine industry may seem to have stagnated, but several international wine brands are likely to forge joint ventures and partnerships with Indian players with evolution of India’s wine culture, Prowess Advisors said in its latest report, pegging the sector as “moderately attractive”.
There is growing demand, moderate competition, consumer loyalty and raw material availability, the food and agri investment consultants said in its India’s Wine Industry, Edition 2024.
“Currently, the Prowess Attractiveness Index score for the wine industry is 42% (Moderately attractive),” Rohit Bahadur, managing director and chief executive officer, of Prowess Advisors told VCCircle in a written reply.
The Prowess Attractive Index score is a proprietary tool to measure the attractiveness of a sector based on core parameters. The index was measured on 15 parameters, including consumer trends, export potential and markets, price sensitivity and power of buyers, raw material availability, and capital requirement.
“The key factors in favour (of the wine industry) include growing demand for wine, moderate competition intensity, good consumer stickiness, raw material availability, among others. The sector can greatly benefit from improvement in certain aspects like the small market size, lack of enough medium-scale wine companies, high regulation and low velocity of trade,” said Bahadur.
Bahadur expects PE activity to evolve slowly as the scale and number of wine companies increase in India.
“However, there are many small regional and new age players entering wine segments which are bringing product innovation and local wineries which would attract small ticket investments from angel investors, micro-VCs and VC investors as well as strategic alcobev players,” said Bahadur.
So far this year, investments worth approximately $22 million have been struck within the wine sector, the report showed.
Some of these include investment of around $19.1 million by Ausom Enterprise, VisVires Capital, AV Thomas and Company, Neelamalai Agro Industries in south India-located Grover Zampa in June. Rainmatter, Anthill Ventures, Auxano Ventures also infused $1.5 million in Pune-based Ronin Wines during the same month.
After witnessing a domestic wine production of around Rs 1,400 crore in 2023, Prowess Advisors estimates the wine industry to grow at a compounded annual growth rate (CAGR) of 20% to Rs 3,483.6 crore by 2028.
As of now, India exports only 2-3% of production. However, this could increase going ahead.
“We expect the wine exports to increase at 15-20% CAGR for next 3 years but the contribution share is expected to remain at sub 5% in the next 2-3 years as the exports will be driven by mostly top 2-3 players,” said Bahadur.
The report cited enhanced product quality, increased consumer interest and broader market penetration as the reasons driving this growth.
“Indian wineries in Nashik, Pune and Bangalore are elevating their quality and gaining global recognition unlocking significant export potential,” Prowess Advisors said alluding to the improving wine quality.
Rising disposable incomes are also encouraging consumers in Tier II, Tier III markets--approximately 65%--to explore premium lifestyle products like wine, it added.
Proliferation of wine tourism in vineyards, growing awareness of the health benefits of moderate wine consumption and rising number of millennials pairing wine with regional cuisines is also likely to boost consumption, it said.
Premium retail outlets are also leading to higher footfalls, especially among women, as they “provide premium experience and tasting experimentation,” the report said.
Out of the total wine consumer in India, 50% are in the 21-35 years age bracket, while 60% are women, the report showed.
In addition, online sales through e-commerce, quick commerce and online retailers have increased access to a wider variety of wines, Prowess Advisors said.
H: Indian wine industry “moderately attractive” as of now: Report
By Prithvi Durai
The wine industry in India looks “moderately attractive” amid growing demand, moderate competition, consumer loyalty and raw material availability, said Prowess Advisors, food and agri-based investment consultants.
“Currently, the Prowess Attractiveness Index score for Wine industry is 42% (Moderately attractive),” Rohit Bahadur, managing director and chief executive officer of Prowess Advisors told VCCircle in a written reply.
The Prowess Attractive Index score is a proprietary tool to measure the attractiveness of a sector based on core parameters. The Indian wine industry, measured by the index, was pegged at 42% or “moderately attractive” based on 15 parameters. Some of these include consumer trends, export potential and markets, price sensitivity and power of buyers, raw material availability, capital requirement among others.
“The key factors in favour (of the wine industry) include growing demand for wine, moderate competition intensity, good consumer stickiness, raw material availability, among others. The sector can greatly benefit from improvement in certain aspects like the small market size, lack of enough medium-scale wine companies, high regulation and low velocity of trade,” Bahadur said in his written reply.
In its report titled India’s Wine Industry, Edition 2024, Prowess Advisors noted that while deal activity in the wine industry seems to be stagnating, several international wine brands are likely to forge joint ventures and partnerships with Indian players with evolution of India’s wine culture.
“We expect PE activity to evolve slowly as the scale and number of wine companies increase in India. However, there are many small regional and new age players entering wine segments which are bringing product innovation and local wineries which would attract small ticket investments from angel investors, micro-VCs and VC investors as well as strategic alcobev players,” Bahadur told VCCircle.
So far this year, investments worth approximately $22 million have been struck within the wine sector, the report showed.
Some of these include: Investment of around $19.1 million by Ausom Enterprise, VisVires Capital, AV Thomas and Company, Neelamalai Agro Industries in south India-located Grover Zampa in June. Rainmatter, Anthill Ventures, Auxano Ventures also infused $1.5 million in Pune-based Ronin Wines during the same month.
After witnessing a domestic wine production of around Rs 1,400 crore in 2023, Prowess Advisors estimates the wine industry to grow at a CAGR (compounded annual growth rate) of 20% to Rs 3,483.6 crore by 2028.
As of now, India exports only 2-3% of production. However, this could increase going ahead.
“We expect the wine exports to increase at 15-20% CAGR for next 3 years but the contribution share is expected to remain at sub 5% in the next 2-3 years as the exports will be driven by mostly top 2-3 players,” Bahadur said in his written reply.
The report cited enhanced product quality, increased consumer interest and broader market penetration as the reasons driving this growth.
“Indian wineries in Nashik, Pune and Bangalore are elevating their quality and gaining global recognition unlocking significant export potential,” Prowess Advisors said alluding to the improving wine quality.
Rising disposable incomes are also encouraging consumers in Tier II, Tier III markets--approximately 65%--to explore premium lifestyle products like wine, it added.
Proliferation of wine tourism in vineyards, growing awareness of the health benefits of moderate wine consumption and rising number of millennials pairing wine with regional cuisines is also likely to boost consumption, it said.
Premium retail outlets are also leading to higher footfalls, especially among women, as they “provide premium experience and tasting experimentation,” the report said.
Out of the total wine consumer in India, 50% are in the 21-35 years age bracket, while 60% are women, the report showed.
In addition, online sales through e-commerce, quick commerce and online retailers have increased access to a wider variety of wines, Prowess Advisors said.