United Spirits to spruce up its wine portfolio

Vijay Mallya's United Spirits (USL) is set to introduce two wine ranges later this year, after the mid-priced Zinzi, launched earlier this month.

Over the past two decades, USL has been more or less absent in the wines category. However, the company felt that it was imperative to create and introduce its own brands as wines form 50 per cent of global spirit sales.

"We will spend whatever it takes to expand the wine market in India. We have patience and we are here for the long haul," said Abhay Kewadkar, business head (wines) and chief wine maker, USL.

The company operates through two wine subsidiaries, United Vintners and Four Seasons Wines. United Vintners will deal in imported wines, which the company has been doing for the past 20 years, while Four Seasons will produce and sell Indian wines straddling all price points.

The company's new range, to be launched in November, would be priced between Rs 375 and Rs 500 per bottle. This would be followed by a super-premium reserve range, which would be sent to French oak barrels.

Zinzi is priced between Rs 150 to Rs 276.

According to Kewadkar, "Zinzi would cater to the young consumer who is looking for a quality product at an affordable price. We are driving at Zinzi being an everyday beverage, not meant just for special occasions. We are aiming at minimum sales of 1.2 million bottles this year, out of which nearly 30 per cent is expected to be contributed by Zinzi. Our products would be sold at both retail outlets and fine dining restaurants."

USL had set up its wine division in September 2006 and invested Rs 25 crore in plant machinery and equipment. The company may also invest as much as 50 per cent of its sales in advertising and promotions and an additional Rs 75 crore in the next four years to scale up production.

USL currently sources grapes from a 1,000 acre land in Baramati, 120 km from Pune. The company looks to buy more 300 acres there and get into contract farming on another 700 acres in the next two years.

Wines form a very small percentage of total spirits sales in India, but it has the potential to go up to 50 per cent, on par with the rest of the world, say experts.

Other players in the Indian wine industry include Chateau Indage, Grover Vineyards and Sula Wines. Diageo India, arm of global spirits Diageo, is also expected to enter the wine market in India in a big way, while Seagram India, part of the Pernod Ricard Group, launched its wine brand Nine Hills last year.

The company expects Zinzi, which is priced lower than many other existing wines, to provide tough competition to other brands.

The increase in disposable income accompanied by a favourable duty structure for indigenous wines is expected to fuel wine consumption in India.

A report by Rabobank International suggests the Indian wine market, valued at $ 62 million, is expected to grow by 25 to 30 per cent to 1.7 million cases by 2010.