According to Abhay Kewadkar, business head and chief wine maker, USL Wines, "We will be the first company to offer shares to contract farmers. We will offer 49 per cent shareholding to 500 farmers who have been with us for 15 years. They will hold shares of our winery project at Baramati. USL will hold 51 per cent stake in the project. The project will ensure direct and indirect employment for 1,500 people in 2-4 years."
USL sources grapes from a 1,000 acre land in Baramati in Pune district. The company has 500 acres for contract farming for wines in Baramati and is looking at scaling it up to 2,000 acres there. Currently, around 500 farmers are on contract, and the number will go up as the acreage increases, in two years.
The company is also looking at new retail models in India for its wines. "We are looking at setting up our own branded outlets. We would also look at setting up bars and lounges as an innovative retail format," said Kewadkar.
The outlets will be a mix of franchisee and company-operated. USL is also looking at tie-ups in South Africa, New Zealand, and Australia, for importing wines. The company has recently tied up with Burgundy giant Boisset and plans to introduce 20 labels in the country in the next three months.
In 2007, USL had acquired French sparkling wine maker Bouvet Ladubay. The distribution deal with Boisset is expected to compliment USL's French wine portfolio.
"Once the volume of the wines sale increases, we will look at introducing PET bottles and tetrapaks for wines. This packaging format works very well overseas and could be replicated in India," Kewadkar said.
The aim is to position wines as a beverage option for youngsters on-the-go.
After the launch of Zinzi, the latest offering by United Breweries, the firm will introduce brands in the affordable bracket, which is below Rs 300 for 750 ml.
Zinzi is priced between Rs 150 and Rs 276. Currently, wines form only 1 per cent of total spirits sales in India, but it has the potential to go up to 50 per cent.
The domestic wine market, valued at $62 million, is expected to grow by 25 to 30 per cent to 1.7 million cases by 2010.
Other players in the domestic 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.
