Wine maker Sula Vineyard eyes double-digit growth on premiumisation

Raising toast to 25 successful years, India’s largest wine maker Sula Vineyard is eyeing a sustained double-digit growth in revenue over the next five years, buoyed by growth in the premium and elite categories and expansion of its new ranges.

It was during Covid that the vineyards shifted focus to its own brands and pivoted towards growing the premium and elite segment of the market.

“Rather than trying to compete in the segment priced between Rs 250 and Rs 700, which is price sensitive and discount driven, we turned our focus to dominating the price segment above Rs  700 and the elite segment over Rs 1,000, which competes with imported wines.

"It has been an incredibly successful journey over the past three years,” says Rajeev Samant, chief executive officer at Sula Vineyards.

The premium and elite section of the winery has grown at a compound annual growth rate of 15-20 per cent over the last three years.

“The segment contributes close to 80 per cent to our revenues, up from 55 per cent four years ago.

"It is a huge shift. Going forward, we see good double-digit growth ahead in these two segments,” he adds.

While premiumisation remains a key growth driver, innovations and expansion are also on the cards for the winery to bolster the journey of sustaining double-digit growth.

The winery’s source range, which recently saw the addition of the source pinot noir, is poised for expansion beyond the home markets of Maharashtra and Karnataka in the coming two years.

“Demand growth in non-traditional markets is now faster than our traditional markets of Maharashtra and Karnataka.

"We are seeing a strong 50 per cent growth in Delhi, more than 40 per cent growth in Rajasthan, and almost over 35 per cent growth in UP,” says Samant.

“We expect this trend of faster growth in non-traditional markets to continue, which will also impact our margins.

"However, that is the way to ensure that we can grow wine as a category faster than cigarettes and beer in India for the next decade,” he adds.

Wine tourism is another area of expansion Samant is focusing on, with 35 keys added in the last 10 months, and more in the pipeline.

“For us, FY24 ended on a very strong note with close to 90 per cent occupancy levels.

"Wine tourism is still seasonal, and we will see occupancy cross 90 per cent in the third and fourth quarter of the year,” he says.

The plan now is to add 30 more keys in the latter half of the ongoing financial year in Nashik.

The winery is also investing a little less than Rs 100 million for tourism development at the two other vineyards in Bengaluru and the recently acquired ND wines.

“We are also in the planning phase of building rooms at the Bengaluru vineyard, which we aim to complete in 18 months,” he adds.

ND Wines will have a terrace tasting room, a tasting cellar, two dining areas, a gift shop, and an expansion of the bottle shop to 800-1,000 sq ft from its current 100 sq ft.