Indian Market Overview
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- Words: 2,443
- Pages: 22
Strictly private and confidential
Strictly private and confidential
Overview of Indian Wine Industry
November 2008
Strictly private and confidential
Contents
Section 1
Indian Market
1
2
Indian Alcohol Market
9
Indian Market
Section 1
Section 1 Indian Market
1
Indian Market
Section 1
India at a glance
Area
3.29mm km2, Kashmir region included
1.148 bn inhabitants (world’s second largest nation by inhabitants)
349 inhabitants per km2
Capital city
Delhi
Government
Parliamentary Democratic Republic
Union of 28 states and 7 union territories (Andaman and Nicobar islands, Chandigarh, Dadra & Nagar Haveli, Daman & Diu, Delhi, Lakshadweep, Pondicherry)
$2,966 bn (2007) by PPP
$1,099 bn (2007) by exchange rate
Currency
Indian Rupee (INR; Rs)
Languages
Hindi, 17 other local languages, English
Religions
Hindu (80%), Muslims (14%), Christians (2.4%), Sikh (2%), Buddhists (0.7%), Other (0.9%)
Time zone
GMT + 5:30
33.7% corporate tax, 12.5% VAT (for most commodities) and tax exemption for first 10 years in Special Economic Zones
Moody’s: Baa2
S&P: BBB-
Fitch: BBB-
Population
Administrative structure GDP
Taxation
Country risk Source: CIA Factbook, EIU
2
Indian Market
Section 1
India is leading the way in GDP growth Ranking of GDP growth 2006 – 2020 (% p.a.) India Malaysia China Thailand Turkey Ireland Indonesia Korea Mexico Chile U.S. Brazil Germany Japan 0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Source: Deutsche Bank Research, Formel-G
3
Indian Market
Section 1
Strong fundamentals exist GDP Growth (USD in millions) 1,400
GDP in PPP 1,270
1,313
13,000
(1) U.S.
1,140
1,200
10,500
(2) China 1,000
915 812
800
(4) India
695
600
591
505
3,870 2,700
(5) Germany
400
1,850
(9) Russia
200
(10) Brazil
1,700
0 2002
2003
2004
2005
2006
2007 (a) 2008 (a) 2009 (a)
(a) Estimate. Source: Economy.com, Global Insights Nov 08
0
2,000
4.0%
10,000
12,000
300
13.10%
14,000
276
250
10.0%
6.0%
8,000
Forex reserves ($ billion)
12.0%
8.0%
6,000
Source: IMF WEO
Inflation Levels 14.0%
4,000
200 8.20%
6.80% 5.90%
7.20% 5.10%
4.40%
5.20% 3.00%
2.0%
6.50% 6.80% 5.50% 5.20% 5.00%
2.50% 2.50%
3.50%
140
150 5.80% 4.70% 4.80%
2.30%
119
100 50
74 26
29
32
38
42
54
0
0.0% 1997
177
6.40%
1998
1999
2000
2001 2002 2003
CP I
Source: CMIE, Global Insight Nov 08
2004 2005
2006 2007
FY97 FY98 FY99 FY00 FY01 FY02 F Y03 FY04 FY05 FY06 FY07
WP I
Source: Indiastat.com, RBI
4
Indian Market
Section 1
India has gained strong standing in the international investor community FDI flow into India
A.T. Kearney FDI confidence index 2007
20.0
5.0% 4.5%
18.0
17.5
16.9 15.7
16.0
1 (1) China
15.3
2 (2) India
2.8%
3.1% 2.9%
10.0
2.5%
2.1% 8.0 6.0
8.1 1.8%
2.0% 6.0
4.0
1.0%
2.0 0.0
0.0%
Foreign inflow % of GDP
Foreign investment ($bn)
14.0 3.0%
Source: UNCTAD, Morgan Stanley Research
1.86
4 (4) UK
1.81
5 (10) Hong Kong
1.78
6 (7) Brazil
1.78
7 (18) Singapore
1.75
8 (22) United Arab Emirates
1.72
9 (6) Russia
1.70
10 (9) Germany
1.70
15 (15) Japan
1.63
18 (*) South Africa
1.61
20 (13) Turkey
1.59
23 (24) Central Asia
1.57
25 (12) Czech Republic
1.56
2002 2003 2004 2005 2006 2007E 2008E Foreign investment
2.09
3 (3) U.S.
4.0%
14.5
12.0
2.21
0.00
0.50
1.00
1.50
2.00
2.50
(0 low – 3 high confidence)
Capital inflow ( ) = 2006 rank. Source: A.T. Kearney
5
Indian Market
Section 1
Large working population and growing middle class contributing to overall growth Population of large urban communities(millions of persons)
Population by age (millions of persons) 120% 100% 80%
700
1,000
1,110
1,200
CAGR
5% 5% 7%
6% 6% 9%
5% 6% 10%
5% 6% 11%
3.9%
500 CAGR: 2.9%
43%
45%
47%
47%
7.4%
20%
40%
34%
32%
30%
435
330
4.6%
200
1.8%
100
40%
CAGR: 2.7% 380
400 300
60%
CAGR: 2.9%
286
0
0% 1996 0 – 14
2001 2006E 15 – 34 35 – 44 45 – 54
2010E >55
Indian middle class breakdown (2002) Upper middle, 5%
High, 1%
Middle, 22%
Low, 72%
F2002 – 188 million households
2000
2005
2010
2015
Indian middle class breakdown (2010E) High, 4%
Upper middle, 7% Middle, 26% Low, 66%
F2010E – 222 million households
Note: Definitions (at F2002 prices): Low Up to $1050. Middle $1050 – $4200. Upper middle $4200 – $10,500. High $10,500 & above. Source: Morgan Stanley, Value Partners
6
Indian Market
Section 1
Growth in consumption and income will lead to a growing domestic market Per capita disposable income
Real growth in national consumption 1,600
$700
1,500
$641 $600
CAGR: 11%
$600
1,400
2003 = index 100
$547 1,200
$488
$500 $430 $400
1,000
$378 800
$300 600 $200
400
$100
200
100
121
2003
2005
0
$0 2003
2004
2005
2006
2007
2008
2008
Source: Value Partners, HSBC, The Economist
7
Indian Market
Section 1
Facts and figures: economy and markets Current market statistics (as of Mar 2008) Market capitalization ($bn)
Savings and investments
1277
Average daily volumes ($bn) - Cash - Derivatives Total domestic mutual fund assets ($bn)
125.5
FII ownership (% of market cap)
1.2%
Total Domestic Mutual Fund Assets (US$ M)
Saving (F2007, % of GDP)
38.0%
Gross capital formation (F2007, % of GDP)
39.4%
Level of gross FDI (F2007, $bn)
22.1
FDI as % of GDP, (F2007)
2.6%
6
National income statistics Nominal GDP (F2007, $bn) Population (F2007, millions) Population growth (F1995 – 2007, % CAGR) Per capita GDP (F2007, $) Nominal US$ GDP per capita growth (F1995 – F2007, %)
Composition of GDP (F2007, %) 838 1,122 1.8% 747 12.5%
Agriculture and allied activities Agriculture Mining and quarrying
18% 17% 3%
Industry
21%
Manufacturing Electricity, gas and water supply Construction Services Trade, hotels, transport and communications Financing, insurance, real est. and bus. services Community, social & personal services
16% 2% 8% 61% 25% 14% 13%
Source: RBI Economic Survey 2007-2008
8
Indian Market
Section 1
Section 2 Indian Alcohol Market
9
Indian Market
Section 1
Indian Alcohol Market Overview
CAGR: 13.2%
$20.0
$18.3
$16.1
$20.7
14.5% 13.7%
13.5%
13.0%
12.6%
$5.0
14.0% 13.5%
13.1%
$10.0
15.0%
12.5%
$0.0
12.0% 2003
2004
2005
2006
2007
CAGR: 7.0%
5.0 4.0
3.6
4.2
4.4
4.7
8.5% 8.0%
7.6% 7.3%
3.0
7.5%
2.0
6.6%
6.7%
1.0
7.0% 6.5%
0.0
6.0% 2003
2004
2005
2006
2007
Market volume (Liters billion) % grow th
Market Value ($ billion) % grow th
Market Segmentation (2007)
Beers, ciders and FABS 10.8%
3.9
% growth
$15.0
$14.3
$23.5
% growth
Market value ($ billion)
$25.0
Market Volume (2003–2007) Market volume (Liters billion)
Market Value (2003–2007)
Market Share (2007) United Brew eries Limited 10.3% SABMiller plc 7.8%
Wine 0.8%
Millenium Alcobev 6.4%
Spirits 88.4%
Other 75.5%
Source: Datamonitor
10
Indian Market
Section 1
Distribution (2007) Supermarkets/ hypermarkets 9.1%
Other 2.8%
Specialist retailers 46.6% On-trade 41.5%
Source: Datamonitor
11
Indian Market
Section 1
Indian Wine Market Competitive Landscape Domestic Key Player
Market Share (2006) Others 29%
Indage Champagne 44%
Grover Vineyards 9%
Established in 1982
Located in Narayangaon, Pune
Key Brands: Marquise de pompadour, Ivy, Joie, Chantilli, Figueira, Riviera, Vino Sparkling, Vin Ballet, Hammer
Established in 1997
Located on the outskirts of Nashik
Key Brands: Dindori Reserve Shiraz, Sula Red Zinfandel, Sula Cabernet Shiraz , Satori Merlot, Madera Red, Sula Sauvignon Blanc, Sula Chenin Blanc, Madera White, Viognier, Dia White
Production capacity of 15 million liters
Total Revenue: $53.4mm (2007-08)
Investors: Arisaig Partners, Reliance Capital Private Equity
Sales: Over 2 mm bottles in 2007-08
Total Revenue: $2.3mm
Investors: Future Capital Holdings, GEM India Advisors
Established in 1988
Production capacity of 2.1 million liters
Located in Nandi Hills, Bangalore
Total Revenue: $4.6mm
Key Brands: La Réserve, Sauvignon Blanc, Cabernet Shiraz, Shiraz Rose, Viognier and Clairette
Investors: n/a
Samant Soma 18%
Source: Euromonitor
Source: Company websites
International Key Player
Established in 1743
Located in Epernay Marne, France
Key Brands: Brut Impérial, Brut Impérial Rosé, Millésime Blanc 1998 & 1999, Nectar Imperial
Total Revenue: $1,173.9mm (2007)
Source: Company websites
12
Indian Market
Section 1
India Wine Market Overview
Industry Overview
Trends
The Indian wine market only makes up 0.8% of the entire Indian alcohol segment The Indian wine market has an estimated size of $265mm and 11mm liters in terms of volume The industry has been growing steadily by 32% (2002-2007) and is estimated to grow by an additional 32% over the next 5 years (20072012) The country’s 3 main wineries include Sula vineyards, Chateau Indage vineyards and Grover vineyards
–
the three players together contribute ~90% of the market
The Indian wine industry is on an upswing as production and consumption are expected to increase by ~32% over the next 5 years As the industry grows, new players such as Seagram and United Spirits have entered the market (2007). While a number of other players such as Diageo are said to be keen on entering as well With a low set up cost for a wine plant between Rs.10–15mm ($0.2– $0.3mm) with a capacity of 100,000 liters, competition and the overall market are expected to increase As wine consumption is still in its infancy, manufacturers are providing wine at economical prices
–
Five-star hotels, pubs and bar-cum-restaurants are the primary wine selling outlets in the country as 63% of the sales are through these channels
wine in the Rs300-500 price range make up ~59% of wines sold
However, ~80% of wine consumption is confined to major cities like Mumbai (39%), Delhi (23%), Bangalore and Goa. The non urban areas still account for only 20% of the market
Market Value (2002–2007)
Market Value (2007–2012)
Market Value ($ millions)
$147 6
150 100 50
$49 2
$82 3
$62
8 7 6
$112 5
5 4 3
3
2 1
0
900
0 2002
2003
2004
2005
2006
2007
CAGR: 32%
800
$624 26
700 600 500 400 300 200
$197 8
$265 11
$360 15
$795 35 33 30 25
$479 20
20 15 10 5
100 0
Market volume (Liters million)
200
9 Market volume (Liters million)
$197 8
CAGR: 32%
Market Value ($ millions)
250
0 2007
2008
2009
2010
2011
2012
Still light grape w ine
Sparkling w ine
Still light grape w ine
Sparkling w ine
Fortified w ine & vermouth
Market volume (Liters million)
Fortified w ine & vermouth
Market volume (Liters million)
Source: Euromonitor International estimates, Official statistics, Trade associations, Trade press, Company research, Trade reviews, Rabobank research dated February 2008, press
13
Indian Market
Section 1
14
Indian Market
Section 1
India Wine Market Overview (continued) Wine Segmentation (2007) Sparkling 8%
Sales of Wine by Sub sector (2007)
Rosé 7%
Fortified 15%
Red 45%
White 25%
Source: Industry Estimates
Forecast Sales of Wine by Sub sector (2012)
Total Value ($ mm)
Total Volume (Liters mm) 7.2 3.6 3.6 _ 0.5 0.1 0.3 0.5 0.5 _ _ _
Still light grape wine Still Red Wine Still White Wine Still Rose Wine Sparkling wine Champagne Other sparking wine Fortified wine & vermouth Port / Oporto Sherry Vermouth
Non–grape wine
154.7 72.9 81.8 – 37.5 28.0 9.5 4.5 4.5 – – _
Non–grape wine
326.7 360.2 0.0 97.6 73.9 23.7 10.9 10.9 _ _ _
Total
196.7
8.2
Total
795.4
Sub Sector Still light grape wine Still Red Wine Still White Wine Still Rose Wine Sparkling wine Champagne Other sparking wine Fortified wine & vermouth Port / Oporto Sherry Vermouth
Regional Consumption
Total Value ($ mm)
Sub Sector
Maharashtra 37%
Goa 10%
CAGR (2007-2012)
30.5 15.4 15.1 _ 1.1 0.3 0.8 1.2 1.2 _ _ _
34.7 35.0 34.5 _ 21.1 21.4 20.0 19.6 19.6 _ _ _
32.8
32.2
Share of Price Segment INR 600 – 800 6%
Other 16%
686.9
Total Volume (Liters mm)
INR > 800 4%
INR < 200 15%
Karnataka 12% Delhi 25%
INR 200 – 600 75%
Source: Euromonitor International estimates, Official statistics, Trade associations, Trade press, Company research, Trade reviews
15
Indian Market
Section 1
India has a familiarity with French wine as they are the largest importer of wine Wine Imports by Country of Origin: Total Value (2006) United USA Kingdo m 5% 7% United Arab Emirates 2% South Africa 1%
Other Argentina Countries 3% 7% Australia 12% Chile 2%
Italy 14% Germany 3%
France 44%
Source: GTIS
16
Indian Market
Section 1
Indian Sparkling Wine Market Overview Overview
Price Segmentation (2007) Over Rs750 10% Under Rs549 28%
Consumption of sparkling wine in India is quite low
–
in 2007, sparkling wine contributed less than 6% of the total volume of wine sales Approximately 50% of sales comes from affluent consumers in West India centered in Pune , Mumbai and Delhi There is little interest in high-priced sparkling wine beyond major cities and developed states
Rs550 to Rs649 55%
Notes:
Under Rs549 ($13.9) Rs550 to Rs649 ($13.9 - $16.4) Rs650 to Rs749 ($16.5 - $19.0) Over Rs750 ($19.0) Source: Euromonitor International estimates, Official statistics, Trade associations, Trade press, Company research, Trade reviews
12.9%
12.6%
12.2%
10%
5%
0% Singapore
Notes:
India
Indonesia
Russia
United Arab Emirates
South Korea
South A frica
Israel
Czech Republic
Hong Kong
HNWI (High net worth individuals) Growth rates and absolute HNWI numbers are rounded. Source: Capgemini Lorenz curve analysis, 2007
Market Value ($ millions)
HNWI population growth (%)
13.3%
2006
Moet & Chandon (LMVH Moet Hennessy Louis Vuitton)
Moet Hennessy India Ltd
54.7
55.7
56.0
56.0
Dom Perignon (LMVH Moet Hennessy Louis Vuitton)
Moet Hennessy India Ltd
43.8
41.5
41.5
42.0
1.5
2.8
2.5
2.0
100.0
100.0
100.0
100.0
40 35 30 25 20 15 10 5 0
CAGR: 27%
$15 $11 0.2 0.2
$19 0.3
$24
$38
0.6
0.5 0.5
$29 0.4
0.3
0.4 0.3 0.2 0.1 0.0
2002
2003 2004 2005 2006 2007 Other sparkling w ine Champagne Market volume (Liters million)
120
CAGR: 21%
100 80 60 40
$38 0.5
$47 0.6
$57 0.7
$82 $68
$98 1.2 1.1 1.0 1.0
0.8
0.8 0.6 0.4
20
0.2
0
0.0 2007
2008
2009
2010
2011
2012
Other sparkling w ine Champagne Market volume (Liters million)
17
Market volume (Liters million)
15.4% 14.1%
2005
Market Value (2007–2012) Market volume (Liters million)
20.5%
15.5%
2004
Market Value (2002–2007)
20%
16.0%
2003
Total
25%
15%
Company
Others
HNWI Population Growth (2005-2006) 21.2%
% Total volume Brand
Market Value ($ millions)
Rs650 to Rs749 7%
Brand Share of Champagne (2003-2006)
Indian Market
Section 1
Source: Euromonitor International estimates, Official statistics, Trade associations, Trade press, Company research, Trade reviews
18
Strictly private and confidential
Overview of Indian Wine Industry
November 2008
Strictly private and confidential
Contents
Section 1
Indian Market
1
2
Indian Alcohol Market
9
Indian Market
Section 1
Section 1 Indian Market
1
Indian Market
Section 1
India at a glance
Area
3.29mm km2, Kashmir region included
1.148 bn inhabitants (world’s second largest nation by inhabitants)
349 inhabitants per km2
Capital city
Delhi
Government
Parliamentary Democratic Republic
Union of 28 states and 7 union territories (Andaman and Nicobar islands, Chandigarh, Dadra & Nagar Haveli, Daman & Diu, Delhi, Lakshadweep, Pondicherry)
$2,966 bn (2007) by PPP
$1,099 bn (2007) by exchange rate
Currency
Indian Rupee (INR; Rs)
Languages
Hindi, 17 other local languages, English
Religions
Hindu (80%), Muslims (14%), Christians (2.4%), Sikh (2%), Buddhists (0.7%), Other (0.9%)
Time zone
GMT + 5:30
33.7% corporate tax, 12.5% VAT (for most commodities) and tax exemption for first 10 years in Special Economic Zones
Moody’s: Baa2
S&P: BBB-
Fitch: BBB-
Population
Administrative structure GDP
Taxation
Country risk Source: CIA Factbook, EIU
2
Indian Market
Section 1
India is leading the way in GDP growth Ranking of GDP growth 2006 – 2020 (% p.a.) India Malaysia China Thailand Turkey Ireland Indonesia Korea Mexico Chile U.S. Brazil Germany Japan 0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
Source: Deutsche Bank Research, Formel-G
3
Indian Market
Section 1
Strong fundamentals exist GDP Growth (USD in millions) 1,400
GDP in PPP 1,270
1,313
13,000
(1) U.S.
1,140
1,200
10,500
(2) China 1,000
915 812
800
(4) India
695
600
591
505
3,870 2,700
(5) Germany
400
1,850
(9) Russia
200
(10) Brazil
1,700
0 2002
2003
2004
2005
2006
2007 (a) 2008 (a) 2009 (a)
(a) Estimate. Source: Economy.com, Global Insights Nov 08
0
2,000
4.0%
10,000
12,000
300
13.10%
14,000
276
250
10.0%
6.0%
8,000
Forex reserves ($ billion)
12.0%
8.0%
6,000
Source: IMF WEO
Inflation Levels 14.0%
4,000
200 8.20%
6.80% 5.90%
7.20% 5.10%
4.40%
5.20% 3.00%
2.0%
6.50% 6.80% 5.50% 5.20% 5.00%
2.50% 2.50%
3.50%
140
150 5.80% 4.70% 4.80%
2.30%
119
100 50
74 26
29
32
38
42
54
0
0.0% 1997
177
6.40%
1998
1999
2000
2001 2002 2003
CP I
Source: CMIE, Global Insight Nov 08
2004 2005
2006 2007
FY97 FY98 FY99 FY00 FY01 FY02 F Y03 FY04 FY05 FY06 FY07
WP I
Source: Indiastat.com, RBI
4
Indian Market
Section 1
India has gained strong standing in the international investor community FDI flow into India
A.T. Kearney FDI confidence index 2007
20.0
5.0% 4.5%
18.0
17.5
16.9 15.7
16.0
1 (1) China
15.3
2 (2) India
2.8%
3.1% 2.9%
10.0
2.5%
2.1% 8.0 6.0
8.1 1.8%
2.0% 6.0
4.0
1.0%
2.0 0.0
0.0%
Foreign inflow % of GDP
Foreign investment ($bn)
14.0 3.0%
Source: UNCTAD, Morgan Stanley Research
1.86
4 (4) UK
1.81
5 (10) Hong Kong
1.78
6 (7) Brazil
1.78
7 (18) Singapore
1.75
8 (22) United Arab Emirates
1.72
9 (6) Russia
1.70
10 (9) Germany
1.70
15 (15) Japan
1.63
18 (*) South Africa
1.61
20 (13) Turkey
1.59
23 (24) Central Asia
1.57
25 (12) Czech Republic
1.56
2002 2003 2004 2005 2006 2007E 2008E Foreign investment
2.09
3 (3) U.S.
4.0%
14.5
12.0
2.21
0.00
0.50
1.00
1.50
2.00
2.50
(0 low – 3 high confidence)
Capital inflow ( ) = 2006 rank. Source: A.T. Kearney
5
Indian Market
Section 1
Large working population and growing middle class contributing to overall growth Population of large urban communities(millions of persons)
Population by age (millions of persons) 120% 100% 80%
700
1,000
1,110
1,200
CAGR
5% 5% 7%
6% 6% 9%
5% 6% 10%
5% 6% 11%
3.9%
500 CAGR: 2.9%
43%
45%
47%
47%
7.4%
20%
40%
34%
32%
30%
435
330
4.6%
200
1.8%
100
40%
CAGR: 2.7% 380
400 300
60%
CAGR: 2.9%
286
0
0% 1996 0 – 14
2001 2006E 15 – 34 35 – 44 45 – 54
2010E >55
Indian middle class breakdown (2002) Upper middle, 5%
High, 1%
Middle, 22%
Low, 72%
F2002 – 188 million households
2000
2005
2010
2015
Indian middle class breakdown (2010E) High, 4%
Upper middle, 7% Middle, 26% Low, 66%
F2010E – 222 million households
Note: Definitions (at F2002 prices): Low Up to $1050. Middle $1050 – $4200. Upper middle $4200 – $10,500. High $10,500 & above. Source: Morgan Stanley, Value Partners
6
Indian Market
Section 1
Growth in consumption and income will lead to a growing domestic market Per capita disposable income
Real growth in national consumption 1,600
$700
1,500
$641 $600
CAGR: 11%
$600
1,400
2003 = index 100
$547 1,200
$488
$500 $430 $400
1,000
$378 800
$300 600 $200
400
$100
200
100
121
2003
2005
0
$0 2003
2004
2005
2006
2007
2008
2008
Source: Value Partners, HSBC, The Economist
7
Indian Market
Section 1
Facts and figures: economy and markets Current market statistics (as of Mar 2008) Market capitalization ($bn)
Savings and investments
1277
Average daily volumes ($bn) - Cash - Derivatives Total domestic mutual fund assets ($bn)
125.5
FII ownership (% of market cap)
1.2%
Total Domestic Mutual Fund Assets (US$ M)
Saving (F2007, % of GDP)
38.0%
Gross capital formation (F2007, % of GDP)
39.4%
Level of gross FDI (F2007, $bn)
22.1
FDI as % of GDP, (F2007)
2.6%
6
National income statistics Nominal GDP (F2007, $bn) Population (F2007, millions) Population growth (F1995 – 2007, % CAGR) Per capita GDP (F2007, $) Nominal US$ GDP per capita growth (F1995 – F2007, %)
Composition of GDP (F2007, %) 838 1,122 1.8% 747 12.5%
Agriculture and allied activities Agriculture Mining and quarrying
18% 17% 3%
Industry
21%
Manufacturing Electricity, gas and water supply Construction Services Trade, hotels, transport and communications Financing, insurance, real est. and bus. services Community, social & personal services
16% 2% 8% 61% 25% 14% 13%
Source: RBI Economic Survey 2007-2008
8
Indian Market
Section 1
Section 2 Indian Alcohol Market
9
Indian Market
Section 1
Indian Alcohol Market Overview
CAGR: 13.2%
$20.0
$18.3
$16.1
$20.7
14.5% 13.7%
13.5%
13.0%
12.6%
$5.0
14.0% 13.5%
13.1%
$10.0
15.0%
12.5%
$0.0
12.0% 2003
2004
2005
2006
2007
CAGR: 7.0%
5.0 4.0
3.6
4.2
4.4
4.7
8.5% 8.0%
7.6% 7.3%
3.0
7.5%
2.0
6.6%
6.7%
1.0
7.0% 6.5%
0.0
6.0% 2003
2004
2005
2006
2007
Market volume (Liters billion) % grow th
Market Value ($ billion) % grow th
Market Segmentation (2007)
Beers, ciders and FABS 10.8%
3.9
% growth
$15.0
$14.3
$23.5
% growth
Market value ($ billion)
$25.0
Market Volume (2003–2007) Market volume (Liters billion)
Market Value (2003–2007)
Market Share (2007) United Brew eries Limited 10.3% SABMiller plc 7.8%
Wine 0.8%
Millenium Alcobev 6.4%
Spirits 88.4%
Other 75.5%
Source: Datamonitor
10
Indian Market
Section 1
Distribution (2007) Supermarkets/ hypermarkets 9.1%
Other 2.8%
Specialist retailers 46.6% On-trade 41.5%
Source: Datamonitor
11
Indian Market
Section 1
Indian Wine Market Competitive Landscape Domestic Key Player
Market Share (2006) Others 29%
Indage Champagne 44%
Grover Vineyards 9%
Established in 1982
Located in Narayangaon, Pune
Key Brands: Marquise de pompadour, Ivy, Joie, Chantilli, Figueira, Riviera, Vino Sparkling, Vin Ballet, Hammer
Established in 1997
Located on the outskirts of Nashik
Key Brands: Dindori Reserve Shiraz, Sula Red Zinfandel, Sula Cabernet Shiraz , Satori Merlot, Madera Red, Sula Sauvignon Blanc, Sula Chenin Blanc, Madera White, Viognier, Dia White
Production capacity of 15 million liters
Total Revenue: $53.4mm (2007-08)
Investors: Arisaig Partners, Reliance Capital Private Equity
Sales: Over 2 mm bottles in 2007-08
Total Revenue: $2.3mm
Investors: Future Capital Holdings, GEM India Advisors
Established in 1988
Production capacity of 2.1 million liters
Located in Nandi Hills, Bangalore
Total Revenue: $4.6mm
Key Brands: La Réserve, Sauvignon Blanc, Cabernet Shiraz, Shiraz Rose, Viognier and Clairette
Investors: n/a
Samant Soma 18%
Source: Euromonitor
Source: Company websites
International Key Player
Established in 1743
Located in Epernay Marne, France
Key Brands: Brut Impérial, Brut Impérial Rosé, Millésime Blanc 1998 & 1999, Nectar Imperial
Total Revenue: $1,173.9mm (2007)
Source: Company websites
12
Indian Market
Section 1
India Wine Market Overview
Industry Overview
Trends
The Indian wine market only makes up 0.8% of the entire Indian alcohol segment The Indian wine market has an estimated size of $265mm and 11mm liters in terms of volume The industry has been growing steadily by 32% (2002-2007) and is estimated to grow by an additional 32% over the next 5 years (20072012) The country’s 3 main wineries include Sula vineyards, Chateau Indage vineyards and Grover vineyards
–
the three players together contribute ~90% of the market
The Indian wine industry is on an upswing as production and consumption are expected to increase by ~32% over the next 5 years As the industry grows, new players such as Seagram and United Spirits have entered the market (2007). While a number of other players such as Diageo are said to be keen on entering as well With a low set up cost for a wine plant between Rs.10–15mm ($0.2– $0.3mm) with a capacity of 100,000 liters, competition and the overall market are expected to increase As wine consumption is still in its infancy, manufacturers are providing wine at economical prices
–
Five-star hotels, pubs and bar-cum-restaurants are the primary wine selling outlets in the country as 63% of the sales are through these channels
wine in the Rs300-500 price range make up ~59% of wines sold
However, ~80% of wine consumption is confined to major cities like Mumbai (39%), Delhi (23%), Bangalore and Goa. The non urban areas still account for only 20% of the market
Market Value (2002–2007)
Market Value (2007–2012)
Market Value ($ millions)
$147 6
150 100 50
$49 2
$82 3
$62
8 7 6
$112 5
5 4 3
3
2 1
0
900
0 2002
2003
2004
2005
2006
2007
CAGR: 32%
800
$624 26
700 600 500 400 300 200
$197 8
$265 11
$360 15
$795 35 33 30 25
$479 20
20 15 10 5
100 0
Market volume (Liters million)
200
9 Market volume (Liters million)
$197 8
CAGR: 32%
Market Value ($ millions)
250
0 2007
2008
2009
2010
2011
2012
Still light grape w ine
Sparkling w ine
Still light grape w ine
Sparkling w ine
Fortified w ine & vermouth
Market volume (Liters million)
Fortified w ine & vermouth
Market volume (Liters million)
Source: Euromonitor International estimates, Official statistics, Trade associations, Trade press, Company research, Trade reviews, Rabobank research dated February 2008, press
13
Indian Market
Section 1
14
Indian Market
Section 1
India Wine Market Overview (continued) Wine Segmentation (2007) Sparkling 8%
Sales of Wine by Sub sector (2007)
Rosé 7%
Fortified 15%
Red 45%
White 25%
Source: Industry Estimates
Forecast Sales of Wine by Sub sector (2012)
Total Value ($ mm)
Total Volume (Liters mm) 7.2 3.6 3.6 _ 0.5 0.1 0.3 0.5 0.5 _ _ _
Still light grape wine Still Red Wine Still White Wine Still Rose Wine Sparkling wine Champagne Other sparking wine Fortified wine & vermouth Port / Oporto Sherry Vermouth
Non–grape wine
154.7 72.9 81.8 – 37.5 28.0 9.5 4.5 4.5 – – _
Non–grape wine
326.7 360.2 0.0 97.6 73.9 23.7 10.9 10.9 _ _ _
Total
196.7
8.2
Total
795.4
Sub Sector Still light grape wine Still Red Wine Still White Wine Still Rose Wine Sparkling wine Champagne Other sparking wine Fortified wine & vermouth Port / Oporto Sherry Vermouth
Regional Consumption
Total Value ($ mm)
Sub Sector
Maharashtra 37%
Goa 10%
CAGR (2007-2012)
30.5 15.4 15.1 _ 1.1 0.3 0.8 1.2 1.2 _ _ _
34.7 35.0 34.5 _ 21.1 21.4 20.0 19.6 19.6 _ _ _
32.8
32.2
Share of Price Segment INR 600 – 800 6%
Other 16%
686.9
Total Volume (Liters mm)
INR > 800 4%
INR < 200 15%
Karnataka 12% Delhi 25%
INR 200 – 600 75%
Source: Euromonitor International estimates, Official statistics, Trade associations, Trade press, Company research, Trade reviews
15
Indian Market
Section 1
India has a familiarity with French wine as they are the largest importer of wine Wine Imports by Country of Origin: Total Value (2006) United USA Kingdo m 5% 7% United Arab Emirates 2% South Africa 1%
Other Argentina Countries 3% 7% Australia 12% Chile 2%
Italy 14% Germany 3%
France 44%
Source: GTIS
16
Indian Market
Section 1
Indian Sparkling Wine Market Overview Overview
Price Segmentation (2007) Over Rs750 10% Under Rs549 28%
Consumption of sparkling wine in India is quite low
–
in 2007, sparkling wine contributed less than 6% of the total volume of wine sales Approximately 50% of sales comes from affluent consumers in West India centered in Pune , Mumbai and Delhi There is little interest in high-priced sparkling wine beyond major cities and developed states
Rs550 to Rs649 55%
Notes:
Under Rs549 ($13.9) Rs550 to Rs649 ($13.9 - $16.4) Rs650 to Rs749 ($16.5 - $19.0) Over Rs750 ($19.0) Source: Euromonitor International estimates, Official statistics, Trade associations, Trade press, Company research, Trade reviews
12.9%
12.6%
12.2%
10%
5%
0% Singapore
Notes:
India
Indonesia
Russia
United Arab Emirates
South Korea
South A frica
Israel
Czech Republic
Hong Kong
HNWI (High net worth individuals) Growth rates and absolute HNWI numbers are rounded. Source: Capgemini Lorenz curve analysis, 2007
Market Value ($ millions)
HNWI population growth (%)
13.3%
2006
Moet & Chandon (LMVH Moet Hennessy Louis Vuitton)
Moet Hennessy India Ltd
54.7
55.7
56.0
56.0
Dom Perignon (LMVH Moet Hennessy Louis Vuitton)
Moet Hennessy India Ltd
43.8
41.5
41.5
42.0
1.5
2.8
2.5
2.0
100.0
100.0
100.0
100.0
40 35 30 25 20 15 10 5 0
CAGR: 27%
$15 $11 0.2 0.2
$19 0.3
$24
$38
0.6
0.5 0.5
$29 0.4
0.3
0.4 0.3 0.2 0.1 0.0
2002
2003 2004 2005 2006 2007 Other sparkling w ine Champagne Market volume (Liters million)
120
CAGR: 21%
100 80 60 40
$38 0.5
$47 0.6
$57 0.7
$82 $68
$98 1.2 1.1 1.0 1.0
0.8
0.8 0.6 0.4
20
0.2
0
0.0 2007
2008
2009
2010
2011
2012
Other sparkling w ine Champagne Market volume (Liters million)
17
Market volume (Liters million)
15.4% 14.1%
2005
Market Value (2007–2012) Market volume (Liters million)
20.5%
15.5%
2004
Market Value (2002–2007)
20%
16.0%
2003
Total
25%
15%
Company
Others
HNWI Population Growth (2005-2006) 21.2%
% Total volume Brand
Market Value ($ millions)
Rs650 to Rs749 7%
Brand Share of Champagne (2003-2006)
Indian Market
Section 1
Source: Euromonitor International estimates, Official statistics, Trade associations, Trade press, Company research, Trade reviews
18
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