Wine Culture Spreads Beyond Metro Cities, Domestic Industry Eyes Steady Expansion

The impact of urban consumption slowdown was more 'stark' on the wine segment versus other AlcoBev categories, as it is a predominantly urban drink, according to the report.

India’s wine market is valued at approximately $150-200 million (including both domestic and imported wines), with more than 3 million cases being sold annually.

Source : Freepik

The wine industry expects a normalised domestic macro environment to come as a boost in the current fiscal after suffering setbacks in 2024-25, which saw urban consumption slowdown and growth taking a "temporary pause", according to the annual report of Sula Vineyards Ltd.

The impact of urban consumption slowdown was more 'stark' on the wine segment versus other AlcoBev categories, as it is a predominantly urban drink, according to the report.

The wine demand was also impacted by multiple temporary regulatory and other market disruptions, including general elections and state elections in key markets such as Maharashtra, Sula Vineyards Founder and CEO Rajeev Samant said in the report.

"After 3 years of strong growth, FY25 was more a year of demand reset for the Indian wine industry," he said, adding, "But the good news is that these setbacks are now behind us as we look forward to a more normalised domestic macro environment going into FY26." However, despite challenging market conditions for the wine industry, Sula reported its highest ever revenue from operations at Rs 619.4 crore in FY25.

"We continued to consolidate our leadership position, being by far and ahead the largest wine brand in the country," said Samant while addressing his shareholders.

According to Samant, "now the worst is behind us" and "optimistic of seeing better traction and growth in FY26 with positive triggers and expansion plans in our Own Brands and Wine Tourism businesses further supported by the normalisation of the macro environment expected soon." The company aims for "accelerating earnings Growth over the next 3 years (FY25-FY28) with improved EBITDA margins and capital efficiency". This will be helped through initiatives such as product development, expansion of its capacity, market Penetration, Wine Tourism and D2C Business.

It is "on-track to expand Cellar capacity by 1 Mn Litres to total capacity of 19.2 Mn Litres per annum by the end of FY26".

Samant also pointed out that the wine culture is evolving and spreading across India outside its top two markets, which is encouraging.

"Our domestic Own Brand sales, excluding Maharashtra and Karnataka, grew by 8 per cent YoY, powered by a total of 11 states registering healthy double-digit growth. This fits in well with our endeavour of creating a truly pan-India penetration," said Samant.

India’s wine market is valued at approximately USD 150-200 million (including both domestic and imported wines), with more than 3 million cases being sold annually.

"Wine is still in a nascent stage in India, accounting for <1% of the Indian AlcoBev market and the per capita consumption of wine in India too is less than 50 ml as compared to the world average of 5.5 litres," the report said.

Therefore, there is a vast scope for the wine sector to grow and expand in India.

"Going forward, the Indian wine market is expected to grow at 15 per cent CAGR over CY 2023-2028 led by the increasing prosperity and disposable income, rapid urbanisation, evolving consumer preferences and increase in the number of working women and women drinkers," the company said.

Besides the wine business, Sula is also witnessing double-digit growth from its wine tourism business. It has two luxury resorts in Nashik - ‘The Source at Sula’ and ‘Beyond by Sula’, with a total of 104 keys.

It has a new 30-key resort coming up near its York Winery, near Nashik and is expanding Wine Tourism Facility at Domaine Sula, Karnataka.

"In FY25, our wine tourism revenue grew by 10.2 per cent YoY to Rs 60.3 crore, driven by a very successful SulaFest’25, coupled with the strong performance of our resorts. Our resort occupancy improved by 400 bps from 74 per cent in FY24 to 78 per cent in FY25 on the back of a strong festive and wedding season," he said.

(This report has been published as part of the auto-generated syndicate wire feed. Apart from the headline, no editing has been done in the copy by ABP Live.)