Globalization opens up vast opportunities for wine
Tuesday, 25 January, 2005
Jeanine Wardman
With the fastest growing middle class in the world, roughly the size of the total population of the United States, India is potentially big - no, huge - news for a global wine industry crouching under the weight of vast litres of surplus stocks, writes Jeanine Wardman.
From the mystical teachings of Tantric Buddhism and Hinduism, the sanctified pursuit of sexual ecstasy as instructed in the ancient Kama Sutra, Mahatma Gandhi’s significant political legacy and the enigmatic spiritualism of latter day gurus like Deepak Chopra, Indian culture and civilization have captivated the West for millennia.
Globalization has fast-tracked this process and popularized contemporary cultural aspects such as the sub-continent’s music, its particular or peculiar (depending on where you’re located, culturally, in the global village) brand of celluloid, and its rich and intricately diverse cuisine, that has successfully shed the curry house image perpetuated by the Brits in the twentieth century.
Globalization, conversely, has also allowed for the influx of all things Western into India, particularly the IT and telecommunications industries. Indians are assimilating aspects of Western culture at a pace and on a scale that could scarcely have been dreamed of by colonial invaders of an earlier age.
All this is big - no huge - news for wine producers the world over. Though India’s population of one billion people evokes images of extreme poverty and wretched squalor in most minds in the developed world, its middle class is the fastest growing in the world.
Says Su Birch of Wines of South Africa (WOSA) who has recently returned from representing the country and its wine at a trade exhibition there: ‘India has gone from 0 to 40 million cell phones in three years. Imagine what it could do for wine!’
In an industry besieged by surplus stock in recent years, both in the Northern and Southern Hemispheres, it is hardly surprising to suddenly find a cosmopolitan congregation of wine producers and marketers squabbling for a piece of the (albeit potential) action.
And the potential is vast beyond belief: of the sub-continent’s one billion inhabitants, 200 million are considered middle class, 80% of whom have no religious restrictions on the consumption of alcohol. ‘The growth will be electric,’ predicts Birch.
According to Birch, there exists a natural affinity for South Africa among Indians. South African cricketers are household names and even more recognized than our most legendary and precious export brand, Nelson Mandela.
Chris Pohl of Global Commodities, a company with years of trading experience in India, concurs, ‘Indians have a kinship with South Africa that another major emerging wine market like China, for instance, does not have. Indians are far more brand conscious in this sense.’ This could give South African wine an edge over its competitors in the highly lucrative Indian wine market.
Chris’s research into the Indian wine market has led him to conclude that South Africa’s wine offer has a further potentially distinctive feature - one he reckons could be the ideal way to introduce novice wine drinkers to the category – commercial dessert wines. And as a bonus it complements traditional Indian cuisine.
Less than twenty years ago the country’s plantings consisted of vast vineyards of a somewhat obscure variety colloquially called Hanepoot (Muscat d’Alexandrie), the so-called industry workhorse Chenin Blanc (which was vinified and or distilled into anything and everything) and to a lesser extent Muscadel (Muscat de Frontignan). Isolation from world markets and trends like the demand for dry table wines, and the lively local appeal of ‘soetes’, inadvertently helped sustain these plantings, until democratization resulted in their falling out of favour with growers and fashion with ever-more sophisticated and increasingly international consumers.
In an ironic twist, these plump sisters of sexier and more elegant siblings, Sauvignon Blanc and Shiraz, may just be the very varieties South African wine needs to lay assertive siege to the Indian wine market.
This market is currently growing at a phenomenal 35% annually reports WOSA, though actual market size figures differ depending on the source. Chris Pohl cites a total market size of 450 000 9-litre cases, of which a meager 150 000 cases make up the imported section. Su Birch cites a figure 8-9 times as much, which WOSA compiles from various sources, including the South African Embassy in India, and says she is aware of a local producer who has exported 4 000 cases to India in its first year of trading.
Jeanette Bruwer from Springfield Estate in Robertson travels to India twice a year in pursuit of a slice of the cake. The Springfield brand’s strategy in India is ‘smaller volumes with the right distribution’.
Bruwer says, ‘It is not unlikely for wine to be delivered from the importer’s warehouse to retail outlets or the hospitality industry by bicycle in 40 °C. It is a risk I’d rather not take as the reputation of our brand is at stake, especially if the product is meant to be consumed in up-market establishments in the tourism and hospitality industries.’ Springfield is available at the Taj Mahal and in polo-clubs around the country. Bruwer reckons the ex-pat market is her brand’s foremost target segment.
Graham Beck has just recently exported its first ever five pallets to India and marketing manager Jacques Roux says the potential is ‘interesting’.
At a conference co-hosted by WOSA and Global Commodities in Stellenbosch last week, Chris Pohl concluded the proceedings by remarking that definite opportunities exist for ‘mid-priced’ South African wines in spite of the burden of high import duties (150%+) and restrictive government distribution regulations. He added that middle-class Indians are ‘hungry for wine knowledge’ and stressed that South Africa’s penetration strategy should rely heavily on ‘continuous education, training and wine culture building.’