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INDIA WINE CONSUMPTION LEAPS, Published May 07 2010 by venki The Vinexpo/IWSR study forecasts an increase of 1.475 million 9-litre cases in Indian wine drinking up to 2013. The study, which was released in New Delhi in mid-March, also outlined the immense demand for red wines in the Indian market. “In 2009, 71.9% of the still light wines drunk in India were red”, said Mrs. Dominique Heriard Dubreuil, Chairman, Vinexpo Asia Pacific. She was in Delhi along with Mr. Robert Beynat, Chief Executive, Vinexpo Asia-Pacific, to promote the upcoming Vinexpo Asia-Pacific 2010 in Hong Kong in May. But surprisingly, despite the bright picture in which the Indian wine market finds itself, not a single Indian participant had registered for the Vinexpo event in Hong Kong when reports last came in around the closing date for entries. The study indicated that the consumption of imported wines doubles every five years in the country. In 2008, imported wines accounted for 14.4% of the volume of wines drunk by Indians and 29.3% of the total sales turnover of all wines in India. “Consumption of imported wines, essentially concentrated in the country’s major cities, doubled between 2004 and 2008”, said Mrs. Dubreuil. The sector saw growth of 106.45% and reached 208,000 9-litre cases. The forecasts of the Vinexpo/IWSR study estimate a further growth of 100.44% in the consumption of imported wines between 2009 and 2013, reaching more than 5 million bottles by the end of th period. Consumption of Indian wines, which grew by a massive 502.38% between 2004 and 2008, is expected to continue to increase by 84.12% in the period from 2009 to 2013. But a real point of note in the report was the increasing popularity and consumption of red wines in India. The red wine proportion is set to increase by 112.66% by 2013, when red wines will account for more than three quarters of all the wine consumed in the country. Between 2009 and 2013, consumption of white and rose wines will also grow, though to a lesser degree, by 53.23% and 30.77%, respectively. This kind of growth will obviously depend a lot on government policies. Wine exporters, particularly the EU bloc, have cried foul of India’s ‘protectionist’ policies in heavily taxing imported wines but the matter is still a subject of debate. In some measures, there has been a trade-friendly atmosphere developing. For example, the Delhi government has liberalized licensing laws to allow private stores selling fruit, vegetables and groceries to retail wine. The decision is expected to significantly boost sales and increase the visibility of wine. And earlier last year, Karnataka took a significant step by issuing the country’s first ever ‘wine policy’ allowing the sale of liquor products in marts and malls. According to some estimates, the sale of wine has increased to 2.5 million litres in the state. At the end of the day, wine is being promoted as a family drink, an entirely new concept in India, where drinking of any alcoholic product is still viewed with a significant amount of prejudice. But these new measures have also triggered a growth in areas under grape cultivation. This somewhat minute picture comes against the backdrop of overall consumption in the world, where a billion more wine bottles will be drunk between 2009 and 2013. In 2008, world wine consumption reached 2.621 billion 9-litre cases, the equivalent of 31.452 billion bottles, a 5.64% increase compared to 2004. According to the forecasts in the Vinexpo /IWSR study, consumption should grow by a further 3.57% between 2009 and 2013 to reach 2.7 billion 9-litre cases. Asia a Key Driver Still light wines account for 92.6% of total world wine consumption in 2008. (See later in article for more world details) As expected, Asia will be a key driver to wine growth in the world, led by China.
In 2008, Asian-Pacific countries accounted for 6.6% of all the wines drunk in the world. Over the 10-year period from 2004 to 2013, Asian-Pacific wine consumption should grow by 86 million cases, which is more than the 85-million-case growth expected on the North American continent in the same period, the study said. China, including Hong Kong, was the 8th largest wine consumer in the world and the 10th largest producer in 2008; it is clearly the growth driver for wine consumption. In 2008, China, including Hong Kong, posted the highest worldwide growth in volumes of wine consumed: 8.720 million more cases of still light wine drunk in one year. This trend recurred in 2009 with growth of 5.29 million 9-litre cases. In 2008, China accounted for 68.9% of all still light wines consumed in Asia and 3% of the world total. Japan is the second largest wine-consuming nation in the Asian region with moderate increases in the volumes consumed by Japanese drinkers from 2009: 0.03% between 2004 and 2008, then 3.65% from 2009 to 2013. India, the 5th largest wine-drinking nation in Asia, posts the largest growth in consumption: 327% from 2004 to 2008, then 97% between 2009 and 2013.
Not Much Bubble for Asians The Vinexpo / The IWSR study forecasts that sparkling wine consumption in Asia will increase by 10.69% between 2009 and 2013. Furthermore, the value of wine sales in Asia had already grown by a substantial 62.97% between 2004 and 2008, reaching US$6.94 billion. “Over the 10-year period from 2004 to 2013, the value of Asian wine sales will more than double with average annual growth of 11.5%”, said Mr. Beynat.
Imported Wines Boost Thirst In 2009, Japan remained the leading wine-importing nation in Asia, managing to still exceed the multiplication of wine imports into China by four between 2004 and 2008, triggered especially by the ban on import taxes in Hong Kong. Finally, coming to the overall world scenario, there have been changes in the consumption patterns of the top 10 still light wineconsuming countries. Having consumed 298.34 million 9-litre cases of wine in 2008, Italy strengthened its position as the leading still light wineconsuming nation in the world, which it won in 2007. In France, which is now in third place, consumption continued to fall by 8.31% between 2004 and 2008. Apart from regulatory restrictions, health awareness, decreasing regular drinkers in France, the habits of consumption have changed in many ways. “We used to have long lunches, even in business settings-up to two hours or so. Now, it’s much like here in India, we have just about 45 minutes to an hour. So, less wine is consumedbut at the same time, since people are more discerning about what they drink, you see an increase in value terms in the wines they choose,” said Mrs. Dubreuil.
US & China Boom China is the 8th largest wine-consuming country, having drunk more than 74.58 million 9-litre cases of still light wine in 2008. Between 2004 and 2008, the Chinese consumption of still light wines grew by 80% and should continue to increase to reach more than 100 million 9-litre cases by 2013. The Russian Federation also entered the top 10 wine-consuming countries in 2007. Russian consumption is expected to continue to grow between 2009 and 2013, but at a slower pace of 6.41% compared to the 59% growth rate from 2004 to 2008. Total Russian consumption is expected to reach 74.91 million 9-litre cases by 2013. Between 2009 and 2013, half the growth in worldwide wine consumption is expected to be located in just two countries: the US andChina . The Vinexpo Asia-Pacific / The IWSRstudy forecasts that the US and China should increase their still light and sparkling wineconsumption by 53.241 million 9-litre casesbetween 2009 and 2013, which represents57% of the total growth in consumptionworldwide over that period. Canada, Russia and Brazil are also expected to increase their wine consumption substantially by 6.51%, 5.63% and 4.23% respectively. The Vinexpo / The IWSR study forecasts that sparkling wine consumption in Asiawill increase by 10.69% between 2009 and 2013 In this table of countries with the fastest growth in volumes of wine consumed, India moves into 10th place with an expected increase of more than 1.47 million 9-litre cases between now and 2013.
Red Sun Rising World consumption of white wine, however, should stabilise between 2008 and 2013, increasing by only 1.15% to reach 955.251 million 9-litre cases by the end of the period. Although rosé wines are drunk significantly less throughout the world, the greatest increase is forecast to come in this category with growth estimated at 6.13% between 2008 and 2013. Significantly, the rise in the value of wine sales is twice as fast as the increase in volumes consumed. World wine sales in 2008 reached US$151.817 billion, up 9.87% compared to 2004. Sales are expected to grow by a further 8.05% in value between 2009 and 2013. Over the 10-year period from 2004 to 2013, the value of worldwide wine sales will have grown by 19.75%, while the volumes consumed will have increased by 8.82%. The world wine trade also continues to develop, Spain has become the leading wine exporter in the world in terms of volume, having increased its exports by 13.66% between 2004 and 2008. Over the same period, Italy posted 8.97% growth in the volumes it exported, while French exports fell by 3.88%. France remains the leading wine exporter in the world in terms of the value of its export sales, ahead of Italy and Spain, having delivered consignments abroad worth US$ 9.731 billion in 2008. There was a last word in the Vinexpo/IWSR report on spirits consumption and it’s worth a mention. Worldwide spirits consumption is slowing down, the study says. World spirits consumption grew by 10.7% between 2004 and 2008, topping the figure of 2.383 billion 9-litre cases. Between 2009 and 2013, the study forecasts slower growth of 2.9%. However, Tequila consumption should grow the most between now and 2013. If locally produced liqueurs are excluded, vodka remains the spirit that is the most consumed in the world, representing 49.3% of total spirits consumption in 2009. Between 2009 and 2013, the fastest growing spirits will be tequila, up 7.18%, and rum, up 5.11%. The consumption of cognac, brandy and scotch are expected to stabilise. The Vinexpo / The IWSR study forecasts that sparkling wine consumption in Asia will increase by 10.69% between 2009 and 2013 For its 8th show outside France, Vinexpo international wine and spirits exhibition is again travelling to Hong Kong, as it did in 1998, 2006 and 2008. Vinexpo Asia-Pacific 2010 will take place at the Hong Kong Convention & Exhibition Centre from 25 to 27 May 2010. The exhibition will represent the largest showcase of wines and spirits ever exhibited under one roof in Asia. In order to accommodate a growing number of requests for stand space, Vinexpo took advantage of extension work at the Hong Kong Convention & Exhibition Centre and decided to increase its overall exhibition area by adding an extra hall. This year, 750 exhibitors from around 30 countries will occupy 8,000 sq. m of floor space. Companies from all over the world will exhibit individually or in national pavilions. The US, Spain, Chile and Germany will be significant participants. Sites have also been reserved for the Italian, Argentinean and Rumanian pavilions, as well as for companies and regions of China and South Africa.
Amongst the major international names, the following may be cited: Dynasty Fine Wines and Dra-gonet (China), Santa Rita and San Pedro (Chile), Henkell & Co (Germany), Cape Legends (South Africa), Marques de Riscal and Gonzalez- Byass (Spain), Sogrape (Portugal), Hayman Distillers (UK) and Banfi Distribuzione and Casa Vinicola Zonin (Italy). Market Analysis: (attached document)“INDIA WINE CONSUMPTION LEAPS”, May 7, 2010 The students are required to answer the following questions:
Using the information from the document and through your research:
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