New whine in a discounted bottle cos get a hangover

Pune: India's wine industry is seeing flat or declining sales as deep post-pandemic discounting squeezed margins and inconsistent marketing spends by wineries failed to capture younger patrons.

Also, heavy price promotion is now a routine practice in the trade even as consumers shift to white spirit cocktails, and ready-to-drink (RTD) beverages.

"This has been a very unfortunate characteristic of the Indian wine market over the last few years, indiscriminate and unsustainable, and I would say, a state of loss-making discounting by some of our competitors," said Rajeev Samant, CEO of Sula Vineyards, during an analyst call in August. "There is some pretty brutal discounting going on. The buy one, get one seems to be the reigning mantra right now for a lot of our competition. And sometimes it goes even further than that."



According to industry research platform IWSR, both the still wine and sparkling wine segments declined 2% in 2024.

"Post-Covid, 2022 was a bumper year, but since 2023, the industry has been in a prolonged slump," said Yatin Patil, MD, Reveilo Wines. "Demand has dropped, but supply is fixed due to the seasonal nature of grape harvests. That imbalance is hurting."

Discounts that started as a temporary fix have become the new norm, say experts.

"The market spends for wine companies have increased substantially due to the deep discounts. The industry, which suffered with cash flows during the Covid times, gave discounts to liquidate their stocks, which have now become a norm," said Jagdish Holkar, president of the All India Wine Producers' Association.

Shrinking Patronage

At the same time, younger consumers are shifting away from wine toward cocktails based on gin and vodka.

"Due to the post-covid trend of experimentation, young consumers are drawn towards internationally trending drinks such as gin, tequila and cocktails. Wineries are left with little budget to spend on the consumer as it gets exhausted on the trade," said Ashwin Rodrigues, founder of Good Drop Wine Cellars and secretary of the Wine Growers Association of India.

"Although the wine industry is facing a muted growth this year due to micro and macro economic factors, we are taking a lot of initiatives to build brand awareness, drive premiumisation and create new consumers," Nitin Handa, GM-Sales at Fratelli Wines, the second largest listed player after Sula.

Fortified Wines

To be sure, fortified wines which make up roughly a third of the wine category and primarily include Port and Sherry saw a 16.1% growth in 2024 largely led by carbonated wine BroCode which markets its brand as beer. In contrast, imported wines faltered, with still wines declining 6% and sparkling imports falling 8% over the same period.

"The declining patronage for wine amongst Gen Z is a global trend, said, Abhay Kewadkar, importer and distributor of wines and spirits.

"The main reason is that Gen Z is moving away from alcohol consumption towards beer and cocktails. There is more choice, innovation and marketing around tall drinks, cocktails. The consumption of ready-to-drink beverages is also going up," added Kewadkar.

To offset falling sales, wineries are doubling down on wine tourism. Sula's tourism business grew 20% in Q1 FY26, and the company is building a 30-key resort in Nashik to expand its capacity by a third. Other boutique wineries in Maharashtra and Karnataka are also expanding hospitality offerings.

Also, as traditional wine consumption slumps, the segment is gradually shifting from shelf to experience, and from bottles to cans in an effort to stay relevant

"The wine in cans concept is important to pursue because it democratizes and demystifies the category," said Jason Holway, IWSR senior consultant.