Ex-UB honcho to develop wine value chain

Last Updated: Sun, Dec 20, 2009 19:00 hrs

Vallee de Vin, maker of the premium Zampa brand of wines, is looking at investing upto Rs 35 crore on expansion as well as verticalisation by offering a range of services centred around the core business of wine manufacturing. Ravi Jain, chief executive officer of the Sanjegaon, Nashik-based vineyard, said that the company has a horizon of upto three years to raise the amount.

"We are yet to decide on the mode of investment raising. Besides increasing the area under grape cultivation, the need to open new verticals around the core business will be addressed. As part of the verticalisation plan, we are considering setting up a wine spa cum resort and wine bistros where wine tasting sessions can be held. We will target investments of upto Rs 30 crore for growth with Rs 3-5 crore more to be spent on equipment," Jain said.

Vallee de Vin has invested Rs 20-25 crore since its inception on expansion and product launches. The company plans to add a red and a white wine to its portfolio by the middle of 2010, Jain said. With a capacity of 300,000 litres annually, Vallee de Vin has been producing red, white and rose wines for the Indian market, with plans to add 100 acres more to its cultivation footprint. It currently has 100 acres of vineyard under contract cultivation with local growers. About 550 tonnes of fruit will be sourced from local growers in the coming year, Jain said.

The Zampa brand was first launched in 2008 from grapes reared at Vallee de Vin’s 35-acre vineyard at Sanjegaon vineyard near Nashik, as well as fruit sourced from local growers. These were the Zampa Syrah 2007, a premium red wine, and Zampa Chenin Blanc 2007, a premium white wine.

This year, the Deepak Roy-Ravi Jain promoted winemaker launched its ‘Zampagne’ wines under the Brut (white wine) and Brut Rose (red) brand names. Brut Rose is a limited edition product. The Brut is priced at Rs 790 for a 750 ml bottle, which could come down to Rs 750 if the state government rolls back the VAT hike, while the Rose Brut is priced at Rs 990 for a 750 ml bottle.

"We have exported 10,000 litres since 2008, and expect this to touch 12,000 litres by March next year," Jain said. The company is also keen to expand in the European market owing to high excise duty barriers in India.

Valle de Vin promoter Deepak Roy worked formerly with UB chief Vijay Mallya, but parted ways with the Bangalore-based liquor doyen a few years ago to start his own wine business. Roy has also headed the Kishore Chhabria group company which produces Officer’s Choice whisky, has authored many successful spirit brands, the last being Gilbey’s Green Label, which is now among the first five largest selling whisky brands in India.

The wine market is still largely dominated by the likes of Indage, Grover’s Vineyards and Sula. UB is the latest entrant here, and it is well prepared with a winery at Baramati and another one being set up at Nashik.

In the Indian market which is estimated at 1.2 million cases annually, wine consumption is expected to touch 188,000 hectolitres by 2011 from 66,000 hectolitres in 2006. The entry of new players like Zampa and Zinzi from Vijay Mallya’s United Breweries, the industry is expected to exceed growth rates of 30 per cent annually.

Imported wines account for a mere 200,000 cases annually. The per capita consumption of wine in India is only 9 ml compared with 400 ml in China. By 2011, Asia is expected to account for 4.8 per cent of the world wine consumption.

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