A CASE STUDY

PRESENTATION ON

SULA Wines
Presented by:
Group 7Akshay Kr. Gupta
Ashirwad
Kavita
Rakesh Arora
Sachin Arora
Shiv Kr Singh

4
-30
-36
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From California to Nashik

Sula wines was the brain child of Rajeev

Samant who was born and brought up in
Mumbai.

After 12th he went to Stanford University in

California where he completed his graduation
in economics and then changed his track to
do a masters in industrial engineering

In 1990 Rajeev joined ORACLE and become youngest

manager at company HQ within a year time.

finance

In 1992 he Quit his job at ORACLE to venture out on his own due
to Indian Govt. Decision to ease trade barriers with the rest of the
worlds.

Contd
The Samant family owned 30 acres patch on the banks of the
Godavari river and Rajeev wanted to do something on that land to
feel of Ownership that drives you toward success
In 1993 he experience first agricultural harvesting by growing
Alphonso mangoes followed by Thompson Seedless Grapes.
As Nasik was largest Table grape growing region Rajeev decided
to grow grapes used for wine and thought of venturing into wine
Business.
He formed a family corporation, Sula Vineyards after his
mothers name Sulabha.
He went back to California and teamup with Kerry Damskey a
consultant deals in winery startup and designing wine production
setup since 3 decades.

ne and Grapes: Introductory Stage !

The Vineyard should ideally be
located in a place with fertile soil,
climate with good variation
between
night
and
day
temperatures, dry weather and
controlled rainfall
The first harvest is never used for
making wine and crop is pruned
away for the first few years to
enhance the quality of entire crop
and
become
available
in
commercial Quantity.
Once matured grapes are ready
to harvest, though it can be done
through machines but premium
winemakers
go
for
manual

Steps involved in wine

making
For red wines the grapes are crushed to break
open and then they are fermented in tanks

Primary fermentation where sugar and yeast

are added at specific temperatures
The fermented mesh is pressed to separate
the skin and pulp from juice
Heat and cold stabilization processes aimed at
getting rid of sediments
Further wine is stored in oak barrels for
secondary process of sedimentation

The Start
Rajeev and Kerry decided on two white wine Varieties,the
Sauvignon Blanc which
Is a classic from Bordeaux region of France and Chenin Blanc which is
a classic from
Loire Valley also in France
He started with Interesting Decision of Contract Farming due to capital
intensive nature of business.
Target market was local but quality standard were world class.
Wine making is a challenging blend of Art & Science. A complicate
process from Growing row material, to processing, packaging ,
marketing & Financing.
There was a problem with the climate as weather was dusty and dry in
summer
With a monsoon between June and September,, so it was decided that
grapes

Early Challenges
The government had not allowed any new wineries to come up in
Maharashtra
For 15 years and it took Mr. Rajeev two years and a file about two feet
thick & almost 200 signatures to Persuade the government to let him set
up the winery
Hidden Cost of Doing Business in India i.e. Baksheesh (Bribe) which was
not the case of Developed nation from where Rajeev consultant belongs.
No banker was willing to lend for such a risky Venture but after a lot of
persuasion
A bank agreed only after securitizing the loan by mortgaging almost
everything
From typical customer reaction-why should I pay so much for an Indian
wine?
Patiently, Rajeev was able to change the mindset and his Indian
customer takes
Pride in consuming a quality Indian Product

Brand Building
Sula had positioned itself as an Indigenous wine made to
international standards With international techniques and know
how.
A number of consumables are procured overseas and also
adopted to the sub-tropical Indian conditions.
The wines, Rajeev chose to produce were well chosen for
India, White wines are a Natural match for Indias fiery cuisine.
Sula celebrated the harvest season of 2005 by opening a 1st
wine tasting room in India in its Nashik winery atop a hill giving
180 degree views
The winery and vineyards are open to public for educational
tours also there
Beyond, a 23 room resort with a beautiful view of Gangapur
Lake
Sula had invested a lot in designing and then promoting its

ccess: Development Stage !

Sula has rapidly established itself as Indias Leading Premium wine
brand.
Sula wines has helped spark a wine revolution in India that has seen
consumption grow at over 25% annually .
In November 2002, Wine Spectetor, which is acclaimed as the worlds
leading wine magazine, did a full length feature on sula wines.
In 2003, Sula Produced Indias 1st Zinfandel Rose
grape) .

wine(variety of red

In 2005, Sula released Dindori Reserve Shiraz, as well as Indias 1st

dessert wine, the Late Harvest Chenin Balnc.
The company doubled its grape production from 700 tones to 1300
tones.

Contd
By 2006, it was a time for the 3rd winery to start operations, which was
having a huge capacity of million litters.
Company is having several awards in its portfolio of success.
from the Brands of it, 2 brands Cabernet Shiraz got 2nd and Dindori
Reserve shiraz got 5th positions on the list of the greatest quality
wines in the wine Asia report 2007.
By 2008, the four wineries of sula have a combined capacity of over 5
million liters.
Company has expanded its area from 30 acres to about 1200 acres.
With all these success efforts, sula vineyards is now Indias number 1
premium wine company, with sales going over 2 million bottles in 2007-08
and over all 2nd largest producer of wines in India.

Growth Stage !

Wine making is a capital intensive business and even Sulas

phenomenal sales have not been enough to fund their growth.

Demand has continued to grow and to satisfy this demand Rajeev

had borrowed heavily to start his venture and the idea of
borrowing more was making him feel uncomfortable
GEM India Advisors owned 33% stake in Sula for Rs. 15 crore in
2005.

Competition
Its main competitors were Chateau Indage and Grover, both of which
were primarily based in Maharashtra, close to Sulas operations
There are about 45 wineries in India, the major competitive threat
looming over wine makers is that posed by the entry of large liquor
companies like UB, Seagrams and Diageo
Seagrams released range of wines with 9 HILLS label
UBs Vijay Mallya tied up with Union Minister, Sharad Pawar family to
launch their range of wines Four Season
Sula wines launched value wines priced at Rs. 240 to Rs. 400

Contd
By 2015 the wine production may increase to 40 lakh
cases
To promote wine drinking as a habit Sula procures and
presents an impressive array of international wines for the
Indian customer by importing them from Australia, Italy
,New zealand, Chile and France
Sulas indigenous production has been accepted abroad ,it
is available in many leading wine consuming nations of the
world including Italy, France and Italy

Strengths

Weaknesses

Indian wine consumption has

grown 25-30% annually over a 5
year period.
Good climate for grape growing
Urban population is increasing.
Youth are craving an alternative
to hard liquors and developing a
more refined taste.
Wine is becoming more
acceptable to women and youth.

Wine remains an elite taste.

Wine is difficult to store in India
due to lack of cellars and
refrigeration.
Less than 50 percent of the
population is
legally old enough to drink (25
yrs. old).
400 million persons are 18 years
old or younger.
Poor awareness of wine and
infrastructure.

Opportunities

Threats

100 million persons will be

legally allowed to drink alcohol
(25 yrs. old) in the next 5 years.
Supermarkets are emerging to
support wine distribution
infrastructure.
Domestic market with increasing
disposable income.

The Indian constitution

discourages alcohol
consumption.
Wine viewed as a sin by some.
Indians still prefer whisky.
Advertising for alcoholic
beverages is
banned.

Questions & Answers

Question 1
Q. What are the advantages and disadvantages of growing through
Contract Model ?
Ans.
Advantages
1) Contract farming provides farmers with production inputs (such as seeds
and fertilizers), quality control, and advice on new production methods
2) For investors and contractors, contract farming overcomes land
constraints, quality is controlled by the investor and crop risks are shared
with the farmers
3) Reduced transaction costs for
(i) Coordination due to agreed arrangements for regular and stable
supplies
(ii) Procurement owing to scale economies, higher productivity

 Disadvantages
1) The term of contract is much longer typically the contract period is
for over 5 years
2) Farmers make a long-term investment, for example by building a
special drainage system, over a short term contract early
termination of the contract by the contractor will translate into a
loss
3) If the crop is lost, the risk falls on the farmer and often no
compensation is provided
4) Investments in training and know-how, farmer discontent and
disputes, are risks to be supported by the contractor

Question 2
Q. What are the elements of Sulas branding strategy ? Will it help them
in the emerging competitive scenario in the Indian Wine Industry ?
Ans.
Sula has positioned itself as an indigenous wine made to international
techniques and know how
Consumables like Barrels from France, corks from Portugal, yeast
from Australia and foil from Spain
Its distinctive solar logo is now quite well recognized by consumers
throughout the country

Contd
White wines were produced which were a natural match for Indias spicy
cuisine
In 2008, Sola introduced value wines priced at Rs. 250 to Rs. 400 and
these wines were doing well
Clever branding of Sula through wine tourism, Sula Fest and its wine bar,
Vinoteca
) It has also set up a wine import division due to the onslaught of foreign
wines

Enjoy Your
Wine.