India has around ~ 3 million wine drinkers. In a country with ~ 1.3 billion population, it is still modest. India's wine market is still in its infancy. The silver lining is that it is on an upward growth trajectory and there will be ample opportunities for both domestic manufacturers and foreign exporters.
Historically alcohol consumption has been associated with a lot of social taboos in the country. However, this is now changing. Moreover, the consumption of wine often resonates with a status symbol and elevated social class, thereby attracting men and women in big volumes.
Two fundamental factors that define the existing wine market in India are- upward growth trajectory and preference for mid-range products. India's growing middle class, rise in disposable income, and shift in the middle class are helping the wine markets to grow. The demand is more towards mid-ranged products with the share of high-end vintage wines less than 1.5%. This further explains the dominance of indigenous brands. 90% of the indigenous production is dominated by Sula and Grover Zampa. However, the popularity of international brands is also gradually rising fast. Major import destinations include Italy, Australia, France etc. This is followed by Spain, South Africa, and Chile.
The pandemic has been a destabilizing factor in an otherwise upbeat growth trajectory of the Indian Wine industry. Due to social distancing norms, businesses in hotels and restaurants plunged drastically. Likewise, events, MICE activities, and big weddings have nearly disappeared. These factors have significantly undermined the wine industry. In 2020, imports of wine fell by over 40%.
Meanwhile, COVID has also new trends in the market, some of whom have the potential to bring a positive tectonic shift in the consumption behavior.