Sonal Holland on the Indian Wine Market: "From a Promising Market to a Lucrative One."

India's first Master of Wine

How did you come to be working in the wine industry?

About 16 years ago, I was working as the Director of Sales at a Fortune 500 company, but I felt unfulfilled and contemplated giving my career a new direction. It was then that I came across the Indian wine market. At the time, there were no qualified wine experts in the country and I saw it as a huge opportunity. I took the view that wine would flourish in India in the years ahead, and when that happened, there would also be a demand for qualified wine experts.

I enrolled in the Wine & Spirit Education Trust in London as there was no means to study wines in India. I soon developed a passion for the subject and realised that I have a flair for communicating about it. That’s when I decided to continue pursuing this path with the aim of becoming India’s first Master of Wine — a dream I realised in 2016, after ten years of study.

My earliest venture was setting up the Sonal Holland Wine Academy in 2009.
 

How has becoming an MW changed your working life in India?

Becoming India’s first Master of Wine has opened many doors for me. Since this is still a sunrise industry in India, our landscape is like a blank canvas. This has allowed me to use my knowledge and understanding of wine and the international wine markets to launch business initiatives in India that align with global standards.

Sonal Holland Wine Academy has now completed 14 successful years of being the foremost wine and beverage institution in the country; where thousands of wine professionals and enthusiasts have benefitted from the WSET and the proprietary courses that we offer.

India’s importance as a wine market continues to gain momentum, as international wine producers and trade associations reach out to us for guidance on how to navigate the regulatory landscape and build a successful brand. The SoHo Wine Consultants consultancy, a service we launched in 2017, works with international wine exporters on how to enter and succeed in the Indian market.

I dedicate time to international wine competitions such as the Decanter World Wine Awards as a judge and these experiences inspired me to launch India Wine Awards in 2017. In its fifth year now, the IWA is an opportunity for every listed wine label in India to participate and be assessed by India’s top wine and hospitality experts. Our winners’ list works as a comprehensive guide for wine drinkers in India.

Restrictive regulation

India remains a very difficult market for wine because of national and local duty rates. Are there grounds for optimism about taxes on wine coming down?

Yes, our regulations around alcohol sales, distribution and marketing are complex and all imported alcoholic beverages, including wine, are substantially taxed. This skews the market towards inexpensive wines.

However, things are changing for the better and we are very hopeful. The India-Australia Economic Cooperation and Trade Agreement (ECTA) came into force in December last year and this has significantly brought down the price of Australian wines in India. We expect similar results from the ongoing free trade agreements with the UK, US and EU as well.

As wine starts generating more revenue for the individual states due to its growing popularity, the government’s perception of it is changing too. Wine is an agricultural product that not only boosts agriculture and tourism but also creates more employment in both rural and urban sectors. The government has started to recognise the long-term potential of the industry and is helping it grow through progressive policies on wine.

Another challenge for anyone looking to export wine to India lies in the cost of having to register each label in each state. Is this changing?

Unfortunately, there has been no change here. Every wine label must be registered in different states annually, and navigating this can be the single biggest deterrent for international exporters with smaller volumes to sell. We hope that at some point, wine goes from being a state subject to a national subject. However, that should not act as a roadblock as importers in India are obliged to ensure that these state-wise registrations for each wine label are complied with.
 

Is there any chance of wine being legally sold online?

There’s definitely a chance of wine being sold online, legally, in India in the near future. The national and state governments have a softer view towards wine since it is a low-alcohol beverage as opposed to hard spirits.

Uncomplicated shopping experiences

In other developing markets such as China, the sale of wine in air-conditioned supermarkets has been very instrumental in reducing spoilage and making wine part of daily life. What moves are happening in this direction in India?

In India too, wine is available in selective supermarkets and retail stores. In fact, sophisticated stores that specialise in wine are now springing up across cities like Mumbai, Delhi and Bengaluru. These air-conditioned stores display a wide variety of wines to consumers, creating a secure environment for people to walk in and browse at a leisurely pace.

This has had a positive influence on sales as it makes wine accessible. The availability of wine in supermarkets and experiential retail stores means that consumers can purchase wine with confidence and ease, without facing the social scrutiny that might come with being spotted by an acquaintance outside a liquor shop. So this trend is bound to pick up in India.
 

How well is wine moving beyond the cities of Mumbai, Delhi, Bangalore and Goa?

According to a report released earlier this year, the Indian hospitality sector is projected to attract over $2.3 billion in investments over the next two to five years, with nearly 12,000 rooms added in this year alone. The hospitality boom is not just limited to megacities like Mumbai, Delhi or Bengaluru, but has also reached Tier 2 cities located in farther corners of the country like Bhubaneswar, Indore, Chandigarh and Manali. We are in the process of bringing accessible and affordable world-class wine education to these cities so the wine culture can thrive as it does in the metros.

Many wine enthusiasts from smaller cities and towns in India follow us on social media. They have great curiosity and thirst for wine knowledge, asking questions related to wine etiquette. This hints at a growing sense of excitement around wine in smaller cities, where people see it as an exotic beverage that exemplifies an aspirational lifestyle. International wine producers too are aware of this surging demand and as a result, they are now keen on tapping into the tier-two and tier-three wine consumer base.
 

Potential buyers 

A lot of Indians are returning from work in the US, UK and Europe. Are they helping to foster a wine culture in India?

Indians living outside of the country have played a significant role in fostering a wine culture in India. The best example of this is how the Bengaluru (India’s Silicon Valley) wine culture developed rapidly because of a huge influx of expatriates and Indian IT professionals who came back to work there. It is now one of the fastest-growing markets for wine in the country. Also, Indians love to travel abroad and gain cultural experiences. We also have a huge affinity towards the Western lifestyle and through our international travels we have been exposed to its wine-drinking culture. When people return from their holidays and business trips, they seek wine from the countries they have travelled to and this has helped propel the demand for wine in India.

How important are women to the growth of the Indian wine market?

Nearly 50% of the Indian population is women. So in a population of 1.4 billion people, 700 million are women- this is not a number to be ignored. Great news is that Indian women are choosing wine over other alcoholic beverages because of its softer, healthier and elegant image. Our research shows that women feel less inhibited and face less criticism when drinking wine in front of their family members. In a society that has traditionally lived as a joint family and encouraged only male drinking, women drinking wine freely at restaurants, bars and at home, is a huge opportunity and a real game-changer.

Preferred styles and grape varieties

Which styles of wine, and from which countries, are most popular in India now?

I am often asked this question by international companies that want to enter and we address it in our India Wine Insider (IWI) report on main trends in the Indian market. 

According to the report, 30% of the total wine consumed in India is imported. Australia, Italy, France and Chile dominate imports. Pricing and brand familiarity have a big role to play in selection for Indian consumers. Premium wines with a strong brand recall among consumers, have also done well here. Therefore, building brand awareness through education, events and digital activations remains an important strategy for succeeding in the Indian market.

Which styles of Indian wine are most successful?

According to the IWI report, Indians love to experiment with new and different styles of wine. The most popular red wines are made from internationally renowned grape varieties such as Cabernet Sauvignon, Shiraz and Merlot, and white wines like Chardonnay, Sauvignon Blanc and Chenin Blanc are sought after.

From a taste profile point of view, Indians prefer dry wine that has a sweet fruit-forward expression, with moderate acidity, ripe, rounded tannins and an overall smooth texture. In the last couple of years, demand for wines in cans too has gone up among new and young consumers who are seeking affordable wine on the go.
 

From premium to ultra-premium

We are seeing a growing number of super premium wines at the 2,000 rupee ($25) level, but what about ultra-premium?

There is a growing number of discerning wine consumers in India who seek very high-end wine experiences collector-worthy wines to small groups of wine connoisseurs from influential networking groups like the YPO and EO.

Indian weddings of people from affluent families also feature ultra-premium wines. The Indian wedding industry’s total value is estimated to be $40-50 billion, and it is not uncommon to see wines like the Penfolds Bin 407, Dom Perignon and Tignanello being poured at such lavish weddings.

How is the on trade developing? Is there a new wave of Indian sommeliers?

Definitely. The new wave of sommeliers in India want to have exemplary table-side skills and the ability to discuss wines with consumers effortlessly. Many sommeliers enrol for WSET courses at our academy and they seek guidance on how they can train further to upskill. Their interest in completing training programs from reputed international organisations like the Court of Master Sommeliers is highly promising and shows how serious we are about improving the standards of wine service in India.
 

Trends - the wine market in a decade

Where do you see the Indian wine industry and market in a decade?

While India is a promising wine market today, it will continue to transform into a lucrative one over the next ten years. Wine will continue to become more and more mainstream as people embrace its discovery, lifestyle and etiquette. The ratio of wine consumption for domestic and international wines stands at 70:30 today, but I see imported wines continuing to gain more traction as people aspire to drink wines from around the world. As wine education shapes consumer sensibilities and helps upskill industry professionals, wine will successfully integrate itself into our culture over the next decade.

Overall, the wine industry will have to shift into higher gear in the next few years as it will have a loyal consumer base similar to that of spirits. The next big task for us will be to ensure that the quality of our wines continues to improve while we tap into a wider market that lies deep in the heart of the country.

And what about Sonal Holland in 10 years?

You’ll have to wait and watch as I am not about to show my cards just yet.