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An Indian Cabernet?
Rahul Chandran
Sunday, October 27, 2002
TECHNICALLY, INDIA DOES not have the climate for making premium wines. But Sham Chougule is not one to be bothered by technicalities. Defying critics, he went on to make the sparkling stuff in a country where liquor is generally frowned upon. And, in the process, he has given the French-traditionally, the world's finest wine-makers-a run for their money.

Chougule has lived the classic rags-to-riches story. Born into a small rural family, Sham Chougule founded a steel fabrication company called Indage (short for Industrial Age) in 1967. In order to stay afloat, the company branched out into civil construction-and it was this off-shoot business that exposed the Chougule family to the virtues of wine.

"In the early eighties, we won a contract to construct a defense site for the royal family of Qatar. While we were involved in that project, our capital bankers were based in France. Twice a month, we would fly to France to discuss the capital outlay for the project with the bank. After each meeting, the Frenchmen would uncork a bottle of wine. That was the inspiration for our venture," says Ranjit Chougule, chief operating officer of Chateau Indage.

Uncharted territory

What an elegant way to lose money, it might seem! From the planting of the first vines to the production of the final product-a bottle of bubbly-takes an average of four years. And, during these first four years, a start-up wine maker keeps accruing overhead costs. To make matters worse, money does not start pouring in as soon as the first batch of grapes has been turned into wine-profits won't be seen for another couple of years. And through these years, the wine maker has to support himself and his staff in hopes that his wine attracts the sensitive palates of connoisseurs.

The skeptical French warned Chougule, "don't waste your time because good wine cannot be made more than 30 degrees on either side of the equator." But common business sense alone would suggest that entering a field where revenue could only be expected after five or six years would be nothing short of foolhardy. Such dire forecasts, however, did not deter the Chougules from investing $4 million into their risky new venture in 1986.

"For us, it was simply a case of untapped opportunity," says Ranjit Chougule. "Two of the world's largest selling alcoholic drinks (Bagpiper and Director's Special) were Indian. So there was an established market for liquor. But our society was not exposed to wine drinking very much. Even the demographics suited us. India has a burgeoning middle class. With a population of one billion, the affluent class numbers up to 100 million. This is an excellent market, yet nobody has even thought about it until we decided to take the plunge," Chougule says.

French wine expert, Piper Hietsecek, conducted a feasibility survey and found that two sites in Maharashtra, India's largest producer of wine, were suitable for cultivation. The company selected Narayangaon, which is closer to their Mumbai headquarters and has the appropriate relief and topology. "Piper executed the turnkey project and we planted the first vines in 1980 and harvested in 1983. 'Omar Khayyam' was launched three years later."

Chougule does concede, however, that in spite of the clear opportunities, the company was going out on a limb. "Essentially, all we had going for us was the market opportunity. However, we later realized that for wine to become popular in India, they had to overcome some seemingly insuperable problems. The biggest was that there was no wine culture. People did not know how wine was drank. Cork openers were not available. The bottling itself was a problem." Indage eventually had to manufacture and market the accessories to wine drinking, too. "We even published a book on wine because the existing books were for connoisseurs, not beginners."

India's arcane excise laws compounded the company's problems. "When we launched, we were not given licenses to sell the wine locally. So, our product had to be shipped out and sold abroad-it was then, in 1986, that we launched in London," Chougule says. Since then, however, things have been better.

"The government is now doing a lot to make the conditions more helpful for local vintners." The Maharashtra government recently announced a new policy for wine growing. Under the policy, the government has set up a new class of licenses to set up wineries in a cooperative set up. "After this policy, it is now possible for people to start grape cultivation or set up wine bars at nominal cost," Chougule says.

Government help notwithstanding, there is a long way to go before the Chateau Indage can s take its claim to the status of a premium wine maker. "A couple of years ago, a local agency carried out a survey to estimate the market size for Indage. We have not reached the mark that they predicted. So, there is a lot of scope for growth here," Chougule reckons.

"Look at it this way," he says, "India has around 30 million income tax payers. If each tax payer buys one bottle of our wine a year, that would mean 30 million liters." When put this way, it does, indeed, seem to be a huge market. But, the Chougules overlooked one factor that might potentially have proven very damaging. Would India take to wine, especially since wine-more than most other alcoholic beverages-is an acquired taste?

A question of taste

Generally, Indians do not drink wine with their food. Given time and exposure, however, they will, according to Chougule.

"The important thing to understand is that wine is an acquired taste, and only consistent drinking will educate one's taste buds to the new flavor. What happens when you offer a foreigner some chaas (buttermilk)? He is out to sea initially, but upon the third or fourth attempt, after his palate has absorbed the flavors, many have fell in love with the drink! Soon, you will find him discoursing on the finer points of various drinks such as chaas and lassi, the subtle differences between paani puri ka pani and jal jira, and the pros and cons of additives such as chutneys. Wine tasting is no different. After a few trials, you learn to discern the delicate nuances and decide which of those you like and how," Chougule says.

Indians tend to like wine that is medium dry, and balanced wines like Chardonnay are the perfect accompaniment to Indian food, Chougule feels. "Ultimately, it depends on the food we eat. Indian food, which is predominantly semi-liquid, is stronger in terms of flavor and texture. So wines like Chardonnay are perfect. But a cabernet is also a good accompaniment because it tends to overpower bland food and goes well with spicy dishes," says Chougule. The Indage brand, Riviera, has proven to be most successful in India because it is a light, easy, anytime wine.


Despite Indage's claim to have a 75 percent share of the nascent wine market, the company has a long way to go before wine gains truly democratic appeal. Indage's share of India's total alcoholic drinks industry is minuscule. The company barely made Rs. 30 crore in revenue last year.

But ever since their initial success in introducing the drink, the marketplace has become crowded. "There are at least 50 local retail players and there are up to 400 foreign wines available in India," Chougule says.

"Most of these players were looking at our little experiment with interest. When we came through unscathed, they decided to enter the marketplace." Chougule's experiment can only be considered a success. Most foreign companies coming to India now look to partner with Chateau Indage-five of them, in fact, have already struck partnership deals with the Indian company. Chateau Indage, which currently produces around 2 million liters of wine, is looking to expand production to 3.6 million by the end of the year, mainly for the export market.

"We are expanding our facilities so that we can keep up with the demand in the foreign market," says Chougule. Indage will be launching its wines in the U.S. next month. The company already has a facility in Germany where it bottles its produce to streamline the process.

But what would lead a global customer to uncork a bottle of Indage's wine rather than a bottle from one of a number of tried-and-true global brands? "Initially, we thought we would market the India brand, which is very popular abroad. But that could potentially backfire sincee the India brand might not remain in fashion for very long. So, we decided that the best way would be to compete with French wines in terms of quality and taste," Chougule says. "I would rather have my wine known as a good wine from India than as a good Indian wine."

The company has also begun to cultivate two ancient, indigenous grape varieties-Arkavathi and Arkesham-that were used to make wine during the moghul period. "The wine produced from these grapes-Soma and Mist of Sahyadri-have been very popular with Westerners who are not used to such delicate flavors.

"This is one USP for our wines. Regional differences in cultivation could influence flavors even when made with the same variety of grapes, and we should position ourselves to target this market," Chougule says. Even optimists, however, admit that it will be a while before India becomes another Chile or even Bulgaria, let alone France.

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