Food and grocery retail accounts for 60 per cent of overall retail in India. The vast majority of the food and grocery retail sector in India is unorganized e.g. street markets, kiosks and small vendors. Due to licensing constraints, wine retail continued to be a fragmented industry till about five years ago. Licenses were issued by the State government against auctions or tenders, based on the assessed need. The private trade was opened up less than a decade ago, initially allowing only Indian wines and later foreign wines as well through the retail channel. Though the license may be on a long term lease and need to be renewed every year, the qualifying individual is allowed only one license.
According to recently published report of Bonafide Research “India Wine Market Outlook, 2021”, sales from organized retail was growing with a CAGR of 18.64% over past four years. Among organized retailers, only a few such as SPAR, Spencer’s, Food Hall and Nature’s Basket have somehow managed to cash in on the opportunity.
Spencer’s Retail tops the list with 14 supermarkets and hypermarkets selling wine through complex state laws. Starting with one store in a Mumbai suburb in 2006, the company has nine of these stores in Hyderabad, Kolkata and Bangalore which serve full spectrum of wine. Three of the stores have even trainee sommeliers to guide the customers and train the rest of the group. Another fast growing supermarket and hypermarket chain Spar is also committed to retail of wines and has already opened 10 retail stores in Bangalore, Hyderabad, Mangalore, Pune, Coimbatore, Delhi and Gurgaon. It sells wine in 6 of its stores and is a leading chain in Bangalore for wines with Gurgaon soon to follow lead. Nature’s Basket, another gourmet retailer chain, owned by well known company Godrej is the third in the hierarchy. Started in 2005, it was the first supermarket chain which started selling wine and stored it in acceptable ambience. It has 19 stores across the country and plans to reach 32 within the next two years. Emphasizing on selling premium wines only, it is the retailer to watch.
Moreover, in cities like Bangalore where it is easy and inexpensive to get an excise license to sell wines in a wine boutique, a few groups of vendors have come up. More notable ones are Drops Total Spirits, Classic Group’s Modern Trade Outlet chain under the brand of ‘Not Just Wine & Cheese’ and Madhuloka each with around 8-10 outlets, a pointer towards multi-branch specialty retail stores in future where the State laws allow. Manufacturers are bringing in specially trained wine experts in the stores to guide consumers to the best. The last retail supporter could be the Indian army canteens, known as Canteen Stores Department spread throughout India, retailing a host of products including wine to the Defence Service personnel. The wider availability of wine through these modern retail stores is likely to create more interest, especially amongst young and female consumers."