Wines - India December 2008

Executive Summary SAMPLE Drivers: Rising consumer awareness, positive government initiatives, and efforts toward making wine more affordable and available Challenges: Inconsistent quality, variance in state-level policies, and ban on alcohol advertising Market Drivers & Challenges Trends Competition Nascent albeit a fast growing industry Estimated worth USD XX mn in 2007 & forecast to reach USD YY mn in 2011 Dominated by still wines although a market exists for sparkling and fortified wines A accounts for bulk of production; B and C account for a% of consumption New entrants from India and abroad expected to increase competition Industry is attracting private equity investors with three transactions in recent years Emerging strategies and business models include: Contract bottling Alliances between importers and foreign brands Partnerships with retailers in states permitting sale through supermarkets Three major domestic players dominate b% of domestic production A, B, C and D Top five importers control a% of import market are led by U, V and W

Drivers: Rising consumer awareness, positive government initiatives, and efforts toward making wine more affordable and available

Challenges: Inconsistent quality, variance in state-level policies, and ban on alcohol advertising

Nascent albeit a fast growing industry

Estimated worth USD XX mn in 2007 & forecast to reach USD YY mn in 2011

Dominated by still wines although a market exists for sparkling and fortified wines

A accounts for bulk of production; B and C account for a% of consumption

New entrants from India and abroad expected to increase competition

Industry is attracting private equity investors with three transactions in recent years

Emerging strategies and business models include:

Contract bottling

Alliances between importers and foreign brands

Partnerships with retailers in states permitting sale through supermarkets

Three major domestic players dominate b% of domestic production

A, B, C and D

Top five importers control a% of import market are led by U, V and W

Contents Market Overview Drivers & Challenges Trends Competition Key Developments

Market Overview

Drivers & Challenges

Trends

Competition

Key Developments

Wine in India is a nascent but fast growing industry with consumption concentrated in metros and in favour of still wines Nascent industry albeit a fast growing one attracting a number of domestic entrepreneurs, foreign firms, and importers Low per capita consumption of A l compared to other countries as well as domestic consumption of spirits and beer Wine drinking is metro phenomenon with Mumbai and Delhi accounting for b% Consumption in other cities and regions is low due to high price relative to beer and spirits as well as distribution hurdles impacting availability ~x% of wine sold is priced below USD XX and y% under USD YY Preferences are largely toward still wines (traditional red and whites) although a market exists for sparkling and fortified wines SAMPLE Segments Consumption Volume and growth Source: a% Mumbai b% Delhi c% Bangalore d% Goa e% Others Rose u% Red v% White w% a% z% y% x% > 30 20-30 10-20 < 10 Price points (USD) vs. sales 2008 Z 2009 A 2010 B 2011 Volume Growth a% b% mn litres % U 2004 V 2005 W 2006 X 2007 Y Forecast

Nascent industry albeit a fast growing one attracting a number of domestic entrepreneurs, foreign firms, and importers

Low per capita consumption of A l compared to other countries as well as domestic consumption of spirits and beer

Wine drinking is metro phenomenon with Mumbai and Delhi accounting for b%

Consumption in other cities and regions is low due to high price relative to beer and spirits as well as distribution hurdles impacting availability

~x% of wine sold is priced below USD XX and y% under USD YY

Preferences are largely toward still wines (traditional red and whites) although a market exists for sparkling and fortified wines

Drivers and challenges Drivers Consumer awareness and perception Government initiatives Affordability Availability Challenges Inconsistent quality Variance in state-level policies Advertising ban on alcohol

Key Trends Trends New entrants from India and abroad likely to increase competition as well as provide more choice to the consumer Emerging strategies such as contract bottling, alliances with importers and partnerships with retail chains Investments made by PE players indicates industry potential

X, Y, and Z dominate the domestic market although new entrants are expected to increase competition SAMPLE Market share – Production (2008 est.) 35% 42% Domestic producers a% Company X b% Company Y c% Company Z d% Company U e% Company V f% Others Total number of wineries is estimated to be X with the maximum located in Maharashtra Dominated by three players, which account for an estimated a% share: X Y Z Other major producers include U, V and W Competition is expected to increase with more entrants – domestic and imports New entrants: A, which controls close to b% of Indian alcohol market C and D are other major players Source: 9%

Total number of wineries is estimated to be X with the maximum located in Maharashtra

Dominated by three players, which account for an estimated a% share:

X

Y

Z

Other major producers include U, V and W

Competition is expected to increase with more entrants – domestic and imports

New entrants:

A, which controls close to b% of Indian alcohol market

C and D are other major players

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