New Market Development for a Unique Italian Wine Brand into the Evolving Indian Market

The goal of this paper research is to analyze the Indian economy, one of the most interesting and stimulating economy in the current world economic context, focusing to the sector of wine market, which represents an enormous potential for the future, in order to understand the assets and potential for Italian Wines.
While Italy is one of the world leader in wine producing and trading, India is today a land of opportunities: Indian Economy has significantly grown in the recent years. Both social and economic indicators have reflected their respective positive impact for the development of the Economy. In the Social sector the best example today is 108 million children attend primary schools in India by making the country’s education system the second largest in the world after China.
In the economic sector Gross Domestic Product (GDP) in nominal terms of US$ 692 billion in 2004, has made the country the world’s tenth largest economy with a real GDP grew by 6.9 percent in 2004/05 compared to 8.5 percent a year. The outcasts for real GDP growth for 2005-06 is 6.5 to 7 percent.
Exports have grown, especially exports of services, which grew by 105 percent in 2004-05, while economic growth in India is among the fastest in the world with an average rate of 5%.
More than coherently imports of foodstuffs and drinks are growing at an annual rate of over 25% and the consumption of wines in India recorded 14% growth in 2003-04 to reach 490,000 9-litre cases, against 430,000 cases the previous year and 22% growth in 2005-2006 to reach 650.000 cases.
The 650,000 case market totalling a sale of US $ 40 million represents less than 2% of the total alcoholic market of 75 million cases ringing in the annual sale of US$ 4 Billion. The average annual growth of 22% since the liberalization policy announced in 2001 is expected to grow further to 30%. Figures presented by the Italian Trade Commissioner in Mumbai, Mr. Vittorio Mecozzi, during the conference organized in Verona (Italy) at Vinitaly 2006 by Confagricoltura (Italian Association of fruit growers and producers) suggests that the consumption of 5.8 million litres in 2004- 05 is expected to rise to 15 million litres by 2010-11.
Sign of the changes happening is the emergence of Wine Clubs in a number of cities – Delhi has two (the Delhi Wine Club and the Wine Society, Delhi); the Bangalore Wine Club has been around since 2001; there is the Chandigarh Wine Club & The Hyderabad Wine Club and some cities want to open the wine club.
This work is organized in order to review the nascent Indian wine industry in terms of the area, production and marketing of wines in the country. After an overview on the Indian wine industry which will cover in detail the history, the categories and the techniques of the Indian Wine, we will proceed trough an accurate market analysis in order to understand the market main figures, the price segmentation and retail price structure, the distribution channels, the market most influent players, the market trends and the taxation and duty structure.
The third chapter of this research paper will study the new Indian consumer, taking in account economical factors (an increasing disposable income of the youth, a more availability and visibility of wines, the growing acceptance of the new culture in the metros, etc.) and also social and religious factor; a majority of people don't consume alcohol at all and consider it a taboo. India is primarily a whisky, vodka and rum drinking country.
The overall potential wine market is composed by 200 million people, supposedly consisting of the burgeoning middle classes and of course the upper-middle and rich classes which form the immediate potentials, but it might take years before the current habits can be changed: the figure of 20-30 million as the potential market represents a more realistic target audience.
In this third part of the thesis we will underline the relation of the Indian consumer with Italian goods in general, considering that Indians showed a special appreciation for Italian food and for the country as tourist destination. A last consideration will be spent on the quality-price ratio of the Indian consumers who are becoming more and more price sensitives and attentives to fill the lack of knowledge of the previous years.
In the fourth chapter we will describe the present situation of Italian wine exports in India and we will try to develop a marketing mix for a new Italian wine brand.