India’s wine industry set to more than double in size by 2028, riding a 20% CAGR, says report

The Indian wine industry, currently around ₹1,400 crore or $175 million in size, is one of the fastest-growing alcobev segments, according to a report by Prowess Group. The segment is expected to grow at a compound annual growth rate (CAGR) of 20 per cent to reach ₹3,500 crore or $440 million by 2028.

The global wine market was valued at approximately $328 billion in 2023. However, major wine markets, such as France and Italy, have been in structural decline for decades, while the US appears to be experiencing an extended downcycle.

On the other hand, developing Asian economies like India, Thailand, Malaysia, Vietnam, the Philippines, and Indonesia are seeing growing wine appeal and increased consumption, the 2024 edition of the ‘India’s Wine Industry’ report indicated.

Currently, India accounts for less than 0.1 per cent of global wine exports. However, this share is expected to grow as Indian brands, particularly premium labels, gain international recognition.

Currently, only 2-3 per cent of the total wine produced in the country is exported, predominantly to the EU. Smaller amounts go to Japan, the US, Turkey, Canada, the UAE, and the Nordic countries.

According to the report, in India, about 85-90 per cent of wine production comes from Maharashtra, particularly from regions like Nashik, which covers 9,000 acres of wine grape cultivation and hosts around 77 wineries.

Karnataka contributes about 6-7 per cent of the country’s wine production, with cultivation spread across 800 acres. Other wine-producing states include Himachal Pradesh, Telangana, Tamil Nadu, and Mizoram, collectively spanning 200 acres.

Consumption-wise, major metropolitan cities like Mumbai, Delhi, Bangalore, and Hyderabad dominate the market. Approximately 65% of wine consumers in India are from urban areas, including tier II and tier III cities.

Rohit Bahadur, CEO and Head of Strategic consulting, at Prowess Group, said, “Supportive government policies, coupled with the rise of wine tourism in regions like Nashik, Bengaluru, and Pune, are fueling this growth. Further, harmonizing wine policies across states will be crucial to facilitating the expansion of both domestic and foreign wine producers.”

Within India, the industry is dominated by large players like Sula Vineyards, Fratelli Wines, and Grover Zampa. The report observed that Sula leads the trio with a 60 per cent market share in 2023.

Fratelli is the second-largest player with around a 25-30 per cent share, followed by Grover Zampa, whose market share is approximately 7 per cent. One unifying factor among all three brands is their pan-India presence across modern Retail and Hotels, Restaurants, and Cafes (HoReCa).

Wine tourism has become a marketing lever by backward integrated wine players such as Sula and Fratelli. In Q2FY25, Sula recorded a 10 per cent year-on-year (YoY) growth in its wine tourism revenue, which was ₹12.2 crore.

It also announced plans to expand its tasting room in its acquired facility in Nashik, ND wines facility, along with opening a restaurant there, in Q4FY25. Alongside, it will expand its wine tourism facilities of Domaine Sula, its Karnataka property, in Q3FY25. The company also said it will build a 30-key resort at York Winery, located on the company’s Nashik property, in 2026.

Fratelli Vineyards eyes expansion of wine tourism in its maiden 40-room resort in Maharashtra at a capex of ₹60 crores. Currently, wine tourism contributes 4-5 per cent of the total market but is expected to increase growing at a CAGR of 25-30 per cent.

The company is also working on an “ultra-luxury” property to commence in H2 FY25. It is expanding its current net area by 100 acres, aimed towards increasing its footprint outside Solapur. Phase I of 40 acres is to be completed by H2 FY25.