Sula Vineyards Targets Rs 1,000 Crore Revenue In Near Future: CEO Rajeev Samant
In Q3, Sula Vineyards reported 28% growth in own brands and 48% in wine tourism.
Sula aims to achieve Rs 1,000 crore revenue in the near future and maintain margins at least at 25%, said Rajeev Samant of Sula Vineyards Ltd.
The October-December quarter is crucial for consumption-led companies due to the festive season. Sula Vineyards posted "record" quarterly gross billings in Q3. It achieved 28% growth in own brands and 48% in wine tourism, on a lower base over nine months ending December 2022.
"Premium wine is a fairly seasonal business and to have such strong numbers in Q3, and also our highest-ever quarterly revenue of own brands and wine tourism bodes well for the future," Rajeev Samant, chief executive officer of Sula Vineyards, told BQ Prime.
The Indian brand has bounced back strongly post Covid-19, and more and more Indians are drinking wine, which makes a compelling case for the company, Samant said.
According to Samant, Sula Vineyards will step back from the imported brands business and concentrate on their own brands. Imported wines is a highly competitive business and hence, will not be a priority business for Sula, he said.
Samant expects the wine industry to grow faster than the spirits and beer industry in India.
The company is focusing on expanding wine tourism as well, and have started the Bangalore Vinery. In terms of wine tourism, it is adopting an asset-light strategy where the partners put up the facility and hotels, and Sula puts up the wine software.
"Capex will mostly be deployed in increasing production capacity to match companies' sales growth. Sula is planning to increase capacity from 14 million litres to 20 million litres over the next two years. In 2023, the company will add 2.5 million litres."
Premiumisation a key pillar of Sula's strategy. Premium product contribution has increased to 65-70% of the company's portfolio as against 50% earlier, in terms of volume and value.
In terms of sales, 70% comes from off-trade sales and less than 30% comes from on-trade sales, he said.
Sula's priority is to expand further in the Indian markets. It will focus on "Make in India and sell in India as India has the highest growth potential for wine market", Samant said.