Business Today

Grapes of growth

Champagne Indage is creating a global wine cellar. After taking over Australia’s Thachi Wines, the company is now setting sail for other shores, reportedly the US and UK.

By Tejeesh N.S. Behl        Print Edition: Sept 9, 2007

After whetting his taste buds with the takeover of Australia’s Thachi Wines—for a reported sum of Australian $15 million (Rs 49.5 crore)—Ranjit S. Chougule, Managing Director, Champagne Indage, is now setting sail for other shores. “The acquisition immediately opens up a huge market for us in the UK and US—Australian wines are the largest selling in the UK, constituting 36 per cent of the country’s 120 million cases a year wine market; they make up 29 per cent of the 350 million cases a year market in the US,” says Chougule.

That’s not all. With an annual production of 27 million litres of wine, Thachi is not only Australia’s seventh-largest but is also three times the size of Champagne Indage, which produces 9 million litres every year. “Australia’s export bucket is almost full-brim, with 450 million litres out of a total production of a billion litres being sold overseas. Its domestic market is now one of the fastest growing, with a per capita consumption of 17 litres,” adds Chougule.

The buyout was also necessitated due to the difficulty in increasing acreage in India, thanks to farmland acquisitions becoming hot political controversies. “We are aiming for an annual production of 100 million litres in the next two years and for that we need to chart out a course for both organic and inorganic growth,” points out Chougule.

The company is setting its sights on acquiring wineries in California, Spain, Italy, South Africa and France. Chougule reveals that exploratory discussions are on with wine makers in South Africa and also in France’s Burgundy and Provence regions.

He’s also looking at assets in Chile and Argentina, and expects to wrap up a few deals by the end of this financial year. Champagne Indage is also in talks with a leading European spirits manufacturer for a lock-stockbarrel purchase of a soon-to-belaunched brand. “Talks have been on for six to seven months and the deal is expected to be announced this quarter,” says Chougule, who expects the halo effect of the brand to rub off on the group and the product portfolio. The company has tied up with ICICI London to fund its overseas ventures, through a mix of equity and debt.

Champagne Indage has also made a shift in its international brand strategy. Till recently it sold its wines only through restaurants that served Indian food. Now the company is focussing on stocking up in non-Indian cuisine eateries too. Back home, the company is also strengthening its presence in the non-alcoholic beverages segment.

While it is already retailing fruit juices under the Seabuckthorn range, the year-end will see Champagne Indage getting into the mineral water and energy drinks segments. Chougule is in the process of finalising the brand names for these products. He is aiming for a complete portfolio of alcoholic and non-alcoholic beverages.

However, the heady growth rates in the domestic wines market—Champagne Indage has been galloping at near 100 per cent in the past two years, and the industry has been growing at 30 per cent—may well ensure that Chougule’s wine collection continues to sparkle.

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