Sula Vineyards Q4 Update: Own Brand Sales Up 15%, Driven By Premiumisation

Sula Vineyards Ltd. expects to have sold over ten lakh cases of its own brands in the year ended March 2023, driven by higher offtake of premium wines.

The country’s biggest wine producer experienced volume growth of its own brands, attributed primarily to the success of the winemaker’s elite and premium wines, which exceeded the five-lakh case mark for the first time, according to its quarterly business update filed with the bourses.

A Technopak report estimated that Sula has a 62% market share in the domestic elite and premium category.

The company has recorded its highest-ever annual revenue, both for its own brands as well as the wine tourism business. In Q4, the winemaker witnessed 15% year-on-year growth for its own brands to Rs 104.3 crore, while its wine tourism grew 18% to Rs 12.4 crore, according to the regulatory filing.

For the full fiscal, its own brand sales were up 26% year-on-year at Rs 482.5 crore, while wine tourism grew 30% to Rs 45 crore. "FY23 has been one of the most momentous and successful years in Sula’s 23-year journey," said Rajeev Samant, chief executive officer at Sula Vineyards.

"Our focus on premiumisation is reaping rich dividends, more than 52% of 1 million cases are our elite and premium wines, including our Sula Vineyards, RASA and The Source brands. That share was just 46% in pre-pandemic FY19."

The firm will continue to focus on highly profitable own brands, and at the same time prune the imported brands business, he said.

Sula has bounced back after Covid-19 pandemic, and with more Indians taking to drinking premium wine, it makes a compelling case for the company, Samant said.

"I am particularly pleased that we conducted more than 1.3 lakh unique individual tastings at our iconic vineyards, a massive 66% growth from the year before. This continues to be a significant focus area for the company."

Wine tourism represents room revenue, sale of food and beverages, merchandise, and all other ancillary services, excluding sale of wine.

The company's wine tourism business continues to soar with total revenue touching Rs 80 crore in FY23 versus just Rs 44 crore in FY19. It expects it to become a Rs 100-crore business in the coming year.

Shares of Sula Vineyards fell 2.22% on the BSE on Tuesday, as compared with a 0.56% gain in the benchmark Nifty50. The stock has fallen 2.6% year-to-date.