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Can Sula's canned wine succeed in India?

The can enhances both approachability and convenience, effectively increasing the market size for wine. With prior success in the West (US$70mm market in the US), and a strong demand for canned alcoholics in India, this might just be the change that gets wine into the Indian mainstream.

Popping open a can of wine? That just got real with Sula’s venture of canned wines - ‘Dia Sparkler’ which comes in both red and white flavours.

Last week, Sula Vineyards, the market leader for wine in India, came up with the first-ever variant of canned wines under its brand, Dia, becoming the first entrant in the Indian canned wine space. Canned wine is already established in the States with a US$70mm market in FY19, and has been seeing good growth in Europe and South Africa as well. In today's post, we understand how a can changes the fundamentals of the wine experience, explore the factors that might have caused Sula to enter the segment, and look at the counterbalancing factors that will go on to determine its success.

The millenialization of wine

Wine and whiskey are drinks you take your time with. Savour them well before a drink. It makes sense, therefore, for these drinks to come in elegant bottles with corkscrews, to and be consumed in pristine glasses. Beer, on the other hand, has been seen as a casual drink that you can enjoy along with some light snacks with your friends or colleagues.

Its low alcohol content (approx. 8%) by volume, makes it very close to the strong beer category. The move from the premium cork-screw glass bottle to a more casual and youthful 330 ml on-the-go can, gives it the cool, convenient feel. While wine in itself will still retain its touch of elegance making it ideal for office parties and the like, it could also see increasing adoption in house parties, gatherings, and trips.

What is interesting about the move is that it retains both the original glass bottle, that will probably still be a favourite for fine dining or gifting, while introducing the canned version. With damage to wine as a catergory remaining low, the move will most likely see share coming from two places - traditional casual beer/breezer drinkers wanting to experiment with wine, and a new set of users who wanted to try wine, but to whom it simply wasn't accessible.

What caused Sula to experiment with canned wine?

This move has been Sula’s attempt to experiment and add new experiences to the customers as it tries to expand the audience to whom wine is accessible. The beverage has been priced reasonably at Rs. 180, in line with premium beer. Cans bring convenience as compared to big glass bottles, lead to less wastage, and could lead to lesser drinking. For the casual light drinker, this presents wine as an interesting, richer alternative. The price point, ease of carrying it around, and convenience of not needing fancy glasses, openers etc, increase the potential places and occasions where it can be consumed. Young folks, specifically women, with lighter drinking habits, and more refined taste, can become a very strong target market for the drink.

Sula has just come out with Dia Sparkler in cans for now but gradually bringing out other variants of Sula’s wine in cans may further add to Sula’s spark. In addition to that, coming out with different can sizes as per needs may not be a bad idea.

On the other hand, it is also to be seen if the acceptability of wine in cans will really come in that strong as this drink has always been connected with fine dining, adding to its richness. Sometimes also used as a gifting item, the receptivity may just be a little dicey.

A balancing act

While it is still too early to call whether this will be a success in the Indian markets, the first-mover advantage combined with the increased accessibility, affordability, and convenience certainly help the firm. Starting with a large market where it has dominance - Maharashtra, will certainly help it capitalize on most of the benefits of the consumer awareness it will have to build to get customers to try the product. The major challenges we see are first the acceptance of a drink typically associated with luxury in a canned format, and two, that if it does succeed, it will open up the market to numerous smaller DTC firms to enter the canned wine segment, and grow from there.

Interesting times ahead for the firm, and certainly an interesting case to track.

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About the Author: The post is written by our EZPP partner Chhavi Chadha with relevant edits and changes by our editorial team. Chhavi is a graduate from SPJIMR currently working with RBL Bank.


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