Sula Vineyards banks on premium wines, tourism to fuel growth beyond metros

Sula Vineyards banks on premium wines, tourism to fuel growth beyond metros

Sula Vineyards is betting big on India’s growing appetite for premium wines, with double-digit growth in non-metro markets such as Assam, Orissa, and Rajasthan driving profitability, CEO Rajeev Samant told Moneycontrol. Samant said the company’s strategy of premiumisation alongside booming wine tourism and innovations like the Muscat Blanc is helping transform wine into an aspirational lifestyle choice across Tier 2 and Tier 3 cities, even as economy wines like PORT continue to anchor volumes.

“Northeastern markets are proving to be strong growth drivers, with premium segment wine performing particularly well. Assam, for instance, has registered double-digit growth in both domestic and imported wines,” Samant said. He added that the Canteen Stores Department (CSD) channel has been a key enabler of wine adoption across semi-urban markets, where the premium segment has emerged as the primary growth driver.

Rajasthan has also been a standout, recording around 15 percent growth driven by strong acceptance of Sula’s Elite segment wines. “The state’s high tourism base and exposure to overseas visitors further fuel demand, making it a standout example of how wine can thrive in non-metro markets,” he said. In the south, Tamil Nadu is seeing strong momentum in sparkling and elite wines, while Orissa is delivering double-digit growth.

Further, Sula’s premium and elite wines priced above ₹700 and ₹1,000 now contribute a record share to the portfolio. “In recent years, we have sharpened our focus on premium and elite wines priced above ₹700 and ₹1,000, directly competing with imports (which are largely above ₹2,000). This premiumisation strategy has been very successful, growing at a faster rate,” Samant said. He added that the company is seeing higher selling prices, better margins, and less need for discounting.

At the same time, Sula continues to maintain a balanced portfolio. “While premiumisation drives our growth, our broader portfolio remains strong, with PORT (in the economy category) continuing to be our highest volume wine,” Samant said.

Sula will also scale back capital expenditure (capex) over the next three years, with capex intensity expected to fall to nearly half of financial year 2025 (FY25) levels, along with initiatives to reduce manufacturing costs and overheads, to strengthen profitability from the second half of financial year 2026 (FY26).

“Much of our capital investments are already behind us. Over the next three years, we expect capex intensity to reduce to nearly half of FY25 levels. At the same time, we are driving multiple initiatives to bring down both manufacturing costs and overheads. The benefits of these concerted efforts should begin to flow through from the second half of FY26, strengthening our profitability and resilience,” Samant said.

In FY25 the company had invested a capex of ₹13.7 crore, higher than ₹5.8 crore in financial year 2024 (FY24).

Wine tourism is also emerging as a significant growth pillar. Sula is expanding capacity and experiences, with a new 30-plus room resort on the way, alongside enlarged tasting rooms, dining spaces and shops at Domaine Sula and Dindori Estate.

On the product front, the company recently launched Sula Muscat Blanc, India’s first still Muscat and its lowest-alcohol wine at 7.5 percent alcohol by volume (ABV). “What makes this milestone even more special is that Sula is the only winery in India cultivating Muscat grapes. With two wines already launched in this category, we are way ahead of the curve, and the response has been phenomenal,” Samant said.

Sustainability remains central to the company’s strategy. “Moving from 65 percent solar integration to 100 percent sustainable winemaking requires a structured, multi-pronged strategy that combines renewable energy expansion, water-use reduction, and sustainable vineyard practices,” Samant said.

Exports are an integral but secondary part of the business. “Domestic demand is expanding rapidly, and the opportunity to build wine culture in Tier 2 and Tier 3 cities is immense. That said, international markets remain important for enhancing brand visibility and cementing India’s credibility as a wine-producing nation,” Samant said. Sula currently exports to 29 countries including Canada, France, Germany, Holland, Italy, Japan, and the Czech Republic.

Samant added that technology and digital channels are becoming crucial for consumer engagement. “Technology and digital platforms are central to how we connect with consumers today, allowing us to tell the Sula story directly, build communities, and create seamless journeys that strengthen loyalty and trust,” he said.