Author: Ravi Viswanathan
With his dishevelled hair and short, portly frame, Ravi Viswanathan, at first glance, looks more avuncular than a former Parisian banker of Indian origin. Viswanathan created a world record in 2011 by bidding €30,000 (Rs 23 lakh then) for a bottle of vintage Veuve Clicquot Champagne discovered in a shipwreck in Finland as a 10th-anniversary gift to his wife. But across his three cellars in Burgundy, Geneva and Singapore, Viswanathan’s over 10,000 vintages – some even predating Napoleon’s death – is any collector’s envy.
The reclusive Viswanathan, who got mixed up last year in the Rafale controversy for financing – along with an Anil Ambani group company – a film by Julie Gayet, the partner of former French President Francois Hollande around the time the deal was being negotiated in 2016, has today emerged as the biggest consolidator of India’s wine industry with three acquisitions in as many months for Rs 120 crore.
A “leap of faith” that started in 2012, Singapore-based Viswanathan was first an investor in Grover Zampa during its merger with Nashik-based Vallee de Vin and late last year became its single largest shareholder through subsequent capital investments.
In 2014, Viswanathan’s offshore investment vehicle VisVires Capital and Ambani’s Reliance Capital bought a chunky 30% stake in Sula, the largest winery in India, only to exit four years later to Belgian family office Verlinvest, with an 18-20% return. Reliance Capital still holds a 10-12% stake in Grover Zampa as a “financial investor.”
Viswanathan, or “Ravi” as he is known in the industry, together with some shareholders of Grover Zampa, recently bought out Hindustan Construction Company’s winery Charosa from the Gulabchand family and Myra Vineyards, a Bengaluru-based brand.
Over the weekend, he is set to make another big move by buying out Four Seasons Wines and Golconda wine from Diageo, the world’s leading liquor company. Four Seasons is a subsidiary of United Spirits or Diageo India.
“Grover is viewed as an old-world winery. We got this opportunity to buy vineyards and wineries with different wine styles rather than build from scratch. These are more fruity, trendy and new-world. So it makes sense for us to have a full range to offer and become a multi-brand lifestyle company,” Viswanathan, 56, explained in an interview that inevitably became a mid-day tasting tutorial. “All the wineries in India are sub-scale, with the exception of Sula. It makes sense to consolidate and benefit from economies of scale. It drives down costs and drives up pricing power. Plus, we are also buying things that complement our portfolio.”
“Grover Zampa is the wine pioneers in India, but they have missed several buses in the past like tourism. So it’s time they step up,” said Sonal Holland, India’s first and only master of wine. “India remains a three-player market. The smaller players had no bandwidth or marketing muscle to compete so consolidation will be beneficial.”
The plan is audacious – morph Grover Zampa into a multi-brand lifestyle company with wine at the centre and branches including tourism, a wine spa like that in the Les Sources de Caudalie set in the vineyards of France’s Bordeaux region, ready-to-drink beverages like Breezer, white spirits like gin, tonic water and even imports. Grover already is the largest exporter from India, shipping its produce to 33 countries.
“Most imports into India are below the bottom of the barrel. They are to wine what military music is to music,” rues Viswanathan, who drove up to Mumbai from Baramati before flying out to Singapore.
His primary investment vehicle is VisVires Capital, which is into fund management and advisory and manages assets of $150-$200 million through three funds. Its growth investment thesis is diverse, ranging from consumer-centric bets like wine through a dedicated fund, mineral water, food and fashion to agri-tech and even film financing. Winemaking is fundamentally an agrarian story, dependant on the vagaries of nature. So Viswanathan is equally focussed on buying 300 acres across Karnataka, Andhra Pradesh and Maharashtra for Grover Zampa.
“We would rather have multiple wineries in various locations of 2-5 million litres than one mega one,” he said. The attention, therefore, is on investing in the best and latest winemaking equipment, including concrete egg tanks to enhance grape fermentation and replace the existing stainless steel ones. “Our new winery will be among the best in the world,” he said.
Hip & happening
Myra will lead the efforts to tap the globally exposed, high-spending millennial. “We will be looking at ready-to-drink wine spritzers and carbonated wines in cans to reach out to the first-timers. The idea is to be hip,” quipped its founder Ajay Shetty, also an investment banker-turned-Winebrenner, who stayed on as the chief lifestyle officer.
Grover Zampa and Charosa have a more serious credo – they are far more complex wines as well – compared with the young, fruity Myra. As part of his ambitious import plans for the flagship, Viswanathan bought three barrels of wine from the annual Hospices de Beaune Wine Auction held every November.
The barrels, currently stored in France, will only be bottled in 2020 but will be open for limited edition advance pre-orders. The French connection actually goes much deeper after VisVires bought one of the oldest vineyards in Burgundy, the Château d’Etroyes, along with a castle in the town of Mercury.
The imports will be branded La Reserve and two exclusive wines – a French Pinot Noir and Chardonnay (Rs 3,000/bottle) will soon be exported to India. The French expertise – the legendary Labruyere family is also on the company’s board – will help break global barriers and build brand equity. “Over time, we intend to fold all our wine investments in India and France into one entity to consolidate,” Viswanathan said.
What gives him the confidence that wines will take off in India as it continues to be plagued by high taxation, cultural barriers and drastic policy changes?
Hope comes from growth potential – the consistent 15-20% CAGR of the Rs 500 crore, 25-30 million bottle market. It’s a speck in the global wine market, which produces 36 billion bottles annually. Viswanathan believes a 10 million bottles/year target is quite feasible within 3-4 years, once all the brands come under the Grover umbrella.
A unique idea to demystify the wine experience, according to Vivek Chandramohan, CEO of Grover Zampa, is its sommelier-at home programme. “Indian women are often reluctant to drink in public. Many are apprehensive about etiquette. But now you can have a full tasting session at home with friends and family. We are also exploiting latent demand in tier II cities like Pune and Jaipur,” he said. Winding up, the chat drifts towards the controversy linking Viswanathan and Ambani with Gayet’s film project. Surprisingly, Viswanathan was candid in his answers and hardly evasive.
“With Anil Ambani’s Reliance, we have financed two projects so far. That particular movie had 5-6 investors and of its total budget of 10 million euros, Reliance only bankrolled 1 million euros. It was a structured investment, very common in Europe. To say it was a quid-pro-quo was erroneous, sensational journalism,” said the man whose father left Pondicherry for France in the 1960s.
The heady potential of the Indian terroir has ensured his maverick son’s homecoming. Controversies aside, Viswanathan is certainly writing a new wine story for all.
