How feasible is starting an unconventional venture in India? Is making wine a promising business in India? In a conversation with PaGaLGuY.com
Rajeev Samant, Founder and CEO of Sula Wines and a Stanford-trained engineer reveals what clicks with wine lovers, his entrepreneurial journey and the intricacies of venture funding in our series on entrepreneurs.
You were a successful software engineer in the USA with Oracle. What made you return to India and start a Wine company?
My father is a first-generation entrepreneur, and I too felt the need to start something of my own. There is a special, incomparable pride one takes in a self-started venture, a feeling of ownership that drives you to make it a success. I could have chosen a secure, cut-and-dry job where I knew what the next day would hold, but I was much more drawn to the road less travelled. Most of my friends were bankers, consultants or media people, and many thought I was crazy to be growing grapes and making wine. Still, I believed in what I was trying to do and did not let traditional expectations scare me off.
Could you narrate your entrepreneurial journey and what were the initial challenges you faced while starting Sula wines?
The journey has been challenging as well as incredibly rewarding. In the beginning, the wine business in India was not exactly open, and it was extremely difficult to get a license to start a winery. But Sula adopted the distinctly Californian philosophy of allowing the world to come in and take a look. That has led to an excellent atmosphere of co-operation between the Nasik wineries, many of which opened after Sula kicked off the 'wine revolution'. The wineries have now formed a strong association, and the wine industry has been growing at the rate of about 25-30 percent per annum. Sula has been growing even faster than that.
What does a wine producer need to do to brand and market wine in India?
Two things have to happen. The first is the market itself becomes ready at a certain point, which obviously helps a lot. The other thing is you have to educate a lot. You have to ensure a lot of positive media coverage. And then you have to go out and put your product in front of consumers and make them understand what it's all about. And in India that is very important because no one actually knows what wine is about. Huge numbers of tasting, sampling, make sure you are available at events and parties. You have to push the availability of wine, which was non-existent a few years ago. Sula has been to that extent fortunate in that we released our wine in 2000 when the country was just about to take off. And so we have grown along with the India boom.
When you received funding for the first time, how did you plan your spending?
Everything comes at a cost, so you have to try and give away as little as possible in terms of share of the company. Do not take more funds than required, take as much as you need or you might regret the decision in the future. However having said that, always think about working capital requirements, quite often entrepreneurs underestimate the amount of funds needed in that respect, as in they estimate the amount of money required to get things moving, what they do not see is, if the project gets delayed by even a few months, what is the working capital required to keep things ticking over and where you are going to get those funds from. So you have to keep this in consideration.
What kind of support have you received from the government so far? What more support and actions do you expect from the government towards the wine industry in India?
The Government has been great in that excise duty has been waved off on wine. That is the biggest step the Government has taken so far. One by one, other small steps are being taken. Of course, the recent freeing up of supermarkets to sell wine is a pretty big step.
As for the things we would like the Government to focus on; our industry is becoming more mature, and as it becomes more so, the basic requirement is infrastructure. What we are really keen to see right now is the four-lane highway from Bombay to Nashik. The Maharashtra government has been talking about the Bombay-Pune-Nashik industrial corridor but let's face it, Nashik has been neglected. Nashik is the future of Indian wine and we need good infrastructure.
We need improved roads and a better power situation. Right now, in fact, our agriculture subsidy is negative. Somebody had promised us free power, which we had not asked for. Next thing we know, we are not getting any power at all because if it is free, they just turn off the switch and leave us to our own devices. So we have to use expensive diesel to power generators in our vineyards and all growers have to do the same. We have about 200 acres of vineyards and if you are to irrigate those on a diesel generator, that is a lot of diesel you are looking at. Definitely we are at a big disadvantage when you compare us to growers in other countries, where they have cheap and plentiful power.
How do you recommend people to nurture their interest in wine?
We have seen that if the customer likes a particular product, he usually follows the product and waits for the new vintage to arrive, then tastes it. If he finds it good he recommends it to his friends. For this reason we have opened the new tasting room at the winery so people could come see our process, taste the latest products and also purchase any if they want from there itself.
What do you see as the total wine market in India? Do you think Indian consumers are price sensitive towards products like wine?
You get this question from both sides. You get asked why wine is so expensive here when you can buy a fairly decent bottle for three Euros in Europe. For me, it is very important that wine should be accessible. I am not interested in targeting my wine at an elite audience. Sure, there are those wines in our portfolio that do cater to that as well. For example, the Dindori Reserve Shiraz is an important example because the amount of work we put into that wine. As a result we have to price it higher than any other Indian wine has ever been priced before, and appreciably higher. That too has its list of regular clientele. We are selling out of that vintage year after year even though it is at Rs 600 plus a bottle. What I want to do is reach the broadest audience possible. So we have wines like our Chenin Blanc, which is at Rs 350, which is accessible to many people.
What is your take on the Indian entrepreneurial scene? How are Indian entrepreneurs different from the hotbed of entrepreneurship in the Bay area?
The bay area has a highly institutionalized structure for entrepreneurs. There is so much backing available, so much advice easily accessible. There is an extremely strong network. That is not the case here in India, however things are improving, and the gap is closing fast. Now the accessibility that an entrepreneur with a good background and a good project has here is a hell of a lot better than I had 10 years ago.
What does it take to be an entrepreneur?
Being an entrepreneur means accepting the inherent risks present in a new venture and going ahead full-force anyway. It’s about having confidence in oneself and a strength of spirit to pull you through difficult times when it would be tempting for most to just throw in the towel and walk away.
Re: [PaGaLGuY.com Exclusive] The man behind Sula Wines -
02-09-2007, 12:44 PM
...luking fwd to more such interviews...cheers !! 
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