Click to Exhibit

Yatin Patil: Taking Vintage Wines across India

Mumbai, March 31, 2008:Yatin Patil, 34, Director, Vintage Wines, started his own wine label in 2002. His aim for the next five years is to build on the premium of the Reveilo brand and take it across the country.

Like any management graduate, Patil also walked right into the corporate world, unsatisfied he gave up his job and decided to walk down the entrepreneurial path and turned 200 acres of his family-owned grape plantation in to a vineyard. Testing the fruit of success does not come easy. So, Patil researched extensively and surveyed the Italian and French wine markets before setting up in Vintage Wine a state-of-the-art winery at Nashik.

In fact, Patil tied up with an Italian Group Enofly for better technical expertise. Long hours were spent swirling wine across the world to make sure he gives his customers the best. "It was quite challenging to get the winery and infrastructure ready. Then, nurture your vineyards, see the grapes come in to your winery, get them crushed, and finally make wine from them," he added.

Excerpts from CNBC-TV18’s exclusive interview with Yatin Patil:


Q: How much does a winery take in terms of just initial investment?

A: It all depends on your capacity. The capacity that we have is almost 2 lakh liters per annum and that took us almost Rs 5 crore in terms of capex.


Q: Was it completely self-funded with a little bit of assistance from the bank?

A: Yes, I would say bank and family friends.


Q: What does sales look like now as far as you are concerned? What about breaking even or turning profitable, what sort of targets and timelines have you set up for yourself?

A: This is capital-intensive industry. A lot of investment goes in at the beginning. It takes almost two years to make this product. It is not like your other products where the turnover is right from cash to cash. Your working cycle is very long, it is almost a year-and-a-half to two years. So, it takes a while till the time you produce the wine, sell it, and actually get money. The breakeven is anywhere in between five-six years.


Q: How are sales looking?

A: Sales are picking up. We have almost tripled sales in two years, but it is just the beginning point for us.


Q: It is also a very regulated business from a government point of view. Did you have to go out, push your product, and distribute it across the country?

A: It is quite a daunting task, given that we do not come from this industry. Setting up businesses in all these states, and handling the local people is quite challenging.

Vintage Wines now has a capacity of 10 lakh liters and is marketed under the brand name of Reveilo. With a turnover of Rs 3 crore, Reveilo is available in Mumbai, Pune, Nashik, and Bangalore.

Even though the sector is two fragmented, Patil is focusing on a pan India presence as well as a foray into the international markets. In fact, he has just shipped his first order to the US.

Patil: Initially, we were looking at the UK and US because these are the main markets in terms of consumption. So, UK at the moment is the biggest market for imported wine but in future we see the US becoming number one. We are focused on the US, UK, and the European market as well, because that also gives you a stamp of approval in terms of quality.


Q: How are you looking at building the brand and what does the brand stand for to your mind?

A: Reveilo stands for quality, I would say that is the bottomline. Right from day one we have just been focusing on quality. If you see the price points, we have positioned our wine in the premium segment because right in the beginning we decided that this was an aspirational drink. So, we targeted the market at the top end and focused there.


Q: What sets your wine apart from everybody else in the market at this point in terms of just the way that it tastes and so on and so forth?

A: 80% of the wine has been made on the vineyard, so one has to really nurture or tend to the grapes in the vineyard. That is what we are doing differently.


Q: Give us a glimpse of what you mean when you say you are doing things differently?

A: The major advantage is that we own the vineyards ourselves, so we are not buying grapes from outside. So, we can tend to the quality right from day one. The main issue is quality versus quantity. In that aspect we are keeping our tonnage per acre at pretty decent levels, where you get excellent quality. I would not say low but at decent levels you get good quality. That has been happening. I personally look after the vineyards.

Reveilo maybe the latest entrant in the market but it is not willing to fight on price. At the upper end, Reveilo is the most expensive India wine with the tag of almost Rs 1,400. High prices mean innovative market names. While Yatin manages the business his wife Kiran looks after marketing.

Patil: It is a tough business but the business is growing. So, there is a lot of opportunity. It is also a very fragmented business. If you see it is not a mass production business because one has to really tend to your raw material i.e. grapes. I would say that again needs a lot of focus. Apart from that, marketing is one of the biggest challenges in this industry.


Q: What is the traditional marketing route for a product like yours?

A: There is a way the market operates. We have gone away from that. Personally, we have gone to people, have sampled our wines with them, while not compromising on quality as well as on pricing. So, the deals happened straight forward. We just present our wine and if they like it they buy it. That has been a simple logic for us.

- Source: CNBC-TV18