Winemaker Fratelli expects 25-30% growth in FY22 and plans entry into the hospitality industry

Fratelli, which means brothers in Italian, is one of the leading wine companies in India, having achieved several milestones since its inception in 2007. Last year, during the pandemic, it launched TiLT – wine in a can. Recently, the company has also redesigned the labels of its single varietal range. In an interview with Business today, Gaurav Sekhri, Partner and Director at Fratelli Wines, talks about the impact of the pandemic, canned wine, redesigned labels and future plans. Here are the edited excerpts:

How has the pandemic affected you?
The alco-bev industry is directly aligned with the hospitality industry and discretionary spending. So when the blockages were announced, it touched us deeply. With limited travel and people not going out to restaurants, our business has been seriously affected. But what we also noticed was that there was a lot of pent-up demand and it came back with a vengeance. Once the liquor stores opened, retail sales surged and almost made up for what was lost in institutional sales.

How are you now?
In FY 21, which suffered the most blockages etc, we still ended up with higher sales than in FY 2019-2020. When things opened up around this time last year, sales were very strong. This allowed us to have higher sales than the previous year. This year again, sales fell in April and May. But as the markets opened, pent-up demand drove people to buy with a vengeance that really drove sales. I’m very optimistic that by the end of FY22 we should have seen growth of around 25-30% over FY21 despite two months of slowing down.

Institutional sales also picked up. Of course, we still don’t have international tourists coming, we don’t have large-scale conferences or gatherings, but despite this, institutional sales have picked up. Last year, between our bottle business and that of cans, we produced 3,000,000 cases. This exercise, everything is going well, we should get closer to the number of 4,000,000.

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What was the reasoning behind the launch of canned wine? How is it going ?
It’s a question of accessibility. It’s a very clear trend globally that people don’t really like the formality around things anymore, especially young consumers. This is reflected in the way they like to consume the products. Canned wine does this. It provides a very good drink without the formality that surrounds it. There is still an element of nervousness among people when they consume wine – is the glass correct, have I opened it long enough, etc. Sometimes you just complicate things. But to enjoy a good drink, you don’t have to do everything.
Also, this is the arrangement. If you are in a good restaurant for dinner, you will like your wine served in a good glass. But if I’m at a concert or sporting event, I’d just like to open the can and drink. It is therefore the parameter which determines the way in which the drink is consumed.

We are extremely bullish on the cans segment. We are now available in 15 states. We have set up a second canning line in our establishment.

You have just launched your single-varietal wines with a new label. Why did you do this now?
When we started the business, these were some of the first wines we launched. We have nearly 30 different labels depending on the price and category of wine. But these single varietals were the first to come out in 2010. After that, we spent a decade trying to build our range.

For two years, we thought we had to rethink our single-varietal labels because they constitute an important part of our activity and our consumers recognize them. We have also received comments from people that while the wines were amazing, the labels did not reflect it. So we decided to go for a new look. The idea was to try to capture what Fratelli represents. After speaking with design houses, we felt that the best way to reflect the brand was through the silhouette of the seven founding brothers of the Fratelli family.

What are your future plans? Is entry into the hotel industry possible?
The hotel business is a natural extension of the wine business, and it’s something we’ve thought about from time to time. We have always postponed it because we wanted to do our wine business first. We have done our research and in the near future you can expect something from us.

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