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WINE 2015 caucasus business week
December 28, 2015 #128
GEORGIA’S WINEMAKING BUSINESS SUFFERS A BLOW IN 2015
Interview with Giorgi Samanishvili, the head of the National Wine Agency of Georgia - How would you appraise the current year performance in the winemaking sector? What volume of wine products has Georgia exported in 2015? What is the current situation in the exports? - The year of 2015 is not over yet, but the year may be appraised as successful, in general. The current year was positive, despite exports slowdownm, compared to 2014.
The year of 2015 has recorded a sharp downturn in our wine exports because of current economic processes in the Russian Federation and the hostilities in Ukraine. Anyway, we have increased our exports to other markets. Despite certain problems, our exports to Kazakhstan grow stage by stage. Our exports grow to China, Poland and the Baltic countries. We have also penetrated new markets, Canada, Japan and the USA. - Has these three countries balanced our exports contraction in the Russian and Ukrainian markets? - Russia and Ukraine were main markets. Therefore, the 2015 exports indicators have slipped in terms of quantity. This year we have diversified exports markets. We export Georgian wines to 50 countries, but the field has already determined its strategic exports markets such as China, Poland, Great Britain and the USA. We will continue active efforts in these markets in 2016 too. - Which markets will you make accent on and what volume of wines does the country plan to export to foreign markets in 2016? - We will make focus on 4 markets in 2016, as determined by the marketing strategy. Moreover, we will also attend all influential exhibitions in 2016. The national wine agency will assist the winemaking companies to take part in the exhibitions.
What is the opinion of Georgian winemakers on the 2015 results? The year was quite problematic, they said. Besides Russian and Ukrainian markets, problems arose in Belarus and Kazakhstan too. The ongoing political and economic developments in these countries have already made negative effect on exports of Georgian products and revenues of winemaking companies. We plan to maintain our sales volume in certain markets, for example, in Ukraine. We plan to take certain steps in this direction. The exports volume depends on the situation in the exports markets. It is difficult to make forecasts in advance. - How much have the 2016 marketing costs increased compared to 2015? - The budget will be the same in GEL as in 2015. - How would you assess the 2015 vintage? Was it successful or not and what kind of complications have arisen in the vintage period? - The process is improved and refined year by year. Despite the reported tensions in the Kakheti Region, this year vintage may be evaluated as the most successful one. The government has not interfered in the pricing process, for the first time. This is very important to let prices reflect the product quality. It is also significant this year the low-quality grapes were not supported. - Do you think the government should subsidize the vintage in the future? The government plans to stop the sector subsidization and is the sector able to exist without subsidization?
Our objective is to free the sector from the subsidization component, because this instrument only weakens the field. It is upon the government to decide whether to subsidize the sector in 2016 or not. The issue will be resolved based on the market realities, i.e. the volume of harvest and the market demand. After calculation of the averaged market price, the government will take a due decision. The government wants to remove subsidization component, but the government may resort to certain interventions, if necessary.
GIORGI MARGVELASHVILI The Tbilvino founder The year of 2015 was unfavorable for our company in terms of export sales. Namely, the sales dropped about 20%. Major slowdown was recorded in Ukraine, Russia and Belarus, as well as in Kazakhstan. The previous year was very good, when our sales in Russia extremely surged. Therefore, we should not refer to those indicators. Our company will intensify efforts in the Baltic countries, Poland and the USA to remunerate losses in Russian, Ukrainian, Belarus and Kazakh markets. We have found new partners in Germany and Australia. This year our domestic sales rose by 15%. We expect the year of 2016 to bring better results. The wineries cannot fully use the harvest that is reaped in Georgia. In 2016, wineries will still have wine reserves and therefore, the field is expected to face problems again”, Margvelashvili noted. GIA GAMTKITSULASHVILI The founder of Twins Wine House “Our company has been operating in the Georgian wine market for 15 years. We were the first who moved pitcher wine to bottles in 2005 and we prepared 5000 bottles of Kakhetian wine from the Napareuli micro zone grapes. Since then our company has expanded the business. The current year was especially important for our company, because we penetrated new wine markets, namely, China and the USA. Moreover, the company exports wines to seven countries such as Japan, China, Russia, Germany, Great Britain, the USA and Lithuania. This year we have processed such grape varieties as Qisi, Khikhvi, Cabernet, Kakhetian Green. In 2016 we will introduce these wines to the Georgian market. We will also export our wines to Latvia, Estonia, Ukraine and Poland in 2016. We will also introduce new wines with new labels such as Qisi, Khikhvi, Kakhetian Green, Cabernet, Alazani Valley White, Alazani Valley Red”, Gamtkitsulashvili said. NUTSA ABRAMISHVILI The founder of Schuchmann Wines Georgia
“The year of 2015 was less profitable compared to our expectations because of currency volatility in our partner countries. At the beginning of 2015 we determined a clear strategy to actively diversity our markets. We have fulfilled this plan and our sales slowdown has marked only 15%, while the exports contraction in the whole country is about 60%. This year we have diversified our markets. Initially we wanted to reduce our ratio in Russia. We have reached this goal and we are meeting the New Year very content. In whole, our company has exported 1.100 million bottles throughout 2015. This year the Russian market was problematic.
Moreover in 2015 the company started use of oil of grapes stone. In 2016 we will introduce the first product. This will be the first gastronomic line in the Georgia market, but this products will be also used for medical treatment. IN 2016 the company will build Schuchmann Wine SPA on the territory of Schuchmann Wines Georgia. ZURA RAMAZASHVILI One of the founders of Telavi Wine Cellar “The year of 2015 was satisfactory for our company if we take into account the regional developments. Russian and Ukrainian realities have sharply shrunk our exports indicators. Anyway, we have shifted these ratios to other markets. In 2015 the company entered new exports markets too, namely, South Korea, Uzbekistan and Kyrgyzstan. In 2016 the company will actively strengthen in the new markets, but the indicators depend on the political and economic situation in the neighboring countries. Moreover, in 2016 the company plans to arrange drip irrigation system by investing 1 million USD to make our grapes higherquality products”. GIGI ARONISHIDZE The marketing director for Dugladze Wine Company “The year of 2015 was very interesting and full of innovations. Our brand appeared in the Georgian market in 2015. The company management decided to carry out the rebranding to penetrate new markets and new consumption niches. Consequently, we have made many important changes: we have developed the company brand code and on its ground we have carried out all other works. We have settled the brand’s architecture, the brand’s communication platform and so on. Besides strategic works, we have also determined the company visual identity: new logotype and brand style, packing of full assortment of products and so on. In 2015 we have introduced two varieties of the sparkling wine of Samepo (Royal) – semisweet and semidry rose. Moreover, Dugladze Wines and Spirit also offer new products. Everybody remembers distinguished marks of Tbilisi, Eniseli, Very Old, Gremi and Vartsikhe. Our company holds reserves of these valuable drinks. We have decided not to lose this competitive advantage, but to promote it and offer new products under these appellations. We also offer wine brands of 3-5 year age. We will introduce Dugladze Wines and Spirit products to both domestic and exports markets in 2016. Our assortments are divided in four groups: top quality wine of indications of specific growth origin, regional wines, table wine Ranina and special wines. The quality and packing of our products have deserved much approval from our partners. They have already made early orders. We plan to implement many other interesting projects in 2016 through communication of both new and old products.