The FINANCIAL — Badagoni, one of the leading Georgian wine companies, will enter the U.S. and Japanese markets in 2012. This brand of wine is already successfully marketed in Eastern and Western Europe. In 2010 Badagoni sales reached 1,000,000 bottles of wine. The company’s most sold wine in Georgia is Saperavi while abroad it is Kakhetian Noble. The company now expects an increase in sales by 100% in the New Year period.
Badagoni was founded in 2006, within its short history the company has managed to possess 20% of the wine market in Georgia. Moreover, the company is mainly oriented on exports and 85% of its production is sold abroad.
“Badagoni produces 18 types of wine. The company has two lines, for European and Traditional markets. In Europe the company sells 8 types of wine, in traditional markets 11 types of wine and in Georgia 14 are sold,” Giorgi Salakaia, General Director of Badagoni told The FINANCIAL.
“Badagoni is cooperating with the Patriarchate of Georgia. In parallel with the foundation of Badagoni Company, in the Monastery Complex of Alaverdi the reconstruction-restoration of XVIth century wine cellar. At present, together with the Patriarchate of Georgia and Ministry of Culture and Monument Protection of Georgia Badagoni is building a depot of historic artefacts. The complex, which is being built according to European technologies, will be of vital importance for Georgians. This will be a museum complex where all the old artefacts and treasures of Alaverdi Monastry will be exhibited,” Salakaia said.
Q. How would you evaluate the year 2010 for Badagoni?
A. The year 2010 was of great importance for Badagoni as after the world financial crisis like the majority of companies we chose a course of stabilization, sustainability of our already achieved results.
Our company was opened in 2006 and the economic crisis unfortunately coincided with when we had finally planned our five year marketing strategy, which in turn was reflected on the realization of our production.
The company exports 85% of its production while the remaining 15% is sold in the local market. The export of production is to those countries where the first waves of the crisis were reflected including traditional markets such as Ukraine, Kazakhstan, Belarus, and Baltic countries. However, by that time we had changed our marketing vision and adjusted to the existing situation and environment. We managed to use the crisis situation to our advantage. When the companies which for a long time were operating in the markets left their positions, we managed to take their places and entered the market with ambition. This was a chance which brought its outcomes in 2010. We are the leaders in the major target market of Georgia – Ukraine, where the brand became well-known. In all shopping malls and prestigious restaurants of Ukraine an individual can already ask for Badagoni wine.
As for the Georgian market, Badagoni has a stable position in its niche market, always differentiated by its developments. This year we created new production together with Alaverdi Eparchy, two new products were created in the marani of the Alaverdi Monastery Complex which is Alaverdi Traditional White, traditionally prepared in a pitcher and the second red. This new brand became the visit card for European markets. The wines got high appraisal and for the first time in the history of Georgian wine, on 2 September we were awarded by the competition organized by flagman magazine in the wine field – Decanter, where out of 10,914 wines, 100 grand prize winners were chosen. So among the world’s 100 best wines our Alaverdi Traditions was named. This award was a great success and recognition for Georgian wine, which entered the world market with big ambitions and the best quality. Moreover, this year we received a gold medal in Germany as well as in Brussels. All these recognitions supported us in international markets.
Q. What are the marketing and business strategies of Badagoni in Europe?
A. This year we made serious steps forward in European markets. Together with our Italian partners Badagoni created a logistics base in Milan, from where Badagoni production is distributed to the whole of Europe.
While entering the European market, the company faced some problems in distribution due to low public awareness of Georgian wine. For the first step we chose to distribute our production in hotel-restaurants and café chains. Here the flagman place was positioned by our pitcher wine, as this wine has no analogue in the world. Today when all wines are becoming alike, the wine produced from our Saperavi and Rkatsiteli grapes has become interesting for everyone.
We would like to raise public awareness of Georgian wine throughout the world, which requires huge efforts and energy. As for the perspectives, we as producers believe in the success of Georgian wine, as even the clients’ mention its exceptional high quality, exoticness and interesting future of the wine.
Q. What challenges does Badagoni face in 2011?
A. Badagoni plans to sustain a stable position in Georgia in 2011. The company will be celebrating its 5 year anniversary next year and consequently, we will provide the report of our five years of activities to society. Each year we have a practice of introducing new products to customers, conduct wine-tasting and listen to the appraisal of Georgian customers.
Moreover, as well as those people who are actively consuming Badagoni wine, there are people who do not, we have the ambition to convince others in foreign countries that Badagoni is the real face of Georgian people, their history and traditions .
Q. Which export markets are the most attractive for Badagoni?
A. Badagoni will be expanding its operations in the European market in 2011. The company has quite good sales in Poland, the Czech Republic and Baltic countries. Germany, Italy and England are our three strategic markets.
The Asian market is also quite attractive for the company. After the New Year period, Badagoni production will be available in Japan. The first production will be shipped to Japan on 12 January. We have been working for the Japanese market by the participation in the exhibitions and wine testings for last 2 years.
Moreover, in parallel we are working on the American market. By 2012 Badagoni will enter the U.S. market with a well planned strategy.
Q. What is the share of Badagoni exports in different countries?
A. The major accent is on traditional countries such as Ukraine, Kazakhstan, Belarus, Baltic countries and Poland. Ukraine is the leader with its 70% of our total exports, which is quite a growing market for us. The remaining 30% is equally shared between other traditional market countries.
Q. What is the share of Badagoni on the Georgian market?
A. According to our data we possess a 20% share of the local wine market, which is quite a high outcome for such a young company. The Georgian market is quite important for the company, as if the people in your own country believe in you this is a guarantee of huge success abroad. However, we do not consider the Georgian market a major part of our business.
Q. Badagoni has 12 vineyards in Georgia, out of them 11 are located in Kakheti and one in Samegrelo. What was the harvest of grapes like in 2010?
A. Badagoni in total has up to 300 hectare territory. All the production is supplied by our vineyards. Badagoni has vineyards in different micro zones, and consequently each brand of Badagoni is supplied by its own wine.
This year, the climate conditions were quite difficult when the weather was sunny for 52 days with no rain. This fact consequently decreased the number of the harvest. However, the quality was quite high, with high sugar content. During the whole period of the company’s existence we have not harvested such high quality grapes. The company is oriented totally on high quality and for us this year was perfect in terms of grape harvesting. The total volume of grape received was 1,000 tons.
Q. Badagoni produces wine for European and Traditional markets. What is the difference between the productions?
A. At Badagoni we have created a European line. There was a marketing problem with the naming of the production. The perception of names such as Kindzmarauli and Tsinandali was quite difficult in European countries. Coming from traditional Georgian names, we created a special line – Kakhetian Noble, Trioni, etc.. Badagoni has created 8 types of wine which are totally realized on European markets.
Moreover, for the first time in the history of Georgian wine we divided the chains of supermarkets and restaurants, like in all western countries. A customer who drinks our wine in a restaurant won’t find the same wine in a supermarket chain.
Q. Which wines are most popular with foreigners?
A. In Europe the highest sale is of Kakhetian Noble, white as well as red. Kakhetian Noble is the typical face of Georgian wine, correctly done, considering all European standards, with the wine being so unique Saperavi have found their own places.
Q. Which wines are most popular with Georgians?
A. Saperavi is the most popular wine in Georgia. Historically and traditionally Saperavi found its own place, there is high awareness of the grape itself. Customers choose Sapervi and believe in this brand. At Badagoni Saperavi has positioned itself as the number one wine and stands apart from the other brands.
With Badagoni produced Saperavi, one will feel the whole spirit and face of the company, how we produce the wine and what the company directions are. Each individual who tastes the wine will feel how right it is, and how the wine has been made with only the best processes and technologies.
White wine is traditionally more liked by Georgians. However, each year there is increase in demand for red wine.
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