The FINANCIAL — Georgian Glass and Mineral Waters (GG&MW), the producer of Borjomi, the fabulous Georgian mineral water, claims to have returned to the delightful sales positions they enjoyed two years ago before the Russian embargo was announced.
As Nitsa Cholokashvili, PR Manager of Borjomi, noted that as a result of the Russian embargo they lost 65% of export a day. The sales of 2006 instead of the planned USD 235 million were reduced to USD 76 million.
GG&MW was founded in 1995 and currently the company belongs to Salford investment foundation, associated with the late Georgian business tycoon Badri Patarkatsishvili of Jewish origin, and private investors, including the corporate top-management.
Borjomi was the number one mineral water brand in virtually all former Soviet Union and CEE countries. Given the strength of the brand, Borjomi is one of the few domestic fast moving consumer goods companies that competes with international premium brands. The Borjomi Brand has been described by the Harvard Business School as “the Perrier of Russia”.
At the time of the acquisition of Borjomi in 2002, mineral water consumption rates in Russia and other former Soviet Union States were 10-15% of those in Western Europe. Since then, mineral water consumption in Russia has been increasing at over 15% per year.
In the first quarter 30 million bottles of Borjomi were produced, in the second quarter – 50 million and in the third quarter – 46 million, which is a 14% rise.
64% of the manufactured products are sent for export and 36% remain in the local market.
In September 2008 Borjomi first stepped into the Japanese market.
“Till the end of the year, 100,000 bottles of Borjomi must be exported to Japan. And in 2009 our partners have taken a responsibility to export 1 million bottles there. In future perspectives we plan to consider boosting sales in: Poland, German and Great Britain,” claimed Cholokashvili.
During January-August of 2008 Georgian mineral waters have proved to be on the top 10 list of exported products. According to the Statistics Department of Georgia, mineral waters hold the 9th position after metal wares, copper, gold, cement, and scrap-iron, medical sorts. With the sum of USD 22,770.5.
“Since May 2006 we became more concentrated on the business priorities like: diversification of markets, multiplication of portfolios of brands with new ones, producing aggressive marketing politic on main markets. The new strategy appeared to be a success and in two years we’re back on the success track,” Cholokashvili told The FINANCIAL.
In her words, this year the company planned to sell about 180 million bottles (0.5 l). The sales were increased with the help of launching new brands, also with the hard work in the local and foreign markets.
After Russian embargo in 2006, Borjomi, which occupied 13% of the bottled water market in Russia’s ten largest cities, trailing behind BonAqua (14.6%) and Aqua Minerale (14.4%), started looking for alternative ways.
Borjomi is sold in 30 countries. “The number one country in terms of sales is Ukraine followed by Georgia, Baltic countries, Azerbaijan, Kazakhstan, Belorussia and Moldova.
During the last two years the company increased export in Baltic countries by 100%, in Ukraine – by 40%, in the USA – by 20%, in Canada – by 40%, Israel – by 100%, Cyprus – by 70% and in Azerbaijan – by 80%.
Since the Russian embargo Borjomi entered these new markets: Kirgizstan, Tajikistan, Mongolia, Turkmenistan, Uzbekistan, Poland, the Czech Republic, Belgium, Germany and Japan.
GG&MW works hard in the direction of public relations in local and foreign markets.
“The company uses different ways of marketing and PR strategies. We started an active campaign in Baltic countries. Last Saturday we had an out tour for Belarusian journalists in Borjomi,” said Cholokashvili.
GG&MW produces 5 sorts of water in both glass and plastic bottles.
The company produces two main brands for export: mineral water Borjomi and spring water Borjomi Springs; the other three brands: Bakuriani, Likani and Aqua Viva are produced for the Georgian market and local consumers.
Borjomi in glass is more traditional. According to sales plastic bottles are more popular. They come in one litre sizes and are more comfortable and light. According to sales, plastic bottles beat glass ones by 10%. In 2008 the number of plastic bottles in general sales reached 54% and glass – 46%.
Borjomi was lucky in avoiding any economical pause caused by the Russo-Georgian war.
“Our company didn't have any so called export pause caused by the Russian aggression. We use sea trade as well as railway, it depends on the country,” Cholokashvili said.
Written By Madona Gasanova
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