The FINANCIAL — Georgian alcoholic drink importers enjoyed 83% sales growth during the first ten months of 2013 compared with the same period of the previous year.
Vodka and whisky are the most imported alcoholic beverages in Georgia. According to Euromonitor’s 2013 research, Georgian production not only accounts for the major share of sales of beer and wine in Georgia, but a considerable amount is intended for wine export. Increasing demand for vodka, mainly flavoured vodka, can be a message delivered to local entrepreneurs as a niche waiting to be discovered.
“Georgia has a limited base of raw materials for vodka production in comparison with the traditional vodka-producing countries. Here grain crops are in limited amounts. Georgia is a wheat importer country. Nevertheless, Georgia could start producing vodka from imported raw materials. However it is probable that Georgia will not have a great competitive advantage. Besides classic vodkas made of raw materials, Georgia can produce flavoured vodka from fruit, so-called “Slivovitz” and other types. Georgia has huge potential in this segment. Therefore a manufacturer of these products oriented on this niche segment would develop gradually,” Levan Davitashvili, Chairman at the National Wine Agency, told The FINANCIAL.
Davitashvili considers the production of vodka in Georgia to be a realistic prospect. He added that this product is still probably going to be more focused on the local market. “We should not expect great export potential due to level of awareness and other marketing factors,” he said.
Contrary to increased import, the export of spirit drinks dropped by 30% during the same, comparative period of 2012-2013. Cognac, brandy and whisky are the top three products exported from Georgia.
Import of alcoholic drinks in Georgia increased by more than 83% during the first ten months of 2013 in comparison with the same period of the last year. With 1,829.3 thousand litres worth a total of USD 12,381.9, vodka makes up the largest part of imported spirit beverages. Ukraine, with 702.8 thousand litres, is the main exporter country of vodka in Georgia. It is followed by Armenia with 525.3 thousand litres, and Russia – with 405.1 thousand litres.
“Accurate statistics of vodka consumption are not available in Georgia because home-made products are not accounted for. More than 17 million bottles of vodka are sold in Georgia annually. This figure indicates the popularity of this drink. There is a tendency of vodka being largely replaced by wine in developed countries. It is unfortunate though that this is not happening in Georgia,” he said.
Exact statistics of wine consumption in Georgia are also unavailable. “According to our estimation only 1.5 million bottles of wine are sold in Tbilisi alone. The rest is consumed on draft, which is not yet measured,” said Davitashvili.
According to GeoStat, the import of vodka reached 1,829.3 thousand litres from January-November 2013, up from 1,731.6 thousand litres from the same ten months’ data of 2012. Next to vodka, Armagnac, brandy and grappa have shown a slight increase in import. Contrary to them, the import of whisky, cognac, liquor, rum and tafia, and gin dropped in 2013 compared with 2012.
Against the background of increased import the export of spirit beverages dropped by almost 30% during the first ten months of 2013, compared with the same period of the previous year. 9,879.5 thousand litres of spirit drinks were exported from Georgia during the first ten months of 2013. The figure was 12,838.7 thousand litres in 2012.
With 1317.4 thousand litres cognac is the main spirit product exported abroad. It is followed by brandy with 781.4 thousand litres, whisky with 399.9 thousand litres, and vodka with 254.5 thousand litres. Belarus, Ukraine and Russia are the top three countries where the largest share of cognac is exported to. Ukraine and Russia are the top two countries for brandy dealers. Georgia exports the largest share of whisky to the Netherlands, Azerbaijan and Moldova. The top countries for vodka dealers comprise: Azerbaijan, Kirgizstan, Netherlands and Armenia.
On New Year’s Eve it is mostly the retailers that sell festive goods that enjoy better sales. Dealers of alcoholic drinks are the leaders of increased sales. This year they saw realization growth of on average 30%.
At New Year sales of alcoholic drink importer company Gagra Plus increased by 25%. The company imports various world brand products; some of them are seasonal such as Red Bull, the beer Budweiser and others.
“Sales increased in accordance with the brands in 2012. 8-12% sales growth was shown for so-called old brands that have been in our portfolio for more than 5 years. Comparatively new brands increased by 15-25%, as for the vodka Stolichnaya, its sales increased by 60%,” said Mamuka Kukava, importer of alcoholic drinks, Gagra Plus.
The bestselling products at Gagra Plus include: the vodka Nemiroff, natural juice Sandora and energy drink Red Bull.
“Despite the increased costs of logistics we did not increase prices in 2013. We plan to enhance the package of our company with strong alcoholic beverages,” said Kukava.
The sales of Euro-Food, the importer of vodkas Khorticia, Khoriti and Morosha, increased by approximately 10% in December. “We sold 400,000 bottles during the first 11 months of 2013 as the producing factory in Ukraine had a problem so we were not able to import the product for a whole four months. Due to that sales dropped by 20% in 2013 in comparison with the same period of the previous year. Prices of production increased by 5% in 2013,” said Levan Berishvili, Head of the Marketing Department at Euro-Food.
“During New Year’s Eve sales of Bagrationi champagne occupy 40-45% out of the annual sales share,” said Irakli Tsereteli, Sales and Marketing Director at Bagrationi 1882.
The company sold 900,000 bottles in 2012. The company expects neither significant growth nor a decrease of sales for 2013.
“Bagrationi Classic Semi-Dry is the bestselling product of our company in Georgia. It makes up 55% of total sales and its market price is GEL 9. In 2013 we have not changed the prices of our products. In 2014 we will start producing white and red wines,” said Tsereteli.
The comparative sales figures of November-December have shown 30% sales growth in the last month of the year at Teliani Valley.
“Realization of Teliani Valley was worth a total of GEL 17 million in 2012. We produce an equal amount of champagne every year. The company did not change its prices in 2013,” Tea Kikvadze, Marketing Executive at Teliani Valley, told The FINANCIAL.
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