The FINANCIAL — Raising public awareness of Georgian wine, supplying the market in greater quantity and producing high quality wine should become the major strategies of Georgian wine producers who plan to export their production to western markets, according to representatives of wine associations of the EU, with whom The FINANCIAL talked last week.
Georgia is a country of wine, however not everyone knows much about it. Much effort is being done in order to boost company sales in western countries however the share of Georgian wine on the shelves is still pretty low in the EU. To support Georgian wine companies The FINANCIAL contacted wine associations in different European countries to get advice from them as well as to get information about the local markets.
“I believe that the most important thing is to attend fairs in order to make contact with importers in the EU so as to raise public awareness of Georgian wine in the EU. Moreover to make Georgian wines better known in the EU, wine producers should contact someone in the EU to help them commercialize the product,” said Ralf Peter Müller, Director of the International German Wine and Spirits Association.
“You would be advised to establish a budget and appoint a specialist to promote public awareness; alternatively, some producer countries use their embassies for this purpose and employ specialist staff, as appropriate,” said John Corbet-Milward, Wine Policy Director, The Wine and Spirit Trade Association in London, UK.
“The major strategies include: to identify points of distinction between Georgian wines and others; ensure that appropriate production standards are met and that that quality is good; ensure price points are competitive; employ competent marketing strategists with experience in the UK/EU, and appoint competent distributers,” Corbet-Milward added.
“The share of Georgian wine in Germany is very small, it’s pretty unknown, basically there needs to be a strategy to deal with the quantity to offer. There should ideally be a large quantity of good quality wine to build up a certain impression of Georgian wine on the EU market, as well as there being carefully chosen pricing,” Müller advised.
“We have other wines from other countries, even from traditional wine-growing European countries and Georgian wines have to compete with them,” Müller added.
According to Müller imported and local wine are 50/50 on the German market, wines produced in Germany are sold in the same quantity as those imported from around the world. Müller believes this is somehow more linked with tourism. When people travel often and then arrive back in their homeland, they try to support their country by purchasing local products.
“In the German market, we have practically no brands, the wines are sold by country. When a customer is looking for red or white wine he is most interested in where the wine comes from,” Müller explained.
“I think the price of wine has not changed very much in recent years. We have a huge range of low costing wines and I think the majority wines sold are from that level,” Müller said.
According to Müller the average price of a bottle of wine is 3 EUR in Germany. The average price of a bottle of wine in the UK is 4.37 GBP. While in Georgia the average bottle of wine costs 6 EUR.
Georgian wine was not found among the top sold UK wines. It was not found in the list of the top 50 brands in the UK off-trade, nor in the top 50 UK brands in supermarket sales.
According to the data provided by Nielsen, the top 5 market players in the UK are the following countries: Australia with a market share of 21.2% and sales volume of 1.1 billion GBP, followed by the USA with market share of 15.9% and sales volume – 764 million GBP. French wine has a market share of 14%, Italy 12.8% and South Africa 10.7%.
There were some companies who refused to provide advice due to competition issues.
“Unfortunately we are not able to give you this kind of information as we are the national promotion organization for all German wine growers, and they would certainly not want us to share our advice and market knowledge with your Georgian readers. Sorry about that! But I am sure you will understand. Best regards from Germany,” Steffen Schindler, Director of Marketing, Deutsches Weininstitut.
The case from Georgian wine producers is more orientation on traditional countries, and Ukraine mainly is outlined as a target market, as well as Baltic and neighbour countries, where less effort is needed for raising public awareness of Georgian wine.
In 2004 80% of Georgian wine exports went to Russia. That was replaced by Ukraine since Moscow imposed an embargo on Georgian products in 2006.
Georgia ranks 2nd (in terms of volume) in grape production in the former Soviet Union behind Moldova, and Georgian wines have always been the most highly prized and sought after in the Soviet space. Presently, the wine is produced by thousands of small farmers (using primarily traditional techniques of wine-making), as well as modern wineries, such as Teliani Valley, Telavis Marani, Tbilvino, Kindzmarauli Marani, Badagoni and Mukhrani.
According to Konstantin Zaldastanishvili, Secretary General of EUGBC, the Europe Georgia Business Council, the majority of exported Georgian products in Europe cover Georgian stores, countries like Germany, and Russian supermarket chains. Moreover, there is a huge market of the Russian language population as well as people from post-soviet republics, which are aware of Georgian products and retain a form of nostalgia for them.
“Georgian wine is for the medium price segment. In my opinion, an increase in volume of exported wine will be possible if Georgian companies do not recognize each other as competitors at this stage. There should be raised public awareness towards Georgian wine in general otherwise for companies alone it will be quite difficult to enter EU markets,” Zaldastanishvili declared.
Discussion about this post