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Minister Davitashvili: “We aspire to foster increase of sales and decrease dependency on an existing and traditional markets”
“Today, the Government of Georgia has adopted a crucial decision, which will accelerate support toward promoting visibility of the Georgian wine and boost export sales. It is vital that the new project comes into force during the vintage period. We have launched efforts of working on the respective project from the very start of an incumbent year. The project’s design has been agreed with the Winegrowers Association of Georgia. We have hosted numerous meetings with the entrepreneurs in order to reach final agreement on some of the terms. The project entails funding of the so called “Treymarketing”, which spans across numerous actions of trade marketing and provides co-funding grants to the wine-producing companies. As you are aware, the Government and leadership of Georgia have been intensifying efforts for promoting Georgian wine, thus, we shall embrace an increased funding for the respective actions. Since 2013, the budget has been tripled and amounts to 3 million. Nowadays, the budget for promoting Georgian wine is around 9 – 10 million GEL; the National Wine Agency deploys various actions for promotion objectives at pre-selected target markets. As an outcome of the research efforts, specific directions have been selected, which enjoy the most experienced and competent marketing companies, which successfully deploy marketing communications operate in the field of wine industry; we have also selected highly credible and influential wine critics, influencers, masters of wine, masters-sommeliers of wine, which have a long record of promoting the Georgian wine. These are the people who are well-aware of the peculiarities of the Georgian wine. We have already developed numerous materials in multiple languages and for communicating to target markets. Dissemination of information on Georgian wine is held in a constant mode at target markets, such as the United States of America, Great Britain, Poland, as well as South-East Asia, Baltic States and etc. We would like to make the Georgian wine a more popular one and translate our efforts into a more success for the wine companies, which will fundamentally affect success of an entire industry and vine-farmers.
Therefore, we have decided to embrace the new stage, when the Georgian wine expands beyond niche segment into the new markets and into a more universal category. The Georgian wine shall be accessible among the core channels of sale, such as the so called “on trade” as well as service- Horeca sector and chain of shops, retail. Therefore, it is vital to fund specific marketing actions, which are deployed by the Georgian wine companies. As a result, we will provide co-funding at those markets, which already have Georgian wine, however, it still requires assistance to be at a point, which is desirable by us. The Georgian wine shall attain a crucial position among popular and exporter countries. Wines of a the new world is accessible at every European country’s market; moreover, popular wines are accessible in both, US and South-East Asian region. This is the category, where we would love the Georgian wine to move to.
Nowadays, the Georgian wine is sold in around 60 countries. In 2019, around 341 countries exported it to 53 countries. Number of companies and export destinations significantly increased in 2020, which has span across 60 countries and 376 companies. However, we are motivated to reflect increased numbers into increased sales. We have already attained a number of 100 million bottles in a year, which is our projection for the year of 2021. We have already advertised 10-year plan, which shall ensure export income of wine sector by the year of 2030 to amount 1 billion USD; the latter objective aims at tripling income from products that are of grape origin.
Co-funding of marketing actions aims at spanning across each and every market, which entails Georgian wine, except for Georgia and the Commonwealth of Independent States. By all means, we do not need to foster realization of Georgian wine within the country itself, since small, medium and larger companies have already been engaged into these actions. Our objective is to foster and increase export sales including in new geography. There have been various questions on diversifying the markets; our primary goal in this regard is to access new markets, which we had already targeted and the Georgian wine has already been progressing there. We are motivated to increase pace and decrease dependency on an incumbent and traditional markets. Therefore, we do not fund marketing actions at the Commonwealth of Independent States, however, we do fund all the other countries, which will host marketing initiatives deployed by our wine companies.
The budget for marketing events for a year has been determined at 600, 000 GEL, however we are at the pilot version and the Government may increase funding if the program proves to be successful. At the same time, it has a direct effect on increasing sales. We will have a comparison of a specific reporting year, when the co-funding of the events will be ensured and sales shall be on rise in comparison to the previous year, thus such data will be a turning point for us. In the respective scenario, a limiting and additional factor is 2 GEL per every bottle sold and it is a budget. As I have already mentioned, a total funding per each company is about 600, 000 with a perspective of boosting it. In fact, we are motivated not to replace the private companies’ marketing actions, therefore one of the core objectives for us is for the private companies to increase their marketing budget, which shall also be visible in an audit. More specifically, an incumbent year’s marketing costs shall be increased in comparison to the previous year, therefore – we will fund the respective increased amount.
I firmly believe that the program will be successful, as it has been elaborated in close cooperation with the private sector. We have hosted numerous discussions, meetings and negotiations with the wine-producer companies. Throughout the process, we have collected feedback and have reached a joint consensus. Therefore, the project has been translated from joint efforts and I believe that the companies will join in with great enthusiasm. We will deploy significant financial stimulus for the next 3-4 years, which will translate into tangible results and in a short-period of 5 years – we will ensure tremendous success in promoting Georgian wine; moreover, we will transform our successful sales” – the Vice-Prime Minister and Minister of Environmental Protection and Agriculture of Georgia, Mr Levan Davitashvili stated, after commencing the Government’s session.