GALT & TAGGART Presents Study on the Wine & Alcoholic Drinks Industry
On Wednesday, GALT & TAGGART hosted a presentation of a study on the Wine and Alcoholic Drinks Industry. The event was attended by specialists in the field, Georgian and foreign experts, the corporate clients of Georgian Bank, representatives of small and medium scale businesses and other invited guests.
The research done by GALT & TAGGART covers the current situation in the sector of wine and alcoholic drinks and the emerging potential of local and export markets. The research mainly focuses on the fundamental financial indicators, different export markets and their connections, the sector’s main challenges and potential for development. The presented research also analyzes the positions of Georgian wine and alcoholic beverages on top export markets.
According to the study, in 2019 a 10% rise is expected in the sector. These expectations are the result of a bumper vineyard crop in 2018 and the tendencies of growth in export. It was noted that between the years of 2013-2018, wine export to non-traditional markets tripled, an astounding accomplishment, especially while considering the lack of prior awareness of Georgian wine on these markets.
Taking into account that wine consumption is fast emerging in Asia, these markets might raise the Georgian wine export by $120 million in the next five years. This, of course, will exceed the revenue coming in from Russia. To accomplish the abovementioned, GALT & TAGGART mentioned the need to popularize the brands and to broaden the distribution network. After interviewing the representatives of the sector, a number of challenges were identified: the lack of collaboration platform/clusters, the lack of a united strategy in terms of export markets, and weak corporate lending. The factors hindering the sector’s consolidation were identified as old fashioned technologies used when producing, high price of grape production, low yield, inadequate relationship between price and quality, and fragmented production processes.
“The business of wine and alcoholic beverages is one of the biggest sectors in the field in our country,” said the head of GALT & TAGGART, Otar Sharikadze. “In 2013-2018, the revenue of the sector nearly doubled and hit $870 million. Wine is the 4th and brandy the 8th biggest exporting product in the country. In 2018, Georgia got a total revenue of $305 million from selling wine and brandy. By our calculations, 2019 will be even more successful for the sector – raising the revenue by 10%.”
The presentation of GALT & TAGGART’s study saw Giorgi Popiashvili, a representative of commercial business, as a guest there to discuss wine branding. The participants of the International Wine Festival that took place in Bordeaux, Vinexpo Bordeaux 2019, were also there to share their experiences with guests. JSC Galt & Taggart is a wholly-owned subsidiary of Bank of Georgia Holdings PLC. The company has grown into a Georgian corporate sector leader. The brokerage and investment house was established in 1996 and has played a major role in Georgia’s capital markets over the past two decades – being both a beneficiary and contributor to the country’s dynamic economy.
By Nini Dakhundaridze