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Saturday, May 12, 2012

Visit to the Republic of Georgia - My Final Report


Overall impression of the Georgian wine industry
·      I didn’t know much of Georgia and its wine industry. But I had heard/read that Georgia (and other parts of the Caucasus) is considered to be the oldest wine-producing region of the world. I had also heard that the country has more than 500 indigenous grape varieties. Psychologically, this is already a great advantage for Georgian producers to market their wines. Both reasons intrigued me to go on the trip in the first place and it can certainly also seduce many other people to try Georgian wines and visit the country. These facts can also be the base for any future efforts to market Georgian wines in the United States.

·      The 2006 boycott on Georgian wines declared by Russia certainly had a huge impact on the entire industry. For the most part (despite the financial hurdle the Georgian had to endure), the changes that the entire industry had to go through were good. There are several wineries today producing both conventional and qvevri wines of high quality and, as I heard from people with far more Georgian wine knowledge than I do, this was not the case during the years where Russia was the biggest importer of Georgian wines (and quantity was a priority over quality).

·      It was good (and certainly not a coincidence) that we spent most of our week in the Kakheti region. It is the most important region in Georgia for wine production with about 70% of the vineyard area and certainly most of the wines that are going to be commercialized in the US will (most likely) be produced in this region.  

·      Georgia is both “old world” and “new world”. It was very interesting to see the dichotomy between these two realities happening in the same country.  Old world wines, in general, would be the ones displaying earthiness, low(er) levels (and a consequent lighter body), cooler climate flavor profiles, etc. Well, some Georgian wines can have all these characteristics; while some others can show a very “new world” style, with lots of fruitiness, high(er) levels of alcohol (and a consequent heavier body), and warm climate flavor profiles. Not to mention that some wines are labeled as an appellation (geographic location), such as Mukuzani (as the wines are labeled in world old world, such as France or Italy), while others are labeled after the grape variety from which the wine is produced, such as Saperavi (as the wines are labeled in world new world, such as the United States or Australia).

Opinion of opportunities for conventional wine

·      The only Georgian grape variety I knew and had tasted before going to Georgia was Saperavi. I still believe that this grape variety can be a good postcard for Georgian wines. They can deliver a message of an identity to the “Georgian terroir” (if not overoaked as we saw in a few cases) with the advantage of being very use to pronounce (some other wines are much harder).

·      I also see good opportunity for some white wines. Kisi, Rkatsiteli, and Mtsvane were the white wines that we mostly tasted and, in general, they have what it takes for a white wine to be successful: They are fruity, fresh and well balanced. Just like a good Grüner Veltliner can be.

·      The prices for these wines (both reds and whites) need to be competitive. The American market is already crowed with wines from many wine regions of the world and, if the wine doesn’t have the “right” quality/price ratio, it becomes a hard to thing to sell. However, it’s important to remember that being competitive is very different than being cheap. Georgia cannot compete at the lower levels of the market, as the cost structure in some New World countries (such as Chile, Argentina, and Australia) is much lower than the one existent in Georgia. The time spent visiting wineries and tasting wines came to prove that Georgia is able to produce “European wines” (or conventional wines) of high quality. This constitutes the stepping-stone for any future marketing and sales efforts. Entering the “price war” is not an option for the country.

 
Opinion of opportunities for Qvevri wine
·      A symposium on Qvevri wines was held in Georgia in September with some famous participants on the fore, such as wine writer Alice Feiring and Isabell Legeron MW. These people are very involved in what’s called the “natural wine movement”, and one can certainly assume that this fact alone will help bring attention to the Georgian wine industry. Moreover, some of the Qvevri wines that were tasted during our trip were of very high quality (of my 5 top wines for quality, 3 of them are Qvevri wines).

·      Qvevri wines are the type of treasure that many other wine regions of the world are trying to emulate. The difference here is that, in Georgia, wines have been made in Qvevri for thousands of years. Our job is simply to educate the “right consumer “and they will become instant advocates of their new (and yet so old) discovery. 

Opinion of opportunities for wine tourism
If one searches for “Republic of Georgia” on Google, the top result comes from the BBC news: “Situated at the strategically important crossroads where Europe meets Asia, Georgia has a unique and ancient cultural heritage, and is famed for its traditions of hospitality and cuisine.”

With such good credentials, it’s easy to imagine that Georgia would be a natural candidate for the top spots in the tourism industry, as many other nice things can be said about the country. However, if you have ever been there, you probably can relate to this description: Unfinished beauty. Mountain ridges and hills occupy about eighty percent of the country, so everywhere you look in rural Georgia, there’s some sort of a beautiful background to the scene. The “unfinished” part comes from recent wars and struggles of the country. It’s very hard to find buildings that have been painted entirely, as the soviet “grayness” is still very much present in the way everything is built. This fact alone may present a few challenges to any effort to promote tourism in the country, but this becomes almost irrelevant if one listens to the story that goes around when Georgians talk about how they came to possess the land they deem the most beautiful in the world: When God was distributing portions of the world to all the peoples of the Earth, the Georgians were having a party and doing some serious drinking. As a result they arrived late and were told by God that all the land had already been distributed. When they replied that they were late only because they had been lifting their glasses in praise of Him, God was pleased and gave the Georgians that part of Earth he had been reserving for himself.
 This is probably the best marketing campaign ever created for a country! Who will not be interested in visiting the place on Earth that God had reserved for himself? On top of that, Georgia claims to be the birthplace of winemaking, where some 10,000 years ago wine production started. This is arguable, but some archaeological evidence suggests that the earliest known wine production occurred in what today is the country of Georgia. Moreover, wine is still made today in Qvevris as it was made thousands of years ago. This fact alone should help to attract tourists.

Speaking of Qvevris, one of the highlights for any wine lover who has been to Georgia must be the Alaverdi Monastery, located 25 km from Akhmeta, in the Kakheti region of Eastern Georgia. Parts of the monastery date back to the 6th century. The beautiful cathedral dates to the 11th century but, more importantly, amazingly good wines are being made there in Qvevris by the monks.  And if you love wine, this is one of those unique experiences in life. This is not just another Georgian attraction, but more likely a “must visit” to anyone who loves wine.

With all of that being sad, the Republic of Georgia is a “great unknown” to most Americans. The easiness to pronounce its name is counteracted by the confusion it brings with the state of Georgia in the United States. Besides, Georgia was until recently, “just” one of the members of the USSR, and not much of its history, geography, and culture were taught in American schools. It’s easy to assume that Americans, in general, have very little knowledge about the country of Georgia, and that definitely doesn’t help to spur the interest of “mainstream tourists”. With that being said, however, the more adventurous type of tourist will possibly be attracted to the mysteries and the uniqueness of Georgian culture. Lack of knowledge in this case is not a barrier to tourism, but rather an incentive.

Language can be another barrier: Georgian, a South Caucasian (or "Kartvelian") language is one of the oldest living languages in the world and has its own distinct alphabet. In practice, for a tourist what it means is that if a sign is not in English (there are some), you won’t have a clue of what it means. Unlike some other western languages where the meaning can be deducted by logic or similarity, you won’t be able to tell (from a sign) what a restaurant is. Therefore, touring the country without a guide or a Georgian friend can be challenging. A company offering guided tours is possibly the only recommended option for American tourists.

There’s one more important drawback to be considered: building a considerable influx of American tourists to Georgia (and its remote wine regions in the countryside) may not be feasible in the short term due to the lack of infrastructure. There are some good efforts being made in the country. Pheasant’s Tears, Schuchmann Wines, and Chateau Mukhrani are examples that it’s possible to deliver a very nice experience to American wine lovers, but this fact brings a question: Is that enough? Many may argue that it is not; especially if we are referring to American tourists who have visited Napa Valley or Champagne for example, where wineries are more like an attraction on a theme park. Moreover, there’s not enough critical mass of attractions (in this case, wineries) in Georgia that will justify the long haul that an American has to endure to get there. But then again, this will not stop the adventurous traveler from going there. In fact, not being “Disneyland” is what attracts many of these more audacious tourists. And, we all know, lack of structure never stopped tourists from going to Machu Pichu…

Top five wines for quality
  • Rkatsiteli Alaverdi Monastery, 2010
  • Rkatsiteli Pheasant Tears, 2010
  • Kisi Vinoterra, 2006
  • Mukuzani Marani, 2008
  • Takveri Mukhrani Rose, 2010
Top fIVE wines for marketability in the U.S.
My list with the “top 5 wines for quality” shows a strong preference for white wines made in Qvevri. It’s unclear at this point if this type of wine can generate a considerable amount of sales, but certainly this style of wine should be used to promote the brand “Georgia” in the United States. However, a grape variety such as Saperavi should be used as the main pusher for volume. Something similar to what New Zealand does with Sauvignon Blanc or Argentina does with Malbec.


My top 4 Saperavi wines:
·      Grand Reserve Saperavi Chateau Mukhrani, 2007
·      Saperavi Mukuzani Marani, 2008
·      Saperavi Mukuzani Tbilvino, 2009
·      2010 Wine Man Kakheti Saperavi
Recommendations
Georgia already has a presence in the US market, but the volumes sold seem to be very limited and the areas where they can be found, even more so. A viable strategy would be to sell the wines DTC (Direct to Consumer), as it would drastically expand the markets where the wine can be purchased (currently, 24 states allow direct shipment to their residents). The almost direct relation “winery x consumer” avoids the mark ups that are pertinent to the 3 tier system (winery > importer > distributor > retailer > consumer), and makes the wine more attractive financially by being able to provide a significant price reduction.

One very important question to be asked prior to any decisions on importing wines into the US is which wine style the American is interested in buying. The very traditional, flavorful (but sometimes unpalatable) Qvevri wines that have, as mentioned above, a strong pull from the “natural wine movement” subscribers; or what is called “European style”, a much more approachable type of wine to the American palate? Regardless of personal tasting preferences, it would be hard to argue that the correct answer is “both”. The more traditional Qvevri wines have an appeal on some segments of the market, but it’s unquestionable that a more accessible style should also be made available to less acquired tastes. The good news is that some of the wineries in Georgia can offer both styles with good quality.

An education web site (in English) is a must for any future efforts to market Georgia and its wines in the US. Austria and Chile have very good examples of how a site can be instructional and visually attractive in one package. This website must be useful for both efforts (promoting wines and tourism).

Cheers,
Luiz Alberto, #winelover



 
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