Georgian wine eyes USA market
02 June, 2011
Georgian wine eyes USA market

Georgian government hopes to fill the gap of Russian market in its wine export by twice bigger US market -the world’s largest wine consuming country. 

Georgian Wine and Tourism Industry Delegation of Georgian wine company owners and heads of prominent Georgian tourism companies will be visiting the US - New York/ California from May 30 to June 8 to witness the wine tourism benefits and acquire some skills. The USAID supported Economic Prosperity Initiative thinks Georgia may get bigger economic benefits

from wine tourism rather than of wine export and recommend developing this industry as soon as possible.

Whatever the prospects for wine tourism in Georgian wine industry, it obviously has to find new export markets to reimburse the loss of Russian market [Georgian wine export still lags behind the pre-Russian-embargo data by 74%] and the world’s largest wine consuming US market lures to this end.

Georgian government believes the US market, with roughly 3 billion liter wine consumption may replace Russia consuming just about 1.5 billion liters according to the US-based Wine Institute statistics.

And although the US market cuts about 3% in total Georgian wine export [unlike 90% of Russian share before embargo] some sector pundits believes it can easily replace Russia as number one importer of Georgian wines if  marketing campaign is duly deployed.

“But it will happen by producing delicious world-class wines, by offering a unified message about remarkable wine culture through the Georgian Wine Association, by delivering the wines at reasonable prices vintage after vintage, and by using passionate and experienced US wine professionals as partners in the effort to do the right job on the American side. And when it does happen, it will have been a complete process and therefore have the highest chance of lasting success,” Keith Johnsen, President of Daqopa Brands, focused on wine import from Georgia and Chile to the US as well as working with a number of producers in Washington, Oregon as well as California, said in the on-line interview with Georgian Journal.

According to him, at the US market that is literally awash in wine all is about value and the bulk of all Georgian wines must be sold for USD10-15 to be successful there.

“Anything over USD 20 remains a difficult sell, and while there is still some activity in that price-range, it is much more limited in volume and usually reserved for recognized regions and brands (such as Napa, or France), and in many cases those wines are also at new lower levels and relative values themselves (for instance, what was previously USD 35 –40 might now be seen regularly for USD 24).  It is critical to remember that we are pioneering a whole new category and country of origin here, with unknown grape varietals - and high prices will be a significant barrier to trial,” Johnsen said.

Cristopher Branch, a wine lawyer in Los Angeles, doubts that the name confusion of Georgia as a country with the name the US state Georgia that does not produce wine may make Georgian wines difficult to sell at the US.

According to Karl Storchmann, Economics Department at New York University, and Managing Editor of Journal of Wine Economics, the US market is quite difficult unlike Russian market for each state has its own rules and he doubts that the US market can replace Russian one to Georgia.  He recommends Georgian wines be focused in a few states like NY, FL, NJ... since there is a large Russian-born and Georgian-born population, “moreover the west coast states don’t drink a lot of imported wines”.

Johnsen strongly disagrees with both opinions.

“Italian, French, Chilean, and Greek wines - as a few examples - are hardly consumed only in areas where those ethnic groups live and shop!  This formula has been tried for years now, with more Georgian wines being offered in Brighton Beach NY than any other single sub-market - and it has not produced any appreciable results.  It is simply “preaching to the choir”, and there is very limited sales potential in doing that…This will never do anything to make saperavi the next malbec,” he said.

Of confusing names of Georgia as a country and Georgia, the US state, he thinks it can be solved by educating American consumer. On the other hand “confusion” can do a service if wrapped duly in marketing tools.

“Retail stores will put them [Georgian wines] on the shelf or display them in the imports section; and written words, on menus or store signs, can easily make immediate statements that  (“From the Cradle of Wine”, or “The World’s Oldest Wine Region”, for instance) that catch attention and generate intrigue.  It is an underestimation of the American consumers’ intelligence and curiosity, and the American merchants’ ability to teach and share, to think that this Georgia-state matter is significant.  If nothing else, it creates amusing conversation - which is always an excellent first step,” Johnsen said.

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