Sue and I were fortunate to be able to extend our visit to the Republic of Georgia at the conclusion the of United Nations World Tourism Organization’s (UNWTO) first Global Conference on Wine Tourism. The conference’s focus was on wine tourism, but we wanted to learn more about the Georgian wine industry itself.
As I explained in an earlier column, I came to Georgia full of questions about the wine industry here and with a preliminary hypothesis to help me shape the inquiry. Here’s what I was thinking.
Georgian wine is very old and the wine culture is strong. I have never been anywhere where wine was so central to the culture. Wine and vine were everywhere we looked. Wine grapes were a central element, for example, of a Soviet-era war memorial we saw in Sighnaghi. And grape vines are at the heart of the image of Georgia as a Christian nation. Saint Nino fashioned the first cross using her own hair to bind two lengths of grape vine. Wine is Georgia’s DNA.
A great deal of the wine that is consumed is produced by families for their own use and to give to friends and neighbors. The fact of such large family production necessarily shapes the market. Not much imported wine enters Georgia, for example. And a great deal of the commercially produced wine must be exported.
The Russia Factor
Russia was for many years the largest export market for Georgian wine and because of this the focus was on semi-sweet red wines made in state-owned factories and often sold in bulk. Quantity was a priority over quality. But then came the Russian embargo of Georgian and Moldovan wines in 2006 and in an instant the most important market, accounting for perhaps 80 percent of sales, was gone and did not return until 2013.
The Russian embargo was the worst thing that could have happened to the Georgian wine industry in the short term and the best thing in the long run. In retrospect it is easy to see that such complete reliance upon a single foreign market for wine sales was not a healthy situation.
The sudden loss of that market forced Georgian producers to develop new markets, improve quality to be competitive in those markets, and find strategies for product differentiation to raise margins and secure market niches.
Silk Road to China
A recent report lists Georgia’s five largest export markets as Russia, Ukraine, China, Kazakhstan and Poland although there have been substantial sales increases (albeit from a low base) to Germany, the UK, and Canada.
The recent rise in the Chinese market has been particularly noteworthy and follows on investments in Georgia wine shops and culinary centers that were established in China. There are ambitious plans to open 100 Georgian wine houses there.
One wine executive we talked with noted a “Silk Road” connection that works in Georgia’s favor. Georgia has negotiated a preferential trade agreement with China and Chinese traders and investors who visit the country taste and enjoy the Georgian wines, learn about the country’s 8000 year wine history and its Silk Road connection. Nothing could make more sense than to buy Georgian wine with its long history and connection to China. Very smart of Georgian producers to leverage this cultural advantage!
Natural Wine Buzz
Here in the United States much of the buzz about Georgian wines concerns natural wines made using the traditional qvevri clay containers to ferment and sometimes age the wine wines. Alice Feiring is a leading advocate of these wines and her recent book For the Love of Wine gives a highly personal account of her passion for them.
No one we talked with is sure how much Georgian natural wine is made by families for their own consumption, but commercial production is relatively limited. One producer estimated total output of perhaps 120,000 bottles more or less with several wineries in the 3000 to 6000 bottle capacity range. Little of this wine is sold domestically in Georgia because of its relatively high cost and the existence of family-produced alternatives.
So the focus is clearly on export to markets where natural wines have a strong presence including Italy, France and Denmark, and developing natural wine markets such as UK, Canada and the United States.
Given all of this my working hypothesis when we left for Georgia was this. The Russian market is the past, now they need to look to the future. But which future? The natural qvevri wines are Georgia’s key to differentiation in the new markets, but high quality natural wine is too narrow a category to carry the ambitions of a great wine producing nation.
Process of Elimination
My hypothesis, based on the process of elimination, was that the way forward is for Georgia to focus on increasing the quality of their conventional wines, making them in a clean international style and differentiating by stressing a small number of exciting indigenous grape varieties (perhaps red Saperavi and white Rkatsiteli and various blends) from among the dozens of native Georgia wine grapes.
In other words, I saw Georgia in a very conventional way, much as I view Turkey or Portugal, for example. That was then. What do I think now? Come back next week to find out.
Thanks to the Georgia National Tourism Administration for inviting us to extend our visit to Georgia and generously providing us with help in visiitng the wine regions and meeting wine producers.