EXPERTO INDULGES TEA-LOVERS BY REVEALING KEY INSIGHTS ABOUT THE GEORGIAN MARKET
- Any weather will seem to be perfect for a hot cup of tea for genuine tea-lovers. And yet, before this Winter officially lets mighty March kick in, it seems timely to discuss the Tea business in Georgia. Whether you drink your tea in a tea-house, restaurant, café or make your own brew at home, there are found plenty of interesting infusions out there to satisfy many diverse taste-needs in Georgia.
Before revealing the findings of our qualitative research, let us look at the latest official data the National Statistics Office of Georgia has on import-export of both green and black teas in the country. We have generated a comprehensive graph that depicts these external trade figures for years 2009 – 2016 (no need to reiterate that the 2016 data is preliminary and shall be adjusted in the coming month by the Office). It is clearly visible that when it comes to black tea, Georgia imports far more of it than exports. However, we were pleasantly surprised to learn that the export of green tea steadily exceeds the import figure year over year. It can also be indirectly caused by the fact that Georgians still do not enjoy drinking green tea as much.
Let us take a closer look at the industry players in Georgia. According to EuroMonitor, “Unilever Group led sales in 2016, recording a value share of 20% due to the popularity of its Lipton brand, and was followed by Geoplant with its Gurieli brand (17%). In third position in 2016 was Suntea Group International with its Mariam brand, which recorded a value share of 9%”.
We shall start by zooming in on the newest local player – Kona, a new Georgian brand of tea and herbal mixes that hit the market at the very end of year 2016. The entity is in the phase of establishing itself as a premium quality nonindustrial brand and their motto is ‘PaucaSed Bona’ that in Latin means ‘quality over quantity’. Ms. Natalia Partskhaladze, Executive Director of Kona explained to Experto that “we started as an experimental farm in the Lavriskhevi village where we constructed a small greenhouse by ourselves. Later, thanks to the support from ENPARD, we installed a proper drip irrigation system and established a small enterprise. In 2014 we applied for the program and thus received a EUR 7,000 grant from them. In spring 2016 we already had a garden and a small enterprise where our tea gets dried and packaged”. But what turned out invaluable for Ms. Partskhaladze was the guidance the ENPARD program provided to her startup: “we were assisted with building the brand identity and besides the mentioned funding we received numerous consultations and underwent trainings that helped us deepen our knowledge regarding tea production”.
Kona currently has nine unique blends, as well as black, green and bilberry teas. As Experto has discovered, it is a Georgian brand with a global dimension: “in our bouquets we only use Georgian tea from Guria, herbs that we grow in our greenhouse and wild-collect all over Georgia, along with spices and flowers we import from all over the world”, elaborated the Executive Director of Kona. In fact, their strategy is to focus on brand development, marketing and technology of post-processing rather than primary production, so they welcome for cooperation all Georgian farmers willing to grow and dry aromatic herbs for Kona herbal blends.
Moving on to the biggest Georgian tea brand, Mr. Murman Gochaleishvili, Director of Geoplant-Ozurgeti packaging plant told Experto that they started operating in September 2015 with an upgraded setup: “we package Gurieli Tea, as well as different types of fruit teas. Raw materials come from Laituri and Naruja tea plantations in Ozurgeti, owned by Ltd. Geoplant.”. Mr. Gochaleishvili believes the Gurieli Tea is uncontested in Georgia: “all Georgian products should eventually outperform imported counterparts in terms of price and quality. After all, Georgia offers all the possibilities to produce ecologically clean and quality products. When it comes to Gurieli Tea, it has no strong competitors, let alone weak competitors. Our market share is significant”.
Speaking of quality, Natura Tea Company represented by its Director Mr. Berdia Elgujauri, owns a 41-ha tea plantation where they cultivate premium quality tea leaves. The entity also owns a tea processing factory equipped with the equipment compliant with modern standards. “Our company is focused on ecologically clean production. Since 2015 we have been producing high quality natural teas for which we hand-pick tea leaves. Around 30% of our products are exported to various European Countries and the remaining 70% is sold locally in Georgia”, explained the Director to Experto. He further elaborated that since the plantations are spread over in ecologically clean areas, Georgian teas thus naturally gain special taste and therapeutic properties.
The Director of Tkibuli Tea, Mr. Ucha Dalakishvili told Experto that according to his assessments, the real Georgian teas occupy around 20% of the local market share, not more. They have targeted other countries to increase sales: “Our company has been operating since year 2004 and so far, we have managed to export our products to Russia, Ukraine, Czech Republic (already referred to as Czechia) and Turkmenistan”.
Mr. Shota Bitadze, founder of Ltd Bitadze had a different approach: “I have been involved in the tea business since year 2000. We help family businesses set up tea production with the standards we have elaborated based on the experience gained in China.” The founder explained to Experto that they produce 30 types of ecologically clean organic teas: “We are members of the Association of Organic Tea Producers and all of us produce tea under one brand name – ‘Georgian Tea 1847’ and use the same logotype - ‘Lady in Red’. The products are sold in Georgia, as well as exported to Russia and Eastern Europe.”
After mentioning an Association, we move to the Nagomari Cooperative, headed by Ms. Nana Kirmelashvili. “Nagomari tea appeared on the Georgian market in 2015 and due to high-quality of tea leaves of our products, it easily gained a high-end niche locally”, explained the Chairwoman. The cooperative has been founded by 6 persons and they currently produce 4 types of Nagomari teas: “We are working on adding fruit teas and other products to our production line in the nearest future. In fact, in cooperation with CARE International Georgia we plan to inject USD 150,000 aimed at rehabilitating abandoned tea plantations in Village Nagomari, as well as at getting needed equipment”. Together with PR Academy they plan to organize a special course that will be called ‘Together with a Cup of Tea’. Ms. Kirmelashvili expressed concern to Experto that she has heard Chinese FDI will be targeting the Georgian tea sector: “This could be a very good thing, I just personally would love if Georgians managed to master and assimilate resources themselves”.
Director of Milmartea, Mr. Giorgi Maisuradze mentioned to Experto that there is a vivid shortage of organic premium tea worldwide and if the country aims to produce only ecologically clean teas, we will be able to compete even with foreign premium tea companies. He further elaborated that Milmarti was founded in 2011 on the basis of the Shemokmedi Experimental Tea Factory initiated back in 1975 and “we focus on producing ecologically clean green and black teas under the Shemokmedi brand. Our annual production is currently at 15 thousand kg using the high quality Japanese technological line. Moreover, in 2015 we started producing ecologically clean teas from leaves of wild blueberry and blackberry”. Besides Georgia, Shemokmedi products can be found in Russia, Czechia and Turkmenistan. Mr. Maisuradze also expressed concern that Georgian tea producers have to unfairly compete with nicely packaged low-priced imported tea products that are usually saturated with additives and expired substances which creates a delusion that locally produced teas are overpriced: “I am delighted to see that more and more local consumers become demanding when it comes to quality products”.
To conclude, “with my experience, Georgian customer is sophisticated, curious and loyal to ‘Made in Georgia’ and clean products”, stated Ms. Partskhaladze, the Executive Director of Kona. Off we go to learn a bit more on how to brew teas and infusions properly without unintentionally diminishing the beneficial properties this ancient hot drink has to offer. Special thanks to the coffee-lovers for bearing with us till the end of the article.