Monday, July 4, 2016

Georgian wine marketing: A success story, or not yet? Hvino's publisher interviewed

04.07.2016. Today The Financial published the interview of Alexander Kaffka, Hvino's founder, which is focused on Georgian wine marketing.

Several years ago, you were among the first to speak about necessities and problems in Georgian wine marketing on international level, in your article for “The Financial”. What has changed since that time? 

Georgia has made a fantastic progress in wine marketing, I am glad to say. Global awareness about Georgian wines has risen very significantly over the past several years. This is especially evident compared to an almost zero level in spring 2012, when that article was published.

But why marketing? Georgian wine is well known. Has the wine quality improved over the last years, too?

I must explain why marketing is important. In Georgia everybody understands that wine traditions are among basic pieces of Georgian culture, which make it special. This is why wine is one of main “signature” products of Georgia, the country’s unique offer. This is very clear to any Georgian, but not so obvious to the rest of the world, where competition in wine industry is very fierce.

On global scale, where yearly wine production is counted by many billions of bottles, Georgia occupies a modest 22-th place, according to latest data by   International Organization of Vine and Wine (OIV).

Though statistics may not be hundred percent accurate, Georgia seems to produce less wine than Moldova or Serbia…

Sorry to interrupt, but is low production necessarily a bad thing? Large production is not equal to good quality.

That’s correct. But in global marketplace, low overall production simply means little awareness of Georgian products.  In most of the world’s markets, except for the former Socialist republics, Georgian wines are little known. These markets are full with other competitively priced and better-known offers. So, besides good quality and attractive price, Georgian wines require plenty of marketing efforts to secure “a place under the sun” in the world market.

And here we come to the importance of marketing for Georgia.

Exactly.  A cost-efficient and wise marketing is vital for a small country like Georgia, where private companies are relatively small, and government assistance is limited. Marketing support allows to diversify the export channels, increasing stability in this business sector – a sector that is very important to Georgia, also because the well-being of so many Georgian families depends on grapes cultivation. Without marketing support, producers would have to rely on traditional markets only. But the largest of them are Russia and Ukraine, which are rather unpredictable.

Cost-efficient and wise marketing… what do you mean exactly? 

When budget is limited, marketing must be focused. You can hear the term “marketing strategy” all the time. Indeed, the importance of a clear strategy cannot be underestimated. Also, it’s important to monitor the efficiency of the marketing efforts. Are they bearing fruit?  Or are we just wasting money?

Could you give any examples?

Every year, a wine producer shows products at a leading international wine show in EU, takes part in wine contest, and even wins medals. But the figure of new contracts and sales in Europe is not growing. A conservative marketing team will consider it “un-prestigious” to abandon European platform and will keep on spending budget on it.  A more flexible team will quickly look for more friendly markets, and switch to wine shows in other parts of the world.

Is that what Georgian winemakers are doing?

Yes, I am glad to see that Georgian winemakers have started to pay attention to alternative markets, and the government is helping them actively on all levels, including the highest interstate activities. For instance, in recent months Georgian Wine Centers have been opened in several provinces of China, in the framework of Georgian-Chinese cooperation agreement.

Can you name other reasons why think Georgia has made a good progress in wine marketing?

When we started to work in Georgia in 2012, there was virtually no information available in this business sector. Neither National Wine Agency (NWA) nor Georgian Wine Association (GWA) even had web sites; coverage of Georgian wine in mass medias was scarce and occasional. We launched our “Hvino News” as a daily news service in English in order to fill in this information vacuum. “Hvino News” received a warm welcome and soon - with support from NWA - we launched the version in Russian language.  Thanks to Russian news service, read in the countries where Georgian wine is traditionally popular, we managed to double the readership of Georgian wine news, reaching over 170 countries (i.e. every country of the world).

So, is Georgian wine news indeed read in every country? 

That’s correct. We register readers from virtually every country, while the largest audience of “Hvino News” outside Georgia comes from USA, Russia, and Great Britain.  Internet traffic analyzers, such as Google Analytics, can easily monitor this. Speaking about Google, I am pleased to tell that in 2016 Hvino became the first Georgian specialized news resource added to Google News. In addition to news, Hvino introduced services such as first online and mobile catalogue of Georgian wines, and first interactive map for wine tourists in Georgia.

I see that your contribution is important, but what are the other factors, which led to the marketing breakthrough?

Our contribution is mainly technical. A news service such as Hvino is an important tool, but it is useless without actual content. It’s the newsmakers who have done an excellent job, which is now bringing the marketing fruits. First of all, our newsmakers are the Georgian winemakers – companies and enthusiasts – who are innovative, persistent, and effective people.

Also, NWA – the government agency – has drastically improved its marketing activities. NWA has been able to select competent and well-connected “ambassadors” in key markets, who played central role in promotion and PR activities in countries such as China and USA. It is important to note the wine agency works in concert with other Georgia’s government bodies, such as the foreign ministry. The tourism authorities is another effective partner – and we see that United Nations World Tourism Organization (UNWTO) has decided to host the first conference on wine tourism in Georgia to demonstrate the country’s tourism potential and promote Georgia as a wine homeland. When possible, NWA’s efforts are supported on the highest level, by the prime minister and other top officials. A bright example is the recent meeting with French president, during inauguration of a new wine culture center in Bordeaux, which is soon to host Georgian wine history exhibition.

GWA’s contribution to international promotion of Georgian wine is also growing. For example, in cooperation with Britain’s Institute of Masters of Wine, the Association organized their first visit to Georgia. After the visit, “Hvino News” has interviewed the British experts, who were greatly impressed by Georgia and shared interesting insights with our readers.

What can be done to further to raise popularity of Georgian wines?

That can be a subject for a separate interview! When I say Georgia has made a huge progress, it does not mean that current situation is already perfect. It’s much better, but still leaves much to be desired.

Please summarize your recommendations

The first is consistency of efforts. Yes, we have seen quite effective marketing campaigns supported by Georgian government. But we do not know if the government would afford to run them in a long run, and how costly they are for the taxpayers. Every campaign has a short life span. If not backed by a long-term planning, campaigns may just drain resources, which otherwise could have been put to a more effective use.

Of course, the long-term planning must be weighted very carefully. For example, when the government’s support is limited, it seems important to keep the balance between the Georgia’s “high-end” wines vs. mass-produced products. Their target groups are very different, and cost-efficiency of marketing efforts in these two directions must be measured.

Another open question is the balance between the “target countries”, especially when some of them have huge own wine industries.  Perhaps some public debate involving industry professionals would be useful for selecting the strategic priorities.

Last but not the least, the public relations. The level of PR is wine industry is still low, except for a handful of private companies.

Maybe your team will help to train some PR professionals for wine industry, to make it even more competitive?

I think that could be good idea. If such people come up, we would do our best to assist them.


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