18.Feb .2020 17:39

TBC Capital: Georgia is among the Top 20 wine exporting countries globally


TBC Capital has published a research about wine industry in Georgia. According to the research,Georgia is among the Top 20 wine exporting countries globally. With the export value of USD 197mln, Georgia ranked 18th in 2018, improving its position by one place from the previous year. As of 2019, the export value grew to USD 223mln.

Georgia’s wine export of 2019 improved the record of 2018, growing 13.2% YoY. Reaching USD 223mln in the last year, the value of exported wine has been increasing with CAGR +23.5% in the last four years. The proportion of exports to total turnover of wine companies is expected to reach 83% in 2019, up from circa 79% in 2018. The sizable share of exports in total turnover comes with no surprise, as Georgia’s wine production largely exceeds the local consumption and wine, the fourth largest export good of the country, generated 5.9% of Georgia’s total export revenue in 2019. For 2019, estimated volume of export exceeds 93mln bottles.

Russia is the leading buyer of Georgian wine by a sizable margin. Georgia generated 59.8% (USD 133.3mln) of total wine export revenues in 2019 from Russia, with the proportion in volume standing even higher at 61.5% (43.1mln litres). For the last decade, the exports of Georgian wine in China grew from negligible USD 0.6mln in 2009 to sizable USD 18.9mln in 2019 and the country became third biggest importer of Georgian wine worldwide. Exports in Kazakhstan were down to USD 8.5mln in 2019 from USD 16.5 five years ago, now close to 2011 level. The sales picked up in Ukraine at a +31% CAGR between 2015 and 2019 and reached USD 23mln, still lower compared to the USD 30mln in 2013.

Mid-to-high class wines11 represent c. 44% of Georgia’s total wine exports. Khvanchkara is the most expensive, with average export price standing at USD 7.63 in 2019, while the prices of other top exported wines ranges between USD 2-3. Alaznis Veli are the top exported Georgian wines, generating 28% of the total wine export revenues and this share has been stable for the past five years. Share of top 4 wines from Rkatsiteli grapes make up to 21% of exports, while share of top 5 wines made solely or partially from Saperavi constitute 63% of export.

Red semi-sweet is the most popular exported wine type, with red dry as a runner up. Together they accounted for 73% of total wine exports in 2019. The high proportion of these wines in export is a result of consumer taste in the CIS that holds the lion’s share in Georgia’s wine export.

Wine export structure differs markedly by destinations. White semi-sweet wines represented 35% of wine export value in Poland in 2019, while red dry wines captured 53% of value in China. As for Russia and Kazakhstan, over half of the exports (55% and 51%, respectively) were red semi-sweet wines. The breakdown was similar for the rest of the CIS and the overall pattern was broadly unchanged from 2018.

Tastes on target export markets are heterogeneous: European consumer prefers classic wines, light and dry. Color is not of a high importance, although of Georgian product, red dry wine matches their taste better. Consumers from Russia and other CIS countries prefer sweet and semi-sweet red wines, with higher concentration of alcohol. As for the Chinese market, high-income individuals tend to consume more dry and semi-dry wines, while people with lower income mostly purchase sweet and semi-sweet wines.