This blog has previously written about the great work being done by Hvino News, a pioneering website that's been reporting on the Georgian wine industry since 2012.
I recently had a chance to be in contact with the site's Tbilisi-born founder, Alexander Kaffka, who has had a long career in international marketing and advertising, which led to an email interview about his work with Hvino News and the general state of Georgia's wine industry. Our interview is below:
How did you get the idea for Hvino?
I must explain I was born in Georgia, and was seeking for ways to contribute professionally to the country's progress. As my experience is largely in publishing, PR and marketing, I started with writing an article for a Tbilisi-based business newspaper, in which I shared my views about necessity for better international promotion of Georgia's "signature products," including wine and tourism. At that time – back in 2012 – someone interested in Georgian products faced a complete information vacuum. Despite a declaration that wine plays a special role in Georgia’s culture and history, neither the government agency responsible for wine nor the business association of wine producers had any presence on the internet.
The feedback received after article, which was published in The Financial both in English and in Georgian languages under title "For A More Attractive Georgia: A (friendly) view from abroad", was unexpected. It was: If you know how to do it, why don't you do such promotion by yourself?
Having a small though efficient team, I decided to take the challenge. Hvino.com (Hvino means wine in Georgian) was launched in several weeks’ time. From the first day it offered daily English language news, business databases, legal documentation, public forum, augmented later by our own business analytics of wine sector. Our launch was welcomed by the mass media, including Georgian television and international wine medias.
How has the site been doing?
Hvino has immediately won popularity, which has been growing steadily since the start. Winemakers started to place commercial banner ads, helping to cover our project costs. We approached all appropriate governmental agencies and were received at high level. Everybody liked our work and our proposals; many people said they had looked forward to them. State officials promised support. The National Wine Agency asked us to produce a Russian-language version of Hvino News, and we gladly agreed.
However, advertising payments were set according to Georgia's microscopic ad rates, and the Agency’s symbolic support covered just a fraction of our expenses. Meetings and talks with high-level people at three ministries had no follow-up. So our bigger projects have been suspended. The ideas for more cost-efficient and innovative promotion were put aside. Our predominantly West European team had difficult periods, not only because of the project’s financial uncertainty but also due to differences in business cultures with Georgia. But we decided not to give up and managed to overcome the problems.
In fact, our team kept coming up with new ideas aimed at promoting Georgian wine. For example, we organized the first “Miss Georgian Wine Photo Contest”, widely covered in the mass media. The contest’s main prize was also innovative – an official postal stamp bearing the winning image. Our latest and most important innovation, launched a month ago, is the first Georgian Wine Catalogue, which essentially is a shopping guide with independent rating.
So we are very active, and our sites’ stats are always showing growth. We are lucky to have many regular readers and fans - from almost 130 countries. But while our services are obviously demanded and popular, financially after two years we are at a loss. Neither my team nor myself want to close down, but financing “from a back pocket” has its limits, unfortunately. Sooner or later we must face the question how to continue running our services.
If you look back over the last few years, what would you say have been the most significant developments in the Georgian wine industry?
Business-wise, the lifting of Russian embargo had the strongest impact on the industry. Outperforming even the most optimistic expectations by far, in the first quarter of 2014 Georgia became the 3rd largest wine exporter to Russia. While last year experts predicted 1 percent of market share, Georgian wines took 14.1 percent of the total imported wine market, outrunning Spain. This is actually larger than Georgia's share prior to the embargo: in 2005, Georgia held 9 percent of the total import market. Interestingly, Georgian and Abkhazian imports together account for 18.8%, which almost brings their total import figure to the first place (NB: Georgia considers the breakaway Abkhazia as part of its sovereign territory.)
2013 was also marked by even more important event related to wine and Georgia in general. Last December the ancient Georgian traditional “qvevri” wine-making method was approved for inclusion into UNESCO's List of Intangible Cultural Heritage. Georgia considers itself as the birthplace of wine and attaches great importance to international recognition of her priority. Earlier in 2012, Georgia registered the brand name "Cradle of Wine" in the European Union, which means that Georgia has the exclusive right to present the wine with words "Georgia - the cradle of wine".
Looking specifically at the lifting of the Russian embargo, how has that impacted the industry?
The Russian market is both a blessing and a curse for Georgian winemakers. It’s a source of immense income for them and for the country, which Georgia badly needs. The Russian market is nearly endless and, practically, it can consume any amount of wine produced in Georgia. Macro economically this is good news. This is also good for improving trade ties between Georgia and Russia. Wine is one of the few, if not the only, Georgian products that may revitalize Russian affection towards Georgia, which traditionally was in place in Russia since early 19th century.
Is it good for Georgian wine quality in long term? Open question. High volumes of trade with Russia in recent past had once resulted in sharp decrease of wine quality. It’s way easier for the winemakers to service Russia then to compete at much more demanding global markets. We could feel the impact at Hvino News too, when the winemakers suddenly lost the reason to invest in advertising, when the Russian market opened.
Looking ahead, what do you think are the biggest obstacles still facing Georgian winemakers?
As I do not consider myself a wine expert I cannot talk about the quality. I just know for sure there are some perfectly fabulous Georgian wines around, and always will be. From what I can judge more professionally, I dare say that most of the problems in marketing of Georgian products, which I underlined in 2012’s article, are still in place. I have an impression that the marketing budgets – both the state agencies’ and individual companies’ budgets - can be spent much more efficiently. I have nothing against “traditional” approach, but in 21st century there are many efficient mechanisms for products promotion. Of course, there are companies, which use modern technologies both in production and in marketing, and we have many good friends in such companies. We want, however, to have more contacts with those companies who might need our professional support. After all, we see our mission in helping to make the millennia’s-old Georgian wine industry better prepared to face the 21-century challenges.