À Votre Santé: Armenian Wines Attempt to Break Into World Market
The production of wine in Armenia grew by 12.3% in 2013 to some 6.4 million liters.
Production has risen in the last three years, spurred better grape harvests and export growth.
This year’s spring frosts have probably caused damage to vineyards, which will in turn impact on production levels.
Worldwide wine consumption is growing 10-15% annually. Reports of the potential health benefits of red wine have helped. This opens the door to marketing Armenian wines to a world audience.
While wine making in Armenia dates to ancient times, today, the country’s wines aren’t well represented on the world market.
2013 export figures show a positive trend. Last year two million bottles were exported; the second highest number in the past ten years. One out of every three liters produced was exported.
On average, each exported liter was valued at $4.40, a decrease from previous years. In terms of international standards, this is an average price, and allows us to see in which market segments Armenian wines are finding a niche.
Customs data shows that Armenian wine exports have grown due to the Russian market, which buys 88% of all exports. 1.76 million bottles were exported to Russia in 2013 as opposed to 1.36 million the previous year.
In 2008, Russia banned the importation of Georgian wines. It took some time for Armenian producers to fill the gap. Wines from Chile and Italy basically benefited as a result of the ban.
I believe the Russian market for wine will still grow. Today, one billion bottles are consumed annually. Armenian wines only constitute 3% of the total Russian market. Chilean wines make up 5% and this market share was obtained in the last five years. The customs value on one liter of Armenian wine exported to Russia is $3.
Experts point to China as the market with long-term growth potential. Armenia doesn’t export wine to China. Last year, Armenian wines were shunted aside in the Ukrainian, Czech and Chinese markets.
Surprisingly, Georgia is the second largest importer of Armenian wines – around 40,000 bottles at $2.6 at bottle (customs price). Georgia is followed by Latvia, where mostly inexpensive Armenian wines are exported. (35,000 bottles at $2.4 a bottle)
In 2013, exports to the United States decreased nearly by half to 31,000 bottles ($6.9 a bottle)
The most expensive Armenian wines are consumed in Italy ($15.1 a bottle). Today, Armenia exports 8,000 bottles to Italy, a fivefold increase in just one year.
11,000 bottles are exported to France. This is a 2.5 fold drop from the previous year.
The data shows that Armenian wines aren’t in high demand even in those countries with large Armenian communities.
Luckily, the twenty or so producers in Armenia have realized that they shouldn’t rely on the diaspora factor alone and need to target a larger audience.
Wine making in Armenia has attracted a great deal of investment in recent years. Producers have installed new equipment and are paying greater attention to design.
Nevertheless, Armenia currently produces 15 times less wine than in the 1980s when yearly production reached 90 million liters.