Over the past 10 years, the wine industry in Armenia has seen impressive growth. The country, upholding over six-thousand-year-old winemaking traditions which were to some extent obscured by brandy production in the Soviet era is now experiencing an era of Renaissance. An increasing number of new producers with fine wines are entering the market, reviving the wine drinking culture and setting higher bars of excellence for competition and growth.
This unprecedented boom was conditioned on the one hand by large investments made by the private sector in the field.
On the other hand, the state and public actors started channeling resources and funds to support the sector, particularly through establishment of Vine and Wine Foundation of Armenia (VWFA) – a governmental institution responsible for development of the sector and operating under the Ministry of Economy of the Republic of Armenia and GIZ through the Private Sector Development and Technical Vocational Education and Training in the South Caucasus (PSD TVET) Programme has actively been supporting the sector since 2017 jointly with the Foundation and other public and private partners.
The support measures are aimed at for one thing to enhance and promote the wine drinking culture in Armenia – a country chiefly famous with its brandy production in the Soviet times. For another thing, efforts are taken to enhance visibility and recognition of quality Armenian wines outside of the country’s borders and positioning of Armenia as a winemaking and wine travel destination.
However, the Corona Pandemic posed major challenges for the global economy and wine sector was no exception. The pandemic had a devastating effect on winemaking and wine tourism decimating wineries’ on-premises sales. The challenges particularly included:
- almost no demand for wine tourism products – abrupt decline in wine sales in the domestic and international markets;
- interrupted supply chains;
- unstable financial situation of especially small and medium winemakers due to lack of income.
As of 2020, the total production of wine in Armenia made 12 676 000l, going down by 13% and the export volume decreased by 6% making 2 622 000l.
Naturally, the small and medium-sized producers were the first to be affected by the new realities caused by COVID. The lockdown mostly targeted homemade wine producers and small and medium producers whose target was the tourist flow.
Creative Strategy to tackle Corona effects for wine producers: Wines of Armenia Online Store as Virtual “Ambassador” of Armenian Wines in EU
GIZ together with its partners developed a series of strategies and measures to address the above-mentioned challenges, especially in terms of recognition and selling of Armenian wines outside of its borders and boosting wine travel in Armenia.
As part of the activities aimed at visibility and promotion of Armenian wines in the European market, GIZ in cooperation with Vine and Wine Foundation of Armenia initiated “Wines of Armenia: EU Logistics Hub” project, comprised of 3 components:
– an online e-commerce platform for direct sales of Armenian wines in Europe – www. winesofarmenia.store
– a single warehouse where all the wines presented in the platform will be stored – based in Berlin.
– a service centre for providing information and guidance on Armenian wines, how to get them, at what prices etc.
How www.winesofarmenia.store helps tackle the pandemic consequences for winemaking and wine travel?
The online platform and single warehouse address several issues for especially small and medium-sized Armenian wine producing companies:
– www.winesofarmenia.store enables small and medium-sized producers to sell their products online in new markets which is almost vital in times of the pandemic, given the limited market opportunities and decreased tourist flow in Armenia.
– The platform gives an excellent opportunity for those wine companies having no representation in Europe to sell their wines to the market. Because of small volumes of production, it is often difficult for Armenian companies to find partners willing to import their wines into the given market.
– It encourages tourists visiting Armenia and trying Armenian wines to buy them in their home countries in Europe through the platform. This will indeed enhance visibility of Wines of Armenia brand outside of Armenia’s borders making the platform a unique Ambassador of Armenian wines in EU.
– The platform gives comprehensive information about Armenian winemaking and wine industry attracting potential tourists and wine lovers to the country, rich in tradition and currently seeing a revival of winemaking.
– Through the single warehouse the small companies optimise their transportation/logistics costs in Europe (e.g., while taking part in international competitions, expos). Based in Berlin, Germany, the warehouse gives Armenian wine producers a chance to transport their wines throughout Europe in a more accessible and affordable way, thus saving their time and resources.
The creativity and innovativeness of the platform is that being a public-private cooperation result, it does not showcase random wines; the selection of wines doesn’t depend on the will of any importer, either. The key principle underlying the selection process is the quality assured through a blind-tasting contest organised by the state and supported by GIZ. Thus, all the producers meeting the quality standards, irrespective of their volumes of production and sizes can be represented on the platform and thus be sold throughout Europe.