Issue 2, 2012. April-May



2011 saw the Georgian mineral water industry achieve its highest sales levels since the 2006 Russian embargo, largely due to the growth of exports. New markets and new competition are fueling a boom for the country's naturally bubbly beverage.

Maia Edilashvili

In 2011 Georgia exported 71.3 million liters of mineral water, worth $47 million, a record number of sales since the 2006 Russian embargo on Georgian exports. This is also extremely close to the market's 2004 peak of 74.9 million liters and a 49% increase on 2010.

The two largest Georgian mineral water producers, Healthy Water and IDS Borjomi Georgia, credit new markets and an increase in demand for the growth in sales last year. Both companies are exploring markets in the Middle East and Africa.

"I can say without hesitation that since the start of the Russian embargo (in 2006), the year of 2011 was the most successful," noted Nitsa Cholokashvili, PR manager at IDS Borjomi Georgia, in an email interview.

"Our local and foreign sales in 2011 increased 22 percent compared with 2010."

IDS Borjomi, which produces Borjomi, Likani, Bakuriani and Borjomi Spring brands, sends its sparkling and still waters to 40 countries worldwide. Cholokashvili said just 35 percent of their production is for domestic sales; the rest is exported around the world.

IDS Borjomi Georgia's competitors also had a good year: Levan Chikovani, the exports manager at Healthy Water, said sales to the US were particularly high. "The demand grows from year to year," he said. "As the demand grows, our sales increase."

Healthy Water sends 15 percent of its production to 15 international markets. Israel, Turkey, Kazakhstan, the Baltic countries and Ukraine are the major consumers, Chikovani noted.

"Speaking about the US market, for instance, every year we intensify cooperation with local partners, organize promotional events to increase brand recognition and thus we boost supplying restaurants, supermarkets and other various stores," he said.

"So I can say that the expansion of the distribution network pushes our sales."

While sales are up, the number of producers is small: Euromonitor International's July 2011 report "Bottled Water in Georgia" noted IDS Borjomi Georgia was the country's top producer in 2010, with a 46 percent trade volume share of the market. Healthy Water Ltd., which produces Nabeghlavi and Bakhmaro brands, came in close second with a 45 percent share. A moderate 3 percent share was held by Igrika-97 Ltd., which produces the Sairme brand.

A third company, Aqua Geo, also entered the market last year, introducing Sno, a new mineral brand. Exports to Azerbaijan and Ukraine are planned, as are sales to the Middle East and Asia.

But IDS Borjomi's Cholokashvili said the increased competition at home will help the company produce better products - eventually leading to more sales.

"The competitive environment helps brands develop rapidly," she said. "This is why we appreciate healthy competition. We respect our rivals and always try to be a step ahead of them."