Cider Research and Innovation Strategy
Introduction
Cider presents a new growth opportunity for Georgia’s economy, and at this stage its promotion is at the initial stage, for example, 2020 “Enterprise Georgia” 30,000 Gel grant program as an acceptable category. Cider is a fermented alcoholic beverage made from apple or pear juice, and is similar in alcohol content to beer.
The cider industry in Georgia is very young, and local production is mostly at home or in small wineries and breweries. Several imported cider brands are already available in markets such as Georgita, Smart supermarkets and Nikora stores. The growth of the industry can be facilitated by the simplification of the tax policy which is quite high compared to other similar drinks.
However, it is important to ensure that the growth of the cider industry is sustainable. The production of cider must not come at the cost of damaging the environment or harming local communities. It is crucial that sustainable practices are integrated into the industry to reduce negative impacts on the environment and promote social and economic development.
 | Excise taxes on grape wine is 0.00Gel, on beer 0.12Gel and on cider alcohol 5% or more 5.00Gel / 5% less 0.60Gel. Developing the cider industry as a new opportunity for Georgia’s economic market requires continuous research, a unified vision and strategy that provides education, technology and other support programs. |
The promotion of the wine sector has shown that a common vision and the right strategy can accelerate rapid development of the industry, such as the creation of new wine brands and bars like ღvino underground, 8000 Vintages, Saamuri Natural Bar and others. Hence, the “Georgian Cider” association was created to develop a proper development strategy, and to unite the private sector, cider, beer and wine enterprises/cellars of all sizes and types, apple farmers, distributors, non-governmental and governmental sectors, and others. The association should prioritise sustainability and ensure that its members adhere to sustainable practices.
 | Currently, there are small and medium-sized producers in the market such as “Gotsa Marani”, “Dughili Cellar”, “Georgian Cider”, “Shareula”, “Bichikos Cider”. “Cider Club Bazaleti”, “Cider Number 4”, “Skhva Khili”, “Sadmelis Marani”, “Salobie Bia’s Cider”, “Underground Micro-brewery”, “NaturAle” and others. Although there is a small demand on the market for cider, it has grown significantly over the past two years. Local cider consumption is increasing, and globally there is a growing demand for cider, where new brands are expected to appear, including natural and craft varieties. Based on research, there is an equal demand for both sweet and dry cider in Georgia, although in the international market, sweet cider is more popular. |
To focus on the growth of cider as a whole category, it is necessary to unify different styles of cider. International brands, mainly those working on mass production, usually make cider from concentrates, while craft manufacturers use apple juice. Although cider can be made from all apple varieties, it is preferable to mix sweet and sour varieties to achieve a variety of flavors. In Georgia, at this stage, the apple varieties available in practice are generally accepted, such as Fuji, Granny Smith, Golden, and others.
| On June 3, on the occasion of International World Cider Day, a one-day event was held at “Deda Ena” Park with the help of “Taste Tbilisi“. A pop-up was made by the natural wine bar “Saamuri“, and a tasting of ten local ciders was held. Demand for cider from foreign tourists and local consumers exceeded expectations, and most of the customers were tasting the drink for the first time. By the end of the day, all the producers managed to sell their entire supplies. There was also great interest from various local bars and restaurants. |  |
The demand on the market is increasing every day, but at this stage the local production cannot fully satisfy it. Therefore, more local producers need to emerge, and the existing ones should increase their productivity.
In order to better depict the picture, we have identified seven important success factors:
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Key Challenges and Opportunities
Tax Regulations
Currently, the tax system, such as excise, is more focused on beer and wine, while other fermented beverage categories, including cider, perry, mead and other fruit wines, are not properly accounted for. Moreover, the excise tax is quite high, which actually discourages the creation and development of the Georgian cider industry.
Excise Taxes by Categories:
- Grape Wine: 0.00 Gel
- Beer: 0.12 Gel
- Cider (5% or more Alc.): 5.00 Gel
- Cider (less than 5% Alc.): 0.60 Gel
Market Access
As mentioned earlier, the demand for cider in the local market has increased significantly in the last two years. This is supported by the fact that on our Facebook page, “Georgian Cider“, the demand has increased from many bars, both from Tbilisi, Kutaisi, and Batumi. As for the international market, they expect new cider brands and especially drinks made with different technologies or varieties. All of this will be further intensified by the joint activation of local producers and the involvement of non-governmental and governmental sectors.
Availability of Apples
According to statistical data, 50% of the fruits produced in Georgia are apples, where there are about 100 different varieties, both local and imported. In addition, there are already well-tested apple varieties for cider in the world. Therefore, our task should be to study all these varieties, make experiments, and share all this with the members of the “Georgian cider” association. Management of “unfit apples” should also be done, and apples that are not suitable for the store should be distributed to enterprises where they will be processed, both into juice and concentrate, which we will use to make cider or juice.
Education
In Georgia, there is literally no knowledge about cider, which is necessary for producers, consumers, and representatives of the related field, such as restaurants, bars, and the culinary field in general. We have already heard interest from a number of chefs who want to use cider in their dishes and also create menus suitable for cider. For all this, we want to cooperate with local media and introduce a cider certification program, which we will create based on international practice. The said program is intended for producers, enthusiasts, distributors, chefs, waiters, and those who want to become a real cider specialist.
Governmental Support
As in all countries, it can be safely said that government support plays a decisive role in the development of the industry. There are good examples of this in both local and foreign markets. For example, in Georgia, the Ministry of Agriculture has been actively supporting the planting of modern apple orchards and co-financing programs for storage refrigerators for the last few years. To summarize briefly, state support in some areas is quite strong, and the same boosting is needed for the development of the cider industry. As for the foreign market, we can take Yorkshire, one of the counties of England, which is famous for its apple orchards and many cider factories. In Yorkshire, there is a state program called a ‘mobile juicer,’ which is completely mounted on a car, and an orchard owner can order it to juice the apples directly in the orchard, which can then be sold as apple juice or made into cider. However, the most important thing is that the excise taxes must be revised, which, as we mentioned before, represent a rather large barrier (see the third point).
International Support
The involvement of international organizations is the backbone for the economic growth of all developing countries. In Georgia, these organizations have been very actively involved for years, both in the state and private sector. Thanks to them, many good startups and businesses have been created, and these companies have repeatedly presented their products/services to the international market. All these methodologies and experiences will be adapted to the cider industry, so that Georgian cider will take root in both local and global markets.
Research and Innovation
Research, especially in a new market, simplifies and makes the demand clearer. Therefore, it is necessary to conduct frequent customer surveys to reveal what kind of cider, in which packaging and at what price is acceptable to them. For this, it is necessary to:
- Develop integrated pest management strategies for healthy trees.
- Improve harvesting and develop modern new methods.
- Determine optimal crop yield and production quality parameters, e.g. crop loading/harvesting, fruit size, juice quality control, and more.
- Understand the relationship between cider juice composition (e.g. sugar, tannins, pectins) on cider flavors and quality.
- Increase cider consistency by controlling juice composition/mixing.
- Identify cider-specific yeast strains and propagation methods.
- Develop alternative conservation methods.
- Develop efficiencies and cost savings in the cider production process.
- Develop strategies to enable year-round cider production.
- Determine the current storage capacity and future needs of Georgian apples.
- Determine post-harvest apple storage protocols and technologies to maintain cider quality.
- Define juice storage protocols and technologies for cider preservation.
What Does Success Look Like?
In our opinion, the 10-year plan for the cider industry is:
- Cider producers must cooperate with each other, with apple growers, laboratories, distributors, government and international organizations, large and small, so that unity and a common vision are necessary for the growth of the industry.
- We should understand that the development of the cider industry has a positive effect not only on cider producers but also on all directions included in the cycle that we have listed above.
- Georgian cider production should be the leader in our market compared to imported cider.
- Co-financing and grant programs should be established.
- The local market should have all the supplies needed for cider production.
Excise Tax:
- Taxation of other fermented beverage categories is to be reviewed.
- Cider, like grape wine, may be exempted from excise duty, at least temporarily.
Market Access:
- Georgian cider should first of all grasp the local market, but at the same time, try to enter the export markets, which will be facilitated by the experience of exporting wine and beer.
In conclusion, the cider industry in Georgia is a relatively new and growing market with a lot of potential for development. While the current tax system poses a challenge, with the right research, education, and support programs, the industry can be accelerated. The creation of the “Georgian Cider” association is a positive step in the right direction to develop a unified vision and strategy for the industry. With the increasing demand for cider both locally and internationally, it is important for more local producers to emerge and for existing ones to increase their productivity to satisfy market demand. Overall, there are many opportunities for the cider industry in Georgia to grow and contribute to the country’s economy.
