Wine Cubes: new business culture in Armenia

15.08.2017 | 11:33 Home / News / Articles /
#ONEArmenia #Semina Consulting #wine
ONEArmenia in cooperation with Semina Consulting initiated a fundraising campaign, aimed at supporting local farmers and developing winemaking in Vayots Dzor marz. Banks.am talked to Country Director of ONEArmenia Anahit Galstyan and Executive Director of Semina Consulting Vahe Keushguerian about their goals and fundraising process.

“Neglected” winemakers

“ONEArmenia tries to implement a project, which will involve more Armenian farmers in winemaking,” Anahit Galstyan told Banks.am.

ONEArmenia came up with an offer to Semina Consulting, which turned out to also be interested in implementation of a similar project. Executive Director of Semina Consulting reminded Banks.am that after the collapse of the USSR, independent winemakers were “neglected” as they did not have the required skills for making high quality wines. Consequently, for years they had to purvey grape at low prices, while they could make a few times more revenue on selling ready and bottled wine.

Wine Cubes

Vayots Dzor is the center of winemaking traditions, so the project will be implemented in this region. The program envisions selecting 3 farmers, which will receive support and consultation on winemaking and marketing. The program will also provide beneficiaries with tasting rooms for receiving guests and selling their own production.

“Semina Consulting is responsible for selecting the beneficiaries, as they have the required experience in working with locals. At the same time, we wish to choose people with entrepreneurial potential wishing to develop further with their own means instead of just staying on the same level,” Anahit Galstyan said.

2 winemakers from Areni and Aghavnadzor have already been selected. The organizers plan to construct the third tasting room near the busy intersection of Areni village.

Business cooperation with privileges

Although the initial investment for opening tasting rooms is made within the frames of the project, the initiators jointly state that “This is not a charity project”. According to Anahit Galstyan, this is exclusive business cooperation, when businesses help entrepreneurship develop.

After signing the agreements with beneficiaries, Semina Consulting in cooperation with EVN Wine Academy will teach them how to grow quality grape. After harvesting, 2 tons of grapes will be purveyed from each farmer, which will produce 2000-3000 bottles of wine to be returned to the farmers. ONEArmenia will support farmers to organize the branding process and marketing issues, as well as form supply chain. According to Vahe Keushguerian, the initial stage of the program will require farmers to grow quality grapes and provide sanitary conditions in tasting rooms.

“We will provide the temporary tasting rooms, wine production and flow of tourists, while farmers should only sell the wine. If they wish to own the tasting rooms in 2-3 years, they will have to pay certain amount of money from total sales so that the program becomes continuous,” Vahe Keushguerian said, adding that this support may grow into business cooperation with certain privileges.

If farmer does not want to buy the tasting room, other beneficiaries will use it in 2 years, so the project will be continuous.

Analyzing the experience of past charity projects, Anahit Galstyan concluded that they did not bring about long-term results, as people do not value what is given them for free.

Preventing emigration

Project authors expect it to revive Armenia’s wine culture, interrupted for a century, and increase the number of small producers in wine industry. Moreover, development of winemaking can attract tourists, who can visit Vayots Dzor not only to see local attractions sightseeing, but to also tour the vineyards and learn about winemaking history of the country.

“On the other hand, stable revenue makes country folk stay put. We want those people to stay in their home villages, earn their living there, buy cars, and we want others to see that and feel encouraged to do the same,” said Vahe Keushguerian, bringing up the example of Piedmont, Italy that had similar experience in the 80s. “In that time, all villagers sold their grape to 3-4 big factories. Some villagers traveled to France and saw how things were done in Burgundy; then they came back, bought a few barrels, made wine, and so began the revolution. If you visit Piedmont region now, you’ll see all farmers driving expensive cars, as they sell wine for EUR 24 per bottle instead of selling grape for EUR 1 per kilo.”

Project authors hope that availability of tasting rooms in different communities can serve as a precedent and encourage other villagers to join their project as beneficiaries.

Fundraising

They launched a fundraising campaign on June 8, aiming to collect USD 61,515. The money will be allocated to training courses for beneficiaries, as well as construction and furnishing of tasting rooms.

They raised more than USD 22,000 in around 2 months (37% of required sum). It’s noteworthy that people from USA donated more (up to USD 100) than people from Armenia (up to USD 20). The fundraising campaign is to last until the end of August, but given certain circumstances, it could be prolonged.

According to the head of ONEArmenia, they’re looking for partners and cooperating with local businesses apart from raising funds.

In case they collect more than indicated in the goal, they will add beneficiaries or services for them.

“If we don’t achieve our goal, we’ll stop where we get and use the money we collected. We can renew fundraising later,” said Anahit Galstyan, adding that sometimes fundraising campaigns excel expectations.

Perspectives of consumption

Around a year later, when first beneficiaries have their product ready, Semina Consulting will assist in distributing it in Yerevan’s restaurants, winehouses and cafes. The price for one bottle will make AMD 2000-3000.

As for export, project authors believe it’s too early to speak about that at this stage.

“Not because the product doesn’t have quality, there’s just not enough for export,” said Vahe Keushguerian. “Let’s say, each beneficiary produces 2000-3000 bottles. One quarter or even half of that is consumed in the place of production by tourists, while the rest goes to winehouses and restaurants in Armenia.”

At the same time, project authors don’t exclude the possibility that their beneficiaries will be able to increase production in the future and enter into the global market. They are ready to support winemakers with export too.

“We hope they won’t stay satisfied with 2000-3000 bottles and will increase production in time. And become Semina’s clients, why not?” said Anahit Galstyan.

Victoria Andreasyan
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