Georgia Moves into the Premium Tea Market

Alu Gamakharia, an internally displaced person (IDP) from Abkhazia, has been living in the Tskaltubo district of Georgia for more than 10 years. In an effort to survive in his new environment he got involved in the tea industry and set up a mini tea-processing factory called Ternali-Tea Ltd. in the village of Ternali. His efforts made a difference not only for his family but also for 42 households whose members are employed either as full-time workers at the factory or as seasonal workers in the tea plantations.

The existing machinery allowed him to produce only low-quality, less expensive tea for export to lower-end markets in Mongolia and Russia. “There was a great demand for this tea in these countries. Russia was the biggest market for our tea, which, as a result of last year’s developments, has been closed for us. As for Mongolia, in recent years its market has been captured by low-quality, cheaper tea from China with which we could not compete,” Gamakharia said. To meet this challenge the company developed a new strategy focused on the production of premium green tea, a product that is in highest demand. “Ten years of experience has convinced me that the production of a low-quality, cheap tea has no prospect in Georgia and its future lies in producing a higher-quality, higher-value product such as premium green tea.”

In support of this effort, ACDI/VOCA's AgVANTAGE project has helped Ternali-Tea get new equipment to sort, spin and dry tea leaves. This has enabled the company to shift from low-quality tea production to production of premium green tea. As a result, the factory is now able to produce over 10 tons per year of high-quality, competitive green tea, which is currently being shipped in bulk. The price of this bulk product is $7 per kg on the domestic market and $15 on the export markets, 10 times more than the unit price of the low-quality tea.

“Today, the Georgian market is full of low-quality imported tea while the plantations in the country remain neglected and overgrown. By shifting to quality tea production we aim to meet the demand of not only the domestic market but also to enter higher-end export markets,” Gamakharia said.

In order to ensure a reliable supply of consistently high-quality raw material, the company has leased a 10-hectare production area, which will provide 45 tons of high-quality raw material for the factory per year.

“The establishment of such mini-factories will help attract investment in the country and especially in the tea industry,” said the Georgian Deputy Minister of Agriculture Mirian Dekanoidze.

Green tea is a popular beverage not only in Asia, but also in Europe and America. Due to its subtropical climate, the tea grown in Georgia has a special flavor and organic characteristics.