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IDS Borjomi Georgia Focuses on Doubling Sales Globally, Sets Big Hopes on Newly Reentered Russian Market

Published: May 13, 2013 | 1:14 pm
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General Director: “We have a proven track record of 17 years and try to always remain one step ahead of our rivals.”

CT DIGEST

The four brands (Borjomi, Likani, Bakuriani and Borjomi Springs) produced by IDS Borjomi Georgia are all four season brands. However, summer is still more associated with mineral waters. “our brands are whole season products and we got certain communications for each brands during whole year, but despite of this, we plan more active and more colorful activities for high season which starts from mid of April and lasts till the end of September.  We are going to offer to our consumer different activities. It depends, which brand is your favorite and which brand you are consuming,” Mr. Zaza Kikvadze, General Director of IDS Borjomi Georgia, told CT Digest during an interview.

- What are the major news people should expect from their favorite mineral water company during the upcoming hot season?

- We are doing market researches all the time and we know what we should do for consumer satisfaction. We know what kind of interests and needs have people who are consuming Borjomi, LIkani, Borjomi Spring and Bakuriani. Specific activity is developed for each brand directed to their target audience.   As you are already aware, Borjomi is the only brand in our brand portfolio which is sold abroad. On strategic export markets (Ukraine, Azerbaijan, Belarus, Lithuania, Latvia, Estonia, Kazakhstan) we have local marketing teams and they plan their activities according to researches we have conducted for each export market. Of course, these activities go in one pace of our main direction. In this case just implementation and delivery of message could be different as it should be done in accordance of local needs, tastes and habits.

- In March Borjomi received the registration permission in Russia. Following to the Russian experts’ visit at Georgian mineral water plant Borjomi on February 26 of this year, the company was included in the list of companies authorized to be registered by Rospotrebnadzor. However, later the Russian state customer rights’ service, unexpectedly blocked comeback of Borjomi to the Russian market for undefined period. In your opinion, what could be the reason for sudden change of mind? How do you see the further development of the situation?

- It was a technical procedure which usually takes time. For now, as you must know everything is going by its pace. Several days ago we received official letter from “Rospotrebnadzor” about our brand’s registration in Russian Federation. So, I hope in nearest future we will start export to Russian market.

 

 

- IDS Borjomi Georgia owns four brands: Borjomi, Likani, Bakuriani and Borjomi Springs. Which of the above-mentioned brands are best sellers on export markets/locally?

- Once again, on export market we sell only Borjomi and in CIS countries it is N1 brand on imported mineral water segment. Local market best sellers are: Likani as a carbonated mineral water and Bakuriani as still mineral water.

- What’s the volume and sales value of the production issues by IDS Borjomi Georgia annually? In 2012? Planned in 2013?

- In 2012 we produced 30% more mineral water then we had produced before Russian ban in 2005.

- Which new markets does IDS Borjomi Georgia plan to enter in near future?

- Today we sell our production in 40 countries worldwide. As Russian embargo is removed we will enter Russian market. Our main strategy is to strengthening the brand on existing markets. So we’re more focused on working very hard on already existing markets rather than to think about widening up our geographic borders.

- IDS Borjomi Georgia is a part of IDS Borjomi International. Its biggest selling brand Borjomi has established its presence in over 30 countries worldwide. What is the main marketing strategy while dealing with such a prominent traditional brand?

- We sell our product in 40 countries worldwide and main idea of our brand is to show everyone functional benefits of our brand. In all our marketing activities we try to explain people that due to unique mineral complex of volcanic origin found in Borjomi this natural mineral water works as a ‘shower from within’ and cleans body from inside. It’s efficient by prophylaxis and treatment of the digestive system and metabolism diseases.

 

- IDS Borjomi Georgia exports its production to North America, Europe, Asia, Pacific. What is the price policy run by the company as far as export markets are concerned?

- Borjomi is a premium brand and the price is defined due to this segmentation. Also, as for export markets, price is different for each country. We calculate it according to logistic expenses as well.

-Two factories operate in Borjomi city: Bottling Plant N1 where Borjomi and Likani are produced in glass bottles, Bottling Plant N2, where  Borjomi, Likani, Borjomi Springs and Bakuriani are produced in PET bottlrs. What’s the total number of people employed by IDS Borjomi Georgia? 

- After renovation which was held during the current year we changed policy and now bottling plant N1 works for production of Borjomi in glass and PET while the plant N2 produces Likani, Bakuriani and Borjomi spring. The total number of our employees, in plants N1,N2, also,  Borjomi mineral water – which works for mineral water extraction and plus employees in the head office in Tbilisi, is 700 people.

- Are you familiar with the new labor code initiative? What are the pros and cons of the document?

- Of course, this document became object of our interest. We studied the code draft in details and think that it is a positive change, as the new version will protect employees’ interests better. Our company precisely observes its social responsibilities and welcomes any initiative in this direction.

- Your company has ISO 2 2000:2005 certification. How important is it in respect to export markets? 

- It is quite important. We got ISO 22 000 in 2007 right after Russia declared embargo. It was again a  confirmation of high quality and European standards we are using while producing mineral water brands.

- IDS Borjomi Georgia has expressed negative position regarding the government’s decision initiating three-time increase of fee on natural resources. How do you see the cooperation with government officials for settling the issue? Does IDS Borjomi International have a foreign experience of dealing with high fee?

- Well, we cannot be agreeing with the latest decision of government regarding three time increase of fee on natural resources. We study international experience and as we already declared Georgia will be the only country in CIS and Europe where with such huge fee. We hope this decision is not  final and more discussions will be in parliament. Let’s see.

- “Till now the fee on natural resources for our company was the highest on the market and it made EUR 5,9-m3 while for other mineral water companies the fee was EUR 4,1-1m3,” was said in the above-mentioned statement made by your company. Why does IDS Borjomi Georgia pay the highest fee on the local market?

- It was the law issued by our government and we should obey the law. They thought that Borjomi is well known brand worldwide, so company should pay more. We do not agree with this formulation and still we think that there shouldn’t be any differentiations between companies.

- As for the local market competition, how tough is it? How impressive are IDS Borjomi Georgia’s shares?

- IDS Borjomi Georgia is the market leader in Georgia and we are proud of it. Yes we have competitors on the local market. We have a proven track record of 17 years and try to always remain one step ahead of our rivals. Competition provides a splendid stimulus to businesses; fair play is integral to the business culture.

- What are the main advantages of the brands produced by your company why people should choose IDS Borjomi Georgia production?

- It is the highest quality and standards we use, uniqueness of each brand, its origin and its resource  and what’s most important- functionality of each brand. Now I will try to introduce  to you all functional benefits for each of our brand in brief: Borjomi – best purification, cleans body due to volcanic origin; Likani  – vitality, gives vital forces due to vital minerals; Bakuriani – best natural renovation – due to opti-mineral complex and 100% absorption by body; Borjomi Springs – Most tasty water and Best water for fine dining.

- What is the most ambitious plan for IDS Borjomi Georgia in a long-term perspective?

- We have certain approved strategy for long term activities and according to this strategy we are working very hard on existing markets for doubling sales figures. We’re always trying to implement innovative projects, like we did in 2007 when the company started the production of the new mineral water brand Likani. I should say that Likani case is one of the success cases in our portfolio.  Also, our main direction is rehabilitation of our bottling plants and existing infrastructure. It is a non-stop process. As you know this field is distinguished with fast development dynamic and we should be relevant. So I have to admit that for today we have modern and up-to-date plants but we keep developing and that’s why I said that it is a non-stop process.

 

 

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