Packaging issues prevented well-known Georgian apple producer group from starting exports

The well-known group of Georgian apple-producing companies Tiriphoni Gardens, Kvarkhiti Agro, and AgroGori, did not start exporting their products this season despite good harvests in their orchards. The main reason for this, as in the previous few years, was the difficulty in packaging fresh fruit. However, this is not the only problem faced by the group. EastFruit spoke with Zurab Gojiashvili, a representative of Tiriphoni Gardens, Kvarkhiti Agro, and AgroGori, about the current apple season for the group, what influence did the COVID-19 pandemic have, and what are their plans for the future.

– What was the harvest like this season in your apple orchards?

We got an apple harvest that exceeded expectations. From the orchards already bearing fruit, we harvested 1160 tons of quality apples of the Gala, Golden Delicious, Red Delicious, Pinova, and Red Johnaprince varieties. Next year, Fuji will be added to them. However, I can’t say that we were happy with the season as there were certain problems.

– Are these problems related to the sale of apples?

Yes, and not only sales. This season, despite the demand for our products from abroad, we were unable to start exporting again because of a problem with the packaging. We received offers from the Middle East, India, Indonesia, Thailand, Colombia, and Russia. However, we were unable to send consignments of apples to any of these countries since neither we nor our potential partners were able to purchase boxes required for sea container transportation of fruits on favourable terms. We needed 18-kg corrugated cardboard boxes with a waterproof layer, etc., including alveolar inserts between the layers so that possible damage to one of the apples did not lead to damage in the whole box. In Georgia, such boxes are still not produced although there is information that an enterprise is in the process of adjusting for the appropriate capacities and this issue may be resolved as early as the next spring. To buy these boxes from abroad at an affordable price, they can only be bought in large wholesale. In Turkey, one of our potential partners was offered at least 500,000 of such boxes which equals an amount calculated for 9,000 tons, but he needed ten times less.

The packaging problem prevented our group from properly presenting its products on the domestic market. In the spring of 2020, we registered our brand “Gorge” and now it is the first season when we started selling branded products. However, for its recognition in the market, we would like to apply appropriate stickers both to the boxes and to each apple. Meanwhile, the boxes that we managed to get were made of plastic and not suitable for international transport. The plastic boxes were also undesirable for domestic transport, but in the absence of a choice, we had to go with them and we were physically unable to apply our stickers. In addition, it is impossible to place apples in them in even layers, so we had to abandon the use of stickers for each fruit. As a result, at present, our apples in bulk packages are without identification marks and this does not contribute to the establishment of our brand on the market in order to occupy our own niche there.

To date, the brand name “Gorge” can be seen only on retail packages of apples produced by Georgian Agro House. This company buys apples from us in bulk and then prepares and distributes them itself, but the label contains an indication of a specific manufacturer, which is us.

– Did branding not really help the group in selling products?

The branding of products in itself is very profitable and it will certainly bear fruit for us, but only after we settle the issue with the packaging. We would like to be recognized both abroad and in Georgia.

– What are the sales channels for your products today?

Our regular partners, in addition to Georgian Agro House, are the Nikora and Agrohab supermarket chains as well as several other companies, which then carry out distribution themselves. We have long-term obligations with them and schedule of deliveries and prices depending on time.

Read also: Georgia demonstrates 14-fold increase of fresh apple exports in the current season!

– How do you assess the demand and prices for apples from your orchards this season?

Demand, in general, is not bad and accordingly sales of apples are going at a good pace. Today, only about 350 tons remain in our cold storage. As for the wholesale prices now, depending on the size and variety of apples, they are in the range of 1.9-2.3 lari ($0.58 – $0.70), which is slightly lower than in the previous season.

– Do you plan to keep some of the apples in storage until the very end of the season?

This year, definitely not. We have a very good refrigeration unit that allows us to store apples for the maximum period. However, due to the COVID-19 pandemic, the premises were built and equipped with a delay. We had commissioned our cold storage only on October 10th after the beginning of this season. Because of this, we had to urgently sell the first 400 tons of the harvest and part of the rest was harvested after the end of the optimal period for apples. Therefore, we do not know exactly how long our apples will retain their presentation. For next season, we will no longer have this problem; therefore, we will be able to better plan sales.

– What else is included in your plans for the next season?

Our main task is to arrange sorting, packaging, and promotion of our product both in the domestic and export markets.

* Tiriphoni Gardens, Kvarkhiti Agro, and AgroGori currently own, in aggregate, 31 hectares of intensive apple orchards – 11, 10, and 10 hectares respectively. They are located in the Gori municipality of the Shida Kartli region in Eastern Georgia. The arrangement of the orchards was started several years ago and the first harvest was in 2018. The apples from the group’s land are GLOBALG.A.P. certified. The group also has a refrigeration facility designed to store 1,000 tons of apples at a time.