The Covid-19 pandemic led to a number of financial challenges for SMEs in Georgia, slowing down production processes because of health guidelines and restrictions. At this critical point, the European Union (EU) through its ENPARD and EU4Business Initiative, Food and Agriculture Organization of the United Nations (FAO) and Georgia’s Ministry of Environmental Protection and Agriculture (MEPA) teamed up to develop a funding mechanism to support Georgian farmers during the pandemic. In March and December 2020, the program awarded 132 matching grants to Georgian farmers, entrepreneurs and SMEs in rural areas. Today, these SMEs have adapted to the new reality, expanded production and prepared their companies to enter local and international markets.
If you have ever wondered whether it is possible to run a startup in the mountainous Adjara region of Georgia, the answer is YES. Inga Gaprindashvili, a professor at Batumi State University who has been in the food technology sector for years, launched her own fruit-drying business. Previously, her students were only able to gain theoretical knowledge about the drying process. One day she decided to turn their learning experience into a hands-on reality.
“By setting up my own enterprise, I wanted to give an example to my students, to show them what it’s like to have a production facility, as well as encourage them to think about their own startups,” recalls Prof. Gaprindashvili.
About 20 students from Batumi State University food technology faculty go through practical training in her fruit-drying shop. She considers this experience crucial, not only for their future careers, but for the development of business in the region in general.
Needless to say, running her own drying facility came with challenges. Gaprindashvili needed a dryer that was easy to operate just when the Covid-19 pandemic hit the world. She was lucky enough to receive FAO and EU support right then and purchased a brand-new electrical dryer, ready to be used for drying fruit, especially blueberries. Year after year, the blueberry crop in Georgia, especially in the western part where Gaprindashvili’s drying facility is located, has been growing. Georgian blueberries are in high demand on both local and export markets.
Chiringuli, the dried fruit produced by Gaprindashvili, has not entered the domestic market. After a careful study of local companies producing similar products, Gaprindashvili decided that her main goal would be to provide customers with dried fruit that is affordable, contains no preservatives, and has a distinguishable taste and health benefits.
“Chiringuli will be equally accessible for people from any social class,” says Prof. Gaprindashvili. “It’s safe for kids to eat and for young people and those who are over 60—even for those with diabetes. We’ve created a product that complies with all the standards. The next step is to deliver it to our customers.”
A British citizen by the name of Ashish Kapur was looking for a place with the right climate—mild winters and hot summers—to grow almonds for export. That’s when he discovered Georgia, which not only has such climate, but also boasts a huge supply of fresh water from the Caucasus mountains.
Kapur set up NCC1701 LTD in 2017 and today his company owns a 450-hectare almond plot in Sighnaghi Municipality in Kakheti region. Organic almonds, one of the most promising crops grown in Georgia, are in especially high demand on international markets. This meant the company had to take another step and move to organic production: to stop using chemicals to manage its crops. Typically, weeds are managed by spraying chemical substances, which in large quantities and over time can be dangerous. Instead, Kapur’s company has been using mechanical tools to remove weeds, without causing damage to the trees and their roots. This is when they approached FAO.
With FAO and EU support, the almond grower purchased a new harvester and huller, a mechanical weeder, and a soil leveler. FAO is also assisting the company in obtaining the Bio Certification necessary to enter the European market—which is the biggest organic market in the world. Within the EU, countries like Germany and Switzerland have a very high level of organic demand. NCC1701 LTD has partnered with a company that has experience with both Switzerland and Georgia to help with exporting almonds to Switzerland. The harvest was small this past year, but they expect a much bigger one in fall 2021—about 300 kilos per hectare.
“The pandemic has made people realize how important it is to have a food supply close by,” explains Kapur. “And people now better understand where their food comes from. Specifically in my area, which is nuts. Nuts are a commodity that you can easily store. So as people start going into lockdowns, it is one of those products that stays in demand for retail consumers, because they are easy to keep and are healthy.”
The company has two main goals for the near future. First, they want to expand their footprint, doubling the size of their fields and crops. At the same time, they want to start a nut growers’ programme, to share their know-how and methods with smaller local farmers. And if product quality is good, Kapur’s enterprise will also help them market it in Europe.
For years, Maro Khozrevanidze and her family have been expanding their farm in the village of Krtsanisi in Gardabani Municipality. The family produces milk, a fermented milk product called matsoni, and cheese, selling these to small stores in the village and beyond. But growing the farm did not come easy. One of the main challenges was processing food for their cows: the family had to pay money, borrow equipment and prepare food at additional cost. They were looking for an opportunity to develop further.
At this critical point, the Khozrevanidze’s received a matching grant from FAO and EU and purchased a new tractor, a cultivator, a disk mower, and other much-needed equipment, along with some new cows. As a result, the family did not have to borrow equipment anymore and was able to increase the herd of cows to 20, while most of the families in the village have at most 5-6. This meant higher milk production and, eventually, more sales.
The dairy farm has become the main source of income for the Khozrevanidze family and they plan to expand by not only being able to process feed for cows but to prepare it on their own farm as well. This type of food has become especially expensive during the Covid-19 pandemic and the family wants to avoid any additional costs.
“People like our milk for its quality, fat consistency and cleanness, and so demand for our dairy products is going up,” says Maro Khozrevanidze. “In turn, we’re interested to expand our operation.”