The Georgian Tea Sector: A Value Chain Study
Wednesday, 30 December, 2015

Georgia is one of the northernmost tea-producing countries in the world. The humid and subtropical Black Sea climate creates ideal conditions for growing tea in five regions of Western Georgia: Adjara, Guria, Samegrelo, Imereti, and Abkhazia. The favorable climatic conditions for growing tea in the country were first identified in the mid-19th century and the first tea plantations were planted shortly thereafter.

During the communist era, Georgia was the main tea producer in the Soviet Union. The volume of local tea production was sufficient to meet demand from all of the USSR. The tea harvest peaked in 1985 at 152,000 tons. During this period, nearly 70,000 hectares of land were allocated to tea cultivation. In many villages in western Georgia, tea cultivation was a way of life. Nearly 180,000 people were involved in the various production stages of the tea value chain. It should be noted, however, that between 1950 and 1990, the emphasis on meeting production quotas came at the expense of maintaining quality.

Shortly after Georgia’s independence from the Soviet Union, the tea sector collapsed amid civil war and the loss of markets. The tea sector rebounded in the late 1990s and early 2000s, yet only partially so as the fragile economic and political stability of the post-independence period left a mark on the overall productivity of the sector. Year after year, tea production has declined, leaving only 1,800 tons being produced today. Only about 11,000 hectares of tea plantations remain, of which only 1,700 hectares are operational (the rest require rehabilitation). The glorious past and current potential of the Georgian tea sector suggest that reviving tea production and processing could bring significant economic and social benefits to western Georgia’s rural communities. The sector could play a role in alleviating rural poverty by providing families with steady jobs and livelihoods.

However, the current state of affairs in the Georgian tea sector is rather grim. Plantations are overgrown and enterprises engaged in the processing are undercapitalized. Furthermore, given the nature of global competition, it has been challenging for Georgian producers and processors to gain a foothold on international markets. Georgia is currently a net importer of tea, which is surprising considering the sector’s rich history and potential.