Focus: Beverages

The Fizz That Counts

May. 2, 2013

Coming off a 7.8% increase in volumes produced in 2012, the beverages sector is poised for further improvement and development in 2013. As a staple of the economic diversification plan the country has followed in recent years, the volume of all industrial products in the beverage-making sector reached a value of AZN169 million in 2011. Beverage manufacturing currently comprises 0.5% of the total value of goods produced in the country, and the segment employs 3.2% of the Azerbaijani workforce.

Both alcoholic and non-alcoholic beverages saw important export growth in 2012, with the total value reaching $21.3 million by the end of the year. This figure represents a 34.7% increase in terms of price equivalents in comparison to 2011, when exports totaled $15.7 million. As a percentage of total exports, beverages occupied a 0.09% share in January 2013 compared to 0.06% in January 2012, marking steady growth year-on-year.

Along with the growth of the middle class and the increasing number of expatriates moving to Azerbaijan demanding higher-quality products, domestic turnover in terms of non-alcoholic beverages is showing long-term growth trends, with AZN26 million, AZN39 million, AZN45 million, and AZN52 million being sold in 2008, 2009, 2010, and 2011, respectively. The rising number of multinationals operating in the country has also supported this growth.

The production and sale of alcoholic beverages has also shown impressive growth in recent years. Beer production in Azerbaijan in 2012 grew by 27.5% over 2011 to 4.9 million deciliters in 2012, while the production of vodka decreased to 679,100 deciliters at a rate of -17.2%, year on year. Although cognac production dropped by 21.8% to 85,900 deciliters, champagne production grew by 2.8 times to 54,200 deciliters. In terms of sales, 1.4 million decaliters of pure alcohol were purchased in 2011, up from the 1.3 million sold in 2010. However, the wine segment achieved the most prolific growth in alcoholic beverage production in 2012, with 917,800 deciliters produced, marking an increase of 47.1%. This upward curve has been observed over the last seven years, with production of wine increasing by about 178,300 decaliters annually. In addition, the area devoted to vineyards is expected to expand from 16,000 hectares to 50,000 hectares by 2020, as producers seek to utilize more than 300 indigenous grape varieties that are to be cultivated in the nine climatic zones throughout Azerbaijan.