Posted by Starbucks recently got into hot water for a poster in California of an Armenian woman in traditional clothing, drinking coffee under the white crescent and star of the Turkish flag. The timing and place (the state is home to more than 300,000 Armenian-Americans) could not be more inopportune for Starbucks. April is the month Armenians commemorate the Armenian Genocide (mass killing in some countries), an event still disputed by the Ankara government and its supporters. Miles away from the closest Starbucks, the Armenians like to drink their coffee in the same strong unfiltered style as the Turks. But you will be ill advised to call it Turkish coffee in the Yerevan coffee shops.
But it is not coffee that Armenia is best known for, but brandy.
Armenian brandy is made from white grapes and spring water, according to a traditional method. During the Yalta conference, unconfirmed reports noted that Churchill developed quite a taste for Armenian brandy. A year after World War II ended, Stalin shipped 400 bottles a year to the thirsty Prime Minister. The supplies dried up when relations got a bit frosty. Today Armenians have their own favourite Churchill quote and likely a bit of folklore. Asked the secret of his long life, Churchill replied: “Cuban cigars, Armenian brandy and no sport”.
The roots of the Yerevan Brandy Company, where Armenia’s best known Ararat brandy is made, go back to 1887. Nerses Tairyan established the first brandy distillery in the country. In 1899, a Russian company, Shustov and Sons acquired the operation. When the company walked away with the Grand-Prix at the 1900 Paris Expo, the brandy even won the legal rights to be labelled cognac. However, politicians have short memories, and today brandy can only be called ‘cognac’ if it is produced in the Cognac region of France.
While brandy distilling is a relatively new industry in Armenia’s long history, winemaking dates back to 4,000 BC. In 2011 archaeologists discovered the oldest known winery in a cave near the village of Areni in Armenia. The Russian poet Alexander Pushkin also made reference to the wines of Armenia-Artaskh and described the custom of keeping huge wine casks buried in the ground; only to be dug out for festive occasions.
However, Armenia’s wine fortunes changed with foreign rule. While independent Georgia closely guarded their varieties in 17th-18th centuries, the Armenians had little control during the Persian, Seijuk and Ottoman Empires. By the time Tsarist Russia came around in 1828, grapes were mostly used for vodka production. During this period, their South Caucasus neighbours continued to benefit from increased investment in wine technology. The Tsar also didn’t help matters when he proclaimed Armenia to be a “country of brandy” and Georgia a “country of wine”. After the collapse of the Soviet Union, most the remaining vineyards became unprofitable.
Local wine producers dream of a revival, but brandy remains the country’s most important manufactured export. Armenians export $90-150 million (2015 estimate) of brandy a year, with Russia laying claim to 90% of the volume. However, the industry has not been immune from geopolitical shocks. The collapse of the Soviet Union and the Nagorno-Karabakh conflict with Azerbaijan led to evaporating sales. The current economic crisis, a spill over from the Crimean War, has negatively impacted Russian volumes (down 30% on prior year). However, since the Yerevan Brandy Company was purchased by Pernod Ricard (in 1998), you no longer have to be a president, dictator or thirsty prime minister to enjoy the fruits of Armenia.
The Supply Chain Lab 