By Siranush Adamyan
Armenian exporters seeking alternatives to the Russian market should focus less on replacing Russia with Europe and more on matching the right products to the right markets, according to Hovsep Patvakanian, head of the Investment Council of Armenia.
Speaking to CivilNet on Wednesday, Patvakanian said Russia's recent restrictions on Armenian agricultural imports have accelerated existing efforts to diversify exports, but says the biggest challenge has been the lower profitability of other markets.
"When you compare Russia as a market with other countries, it's not a matter of how easy it is to enter those countries, but rather how profitable it will be," he said. "Many producers already had the standards, certifications and distributors needed for Europe, but Russia offered higher profit margins because of lower transportation costs and less competition."
As a result, many companies that were technically ready to export elsewhere continued to prioritize Russia until the latest trade restrictions forced them to reconsider.
Patvakanian said exporters now need to move beyond viewing export diversification as a binary choice between Russia and the European Union.
"Usually people imply that if we don't export to Russia, then we export to the EU," he said. "But the low-hanging fruits are countries where Armenian products are already known, like Central Asia, the Gulf countries, the Baltics, Ukraine and Moldova."
Different products for different markets
The Investment Council has been mapping the competitive advantages of Armenian products in specific foreign markets rather than promoting exports broadly, in order to connect producers with appropriate distributors and retail chains.
For example, tomatoes have little chance of competing in the European Union, where local production is strong, but demand in Gulf countries creates export opportunities. France, meanwhile, imports much of its peppers from Morocco, making Armenian peppers competitive on a price-to-quality basis.
As a result, the council promotes peppers to French retailers, dried fruits and chocolate in Scandinavia and the Baltics, and fresh produce such as strawberries, tomatoes, and cucumbers in Gulf markets.
"It's very important to hit the right target with the right product category," Patvakanian said. "You can't really go to Spain and talk to them about selling Armenian apricots."
Europe remains a difficult market
Despite growing interest in Europe, Patvakanian cautioned that the EU cannot quickly replace Russia as Armenia's primary export destination.
"We will not be able to substitute 100 percent of the volume we were exporting to Russia with other countries," he said, estimating it could take three to four years for exporters to rebuild those sales across the European, Central Asia and Gulf markets.
He described Europe as an "intricate market" where competition is intense and gaining access to major retail chains and the hospitality sector is difficult for producers from outside the bloc.
Instead of expecting a rapid expansion across Europe, Patvakanian believes Armenia should make better use of existing diaspora Armenian-owned distribution companies operating abroad.
He pointed to Armenian-owned distributors in Sweden, the Czech Republic, Poland and France that already supply major European retailers and have expressed interest in helping Armenian producers enter those supply chains. "What we've seen is a lot of outreach from those people trying to help Armenian producers enter the retail chains that these distributors are working with," he said.
Logistics matter as much as markets
Patvakanian argued that improving logistics is just as important as opening new markets.
Large retailers require uninterrupted deliveries and significant volumes, something individual Armenian farmers often struggle to provide. He cited cases where Armenian suppliers were forced to leave international retail chains after failing to maintain continuous deliveries and incurring penalties.
To address those problems, he called for more reliable cargo routes to Europe, the Gulf and Central Asia, as well as warehouses in regional trade hubs that would allow exporters to store non-perishable products closer to customers.
He also advocated creating collection and distribution centers in Armenia, modeled on projects already operating in Central Asia, where international retailers work directly with local farmers, provide training, collect produce and guarantee purchases for export.
As part of these diversification efforts, the Investment Council will host an international trade forum in Yerevan from October 7-9, bringing together more than 35 distributors and retail chains from its target regions.
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