LINKING PRODUCERS TO
MODERN FOOD RETAILERS:
A Survey of Buyer Interest in the Balkans
Prepared for the U.S. Agency for International Development
By Chemonics International and J.E. Austin Associates
MAY 2005
CONTENT OF THE PRESENTATION
•
•
•
•
•
•
•
Introduction
Demand in the Region
Positive Elements
Obstacles
Comments by Country
Recommendations
Conclusions
INTRODUCTION – STUDY OBJECTIVES
1. Determine potential for farmers to sell to
large-scale buyers
2. Suggest regional interventions by USAID
INTRODUCTION – STUDY DESIGN
•
•
•
•
Limited Internet research
Interviews in six countries
Analysis and conclusions
Written report
INTRODUCTION –
DATES, CONSULTANTS, COUNTRIES
Research done in April and May 2005
Douglas Griffith and Jeff MacKenzie
Chemonics International, Inc.
Romania and Serbia
Marcos Arocha and Kenneth Weiss
J.E. Austin Associates, Inc.
Albania, Bosnia-Herzegovina, Bulgaria and Montenegro
INTRODUCTION – PEOPLE INTERVIEWED
Roughly 70 interviews
in 6 countries
Managers of
hypermarket and
supermarket chains,
processing
companies, hotel
chains, wholesale
companies
INTRODUCTION
- MAP OF
REGION
DEMAND – INFLUX OF BIG RETAILERS
• Metro, Carrefour,
Billa, Mercator, etc.
• A worldwide
phenomenon
• Growth in every
country visited
• Dramatic expansion
plans
DEMAND – PRODUCTS OF INTEREST
• Vegetables – salad
and other
• Fruits – melons,
apples, etc.
• Meat (packaged cuts)
- beef, turkey, etc.
• Dairy – fresh milk,
white cheese, etc.
DEMAND – PROCUREMENT METHODS
• Interest in local
products (esp. fresh)
• Local decision-making
/ buying
• Emphasis on quality
and quantity
• Preference for longterm relationships
• Discounts and slotting
fees
• Private labeling,
electronic systems
• Increasing use of
central warehousing
• Long payment terms
ON THE POSITIVE SIDE
•
•
•
•
Big stores becoming more important
Open to potential new suppliers
Superb preparation for exporting
Several success stores
CONSTRAINTS I
•
•
•
•
•
•
Critical mass and continuity
Quality and condition
Packaging
Cold storage
Business informality
Supplier agreements unreliable
CONSTRAINTS II
•
•
•
•
•
•
Definition of quality
Difficulty finding investors
Difficulty obtaining loans
Competition from imports
Strict buyer conditions
Inadequate extension services
RECOMMENDATIONS – QUALITY
•
•
•
•
Definitions of quality
Health and safety standards
Post-harvest handling
Packaging information and materials
RECOMMENDATIONS – RELIABILITY
•
•
•
•
Sustainable business models
Extended growing seasons
Producer cooperation
Long-term relationships
RECOMMENDATIONS –
ACCESS TO CREDIT
•
•
•
•
New financial mechanisms
Electronic information systems
“Bankable” supply relationships
International partnerships
RECOMMENDATIONS – OTHER
• Agricultural extension
• Turn farms into businesses
• Conferences, exhibits, etc.
COUNTRY SUMMARIES I
BULGARIA
• Metro, Billa, ENA,
Ramstore, HITT
• Kaufland and others
• Produce from local
sources
• Government
regulations
• Protection of “infant
industries”
ROMANIA
• Ten years with big
stores; trend continues
• Metro, Carrefour,
Mega Image, Billa, etc.
• Most produce imported
• Role of wholesalers
• Consumer behavior
changing
COUNTRY SUMMARIES II
BOSNIAHERZEGOVNIA
• Small market
• Mercator, Velpro,
Interex, VF
Commerce
• The role of
wholesalers
• The baking industry
SERBIA
• Mercator, C-Market,
Super Vero, Metro,
and others
• Growing numbers of
food retailers
COUNTRY SUMMARIES III
ALBANIA
• First Hypermarket to
open in Sept.
• Small supermarket
chains
• Hotels on the coast
• Greenhouse
industry
MONTENEGRO
• Confusion from
political situation
• Surprising number
of stores
• ERA, Voli Trade,
and Mex Centar
• The Grey Market
POSSIBLE REGIONAL ACTIVITIES I
•
•
•
•
•
Cooperation by producers
Cooperation by wholesalers
Private brands and co-branding
Supplying food chains for export
Buyer-seller events
POSSIBLE REGIONAL ACTIVITIES II
•
•
•
•
•
Training on grades and standards
Guide to selling to supermarkets
Guidelines on packaging
Business plan for cold storage
IT solutions for tracing products
CONCLUSIONS
1. Market changes are working against small
farmers, processors, wholesalers and
retailers.
2. Selected interventions will help small
business to cope and survive.
3. Some interventions may be appropriate for
USAID at the regional level.
— END —
THANK YOU