Agrarian reset: technologies interesting to farmers
Some changes in the agribusiness that have taken place due to COVID-19 will disappear together with it. However, key transformations will remain, creating the basis for long-term innovations.
Force majeure has forced small and mid-sized businesses to quickly master new technologies, “dive” into modern sales and delivery channels, explore related business areas and look for partners for collaboration and effective ambassadors to promotional marketing of products to consumers.
To master delivery and online sales
The main problem for small agricultural producers was the loss of markets for their products. At the beginning of the season, traditional offline venues (markets and fairs) were closed for quarantine. Each entrepreneur was forced to look for the new way to consumers.
The key role in the rapid adaptation to the new reality belongs to online technologies. In the spring, the communication of small agribusiness has almost completely moved to social networks and messengers. Growers have begun to create mass sales groups on Viber (such as KDZP vegetables [“овочі КДЗП”]) and stores on their Instagram and Facebook pages (such as the fruit and berry fair).
At the end of March, a new project “Vitamin Box” was launched in Kyiv. It means fresh vegetables, greens, berries and other products with daily door-to-door delivery in the capital, and to other regions with the help of delivery services. 25 farmers from all regions of the country became suppliers for the “Vitamin Box”. The number of growers and their offers allowed to change the filling of the “box” every week.
According to the initiator of the project, Hanna Morozova, its goal is to help farmers who have been left without the usual sales channels under quarantine conditions and to promote the domestic product. “The current situation has prompted us to take active measures and cooperate with other manufacturers. Only two days passed from the decision to the start – during this time we launched the website, held negotiations with farmers regarding the volume and supply of products, established logistics. We had to learn “on the fly” – to properly pack greens to keep them longer, to explore the city for fast delivery of boxes to customers, to respond to orders in time and control volumes,” says the co-founder of “Vitamin Box”.
When selecting the suppliers we were focused on farmers from southern Ukraine, who were previously trained in the UHBDP fruit and vegetable business development project, i.e. were able to properly select, prepack and pack products, while ensuring their quality and freshness.
The experiment with door-to-door delivery of fresh vegetables was actually very successful. In a few months, the number of growers has doubled, the number of customers increased to more than a thousand. Most importantly, the Project has received competing followers who provide field-to-table delivery in other regions.
To start development of processing
Earlier, for several seasons in a row, in terms of margins, blueberries remained the top berry on the Ukrainian market. Raspberry was ranked second. However, this season the situation with the range and its profitability has changed in some way.
Due to unfavorable weather and climatic conditions and prolonged rains during the ripening of berries, farmers were unable to reap a good harvest. Volumes that were saved from the fields in the rain suffered in terms of quality. “We managed to earn maximum 60-70% of profit of last year's blueberries. I’m thinking now in which direction I should diversify my business,” one of the entrepreneurs shared.
Fortunately, not all berries are so bad. For example, blackberry growers say that despite the freak weather, they harvested up to 40 t/ha of berries. “The yield of blackberries is 4 times higher than that of raspberries, at its market price of $ 4.1-5.6/kg and the fact that the cost of both types of berries is about the same,” said Kateryna Zverieva, development director of the Ukrainian Fruit and Vegetable Association (UFVA).
Small growers are also interested in finding value-added niches. For example, on the GP Agro farm in Lviv region, black currants were grown and sold on 40 hectares of land for five years. This year, in addition to caring for the plantation, they also mastered berry processing.
“We have decided on the setting up of a complex for freezing and processing of berries since we realized that we needed added value. Frozen berries are products that may be exported to any corner of the world at any moment. In addition, the price for such products is relatively stable unlike the price of fresh berries that changes every year. Moreover, it turned out that our services related to freezing and preparation for sale are also demanded by other small enterprises: we had many orders during this season and our production facilities allowed to service all interested persons”, Emil Vynnytskyi, head of J.P. Agro expresses his joy.
As a matter of fact, it is a great example, since products refinement infrastructure shall be established for the development of the vegetables industry, particularly in villages and districts that specialize in growing of one, two or three crops. “The first rate would be prepared for the fresh market and the second rate would serve as raw materials for processing enterprises”, experts of the Ukrainian Horticultural Association offer.
Anatolii Vlasenko, director of Olimp cereal production enterprise in Kharkiv, notes that recently the competition between small enterprises has intensified in niche cereals segment. “Healthy eating became very popular and it causes the increase of consumption of whole-grain crops (bulgur, couscous etc.) and bean cultures (different breeds of haricot, lentil, chick pea etc.) new to the Ukrainian market”, he claims. The demand also increases for different grain mixtures and instant pre-processed cereals in bags.
The higher level of margines of these trendy wheat cereals and beans encourages other processors and even novices to install equipment for such products manufacturing and to extend marketing channels.
Establishing of cooperation with cafes, bars and restaurants
Despite the risks, farmers continue experimenting with the assortment and thus new niche products will appear. During the next seasons more exotic crops that producers consider promising today will conquer the Ukrainian food market: African okra or Abelmoschus esculentus (tastes like something between Green beans and zucchini) that helps to decrease the level of glucose in blood, as well as micro greenery and baby vegetables, which farmers-enthusiasts start to grow. Moreover, farmers grow edible flowers, such as spot flower, nasturtium, borage: they may be grown not only in open ground but also behind the closed doors with artificial lights and micro climate. Exotic types of cabbage are also grown – salad cabbage kale (leaf cabbage) and broccolini (broccoli on the top and asparagus on the bottom).
Time will show whether these products will be in demand on the market. Currently farmers are optimistic and hope that broccolini will become as popular vegetable as asparagus, whereas they have some misgivings concerning okra.
“It is a very promising and not a very demanding crop. The problem is that supermarkets are not ready to sell it because they do not know what this crop is and the manufacturers are afraid to grow it because they are not sure that they will convince retailers instantly. They need a driver to promote such crops, as was the case with asparagus, which the enthusiasts from Kakhovka offered networks for sale a few years ago. Due to them Ukrainians finally took a liking to asparagus. Someone has to become interested first – networks or restaurants”, Vadym Dudka, director of the company Agroanalysis, comments.
Names of these exotic products are little known to our local consumers and the seeds are very expensive. In addition, niche vegetables shall be gathered almost manually which also affects their cost significantly.
Yaroslav Artiukh, chef of the restaurant Vareniy, believes that manufacturers shall offer any agricultural novelty products for tasting in cafes, bars, restaurants. “Such promo campaigns will help to speed up the journey of new products to the Ukrainian consumers, will grant an opportunity to taste it and share impressions with friends and acquaintances”, he is convinced.
In addition, small agrarians, farmers and craft producers have an obvious advantage in comparison with big agricultural companies – it is their dynamism, innovativeness and high speed of responseto external and internal market transformation. Thus, the need to create a demand is another challenge for Ukrainian agricultural entrepreneurs.
