Organic production is a literally bright future of Ukrainian agricultural sector as well as countryside in general. In particular, this is the most relevant and profitable niche where Ukrainian farmers can become the world leader. At The World´s Leading Trade Fair for Organic Food BioFach 2018 in Nurnberg Ukrainian products had great success. Though, this year at Biofach the mobile application Agroportex.bio hit the front page. It helps producer and customer find each other faster and without intermediary. Ukrainian project is unique. A lot of foreign companies have shown great interest in it and for our producers it opens bright prospects.
BioFach (www.biofach.de) is the largest and most authoritative world event in the field of organic production. It was extremely important for Ukraine to declare itself at this level. However, in our country the organic production has great potential.
There is a huge demand for organic products in the world which grows day by day. They are expensive, therefore the premium for organic is high. Our black soils let us get decent crops without the use of chemical fertilizers, and considering that such cultivation requires a lot of human labor, new jobs will be created in the countryside, as well as such production protects the environment. Despite everything, the benefit is obvious. The only thing that does not allow Ukrainian farmers to win markets in Europe and those which are overseas is a weak marketing. So far, only intermediaries are making good money on their products. A huge delegation came from Ukraine to BioFach in order to introduce domestic producers to the world and to assist them to find their foreign partners by themselves.
Our National Pavilion has been presented here for the fifth time already. During this time, it’s area has almost doubled: from 70 sq.m. in 2014 up to 130 sq.m. in 2018, as well as the number of exhibiting companies that has increased from 8 to 20.” Among them there were processors who made up the majority. So, if before almost all the participants of the National Pavilion of Ukraine were grain producers, now there were 4 berry producers, 3 producers of oilseeds, 1 producer of tomato paste, 1 tea maker, 1 certification body and 9 grain producers which also offered processed products.
“Organic agriculture in Ukraine is developing very rapidly. Moreover, both the number of producers and the range of products is increasing, and most important that our organic production quickly fit in contemporary world trends", says Olga Trofimtseva, Deputy Minister on European Integration of Agrarian Policy and Food of Ukraine, and continues: "In particular, there is an increase in the number of companies that offer processed products. Today, producers of organic goods have clear understanding that high-tech enterprises have a significant advantage in Ukraine and on the international market as well. The current trend is the orientation toward the preferences of the next generation. I would suggest all of our producers who are just entering the market to take into account these global trends. You should use some unique potential of your area and create an individual product; pay special attention to processing (it may be, for example, frozen berries, oil, etc.) and focus on the tastes of the ultimate consumer, of course not only Ukrainian but also foreign. Considering these facts, you will find profit in it".
Time and again, within the framework of the exhibition, in order to have an opportunity for Ukrainian producers and foreign buyers to communicate more active, the traditional Ukrainian Forum has taken place.
Impressions of the participants
"BioFach is a unique platform which gives possibility to establish strong business connections", - says Andriy Pylypchenko, the founder of the agricultural group "Arnika". "Indeed, over the past years, the attitude towards Ukrainian producers has improved. For example, our company has already gained considerable reliability among consumers. We are working in the segment of "premium" and we can confirm the quality of our products and the entire cycle of production. If last year all export sales were carried out hundred-per-cent through intermediaries, this year the number of direct sales is making up almost 20%. Next year we are expecting this number to increase significantly.
Participants have asserted that during the exhibition each of them has concluded about 60 contacts with potential buyers!
"For the producer, this exhibition is extremely important as we can make a direct contact with a buyer. If we do not participate in such events, we will stay unknown and we will continue to use the services of Polish and Baltic traders who sell our berries under their label dumping us at a price and closing those potential markets that we are hoping to open here. I would like to mention that very often we are facing situation that under the terms of contract of traders we do not have right to brand our product. They are asking to don’t indicate that this product is from Ukraine or that it is produced by "Fruktona", thus the consumer does not know that this is our product.
The Ukrainian hall at this exhibition is a great leap forward both for the Ukrainian producer and for Ukraine as a country in general. During the exhibition, we had more than 40 meetings per day and 75% of them is our customer. I advise everyone to come to the international exhibitions, represent Ukraine and your goods and you will discover new opportunities!"- said Kostiantyn Kuzmenko, the director of the company "Fruktona" (Vinnytsya).
As long as not all the organic producers were able to come to BioFach personally, the organizers of the International Agricultural Exhibition and Forum AGROPORT Ukraine (www.agroport.ua) were establishing necessary relations and representing the interests of domestic farmers.
"Agroport outwent the format of the agricultural exhibition long ago, today it represents an entire support system for producers. Accordingly, we are trying to raise awareness of farmers, to give new knowledge, and BioFach is important to us from the standpoint of experience", - says the Head of AGROPORT Dmytro Tytarenko. "For example, In Ukraine marketing is quite weak. Therefore, we are trying to understand how this process is organized by the world's leading companies and how to help Ukrainian farmers to reach the same level. Unfortunately, Ukraine is currently considered “as a market for cheap raw materials” for further processing. In addition, Ukrainian producers have already managed to establish a certain name of unfairness on the international market. But now this situation is changing rapidly. The organic sector is particularly interesting from the marketing point of view, as it has a defined standards, certification system and quality assurance."
Innovations from Ukrainians.
The mobile application Agroportex.bio, which was presented by the Ukraine at the exhibition, will become a major tool for marketing development and forming a good reputation.
“Producers want to sell goods with higher prices and buyers are looking to buy as cheap as possible. To do this they definitely need to exclude intermediaries. Each year in the world there are platforms created to solve this task, but at the end they are not applicable for Ukraine and Ukrainian farmers cannot take advantage from them, " – points out Mariia Makhnovets, consultant in organic trade from Ukraine, representative of Agroportex.bio company. "First of all, they are in foreign language, and second of all, they are usually developed as a website, whereas farmers do not have time to surf in the Internet for long, the phone is the most convenient tool for them. When they need to establish connections, Ukrainians create communities in social networks but they are working pretty chaotic. Therefore, Agroportex.bio is an alternative to the traditional foreign specialized platforms and Ukrainian bulletin boards. Because the first ones are not adapted to the mental and infrastructural realities of the Ukrainian market, and the second ones do not guarantee the traceability of organic supply chains to the buyers and reliability of sellers”.
Only primary producers with certified organic production and proven reputation will be able to use the Agroportex.bio application. The system will instantly notify them about the products requests specified in their organic certificates. All offers from producers and requests from buyers will be automatically translated to the user language. The start-up of the mobile application is scheduled on the second quarter of 2018 approximately. Users would have to pay yearly fee for subscription and in future there will be commission taken from the auction (difference of the offered price and one which is confirmed). Developers believe that exactly this type of format but not the commission from the contract will be the most beneficial for all the parties.
According to the representatives of the project, in the first six months the application can be used free of charge by pre-registration on the website: www.agroportex.bio
What do partners think?
"I think that Ukraine has great potential and in 7 years this market has developed considerably. Ukraine has three main privileges: first is a good geographical location, it is close to European markets; second, there are very good prices in Ukraine which is important for German buyers; and thirdly, there is a high demand for organic finished products. For example, we are distinguishing for ourselves the following main niches: berries and traditional national products such as: bagels, jams, mushrooms, watermelons, for instance, from Kherson and Carpatian region, etc.
Ukraine has a lot of young talented beginners in business, but they are facing problems such as dealing with products that do not always meet European standards and the overall image of Ukrainian production that needs to be improved. That is why the Ukrainian hall at BioFach is the best opportunity to present its own products. Moreover, I hope that in the nearest future we will be able to find Ukrainian producers and their organic products through mobile applications such as AgroportEx.bio easily.
We do also arranging visits for German delegations to the exhibitions in Ukraine, in particular this year we will work with Agroport and will have an opportunity to tell more about the Ukrainian market of organic products to German potential buyers. We can only encourage both sides, European importers and Ukrainian producers, to strengthen the activities for bilateral trade as there is still huge potential for creating sustainable value and I am not only thinking of Organic honey, where we are actually observing huge demand from German side"- said André Pilling, Project Manager of “Agritrade Ukraine”.
"BioFach fair is the best platform in the world where you can present an assortment of organic products from exhibitors from all over the world! For Ukraine, it is also a great opportunity to show its own products and to prove itself on foreign markets.
For several years running, the Institute of Organic Agriculture FiBL (Switzerland) supports the organization of the National Pavilion and the Ukrainian Forum at BioFach within the framework of the project "Development of the Organic Market in Ukraine".
In general, Switzerland has been closely connected with Ukraine for many years. We have been working with Ukraine for about 10 years. During this time, we are observing a great potential for the development of this market and we understand that Ukraine can become a leader in the export of organics to the European organic market. But we still have a lot of work to do that is why we often conduct training sessions, conferences and other events that can provide more information both for the beginners in organic market and companies that are running organic business already.
In addition to organic products that have been exported from Ukraine for a long time like arable crops, we see potential in exporting of organic processed products like sunflower or rape oil, cakes for feedstuff industry or organic berries to Western Europe and a potential for fruits and dairy products to the markets in Middle East.” – mentioned Toralf Richter, expert in the field of agricultural arable crops, FiBL (Switzerland), Project "Organic market development in Ukraine".
And, after all ... we had a chance to talk with a potential buyer.
"Prospects for Ukrainian exports to European countries are very significant because many unique authentic products are produced in Ukraine. I believe that potential European buyers, like me, are interested in products such as honey, marmalade, jam, and canned products from berries, especially those that are grown and produced in the Carpathians; as well as mushrooms and especially interesting are dairy products.
Unfortunately, it is not so easy to contact Ukrainian producer directly. The only possible option for me is to search through the Internet but the problem is the "language barrier", as not all the websites have information in foreign languages. That’s why the lack of information about the producer is a big problem."- noted Tobias Elschner, the owner of organic shop “Gesunde Kost OHG” in the center of Stuttgart (Germany).
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