High Value Agricultural Products (HVAPs)

Transcrição

High Value Agricultural Products (HVAPs)
Hilfswerk Austria International
2012
The Study was developed and published with financial support from
the European Union as part of the second phase of the program
“Central Asia Invest”. The contents of this publication are the sole
responsibility of Hilfswerk Austria International and may not reflect
the opinion of the European Union.
Project: Integrated approach towards promoting Central Asia
Nuts, Dried fruit and honeY processing SMEs “CANDY”.
Authors: Margit Wendelberger and Shukhrat Kodirov.
Margit Wendelberger, graduated in the field of marketing and management from the
Business University of Vienna and finished post-graduate marketing studies at the university
St. Gallen, Switzerland. She got further education in e-business management at the Danube
University Krems and was certified as Management-Coach at the Institute for Systemic
Coaching Vienna.
After working many years in International Marketing at Unilever internationally (in Austria,
Italy, Japan and Hungary) - she started the marketing consulting company MARCOM with the
main emphases on the Development and Implementation of Marketing strategies, Business
concepts and Export support as well as Marketing and Management Training; particularly
also in Eastern Europe, Asia and South America.
For more than 20 years Margit Wendelberger is appreciated as coach and supervisor for top
management and executives in Austria and internationally.
She is also Lecturer for Marketing and Customer relationship management (CRM) at the
Vienna University of Applied Sciences (FH Wien); Trainer and Coach for Marketing and CRM
at the Top-Management Institute Hernstein Institute for Management and Leadership and
Lecturer for Marketing strategies at the Danube University Krems.
Project is co-financed by
the Austrian Development
Agency – ADA
2
TABLE OF CONTENTS
1
THE PURPOSE AND OBJECTIVES OF THE STUDY .............................................................................. 6
1.1
The purpose of the study ........................................................................................................ 6
1.2
Research objectives ................................................................................................................. 6
1.3
Research methodology ........................................................................................................... 6
2
OVERVIEW OF TAJIKISTAN AGRICULTURE SECTOR ......................................................................... 6
3
OVERVIEW OF KYRGYZSTAN AGRICULTURE SECTOR ...................................................................... 9
4
VALUE ADDED AT FARMER LEVEL ................................................................................................. 10
4.1
Analysis of the production costs ........................................................................................... 10
4.1.1
Tajikistan ....................................................................................................................... 10
4.1.2
Kyrgyzstan ..................................................................................................................... 12
4.2
Profitability analysis .............................................................................................................. 13
5
BRIEF OVERVIEW OF TAJIKISTAN PROCESSING SECTOR ............................................................... 15
6
BRIEF OVERVIEW OF KYRGYZSTAN PROCESSING SECTOR ............................................................ 16
7
8
9
6.1
Analysis of production costs.................................................................................................. 17
6.2
Analysis of profitability.......................................................................................................... 20
SALES AND DISTRIBUTION CHANNELS .......................................................................................... 23
7.1
Direct sales ............................................................................................................................ 23
7.2
Farmers ................................................................................................................................. 23
7.3
Merchants ............................................................................................................................. 23
7.4
Consolidators and wholesalers ............................................................................................. 23
7.5
Dried fruit Processors ............................................................................................................ 23
7.6
Wholesalers - Exporters ........................................................................................................ 23
7.7
Retailers................................................................................................................................. 23
THE EUROPEAN MARKET............................................................................................................... 24
8.1
Characteristics of the European market ............................................................................... 24
8.2
The European food market ................................................................................................... 26
8.3
Trends in Europe ................................................................................................................... 26
8.3.1
Economic and market trends ........................................................................................ 26
8.3.2
Social trends .................................................................................................................. 28
8.3.3
Influence of trends on food products ........................................................................... 29
THE AUSTRIAN FOOD MARKET...................................................................................................... 30
9.1
Food industry in Austria ........................................................................................................ 30
3
9.2
Distribution channels in Austria ............................................................................................ 31
9.2.1
Retailers......................................................................................................................... 31
9.2.2
Wholesalers ................................................................................................................... 31
9.2.3
Trading companies ........................................................................................................ 32
9.2.4
Food processors and food industry ............................................................................... 32
9.3
Grocery market in Austria ..................................................................................................... 33
9.3.1
REWE Group .................................................................................................................. 33
9.3.2
SPAR Group ................................................................................................................... 34
9.3.3
Hofer.............................................................................................................................. 35
9.4
10
Sales support and customer service...................................................................................... 35
DRIED FRUITS ............................................................................................................................ 36
10.1
Introduction .......................................................................................................................... 36
10.2
Comparative analysis of the product properties and production potential ......................... 37
10.3
Varietal Composition ............................................................................................................. 38
10.4
Packaging............................................................................................................................... 40
10.5
Direct and indirect competition ............................................................................................ 41
10.6
Strategic Opportunities ......................................................................................................... 43
11
NUTS .......................................................................................................................................... 43
11.1
Introduction .......................................................................................................................... 43
11.2
11.3
12
HONEY ....................................................................................................................................... 48
12.1
Introduction .......................................................................................................................... 48
12.2
12.3
12.4
Comparison of the prices ...................................................................................................... 49
12.5
Strategic Opportunities ......................................................................................................... 50
13
PRODUCT QUALITY AND SAFETY STANDARDS .......................................................................... 52
13.1
Product requirements by European law and Regulations .................................................... 52
13.1.1
European standards ...................................................................................................... 52
Health control: most imports of products of animal origin and non-animal origin from non-EU 52
countries must enter the EU via an approved Border Inspection Post (BIP) under the authority of
an ................................................................................................................................................... 52
official veterinarian. ...................................................................................................................... 52
13.1.2
Specific Product requirements ...................................................................................... 53
4
13.1.3
13.2
Requirements for organic products .............................................................................. 53
Product requirements by Buyers (distributors, wholesalers) ............................................... 54
13.2.1
High quality level ........................................................................................................... 54
13.2.2
Continuity ...................................................................................................................... 55
13.2.3
High standards of delivery service ................................................................................ 55
13.2.4
Product packaging ......................................................................................................... 55
13.2.5
Transport packaging ...................................................................................................... 56
13.3
Product requirements by Consumers ................................................................................... 56
14
EXPORT POTENTIAL OF RUSSIA AND KAZAKHSTAN MARKETS.................................................. 57
15
PRODUCT MARKETING IN THE DOMESTIC MARKETS ............................................................... 63
16
PRODUCT MARKETING IN EUROPEAN MARKETS ...................................................................... 66
16.1
Price strategy......................................................................................................................... 67
16.2
Packaging............................................................................................................................... 67
16.2.1
Packaging and price ....................................................................................................... 68
16.2.2
Packaging on the Austrian market ................................................................................ 70
16.3
Food labels ............................................................................................................................ 72
16.3.1
Eco-labelling .................................................................................................................. 72
16.3.2
Social-labelling............................................................................................................... 72
16.3.3
Food quality label in Austria .......................................................................................... 72
16.4
Quality ................................................................................................................................... 73
16.5
Cross cultural aspects ............................................................................................................ 73
17
CONCLUSIONS AND RECOMMENDATIONS ............................................................................... 74
18
LIST OF TABLES, CHARTS AND BOXES........................................................................................ 75
19
REFERENCES .............................................................................................................................. 76
5
1
THE PURPOSE AND OBJECTIVES OF THE STUDY
1.1 The purpose of the study
To analyze the industry dealing with production and processing of fruits and vegetables in Tajikistan
and Kyrgyzstan and identify products having high value added nature (dried fruits, nuts, honey and
candied fruit).
1.2 Research objectives








Identify products that have high market potential, specify characteristics and demands of
these markets;
Identify existing potential on processing such production and needs assessment for their
processing (skills, tools, equipment);
To assess consumption market volumes and the existing export potential including the final
product distribution channels;
To assess the importance for macroeconomics;
Review and assess the potential to improve the CDS in terms of poverty reduction, job
creation, economic growth, gender equality and environmental protection;
to identify market / consumer requirements necessary for exporting to the European Union;
to learn more about distribution channels in Europe taking Austria as example
to identify the marketing needs for exporting to Europe taking Austria as example
1.3 Research methodology
This study has been researched by primary and secondary research. The sources used were existing
studies, reports and analysis of existing market data and market examples.
2
OVERVIEW OF TAJIKISTAN AGRICULTURE SECTOR
Agriculture is one of the key sectors of the economy of Tajikistan. The share of agriculture in the GDP
is 18.7%. Out of the total population of the country more than 73% live in rural areas. It is estimated
that 1 hectare of arable land accounts for about 5.9 of the rural residents1 which indicates of a large
labor force resources. Agricultural lands in Tajikistan occupy about 4.6 million hectares or 7% of the
total land area.
6
Chart 1: Structure of areas under agriculture crops (thousand ha)
Cereals,
leguminous crops
459,9
industrial crops
194,2
potatoes
31,8
vegetables
food crops
44,8
21
Forage crops
87,7
Source: (State Committee on Statistics Tajikistan, 2010)
Tajikistan has a continental climate with hot and dry summers in the lowlands but with more cold
and wet periods in the mountainous areas. The soil is pretty good in the south to the upper reaches
of the valleys, but less fertile in the northern valleys. However, the agricultural resource
environment is characterized by a limited arable land, low availability of permanent pastures and a
heavy dependence on irrigation for crop production. Mountainous terrain of Tajikistan limits its
potential for production of agricultural crops. Only 30% of the territory of Tajikistan can be used for
agricultural production. Out of this land, approximately 800 hectares is arable, which is only 0.21 ha /
capita of rural population. The remaining 3.3 million hectares are pastures.
In the structure of the gross harvest of agricultural crops cereals, legumes and vegetables account for
the biggest share (56%). Fruits and berries account for only 5% of the total crop.
Chart 2: Structure of gross yield of agricultural crops (percentage of total)
cereals and legumes
29%
raw cotton
7%
potatoes
18%
vegetables
27%
food melons
fruits and berries
grapes
11%
5%
3%
Agriculture is mainly represented by crop farming and animal husbandry.
7
The total irrigated land area is 710 hectares, of which 570 hectares are arable. The main agricultural
production in the valley part of the country is cotton, as for the mountainous area it is horticulture,
potatoes and livestock.
In Tajikistan, the State Program on development of horticulture and viticulture for the period of
2010-2014 have been adopted which makes provisions for making new orchards and vineyards in the
area of 47 thousand hectares, including apricot orchards in the area of at least 16 hectares.
As of January 1, 2011the area of gardens in the country amounted to more than 110 thousand
hectares, and of vineyards - 35.7 thousand ha. Administratively gardening in the country is
distributed as follows:





Sughd region - mainly apricot orchards are cultivated 70-75%, vineyards - 15%, the rest of the
gardens are large fruits and subtropical crops;
in the foothills and mountainous part of Khatlon large fruits, mainly apples, pears, grapes,
subtropical and nut crops are grown, in the valley part of the region (Vakhsh valley and
Nizhnekaferniganskaya) - stone fruits, drupes and their sub-breeds are grown;
Districts of central Government Subordination: stone fruits, nuts and grapes are grown;
Gorno-Badakhshan Autonomous Oblast: here large fruits, stone fruits, walnut and mulberry
fruit are cultivated;
Rasht zone - in gardening large fruits crops such as apple and pear, walnut dominate.
During the years of independence of Tajikistan the country's agricultural sector has undergone
significant changes associated with the transition to a market economy, due to the transfer of land
rights, associated by the transfer of considerable freedom given to dehkan (farmer) farms and
farmers to make their own decisions, with introduction of new forms of management, and the
introduction of new forms of relationship between actors of the agricultural sector and the state. At
the moment, the transition process is still ongoing and is still the issue of the legal status of farms is
not clear.
In the course of agrarian reform, instead of the former collective farms, more than 29,000 farmer
(farming) cooperatives and associations have been created. More than 80% of all land have been
passed them for lifetime use. However, the absolute number of these farms is limited in size and as
farming structure they are ineffective.
As a result of reforms in the agricultural sector three main forms of management appeared:
 Agricultural companies1
 Dehkan farms, formed as a result of the land reform 2;
 Households 3
Table 1: Numbers of agriculture companies and organizations in the agriculture sector
Collective farms
Intercompany agricultural
enterprises
Dehkan farms
2007
14
2010
1
18
5
26.500
51.372
1
Agricultural companies comprise of: collective farms, state farms, inter-farms, lease holding companies, companies
established on the cooperatives, also their bases and other production structures, subsidiary plots of companies and
enterprises
2
Dehkan farm is an independent, unassisted economic entity whose activity as an business is based on the personal
performance of an individual, family members of an individual or of a group of people based on the land plot and other
property belonging to its members.
3
Households consists of personal plots, collective orchards & gardens, summer cottage plots with an area from 0,1 to 0,3 ha
8
3
OVERVIEW OF KYRGYZSTAN AGRICULTURE SECTOR
Kyrgyzstan is mountainous agricultural country. Agriculture of the Kyrgyz Republic is one of the main
economic activities of the country which accounts for about 19% of the country GDP.
Agricultural system of the country has a low level of concentration and thus it has a high level of
scattered operation, whereby the exception is somewhat in works dealing with cereals (except
wheat), potatoes and livestock. All the rest types of grains and agricultural operations have
insignificant impact on the country GDP.
Chart 3: Structure of sown areas of crops (ha).
Cereals and legumes
625,8
Industrial crops
94,8
Potatoes
84,9
Vegetables and melons
42,8
Forage crops
291,5
Source: (National Statistical Committee of the Kyrgyz Republic , 2010)
In Kyrgyzstan, about 65.0% of the population lives in rural areas, out of a total employed citizens
30.7% or in other words 14% of the population is engaged in agriculture (in the developed countries
this figure is 1-3%). These data indicate that agriculture in Kyrgyzstan has not only economic, but also
a great social and political importance.
In the total gross output of agriculture, hunting and forestry in 2011 the share of crop production
amounted to 52.1%, of livestock 46.1%, agricultural services 1.7%, hunting and forestry 0.1%.
Chart 4: Structure of gross harvest of agricultural crops (percentage of total)
cereals and legumes
raw cotton
38%
2%
potatoes
32%
vegetables and melons
20%
sugar beet
3%
fruits and berries
5%
grapes
0%
tobacco
0%
9
Of the country's total area 56.2% is considered to be as agricultural land and only 1.41 million ha or
7.3% - as arable land, of which 1.072 million hectares are irrigated which makes three-quarters of
arable land. Out of the total area of agricultural land 87% are pastures. On average, one hectare of
arable land feeds 4 people.
As at the end of 2010, in the country there were 374 agricultural cooperatives, 93 collective-peasant
farms, 42 joint-stock companies, 64 state-owned farms. Along with the state and collective farms
there are peasants (farmer's) entities whose numbers are increasing every year. So, if at the end of
1991 their number were 4.6 thousand by the end of 2010 it reached 331.1 thousand.
Table 2: Number of agricultural enterprises and organizations in agricultural sector
State farms
Collectively farms
farms
2007
76
1144
323.555
2011
65
556
344.492
Along with the development and strengthening of the peasant farms some significant changes have
occurred in the production of agricultural products by the categories of farms. So if in 1992 the share
of state and collective farms made 55.8% of the total agricultural production, while in 2010 their
share decreased down to 2.4%, and the share of the peasant farm on the contrary, increased from
2,1% to 56.9%.
4
4.1
VALUE ADDED AT FARMER LEVEL
Analysis of the production costs
4.1.1 Tajikistan
The main crops grown in Tajikistan are cotton, wheat, vegetables (onions, tomatoes, cucumbers,
cabbage), potatoes, melons (watermelon, cantaloupe), fruit mainly apricots, apples, pears and
grapes.
The most expensive crops in Tajikistan are the vegetables both closed and open ground ones. On
average, on one hectare of grown vegetables in Sughd region of Tajikistan, farmers spend about 6
500 Somoni ($1 352 US) and according to estimates the highest cost crop is onion as for cultivation of
1 ha of it farmer spend about 4 363 U.S. dollars including harvesting and transportation costs. In the
cost structure for growing onions about 50% of the costs fall on the seeds and fertilizers.
Potato growing also requires significant financial costs. For growing potato in 1 ha farmers spend on
average $ 4,000 US and even more than this figure, where about 35% is spent on seeds stock and
25% of the total cost is the cost of mineral and organic fertilizers.
10
Table 3: Costs for production of various agricultural crops Sughd region, Tajikistan, 2010
Costs per 1 ha
(USD)
Description
Wheat
Corn
Cotton
Potato
Onion
Melons (watermelon, melon)
825
1.349
1.494
4.015
4.363
2.376
Source: (Agriculture department of Sughd region, 2010)
For cotton growing the costs are 7,171 somoni (1,494 U.S. dollars), the bulk of costs here also
account for working capital (seed, fertilizer). The share of the working capital in the cost structure is
more than 50%.
Out of all analyzed above crops wheat requires a significant costs into mechanized operations 51%
and corn requires more labor 34%.
Chart 5: Costs structure for production of principal agricultural crops in Tajikistan.
Бахчевые
Melons
OnionЛук
Картофель
Potato
Хлопок
Cotton
Corn
Кукуруза
Wheat
Пшеница
0%
50%
100%
Оборотные
средства
Working capital
Механизированные
работы
Mechanized operations
Стоимость
рабочей силы
Labor costs
Source: results of analysis in this study
In general, in the costs structure / cost of production of major crops, more than 46% comes to
working capital (seed, fertilizer, chemicals, water), 25% of mechanized services (machinery and
equipment), about 23% to labor costs (maintenance and cleaning) and 6% other costs (mainly taxes).
11
Chart 6: Overall cost structure of production of major agricultural crops.
other expenses
6,20%
wages
mechanized services
22,90%
25,40%
working capital
46,50%
4.1.2 Kyrgyzstan
The most important crops in Kyrgyzstan are wheat and potatoes. Wheat is grown in almost all
regions of the country. Also cotton is grown in the country, and from fruits: apricots, plums, apples,
and nuts are grown.
In order to analyze and compare the results the analysis of crops similar to ones grown in Tajikistan
have been carried out.
Table 4: Production costs are various agricultural crops, Osh, Kyrgyzstan, 2011
Description
wheat
corn
cotton
potatoes
bow
Melons (watermelon,
cantaloupe)
Costs per 1 ha
(USD)
1.160
1.740
1.661
3.440
3.181
2.597
Source: (TES - Center, 2011)
The cost of growing onions in an area of 1 hectare is equal to $3,181 US which is 27.5% lower than
for same indicator in Tajikistan.
Kyrgyz farmers grow potatoes also cheaper by 15%.
Cost of potatoes growing in an area of one hectare is 3,440 USD, where approximately 1/3 is cost of
seeds, 1/4 of the total cost goes to fertilizers. Field works (labor, machinery) make 18% of the total
costs, while the remaining 82% of the cost are charged against raw materials and consumables.
It is a little more expensive for Kyrgyz farmers to grow such crops as wheat, corn, cotton and melons.
Costs on these crops are by 5-7% higher than in Tajikistan.
The cheapest crop to produce, among the analyzed crop is wheat. Wheat production in an area of 1
hectare requires about 1,200 USD, of which about 70% is the cost of agricultural inputs.
In general the cost structure for the analyzed crops is identical in both countries. Like in Tajikistan
major costs account for working capital but the share of the cost of mechanized works and labour
force payment in the context of crops is slightly higher.
12
Chart 7: The cost structure for the production of major agricultural crops in Kyrgyzstan
Бахчевые
Melons
OnionЛук
Onion
Potato
Potato
Potato
Картофель
Хлопок
Cotton
Corn
Кукуруза
Wheat
Пшеница
0%
50%
100%
Оборотные
средства
Working capital
Механизированные
работы
Mechanized operations
Стоимость
рабочей силы
Labor costs
Chart 8: Overall cost structure of production of major agricultural crops in Kyrgyzstan
circulating assets
60%
mechanized services
21%
wages
other expenses
15%
4%
4.2 Profitability analysis
The profitability analysis carried out in the framework of the present study showed a significantly
higher profitability from growing crops with Kyrgyzstan farmers. The profitability of major crops
production researched in this study shows that in Kyrgyzstan such profitability is much higher than in
Tajikistan.
13
Table 5: The profitability of production of main agricultural crops in Tajikistan
Description
%
wheat
70
25
10
38
72
corn
cotton
potatoes
bow
Melons (watermelon,
cantaloupe) *
63
* average profitability by two cultures (23% watermelon, cantaloupe - 104%).
Table 6: Profitability of manufacture of main agricultural crops in Kyrgyzstan
Description
%
wheat
76
81
92
86
234
corn
cotton
potatoes
bow
Melons (watermelon,
cantaloupe)*
239
* average profitability by two cultures (watermelon -152%, cantaloupe - 327%).
High profitability of production in particular, perhaps is related to low costs of seeds and fertilizers,
as well as their availability and abundance in Kyrgyzstan. The analysis revealed that in Kyrgyzstan the
costs of planting materials and fertilizers are by 5-10% cheaper than in Tajikistan, there are also
differences in the production technology and standards for the use of these materials in these two
countries. Besides the fact that in Kyrgyzstan farmers have much better access to mineral fertilizers
they consume less fertilizers for growing certain crops. Such crops like onions, potatoes, corn, and
melons have the best profitability.
An analysis of crop yields suggested a high yield of maize, potatoes, onions and melons in Kyrgyzstan.
Table 7: Productivity of the main crops (t / ha)
Description
wheat
corn
cotton
potatoes
bow
watermelon
cantaloupe
Таджикистан
Кыргызстан
4
4
3
25
45
20
18
4
9,8
3
30
50
50
30
14
Another factor strongly influencing the profitability of these crops production is different pricing
policies in the analyzed countries. According to provisional the purchase price of 1 kg of cotton in
Tajikistan is 3 Somoni (0,625 USD), while the price of cotton in Kyrgyzstan is 66% higher. Price of
wheat in Kyrgyzstan is by 25% higher.
In case of the applying a common denominator in terms of output and the cost of sales then
profitability of these crops shall be almost the same in both countries, with a difference of 5-10%.
5
BRIEF OVERVIEW OF TAJIKISTAN PROCESSING SECTOR
One of the main sectors of the economy of the Republic of Tajikistan is its industrial sector which has
a direct impact on the socio - economic development of the region. The industry accounts for 12.6%
of GDP.
The industrial sector of the country consists of mining and manufacturing industry and includes such
sectors as mining and mineral processing, energy, light industry, metallurgy, engineering, and
construction.
In the structure of industrial sector of the country prevailing production output comes to the
processing industry (80%).
As of 01.01.2011 1,347 medium and large industrial enterprises were functioning in Tajikistan whose
aggregate output of production amounted to more than 1.7 billion U.S. dollars.
In 2011, industrial enterprises of the Republic of Tajikistan produced goods worth 7.6 billion Somoni
(U.S. $ 1.6 billion). For the reporting period industrial production index compared to the year of 2010
amounted to 105.9%. Growth in industrial production outputs resulted from putting into operation
of new enterprises which enabled to increase production volumes, a significant increase in the
mining industry, in power production and non-energy materials, in the textile and clothing industry,
chemical industry, food production, rubber and plastic products and electrical products. Meanwhile,
in the past year production of aluminum significantly reduced as well as wood processing and
production of wood items, petroleum products, building materials and electricity. Out of 83 major
production items in 2011, production increased on 56 items, whereas it has decreased on 24 items,
and production of three items of goods ceased. In the past year out of 882 enterprises of Tajikistan
90 did not function at all. In 2011, the growth of production in the agricultural sector has exceeded
the growth in the industrial sector by 2%.
The average number of production personnel in these enterprises is 70 thousand people. The index
of industrial production in the manufacturing sector amounted to more than 110.9%.
In the processing industry food products, including beverages and tobacco have been produced for
the amount of 465.7 million USD. In the textile and clothing industry goods are produced for the
amount of 304.4 million USD. In 2011, 27.8 thousand tons of meat has been processed, 4.4 tons of
dairy products, 1,6 tons of sausages and 4,4 thousand tons of confectionery products have been
produced. Last year a significant decline in production of tobacco and alcohol was observed. In the
past year in the textile and clothing industry the following volumes of goods were manufactured:
Carpet - 656.8 thousand square meters, cotton yarn – 7 thousand tons. Shoes and leather goods have
been produced by 1.7 times more.
Processing industry is a strategic sector of the economy of Tajikistan, which must play a decisive role
in the development of the entire economy of the country. By 2015, the industry should be a catalyst
for the development of the agricultural sector. Due to the fact that this sector of economy is not
15
developed only 10 percent of agricultural products grown domestically are being processed in the
country.
In the upcoming period it is necessary to create benevolent conditions for processing companies by
providing them access to loans at reasonable interest rates for investments into modernization of the
enterprises, for them to be able to produce goods that can be competitive not only in domestic
market but also in the foreign markets. In future loans will primarily made to small and medium
private businesses or cooperative enterprises processing goods for export or import substitution. It is
assumed that the investments shall be routed strictly in accordance with the business plans.
To organize profitable business in the industry and to have a competent management in place an
adequate training of production managers is also required.
It is also necessary to establish research activities on markets, about product mix and pricing, in
order to provide information to processing enterprises and rural producers.
Based on the economic analysis of the sector the profitable niche at the export market are
enterprises dealing with processing of cotton, potato, tomato, fruits, oilseeds, meat and beans,
whose products have comparative advantage and competitiveness in the market of CIS countries.
Main producers of agricultural products are dekhkan (individual) farms and household plots of
population. Agribusiness management improvement is underway and accordingly financial
responsibility for its results has increased. Develop market-land Constitution of the country provided
a constitutional right for unlimited, immediate and lifelong use of the land.
Most of the processed products are exported to the CIS countries. Therefore agricultural
management bodies must take adequate measure to remove existing impediments and barriers in
goods transportation both domestically and abroad.
Problems of rural development today are not only of economic essence, but also have a negative
impact on the social development of the village. The problem is further aggravated by the fact that in
rural areas there are no other sources of income except agriculture. This does not enable the existing
business entities to support rural infrastructure and provide support in its development.
Most of the population, especially in rural areas, currently does not have enough income to buy and
consume food to provide the required energy needs.
Poverty reduction in Tajikistan is largely conditional to the macroeconomic and political stability,
substantial remittances of labour migrants, initial reforms and efforts to liberalize the economy.
Targeted structural and sectoral reforms are required to ensure and in the future to provide
sustainable economic growth and poverty reduction.
6
BRIEF OVERVIEW OF KYRGYZSTAN PROCESSING SECTOR
The main volume of industrial production (up 91%) are generated by five major economy branches,
four of which are from the field of processing industry: metallurgy and production of fabricated
metal products with a specific weight of 56.8%, manufacture of food products, beverages and
tobacco - 10 5%, textile-clothing industry - 4.5%, production of other non-metallic mineral products
(construction materials), with a specific weight of 4.9%.
In recent years processing industry in Kyrgyzstan is becoming increasingly important, since
agriculture is the main source of income for about 70% of the population living in rural areas.
16
Food and processing industry is diversified and consists of 16 sub-sectors: sugar, alcohol, alcoholic
beverage, bakery, confectionery, fruit and vegetables, meat, milk, oil, pasta, wine, beer, soft drinks,
tobacco, flour, cereals and tea-packing
Dairy production holds a leading position in the industry which accounts for over 21% of output. The
share of the flour milling industry is 15,5%, baking 13, 6%, tobacco 9.5%, liquor, 6, 7%, etc.
As of 01.01.2011, in the Republic of Kyrgyzstan 2039 medium and large industrial enterprises are
functioning in where the total volume of production amounts to 3.4 billion U.S. dollars.
In the structure of the national industrial sector production is prevailing accounted for 81.4% of the
processing industry.
The average number of production personnel in these enterprises is 268,600 people. The index of
industrial production in the processing sector amounted to more than 109.8%.
In the industrial structure by the form of ownership absolute majority at 90.1% belongs to private
enterprises
Lately horticultural enterprises activity growth trend is observed, especially those producing dried
fruits and juices. Although this industry is still in a poor state, but given the possibility of raw
materials availability, as well as the amount of manual labor employed in the cultivation and
harvesting of fruits and vegetables, the system is in a better position than the livestock sector.
Vegetables are mostly annual plants so their production can be easily planned.
In this situation small production plants and enterprise which began to appear in the last 2-3 years
became sustainable. Such businesses are more flexible and have the correct marketing approach in
the creation and production management.
Majority of processing companies are seeking to acquire appropriate packaging for their products,
thus they have to import packaging material, such as glass bottles from Uzbekistan and Russia,
polymer packaging from Russia, Turkey and Europe. Many plants managers believe that all the
production challenges can be solved only through the purchase of expensive packaging lines as
TetraPak, making no changes to the overall management system of the of production as it is dictated
required by the new conditions.
6.1 Analysis of production costs
Tajikistan and Kyrgyzstan are the main countries of fruit and vegetable producers in Central Asia,
including seeds and stone fruits such as apricots, apples, peaches, cherries and grapes.
Among the above crops in terms of volume of production and further processing and export apricot
the main one, both as fresh and dried. Apricot is being widely cultivated both in Tajikistan and
Kyrgyzstan almost everywhere, mostly apricot orchards are set at altitudes from 330 m to 3000 m
above sea level (Langar). Key apricot orchards located in Tajikistan mostly in Sughd, Zarafshan and
Hissar valleys and mountains. In Kyrgyzstan such orchards are in Batken and Osh oblasts.
The valuable local varieties of dried fruit, created as a result folk traditional selection are
characterized by high yield, high sugar content of the fruit, the strength of their attachment to the
fruit stem and the ability of drying on the tree, result in a high yield and high quality of dried apricots.
By its beautiful, bright orange or golden yellow colors of dried product, its high sugar content and
taste Tajik apricot varieties are far superior to the European and U.S. industrial varieties.
Production of apricots in the Sughd region is concentrated in four districts including Bobojon
Gafurov, Kanibadam, Asht and Isfara districts, which accounts for 89% of the total number of apricot
orchards in the region.
17
Table 8: Area of apricot orchards in Sughs region of Tajikistan, 2010
Districts
Aini
Asht
Bobojon Ghafurov
Ghonchi
Jabbor Rasulov
Zafarobod
Istaravshan
Isfarah
Konibodom
Kuhistoni Mastchoh
Mastchoh
Spitamen
Panjakent
Shahriston
In total
hа
542
11.111
6.042
125
608
48
181
6.683
6.638
214
318
743
354
72
34.116
In Sughd region, mainly such varieties of apricots as Khurmoi, Mirsanjali, Boboyee, Kandak, Tojiboyi,
Uchma, Niyozi, Isfarak, Mullogadoi, Uchma, Mahtobi, Javpazak, Darovshak Kali Zafari, BibiNigori,
Shirpayvand from Samarkand oasis such varieties as Ahrori, Arzomi, Gulyungi-Kursadyk are are
widely spread . There are varieties of Zarafshan Valley like Koshfi, Rukhijavononsurkh, from the
eastern part of the Fergana Valley, Subhoni.
Table 9: The most common varieties of apricot and their brief description
GouKandak - The most common form, type of variety Kandak; It is a popular variety among the local
population and is widely distributed in home gardens of B. Gafurov district. Fruits are round, slightly
compressed laterally, with orange color with carmine pink. Its flesh is light orange, with medium density,
sugary. It has a high and regular yields. Dry fruit grade, also is suitable for canning.
Gyulungchi Kursadyk - one of the best varieties of Penjikent district. According to its biological characteristics it
is similar to Khurmoi variety. The leaves are large, light green, oval, with an oval base and a big clove on the tip.
Annual sprouts are long, thin, light-brown. Growth buds are small, sharply tapered, conical fruit buds. The fruits
are medium in size weighing 30-40 g. High annual yield. Variety has a high resistance to spring frosts. A tree of
this variety is resistant to diseases. The variety is of multipurpose application. Gives high quality products only
if proper irrigation is provided.
Isfarak – Central Asian variety of folk selection, it is widely spread in Kanibodom district. Fruits are of average
or below average size (27 g), rounded, laterally compressed. The skin is yellow-orange to red. Flesh light is
orange, dryish, sweet with a distinct acidity and slight aroma. Stone is of medium size. Late-ripening variety,
good for drying, high yield.
Khurmoi Lemonyi – A grade of dried fruit common in Isfara and Kanibadam districts, locally named as
“limonka”. By its frost resistance property it exceeds sub-varieties of Khurmoi variety. Fruit buds stand spring
frosts better than other varieties of local apricots. Fruits are of medium size weighing 22-26 g. The skin is
slightly pubescent, dense, softly fibered, slightly juicy, high sugar content. Stone is small, oblong, one-sided
oval. Gets dry on the tree. Average yield, but annually at good quality. Kaisa yield - 26%, dry apricot yield - 34%.
UchmaKrasnaya – Dry fruit variety of Kanibadam district. Fruits are medium sized, rounded. The skin is thick
lowered, dense, dark orange color on the sunny side, more intensive. In fresh fruits total sugar content is high.
The leaves are bright green, ovate, curved pointed apex. Petiole is short, thick. Yield capacity is good, in the age
of 15 years old on average generates 70. - 80 kg. The variety of multi-purpose use. Can be used to make qaisa,
compotes and fresh use. Its transportability is poor. When ripens fruits fall down.
18
Tojiboi - The variety of multi-purpose use. Wide spread in Isfara. Fruits are medium sized weighing 22-25 g.
Fruits are broadly shaped, laterally compressed. Flesh is dense, juicy, sweet and sour, creamy-yellow with a
good sugar content and moderate acidity. Leaf blade edges are serrulate, medium in size, oval-ovate, gradually
tapered to the top. Petioles are long (30-40 mm.) Yield is abundant and annual, at the age 15 is 60 kg. The fruits
ripen at the same time and firmly held in the form of slightly dried fruit on the branches of the apricot tree. The
taste of fresh fruit is and sour-sweet, juicy flesh. It gives a good yield on gravelly soils. The quality of dried
products in the form of dried apricots is high.
In the framework of the study production of apricots was analyzed, data were taken directly from the
farmers engaged in cultivation of apricots in Sughd region of Tajikistan and Batken oblast of
Kyrgyzstan
The survey revealed that the majority of farmers engaged in the production of apricot have from 0.1
to 1 ha of orchards of apricot and on average 150 seedlings are planted in one hectare (planting
scheme 8m x 8m, Isfara, Asht, B. Gafurov Kanibadam, Batken), and average yield is 5 t/ha.
Resources for production
Resources are imported from different countries and farmers buy them in organized or black
markets. Suppliers can be different actors, including farmers, agronomists, private businessmen,
companies and production enterprises and state joint stock companies.
Seedlings are mainly sold in nurseries and fertilizers are sold by private businessmen and companies.
In Batken oblast of Kyrgyzstan one of the main suppliers of raw materials for farmers is "Moltushum"
cooperative
Primary production and processing
Apricot production process does not cost much, but it requires special care and strict adherence to
all agricultural practices, but unfortunately both in Tajikistan and in Kyrgyzstan, farmers in most
cases, do not observe all the agro-technical standards and main reasons are: lack of irrigation water,
high cost of mineral and organic fertilizers. Consequently it results in low productivity of the gardens,
on average currently the yield of apricot orchards varies between 2000 and 3000 kg per 1 ha.
However farmers of Isfara and Asht district of Sughd region where farmers seek to keep all the agrotechnical standards the yield rates from 5,000 to 8,000 kg / ha.
Initial processing of apricot or drying process is the most important stage of production as notably
this process determines the quality, appearance, price and ultimately the revenue of producer.
Many producers because of the high cost of the drying process (from 1500 to 2000 USD / ha) prefer
not to get involved in drying of fruits themselves and sell it to entrepreneurs directly engaged in
buying and drying apricots (usually residents of Isfara district, Sughd region, RT) such cases are
observed in B. Gafurov, Kanibodom and Asht districts of Tajikistan and Batken oblast of Kyrgyzstan.
The method of apricots’ solar & air drying is widespread whereby apricot are widely scattered on
the ground to dry in the sun. The main advantage of this method is that apricots are dried in large
quantities; however, here there is likelihood that apricots encounter foreign material like dust and
insects.
In recent years, with the support of international organizations modern and sparing methods of
drying (solar drying, tunnel drying) have been introduced into production but because of the volume
of capital investments these methods are not yet widespread, however these new methods have a
number of advantages over conventional drying methods where one of the main advantages is the
high quality of the final product.
19
On average, to the producer, maintenance of 1 ha of apricot garden costs 740 USD and production
cost of fresh apricots ranges from 0,15 to 0,30 USD / kg depending on the crop capacity of the
garden.
In the cost structure the biggest share of costs refers to mineral and organic fertilizers equaling to
16%, or 235 USD.
The rest cost items are about the same cost and range from 4% to 8% of the total costs for 1 hectare
apricot garden. More detailed information can be found in Table 10.
Drying of 1 ha of apricots depending on the crop yield of the garden costs to the farmer from 750 to
1,000 USD / ha4.
Apricots are harvested from mid-June to mid-July and in some cases apricots are collected by hand in
order to maintain their shape. It takes about 10 workers in order to harvest from one hectare of
apricot garden and most of these workers are women. The average daily wage of workers harvest
apricots is 20 - 25somoni plus 25% social tax for each worker. Workers engaged in drying and sorting
apricots the same amount of money is paid for their work.
B Ghafurov dist,
d\farm I
Dadoboev
Isfara
Asht, d\far Aziz
Data from
Agriculture
Dept, Sughd
B Ghafurov dist,
d\farm I
Dadoboev
Isfara
Asht, d\far Aziz
Table 10: Costs of growing and maintenance of 1 ha of apricot garden
Salary and payroll fund
Mineral & organic fertilizer
Fuel
Irrigation water
Treatment of garden (against
diseases and insects)
Depreciation
Overhead expenses
Other expenses
Expenses for growing apricots
262,5
1000,0
350,0
314,0
350
1200
350
400
687,50
1200,00
300,00
200,00
687,50
1200,00
300,00
200,00
0,21
0,12
0,08
0,09
0,07
0,25
0,09
0,08
0,07
0,24
0,07
0,08
0,09
0,15
0,04
0,03
0,09
0,15
0,04
0,03
360,0
360
200,00
200,00
0,10
0,09
0,07
0,03
0,03
500,0
500,0
0
300
500
0,00
960,00
300,00
0,00
960,00
300,00
0,06
0,07
0,04
0,00
0,13
0,13
0,00
0,06
0,10
0,00
0,12
0,04
0,00
0,12
0,04
3286,5
3460
3847,50
3847,50
0,77
0,82
0,69
0,48
0,48
Harvesting (workers)
DRYING
Raw materials (sulphur etc. )
Payments to workers
In total for drying
Costs of drying and orchard
maintenance
Production costs per 1 kg of
dried apricots (4x1,19)
1000,0
1250
1000,00
1000,00
0,19
0,25
0,25
0,13
0,13
120,0
1450,0
2570,0
150
1875
3275
240,00
4100,00
5340
240,00
4100,00
5340
0,23
0,00
1,19
0,03
0,36
0,80
0,03
0,38
0,66
0,03
0,41
0,70
0,03
0,41
0,70
5856,5
6735
9187
9187,50
0,00
1,62
1,35
1,18
1,18
4,76
6,47
5,39
4,72
4,72
Description
Source: Survey results carried out in the framework of this study
6.2 Analysis of profitability
Profitability on apricot and dried apricots is entirely dependent on the market price, but despite the
fact that one of the biggest parts of apricot plantations are located in Tajikistan and Kyrgyzstan the
key role on determining the price of dried apricots play Turkish producers.
4
Based on the data collected by interviewing of producers
20
Prices of dried apricots in the domestic markets depend largely on the prices in Russia, which are
dependent on the price of Turkish apricots.
Presently both from Tajikistan (Asht, Kanibadam) and Kyrgyzstan (Batken) small quantitiesof early
apricots in a fresh kind are exported to markets of Russia and Kazakhstan the fresh apricots are
usually transported by trucks.
So at the time of the survey, farmers were selling their fresh products depending on the grade at
wholesale price from 0.7 to 3 somoni.
Table 11: Average price of apricots in the major markets
Name of the market and
location
Average prices
per year (USD)
Panjshanbe Market,
Khujand, RT
Central market of Isfara, RT
“Sukh” Market, RK
0,46
0,14
0,52
Source: Survey results carried out in the framework of the study
Thus, the peak price for Apricots fall from June to August, during which time the best varieties of
apricot ripen which are good both for drying and for fresh consumption, fresh apricots are exported
to Russia mainly in May.
At the time of the study farmers dealing with apricot production from 1 ha had an average income of
1,800 USD when selling fresh apricots, the profit from 1 ha was about 1,070 USD and profitability on
average was 146%.
Farmers who sell dried apricot, i.e. those who carry out initial processing from 1 ha of apricot garden
have an income of 2900 USD, while the profit margin is 1500 USD, profitability is 99%, but it should
be noted that in the calculations we used the sales price of the cheapest apricots of low grade, so at
drying medium grade of apricot varieties ( like Boboi, Kadu Hurmoi) at an average wholesale price of
3,7 USD (18 somoni) the farmer’s profit is 5800 USD / ha with profitability equal to more than 300%.
Chart 9: Profitability of apricots at various stages of selling (before and after processing)
25000
20000
15000
10000
5000
0
Абрикос
в свежем
Fresh apricot
виде
Доход
Прибыль
Additional
profit
Сушенный
абрикос
Dried apricot
Incom
Profit прибыль
Дополнительная
21
The results showed that if farmers sell dried apricots they can earn additional income from the
activity, depending on the varieties of apricot, anything from 300 to 3,000 USD / ha.
Although the apricots in Tajikistan and Kyrgyzstan are produced in large quantities, there are no
sufficient appropriate and profitable varieties of apricots, inadequate variety and quality result to
high production costs, a huge waste of labor and savings from expansion of production.
Also, most of the apricot orchards were established in the late 80's and early 90's, most of the
farmers do not comply with all the agronomic requirements for the care of gardens, farmers have
poor access to high-quality fertilizers, there is not sufficient water to irrigate the gardens especially in
the fall, winter and early spring. All these factors are the main reasons for the low yield of gardens.
The survey results showed that farmers are greatly interested in the cultivation of the best varieties
of apricot and restore uniform and profitable orchards in order to meet the demand of international
markets.
Asht, d\far Aziz
Data from Agriculture
Dept, Sughd
B Ghafurov dist, d\farm I
Dadoboev
Isfara
Asht, d\far Aziz
PRODUCTIVITY (kg / ha)
Crop capacity
а) fresh
b) dried
INCOME
а) fresh
b) dried
Firewood
Tax on selling (4% of the sale
amount)
а) fresh
b) dried
Land tax
а) fresh
b) dried
PROFIT
а) fresh
b) dried
ADDITIONAL PROFIT / LOSS
Isfara
Description
B Ghafurov dist, d\farm I
Dadoboev
Table 12: Profitability of apricot in various stages of selling (somoni)
4000
5000
8000
2200
4000
5000
8000
1,25
1,00
2,00
8,00
8,00
12,00
1,00
1,00
1,25
1,00
2,00
1,00
8,00
8,00
8,00
8,00
12,0
8,00
5000,00
5000,0
8000,00
10000
16000,0
8000,00
1,00
1,00
1,00
2,00
1,00
24000,0
16000,0
8,00
8,00
8,00
12,0
800,00
8,00
800,00
800,00
800,00
232,00
232,00
672,00
352,00
0,04
0,06
0,05
0,08
352,00
432,00
992,00
672,00
0,32
0,35
0,35
0,50
135,00
135,00
135,00
135,00
0,05
0,03
0,03
0,02
0,14
0,11
0,07
1,42
2146,50
1973,0
11345,5
3665,50
0,15
0,54
0,39
0,46
2456,50
3498,0
15669,5
7349,50
2,88
2,46
2,80
7,83
3,67
310,00
1525
4324
3684
2,73
1,92
2,40
6,42
3,22
22
7
SALES AND DISTRIBUTION CHANNELS
7.1 Direct sales
Distribution channels of crops may have different overall lengths. The shortest sales channels are
direct sales. In this form of distribution there is no middleman between the producer and the buyer.
Direct delivery channels are often used for sales in industrial markets.
7.2 Farmers
They grow and dry dried fruits themselves. The most abundant channel of sales by farmers is selling
dried apricot. It is sold in the market for consumption and consolidators and traders. Some farmers
supply directly dried apricot exports via established distribution channels
7.3 Merchants
Buy dried fruit or fresh fruit from the farmers and sell in the retail market (fresh) or in larger markets
(dried). They are the drivers that provide consolidation of commodity flows around the main
markets, where wholesalers, exporters and processors of dried fruit come.
7.4 Consolidators and wholesalers
These are the entrepreneurs who purchase the dried fruit from the merchants, consolidating the
goods by color, grade, size and quality of the fruit. Their main customers are exporters. These
business groups are also the suppliers of raw materials for processors of dried fruit.
7.5 Dried fruit Processors
This is a group of companies that have started to work in recent years, creating a new segment. They
process dried fruits on special equipment with a focus on the consumer, including cleanliness,
hygiene and attractive packaging. They buy dried fruits from farmers, traders, wholesalers and
consolidators. Exporters are the buyers of their products or services to the. Often they act as
exporters themselves.
7.6 Wholesalers - Exporters
Wholesalers arrange sales, consolidation of goods and export. The presence of wholesalers exporters enables producers to focus on production of goods, processing, improving product quality
and packaging.
7.7 Retailers
In the consumer market the end beneficiary of the product is the retail buyer. Distribution channels
to retail buyers typically include several intermediaries consisting of wholesalers and then retailers.
23
8
THE EUROPEAN MARKET
8.1 Characteristics of the European market
The population in the European Union is about 500 million.
Compared to the Russian or Kazakh market the European market is rather large in terms of purchase
power. The average household disposable income per capita in Austria is 23.806 Euro (about 30.900
USD) per year (EUROSTAT, 2011), which is higher than the European Union average of 19.716 Euro
(about 25.600 USD) (EUROSTAT, 2011) and much higher than in Russia with about 13.900 USD
(approx. 10.700 Euro) (OECD, 2012). Household disposable net income is the amount of money that a
household earns each year after tax. It represents the money available to a household for spending
on goods or services.
Despite a general increase in living standards not all people have benefited from this to the same
extent. In Austria, the income of the top 20% of the population is about 48 800 USD a year, whereas
the bottom 20% live on about 13.000 USD a year. In Russia for example, the income of the top 20%
of the population is about 33.900 USD a year, whereas the bottom 20% live on 3.800 USD a year
(OECD, 2012).
Table 13: Countries in the European Union (EU)
Country
Country
Code for
customs
population
in mil.
2009
disposable
income/capita
Euro per year
VAT /
VAT for food
%
2011______ _
2012
European Union
CE
499,8
19.716
Austria
AT
8,1
23.806
20 / 10
Belgium
BE
10,8
22.291
21 / 6
Bulgaria
BG
7,6
7.180
20 / 9
Cyprus
CY
0,8
18.713
15 / 5
Czech Republic
CZ
10,5
13.855
20 / 14
Denmark
DK
5,5
20.453
25 / 25
Estonia
EE
1,3
10.920
20 / 20
Finland
FI
5,3
21.586
23 / 13
France
FR
64,4
23.232
19,6 / 5,5
.
24
Country
Country
Code for
customs
population
in mil.
2009
disposable
income/capita
Euro per year
VAT /
VAT for food
%
2011______ _
2012
Germany
DE
82,1
24.698
19 / 7
Greece
EL
11,3
15.715
23 / 13
Hungary
HU
10,0
11.848
27 / 27
Ireland
IE
4,5
19.328
23 / 0
Italy
IT
60,1
20.140
21 / 4
Latvia
LV
2,3
10.078
22 / 22
Lithuania
LT
3,4
12.636
21 / 21
Luxembourg
LU
0,5
28.660 (2009) 15 / 3
Malta
MT
0,4
N.A.
18 / 0
Netherlands
NL
16,5
21.264
19 / 6
Poland
PL
38,1
12.208
23 / 5
Portugal
PT
10,6
16.014
23 / 6
Romania
RO
21,5
Slovakia
SK
5,4
13.557
20 / 20
Slovenia
SI
2,0
16.154
20 / 8,5
Spain
ES
45,8
18.604
18 / 4
Sweden
SE
9,3
21.911
25 / 12
United Kingdom
UK
61,6
21.669
20 / 0
.
7.669 (2010) 24 / 24
Disposible income: gross disposable income of households divided by the purchasing power
parities of the actual individual consumption of households and by the total population.
Sources: (EUROSTAT, 2011), (EUROSTAT, 2012), (EUROSTAT, 2012)
As can be seen in above table the purchasing power is very different within the European Union: the
average disposable income varies from 7.180 Euro to 28.660 Euro.
25
8.2 The European food market
The European Union is formed by 27 countries having 23 different languages. This means the
European Union can not be seen as one single market but 27 markets with different cultures. Each
country and especially each culture has its specific needs and demands. This is especially true for
food products.
Entering the European food market means facing a variety of different perceptions of taste and
quality, different expectations, different price sensitivities, cultural aspects and so on. In addition the
language issue has to be considered, esp. in marketing for packaging and advertising but also brand
names.
What is valid for all the countries in the European Union is that the market for food products is very
competitive. Most of the food products are sold in Supermarkets. The consumers have a choice of a
wide variety of food products with different quality, price and packaging.
Within the European Union there are many good food producers: in Eastern Europe (esp. Hungary
and Bulgaria) but also in Southern Europe (esp. Spain and Italy). Being within der EU these producers
can benefit from lower transport costs and no customs duty at all. Turkey has specific non-member
contracts with the EU so that most of the imports from Turkey into the EU are free of customs duty.
Therefore a lot of fruit products (esp. dried fruits) from Turkey can be found on the European
market.
8.3 Trends in Europe
Trends have a big influence onto consumers and their buying behavior. Therefore to observe trends
to predict the future development of markets and products but also the consumer behavior is very
important for a good marketing strategy.
8.3.1 Economic and market trends
Economic slowdown: in most of the European countries there is no or little economic growth. Some
of the countries like Greece, Spain and Hungary are fighting bankruptcy which has an influence onto
the strengths of the currency Euro and also affects the economy of their main trade partner
countries.
The weaker Euro also makes imports to Europe more expensive because most of the trade with Asia
and the US is still done in USD.
Due to this economic slowdown the rate of unemployment increased and consumers face a reduced
spending power.
North-western and Central-European markets are ahead of Eastern and Southern European markets
in terms of trends, new development but also economic power. This has an influence in the kind of
products (e.g. concerning price and innovation) consumer will ask for.
Individualism: especially in urban areas many live an individual lifestyle with the effect that these
consumers want to differentiate themselves from most other people and they enjoy travelling into
kind of exotic destinations. Therefore they buy products which are different to the standard
products. For example they would buy dried fruits with an interesting mixture of ingredients and an
exotic product / brand name.
26
Brand name: Pearls of Samarkand
Product name: Himalaya Mix
Non-materialism: in the last years an increasing number of well-educated people have more interest
in new spiritual, cultural and religious experiences. This trend is not so much valid for EasternEuropean markets.
Concern for nature: many Central and Northern Europeans are interested in pure and natural
products (food, cosmetics, textiles), eco-labelling and social-labelling (fair trade products).
Concern about health and healthier life: with the increasing life expectancy people are more
interested in staying healthy longer. Therefore they care about their health and wellness even in
younger age and also buy organic food to support it.
Consumers are well-informed and critical: consumers have easily access to information by the
internet. Via consumer platforms and internet foren they learn about the experience of other
customers with a certain product or brand.
In a study about the change of the food buying behaviour of customers between 2005 and 2010
customers are more interested in:
 origin of the products: 67 % said they care in 2010 more about the origin than 5 years before
 quality of products: 64 % say they pay now more attention to it
 pureness and naturalness: for 62 % it is now more important than 5 years earlier
 health value of the products: 59 % care more about it
 price: 49 % are more price concerned
 production background of products: 44 % of the customers want to know more about it
 taste of products: 42 % are more sensitive to it
 nutritional labeling: 38 % pay more attention to it
 shelf life: 36 % pay more attention to it than 5 years before
27
Chart 10: Buying behavior 2005 and 2010
Research question: If you compare your buying behavior of 2005 with today´s – do you care
more, the same or less about following criteria?
don´t know
less
same
more
Source: (The Nielsen Company, 2011)
8.3.2 Social trends
Aging societies: in North-Western Europe a lot of retired people have quite high spending power due
to their high pension out of the social security system, while in Eastern and Southern Europe there is
a different social system and pensioners suffer from mostly very low retirement pay. Pensioners are
usually quite health concerned and together with a high pension they are willing to spend a lot of
money on good quality and healthy food products.
Smaller households: all over Europe families have fewer children. Especially in urban areas in Central
and Northern Europe many single or 2-persons households exist. This is the result of several reasons:
children leave home early because parents support their life on their own financially. Another reason
is the aging society with people (mostly women) living longer but separate from their children. In
addition to these reasons is the high divorce rate.
Table 14: Household structure Austria 2010
Average household size:
2,3 persons
Single households:
36,0 %
Households with 2-3 persons:
44,5 %
Households with 4 or more persons:
19,5 %
Source: (Statistik Austria, 2010)
Multicultural societies: increased awareness of many cultures has expanded the markets for
products with ethnic origins / themes and the interest in travelling to “exotic” destinations.
28
8.3.3
Influence of trends on food products
Economic slowdown  fewer big purchases, focus on home and on themselves, less visits of
restaurants – more home cooking
Individualism  demand for “unique” new products in the health sector (food, ...) and individual
travel destinations (open for food from "exotic" countries)
Non-materialism  fewer luxury but more experience driven
Concern for nature  natural products and services, eco-/socio labelling
Ageing societies  high quality products and money for healthy food products
Smaller households  bigger market but smaller units (packaging,...)
Multicultural societies  more fragmented markets, open for new food experiences and Asian food
products (due to the good image of TCM – Traditional Chinese Medicine)
29
9
THE AUSTRIAN FOOD MARKET
9.1 Food industry in Austria
The Austrian food industry is characterized by small farms and small scale production.
Austria does not have big animal farms like Germany or Hungary. Also vegetable and fruit production
is small scale compared to large plantations in the Netherlands (mainly for vegetables) and in Spain
(mainly for fruits).
The annual turnover of the Austrian food industry is 55 billion Euro which is about 14% of the
Austrian GDP (gross domestic product).
There are about 187.000 agricultural operations in Austria, of which 20,870 are engaged in organic
farming with a production output of 6.1 billion Euro.
The organic food market is highly developed in Austria. This is valid for the production of organic
food but also the consumption of it. Austria is the most advanced market for organic food in the
European Union. Consumers are willing to pay a premium for good quality organic products.
The market for organic products in Austria is quite interesting.
Chart 11: Total organic market in Austria 2010 (by turnover)
Turnover: 1,124 billion Euro
67,5% grocery stores
13,6% special shops (bio shops)
6,8% direct sale from farms
6,8% export (mainly Germany)
5,3% restaurants
Source: (Bio Austria, 2010)
Very strict requirements apply for organic products. The products need to be certified in order to
claim to be organic.
30
9.2 Distribution channels in Austria
The distribution channels of Austria are very similar to the distribution channels in the European
Union, especially in Germany and other central European countries. Very often the same big players
are doing business in more than one country. For example most of the large distributors of Austria
(retailers like REWE, wholesalers like Metro) are subsidiaries of the distributors in Germany and Italy.
9.2.1
Retailers
9.2.1.1 Retail food stores
In Austria are about 6.000 food retail stores of different size. There is a clear categorisation by m².
Table 15: Food retail stores in Austria
Store type
sales space
number in %
turnover in %
of total retail turnover
Small grocery stores
- 249 m²
26 %
5%
Larger grocery stores
250 – 399 m²
11 %
6%
Supermarkets
400 – 999 m²
57 %
65 %
Small Hypermarkets
1.000 – 2.499 m²
5%
15 %
Hypermarkets
2.500 m² -
1%
10%
Source: (The Nielsen Company, 2011)
Compared to other European countries Austria has 396 supermarkets per million inhabitants which is
the second position (after Norway) in Europe. As a result of this about 65 % of the total food
turnover is made in supermarkets.
In average food retail stores offer about 85% food and 15% non-food products.
For further details see in chapter 0 Grocery market in Austria.
9.2.1.2 Specialised trade
Health food stores (Reformhaus) and Organic food shops (Bioladen) concentrate on organic and
functional food specialties. They usually offer expert advice in store. In general the prices are
significantly higher than in supermarkets. Most of these shops are single stores and do not belong to
a chain.
Drugstores like BIPA (www.bipa.at) with about 580 shops, Gewußt wie wellness & beauty
(www.gewusstwie.at) with 80 shops and DM (www.dm-drogeriemarkt.at) with about 377 outlets in
Austria and 1.350 in Germany sell also healthy food products like dried fruits, honey,… therefore this
distribution channel could be also considered.
9.2.2 Wholesalers
About 100 food wholesalers serve retailers, gastronomy and bulk consumers (like catering and
canteen kitchens for kinder gardens, hospitals, companies,...) as well as small food processors.
31
Large wholesalers with outlets are called Cash&Carry stores which offer a wide range of food- and
non-food products for retailers, gastronomy and bulk consumers. Most of them offer standard food
products but also organic food products. The shopping in these outlets is only possible for registered
companies by obtaining a member card.
The biggest wholesalers in Austria with their own outlets are Metro (www.metro.at), Cash&Carry
Pfeiffer (www.ccpfeiffer.at), AGM (www.agm.at) and focused on Western-Austria MPreis
(www.mpreis.at). Metro is the biggest wholesaler in Germany too (www.metro.de).
Wholesalers
focused
on
Organic
products
austria.at/partner/kooperationspartner/fachgrosshandel
can
be
found
on:
www.bio-
The biggest are:


Biogast (www.biogast.at): wholesaler for retail shops, gastronomy and bulk consumer
Cash&Carry Pfeiffer (www.ccpfeiffer.at): Cash & Carry mainly for gastronomy and bulk
consumers
9.2.3 Trading companies
Most of the trading companies import food products (mostly in bulk) and sell them to smaller food
processors and to the food industry.
Some of these trading companies offer in addition packaging and marketing services.
A larger trading company for dried fruits and nuts is Farmgold (www.farmgold.at) which also has a
packaging plant.
Sales offices with marketing services offer market and brand development, marketing, sales and
distribution of brands. They represent mostly smaller to medium sized international companies on
the Austrian (European) market and distribute these brands to the retail and wholesale sector. An
example for this type of service is Your Food Brands (www.yourfoodbrands.com).
9.2.4 Food processors and food industry
In addition to retail trade and wholesalers especially food products in bulk are purchased by food
processing companies like bakeries and confectioners, cereal producer, ice cream producer, milk and
yoghurt producer, chocolate producer,... For these bulk products packaging has to be practical and
easy to use. Quality, convenience and price are the major purchasing criteria.
32
9.3 Grocery market in Austria
LEH
2009)
Chart 12: GroceryMarktanteile
market in Austria
by(Stand
Market shares
4%
4%
4%
4%
31%
5%
REWE
SPAR
Hofer
Markant
Zielpunkt
Lidl
20%
ADEG
Übriger LEH
28%
Source: Nielsen Market Research
The grocery market in Austria dominated by 3 main players:

REWE Group (31%): with shop chains BILLA, MERKUR, PENNY, BIPA, ADEG, AGM

SPAR Group (28%): with shop chains SPAR, INTERSPAR, EUROSPAR, MAXI-MARKT

HOFER (20%): HOFER
These 3 together dominate about 80% of the market.
Also in other European countries the grocery market is concentrated on a few supermarket chains
like in Austria. This generates a market power on the side of the distributors and chains.
To get a listing of a new product or brand into one of the grocery chains is mostly not easy but there
are not so many other selling options for food producers. Supermarket chains usually ask for a ready,
marketable product and brand with an attractive packaging and purchasing price. Of course the
quality has to be according. These chains usually do not take their time to develop brands of
producers unless it is their own private label or trade brand. Since there are already plenty of
different products, brands and qualities of food products on the market they are only interested in
new product developments and new interesting products with a specific USP (Unique Selling
Proposition) making them unique and especially attractive for consumers.
9.3.1 REWE Group
Store brands:
33






Billa (www.billa.at) : quality supermarkets medium size; located mainly east part of
Austria and urban areas; positioning: quality, freshness and innovation for daily needs
Merkur (www.merkurmarkt.at):
quality large supermarkets (hypermarkets) with
positioning: freshness and high quality; located mainly east part of Austria and urban
areas
Penny (www.penny.at): discount supermarket with positioning: low price and value for
money
BIPA (www.bipa.at): drugstore supermarkets
ADEG (www.adeg.at): smaller regional supermarkets, mainly west part of Austria and
rural areas
AGM (www.agm.at): wholesale
Turnover (2011): 7.500 million Euro
Market share: 31 %
Number of shops (2011): 2.467 outlets
Employees (2011): 39.432
www.rewe.at
9.3.2 SPAR Group
Store brands:





SPAR: quality supermarkets medium size up to 1.000 m²; located mainly west and middle
part of Austria and urban areas; positioning: quality, freshness and innovation for daily
needs
EUROSPAR: large supermarkets with 1.000 – 2.000 m²
INTERSPAR: quality large supermarkets (hypermarkets) with 2.500 – 5.000 m² ;
positioning: freshness and high quality; assortment about 50.000 articles
MAXI MARKT: hypermarkets with 5.000 – 6.000 m²
INTERSPAR: quality large supermarkets (hypermarkets) with 2.500 – 5.000 m² ;
positioning: freshness and high quality; assortment about 50.000 articles
Turnover (2011): 4.770 million Euro
Market share: 28%
Number of shops (2011): 1.531 outlets
Employees (2011): 37.352
www.spar.at
34
9.3.3 Hofer
Store brands:

Hofer: good value for money discount supermarkets medium size with mostly own
trade brands; products are of good to very good quality because Hofer lets its products
produce by the most important quality brand producers but under its Hofer trade brands
Market share: 20%
Number of shops (2011): 430 outlets in Austria, 1.815 in Germany
www.hofer.at
9.4 Sales support and customer service
Purchasers of each distribution channel ask for sufficient sales support and good customer service.
Because the market is very competitive and there are many producers from countries within the
European Union or nearby who want to sell their products the level of customer service and sales
support currently offered by them or asked from the purchasers is quite high. If service or support is
needed by a distributor or buyer they want it very fast and mostly free of charge. Especially retailers
but also food processors might need a fast reaction. Retailers who are not serviced properly will delist a product or brand very quick. Food processors need a fast reaction for example if there is a
problem with the product quality or the delivery time as their production might be stopped by this.
Distributors and food processors mostly have little stocks of a product and therefore need a very fast
problem solution.
Because of the distance, the time difference to Asia but also the need of good European market
know-how it might be necessary to have a sales representative in the export market. This might be
only feasible for producers selling larger quantities as it involves high costs for this local customer
service. A solution for smaller producers could be to share a local sales support or to involve a
company which offers customer service on demand.
This issue has to be addressed and discussed with the buyer during the sales negotiation in order to
avoid misunderstandings and costly problems afterwards.
Order settling and delivery service
For all the distributors (retailers, wholesalers, food processors) order settling and delivery service is
next to the price very important. It can influence very much the image of the supplier and the
product preference for the distributor.
35
Key criteria are:

the endurance of the complete order settling: this is the time between placing the order by
the customer and delivery of the product to the customer
•
the ability to deliver and the readiness for delivery : the ability to fulfill the customer order in
the desired time
•
the condition and the accuracy of the delivered products
All these criteria are critical for a long term relationship to the buyer.
10 DRIED FRUITS
10.1 Introduction
Production and consumption of fruits globally continues to grow and this trend has not been
adversely impacted by the global economic crisis of 2009. According to FAO (FAO STAT - Food and
Agriculture Organization of the United Nations) and following the estimates of AS MARKETING, last
year the harvest of most fruit crops in the world reached its maximum level and a significant
decrease in the coming years may be caused only by extreme seasonal climatic conditions in one of
the major producing regions.
Despite the development of new methods for processing fruits (especially freezing), traditional
methods, such as drying, remain highly popular and common for certain types of fruits.
The Central Asia countries, in particular Tajikistan, Kyrgyzstan and Uzbekistan are one of the main
producers and suppliers of fruits and vegetables to the near and far foreign countries. Special role
and value to consumers have dried fruit, such as apricots, raisins, apples, or a mixture thereof.
The main regions of dried fruit production in Tajikistan are the Sughd and Khatlon regions and in
Kyrgyzstan Batken, Osh and Jalalabad oblasts.
As the research suggested, dried fruits produced in the territory of Tajikistan and Kyrgyzstan are
mainly exported to markets of Russia and Kazakhstan. Exports from Tajikistan are particularly done
from Isfara district of Sughd region because main processors and exporters of dried fruits are located
Isfara district.
Only a small portion of dried fruits (dried apricots), under the brand name "Dary Batkena" from
Batken, producer agricultural cooperative "Moltushum", as well as dried prunes, with pits and
without pits from Jalalabad region of Kyrgyzstan are exported to Russia.
The major players in the market of dried fruits or along the value chain of the product are producers
and suppliers of agricultural raw materials for farmers or industrial sector, farmers, traders,
wholesalers and consolidators, dried fruit processors, retailers and exporters.
36
Chart 13: Scheme of movement of dried fruit or dried fruit added value chain
Рынки
markets
Экспортеры
export
Переработчики
dried fruit
сущенных
фруктов
processors
Консалидаторы
consolidators
Оптовики
wholesalers
ers
Трейдеры
traders
Переработка
processors
Производители
producers
Source: Survey results of the study
10.2 Comparative analysis of the product properties and production potential
With regards to agricultural production, Tajikistan and Kyrgyzstan have many natural
advantages. These advantages are especially expressed in excellent soil, availability of water
sources, relatively low labor costs and a rather favorable climate. However, to succeed in the
37
new world market and in the markets of Russia and the expanding European Union, loc al
producers of dried fruits have to improve the quality and composition of the variety of products
offered for export. At the moment, the main problem is the limited supply of raw materials of
acceptable quality. The quality of the proposed goods is very inhomogeneous, due to discord on
the varietal composition, sugar content, fruit size, etc.
According to the research and review of the literature, dried fruits meant for selling in small or large
packages (from 100 g to 5 kg) should be of a high enough quality and most importantly of a consistent
quality. This problem can be easily solved by the introduction of calibration procedures, quality
standards and strict tolerance ranges similar to those of the EU and Russia. Additional limitations are
related to the lack of modern harvesting machinery and dryers. With the improvement of quality, in
order to improve attitudes to local products, it is necessary to develop better packaging and a better
marketing strategy.
In order to compete effectively in the market, local producers and processors of dried fruits
must improve the quality of final products and achieve stable product moisture content. To
improve profitability it is necessary to implement effective processing practices that would
adequately prevent both over-drying and under-drying of product.
Tajik and Kyrgyz dried fruits processors and exporters will need to identify the specific requirements of
each client and then develop standards and procedures that would ensure that the requisite technical
parameters are in place which enables maintenance of stable quality at the achieved level. To this end
Association of Producers and exporters of agricultural products in Tajikistan has already started working,
in particular, they together with producers and major exporters develop standards for dried fruits and in
the near future they will receive a special code.
Value of exported edible fruits from Tajikistan in 2010 amounted to 102 million U.S. dollars and the
value of exported dried apricots in 2010 amounted to 39.4 million U.S. dollars (www121). But in the
course of the survey one limiting factor in the way of access to European markets was identified that
is the lack of quality certification, in this regard Hilfswerk Austria International in the framework of
the second phase of the Project "Central Asia Invest" and the Rural Development Program, producers
and workers of processing industry are receiving certifications of GlobalGap and HACCP which is the
minimum requirement for access to European markets.
10.3 Varietal Composition
The main types of dry fruits produced in Tajikistan, are the following:
•
compote mixture (dried fruits blend for stewed fruit);
•
dried apricots;
•
dried grapes - raisins (several type and varieties)
•
dried apples.
Out of all the above mentioned types of dried fruit most significant in volume and mass are dried
apricot and its derivatives. Of the types of dried fruits highest volumes and the biggest demand is for
dry fruits blend for stewed fruit.
Production of dried fruits provides economic activity of several districts and livelihood for hundreds
of thousands of households in the region of production and processing.
38
Compote mixture
Compote mixtures is the first product of dried fruits in
terms of production and exports, as well as the second
most important product on the profitability after dried
apricots.
Compote mixtures are produced in several forms,
depending on the components following a specific order or
the purchase price. If an order is placed at the price of
purchase, suppliers by varying proportions of blending of
expensive and cheap dried fruits and considering the
quality of the raw materials produce such mixtures.
Thus, the wholesale price of mixtures can range from 0.50
to 1.20 U.S. dollars per 1 kg.
The reason why compote mixtures have high demand is
their low price, they are supplied mainly to Russia, both for
the budget organizations and to meet the demand in the
market.
There are the following types of compote blends:
•
Two-component mixture of dried apricots and
dried apples; Input materials are of low quality.
Buyers of this blend are usually units of the Ministry
of Defense and governmental penal agencies.
•
Four-component mixture consisting of dried
apricots, apples, pears and dried mountain
cherries. Input components of table and the third
grade.
•
Six-component mixture containing dried apricots,
apples, pears and dried mountain cherries, raisins
and dried quince. The input components of the
third and second grade.
•
Six-component mixture of dried apricots, apples,
pears and dried mountain cherries, raisins and
dried quince. The input components are of the first
and second grade. This mixture has a high content
of cherries and raisins. Usually this type of compote
mixture is meant for sale in the wholesale and
retail trade, for organizations and individuals.
Sometimes, following the orders dried peaches and dried
plums may be added to the components of compote
mixture. However, due to the fact that dry peach is not
easily available and dried prunes have a short shelf life,
these components are not used in commercial orders.
Dried apricots
Dried apricot production is the main activity in the
production of dried fruits, as the production capacity of
apricots in the country is great. Dried apricots are sold as a
basic component in compote mixture as well as a separate
39
dry fruit and forms various groups of products thus subdivided into separate standalone subproducts:
•
kuraga (dried apricots without stones, sulfur-treated);
•
dried uryuk (dried apricot with a stone, sulfur-treated);
•
dried uryuk (dried apricot with a stone, without sulfur treatment).
Kuraga and dried uryuk are of low quality and are used as ingredients for compote mixes, as for the
dried fruits of first grade and higher grade and "Extra" are separate products.
Dried grapes (raisins)
Various types of raisins are produced in Tajikistan. About 30% of the vineyards of Tajikistan belong to
groups that are called "sultan" or "kishmish". The main region producing raisins is Sughd region.
Despite the fact that a large number of vineyards are located in the RRS and wine-growing is very
well developed in these areas, here production of grapes for making raisins is limited. The reason is
that most of the grapes produced here are of table varieties and are sold for fresh consumption.
Dried Apples
This kind of dried fruit is the second major component of the compote mixture after dried apricot.
Suppliers of dried apples are farmers and procurement organizations located in Zarafshan Valley
(mostly Penjikent), Hissor and Faizabad districts, as well as farmers from Istaravshan, Sogd region of
Tajikistan. Lack of markets for fresh apples and low purchase prices for raw materials offered by
canneries forces farmers to dry the harvested crop of apples in order to save it and then to sell it as
compote mixtures.
Dried pears and quinces
Dried pears and quinces are auxiliary components of compote mixtures. Their production has a
targeted character. Their producers are individual farmers on their plots and gardens.
Dried Mountain Cherry
Dried mountain cherry is a component of the compote mixture and is supplied by farmers of
mountain areas of districts of republican subordination, forestry enterprises and farmers of Asht
district. Also some part of dried mountain cherry comes from Uzbekistan.
Dried plums
Dried plums, which are present in the compote mixture is mostly produced in neighboring countries Uzbekistan and Kyrgyzstan. Neighborhood and border transparency enable their presence in the
Tajik market of dried fruit. Local production of prunes in Tajikistan is in the stage of development and
cannot fully meet internal needs yet
10.4 Packaging
In export markets packaging is considered to be as one of the main criteria. The contents of each
package must be uniform. Only products of the same origin and variety, the same quality and
having same humidity content should be in the package. Packaging should effectively protect the
product and give it an attractive look.
As recent market research suggested dried fruits from Tajikistan and Kyrgyzstan has a
reputation of delicious and nutritious products. However, the products are unattractive
compared to products from other countries. This factor limits its value both in the expor t
markets and in the domestic market.
40
Good packaging reduces transportation losses, increases its aesthetic value and prolongs the shelf life of
the product. General packing requirements for any dried products is to ensure the proper preservation of
the product.
Retail packaging:
The most common retail packaging is a plastic bag of 200, 250 or 500 grams. Illustrations with the most
popular configurations of these packages are given in the text and in the annexes to the report. These
small packages require minimal additional processing, they are easy to put on the shelf and the quality
of the products preserves in them for longer than in a large wholesale packaging.
Plastic bags can be transparent, making it possible to see the product (as in «Rapunzel» brand in a
segment of the "premium") or completely opaque to the eye, with color printing (as in «Sunsweet»,
«SunnyFruits», etc.). Also the following options for packaging are prunes popular: plastic bags (no
possibility of re-closing) and tin cans. Transition to these types of consumer packaging effectively
brings higher profits to processor, providing the processor manages to choose the correct option of
packages for each of its customers - retailers, which enables more effectively deliver the product to
final beneficiaries.
This type of packaging provides additional opportunities for branding, because each package is able to
bear the attractive logo, advertising products.
In terms of food safety such packages are more convenient for consumers, because the buyer purchases a
product, which was not touched by sellers in the pre-selling process and other customers who examined
the product.
Package of dried apricots
Tajik dried apricots are mostly packed in bags of 25-50 kg. There are also packages of 10 and 12 kg.
These packages are meant for wholesale trade. Some of Tajikistan companies are packing dried
apricots into 5 kg boxes. This type of packaging is the most common in Russia and replicates Turkish
standard - the leader in production of dried apricots. For the internal market in Tajikistan dried
apricots for retail sale are also available in smaller package (100 grams, 250 and 500 grams).
Packing of compote mixture
Compote mixture is packed in bags of 30 kg. However, the weight can be adjusted on the request of
the customer. There is not any versatile weight. Sometimes the weight of each bag is not specified in
a batch.
Packing of raisins
Raisins packaging is more standard. Raisins are packed in cardboard boxes weighing 10 and 12 kg.
These packages are packages for wholesale trade.
10.5 Direct and indirect competition
The world exports and imports (respectively) of dried apricots over the past decade have increased
and reached a volume of 150 thousand tons per year compared to 100-120 thousand tons in the
early 2000s.
Undisputed leader of the world market of dried apricots is Turkey whose share is about 2/3 of the
total global supply. World's largest importer of dried fruits is Russia accounting for about 30% of its
global imports.
Due to the increase in the average cost of supply, in 2010 compared to 2009 imports of apricots has
grown by 7%, in real terms, a small but negative trend is observed.
41
In 2010, 44,815 thousand tons of dried apricots were imported to Russia which is 8% less than in the
previous year. The main supplier of this product to Russia is Tajikistan with a share of 60% of imports.
In second place, having about 30% of imports share are products from Turkey.
Chart 14: Sources of import of apricots to Russia
1%
32%
60%
7%
Tajikistan
Uzbekistan
Turkey
Others
Source: (AS Marketing)
But it is worth noting that Turkish dried apricots are more expensive compared to products from
Tajikistan so in terms of value Turkey is in the leading position with a share of 47%. Also among the
suppliers although with a large margin is Uzbekistan.
Russia is also one of the world's largest importers of dried grapes. Russia is characterized by low
levels of import prices on the product, which, however, is growing faster than the world average
rates. Since the beginning of the 2000s, Russia's average price for dried grapes increased almost fourfold exceeding $ 1,300 per ton, or 80% of the world price for it, whereas, for example, in 2002 the
value of the product was less than 40% of the world price. This is due to the orientation of the
geography of Russian imports from countries- supplies offering this product at a lower price, such
countries as Uzbekistan, Iran, Afghanistan, Tajikistan, etc. In terms of value in 2010, an increase in
the supply volumes at 5% is observed and a slight decline in real terms with an indicator of about 3%.
In 2010 the products from Iran in real terms makes 40% of imports, which is 10% more than in 2009.
Chart 15: Sources of import of dried grapes in the Russian Federation.
Uzbekistan
25%
Iran
31%
Afghanistan
15%
Turkey
10%
Tajikistan
Chile
China
Others
9%
5%
3%
2%
Source: (AS Marketing)
42
In major export markets of dried fruit from Tajikistan and Kyrgyzstan i.e. markets of Russia and
Kazakhstan dried fruits are present all year round. Most of companies and retailers prefer to work with
premium dried fruit, uniform in size and quality, well-known brands and companies that can provide a
regular supply of large quantities of products. As for the processing enterprises they purchase wholesale
dried fruits usually in cardboard boxes of 10 or 12 kg bags.
10.6 Strategic Opportunities
Global demand for fruits, grapes, nuts and other useful plant products in all kinds (including dried
fruit) is not limited in the foreseeable future and will continue to grow, following the progress of the
world economy and the spread of modern standards of consumption in developing countries.
While maintaining the pace of development of fruit and grape growing in the world at the level of
the first ten years of the two thousandth's, by 2020, the world's harvests of fresh grapes may reach
70 million tons per year, apricots - 5 million tons, plums - 12 million tons. At that dramatically will
increase production of dry above mentioned fruits: dried grapes - up to 1,300 thousand tons per
year, dried apricots - up to 300 thousand tons per year.
International trade in these products will develop even more dynamically. Production, processing
and sale of nuts and dried fruits may be one of the key factors and income generating products.
11 NUTS
11.1 Introduction
Tajikistan is in the center of origin of cultivated plants - South-West Asia and Central Asian homeland.
Presently it has 5,000 flora species. It is recognized that the foothill and mountain areas of Tajikistan
are one of the centers of origin of fruit crops, such as walnut (Juglans regia), pistachio (Pistacia vera
L.), almonds (Amugdalus communis L.), and jujube (Zizyphus sativa Ciarin), pear (Pyrus communis L.),
Loch (Eleagnus angustifolia), grape (Vitis vinifera L.).
Walnut (Juglans regia)
Among the fruit trees walnut nutritionally is one of valuable crops. The kernel of a walnut due to its
rich chemical composition: 76% oil, 22% protein, 16% sugars, vitamins (A, B, E, F and unripe fruits C)
is part of the highly nourishing products. Walnut kernel in fresh and fried is widely used in
confectionery and culinary industry. Walnut oil is also used in the preparation of oriental sweets. The
oil obtained from the kernels contains a number of unsaturated fatty acids. Out of the indispensible
proteins lysine is dominant whose content in the core of the walnut is more than in a chicken egg (1).
All of unripe walnut parts: the pericarp, the leaves contain different chemicals that are used in the
paint industry and in folk medicine.
Walnut timber is used to make various tools and for production of high quality plywood. Walnut
growing is a profitable industry.
Pursuant to the order № 683 of the President of the Republic of Tajikistan Emomali Rahmon as of
August 27, 2009 on the establishment of 46,901 ha of new orchards and vineyards, in Tajikistan
particular attention is being paid to creating walnut orchards in areas where climatic conditions
correspond to biology of walnut.
43
On productivity walnut surpasses all other fruit crops. Provided timely agricultural activities and
irrigation grafted seedlings in the age of 5-6 years, and not grafted ones in the age of 10-12 years
start fruiting. Saplings of early-maturing varieties come into fruition in the age of 3-4 years old.
For centuries of growing walnut seedlings in Tajikistan from seed origin many varieties were selected.
People have given names to the best varieties of walnut, such as: Kogoti - a variety with an average
thickness of the shell and recoverability of the whole kernel; Boghi – paper-like shell; Nulizogh - fruits
with elongated beak, Kumba - large; Himeli - botryoidal; Kuraki – it has a thick shell and hard
recoverability of kernel. Each variety brings together many forms, differing by their economic and
biological features.
A collection of walnut trees is created in Faizabad station of Horticulture by the Institute of
Horticulture and Vegetable Growing within the test plot of Tajik Academy of Agricultural Science,
Forest Environmental Protection Committee under the Government of Tajikistan. Over the recent a
walnut variety named Whiston was zoned and transferred to the state variety testing, perspective
form T-6/26.
Pistachio (Pistacia vera L.)
Pistachio Pistacia vera L. - One of the main tree species in the foothills of southern Tajikistan.
Pistachios have the most important forest reclamation, water conservation and soil protection value.
Exceptional drought standing, not exigent to the soil quality, its ability to develop a deep root system
makes the pistachio a valuable tree in the fight against soil erosion.
The role of pistachio trees is not less important in the mountain gardening. Pistachios are considered
to be a gourmet delicacy; they are eaten raw or roasted. On calorie vale pistachio exceeds almonds,
walnuts, bread, potatoes and cheese. It contains a large amount of fat and proteins that are well
absorbed by the body, as well as vitamins A, B, and E. It is recommended in the treatment of diseases
of liver, stomach and external ulcers, it improves digestion. Galls (buzgunch) are used to treat
stomach disorders, diseases of the teeth and gums.
The reason for the mass cutting of pistachio forests in the past is its high-calorie burning coal, which
is valued in the market above other species.
For Tajikistan with its arid climate and mountainous terrain pistachio is of particular importance. As a
drought-breed tree it can grow in places where any other fruit trees cannot grow.
Until recently, in all forestry enterprises pistachio was grown as a forest culture by creating
excessively dense forests with 3-5 and even 10 thousand seedlings per a hectare. At such dense
cultivation trees did not bear fruits at the age of 15-18 and even 25 years old, their growth declined
sharply. To provide their normal development, as well as to achieve high yields scientists proposed to
carry out the reconstruction of plantations – dilute the plantations leaving from 200-300 to 500 trees
and care for them, and the new pistachio orchard to create using standard orchard scheme.
Almonds (Amugdalus communis L.)
Almond grows best in areas with a dry climate and short mild winters. Among all the nuts and fruit
crops almonds are most drought-resistant trees. It does not require high soil fertility, it grows well in
stony slate, clay soils, black earth, gray earth, but the best way for it is a deep, easily permeable loam
mixed with crushed stone and a high content of lime. To obtain high yields it requires irrigation and
good farming practices. This is a valuable species for mining reclamation. Due to its high tolerance to
drought and undemanding nature to soil almonds can be cultivated on southern part of the country
in dry slopes of the rocky soil.
Almond tree usually has a height of 10 m or more, it forms a sinuous and taper trunk, lives up to 100
years. Its leaves are lanceolate or oblong-oval, shiny. The flowers are white, rarely pink.
44
Drupes have a length of 10-60 mm on a bare stalk up to 10 mm length with a semi-dry or dry pericarp
green or gray-green. When ripening, the fruit pericarp often cracks mainly along the ventral suture
and the base.
Ordinary almond tree is a drought-resistant tree, warm-and light-demanding. It refers to the shortday plants.
Almond takes no damage to its trunk and branches as a result short frosts of -25 - 28 ° C, but is often
damaged during flowering by late spring frosts. Most varieties of almonds have long been cultivated,
they have been formed in a relatively mild climate with a short winter, so they have a short and not
profound period of winter dormancy and its vegetation starts early. In case of provocative weather
conditions in the winter (if after thaw suddenly come frosts) strong frost damage to flower buds
were observed.
Useful properties of nuts are stipulated by the following reasons:
1. The presence of vitamins and minerals
2. The presence of biologically active substances
3. The presence of mono-unsaturated fats.
For comparison purposes, according to their useful properties, in the tables below we indicate the
presence of minerals and vitamins, as well as a percentage of the daily requirement of nutrients for
the body.
Table 16: Content of minerals in walnuts, pistachios and almonds
Content of
minerals
phosphorus
potassium
copper
Iron
magnesium
manganese
zink
selenium
calcium
sodium
Walnuts
Unit of
measure
(mg)
345,68
440,92
1,59
2,89
158,73
3,41
3,10
98,77
3,53
Pistachios
% of daily
requirement
49%
22%
53%
29%
40%
68%
21%
10%
1%
Unit of
measure
(mg)
483,25
1040,56
1,33
4,2
119,93
1,27
2,29
9,17
109,35
10,58
almonds
% of daily
requirement
69%
52%
44%
42%
30%
25%
15%
13%
11%
2%
Unit of
measure
(mg)
483,25
705,47
0,99
3,7
268,08
2,29
3,07
2,47
264,55
-
% of daily
requirement
69%
35%
33%
37%
67%
46%
20%
4%
26%
-
Source: (еморехи)
45
Table 17: Content of minerals in walnuts, pistachios and almonds
Content of
minerals
Walnuts
Unit of
measure
(mg)
Vitamin С
1,41
Vitamin B1
0,34
Vitamin B2
0,15
Vitamin B3
1,13
Vitamin B5
0,57
Vitamin B6
0,54
Vitamin B9
9,88*
Vitamin A
21,16**
Vitamin E
0,71
Vitamin K
2,822*
* unit of measure – mkg
Pistachios
% of daily
requirement
2%
29%
13%
7%
11%
36%
2%
0,21%
3%
4%
Unit of
% of daily
measure
requirement
(mg)
2,47
4%
0,84
70%
0,16
13%
1,43*
9%
0,51
10%
1,27
85%
49,38*
12%
261,02**
3%
1,94
9%
13,05*
17%
** unit of measure – ME
almonds
Unit of
measure
(mg)
0,21
1,01
3,39
0,47*
0,14
49,38*
26,21
-
% of daily
requirement
18%
84%
21%
9%
10%
12%
116%
-
Walnut (Juglans regia)
Walnut fruits have different shapes: from round to elongated, which are covered with fleshy and
pubescent naked shell. The thickness and the surface of the shell is various. The weight of dry fruit is
from 4 to 24 g, depending on the thickness of the shell. Kernel recovery is up to 55% (4).
In Tajikistan and Kyrgyzstan, depending on the elevation of above sea level walnut blooms in the
second half of May to June.
Due to weather conditions, the phase of flowering of pollen supplier and pistillate flower in a single
tree continues from 10-15 to 45 days. The fruit after one month of flowering is gaining its volume. Its
green pericarp and kernel grow until maturing.
Walnut gives good fruits from the age of 20 to 60 years old. Despite the fact that the walnut
thermophile culture, it's almost not damaged by winter frosts.
Long-term studies in Moldova and Crimea revealed that walnut trees can withstand up to -30-350 C.
In Central Asia annual shoots are damaged at temperatures of -26-280 C. Stability of walnut to low
temperatures is much dependent on the growth and development of a tree in the vegetation period.
In Tajikistan and Kyrgyzstan walnut suffers most from the return of frost during its flowering.
Walnut is very light-demanding crop. At a single planting of trees or sparse planting the roots and
crown of walnut trees develop normally and give good harvest every year.
Walnut is very demanding to moisture, so it grows well in moist soils. On the other hand its massive
root system that goes deep to soil saves it from a lack of moisture in the upper soil layer.
However, despite this, in the dry lands without preliminary accumulation of moisture establishing
walnut garden is not recommended.
Its strong root system thrives on rocky and gravelly soils, but the level of ground waters should not
be closer than 2 m. Not very salty soil is suitable for walnut.
Pistachio (Pistacia vera L.)
Pistachio is a dioecious, wind-pollinated plant. Therefore, in any type of pistachio plantations, along
with fruit-bearing pistillate species there pollen suppliers are always present. As a rule, to ensure
46
guaranteed yields, both in natural populations and in cultures of seed origin there is an approximate
1:1 ratio of pistillate species and pollen suppliers.
In the gardening practice the number of individuals can be significantly reduced with increasing the
ratio of male and female specimens to 1:6, 1:8 or even 1:10.
However, even at overlapping of flowering of plants in the majority of both sexes, any prolonged
rainfall, high humidity, windless weather and other factors during flowering period make it difficult to
transfer the pollen by wind, thus adversely affecting the normal fertilization of female inflorescences.
By the time of full ripening of the crop usually remain 5-7 clusters (21offs) of good-quality fruit.
Overall, over the period from the end of flowering to ripening of crop losses could amount to an
average of 80%, of which 50% are biological drop of ovaries and 30% accounts for losses from
damage by pests, diseases and adverse climatic factors.
The age of commencing commercial yield is typically for self-seeding 45-50, for the cultures of the
forest type - 25-35, for garden types - 18-20 years old.
For pistachio periodicity of fruiting is characteristic.
Crop capacity of pistachios in Southern Tajikistan varies from 320 to 1000 g per tree. In the forest
plantations of Danghara district of Tajikistan (Sarsarak, Tereklitau ridges) in middle-aged plantations
(60-80 years) the crop, depending on climatic factors, was from 50 to 1500g per tree.
Strong variations in crop capacity depend on the individual circumstances of each individual. Thus, in
some trees yield even in the good years does not exceed 300-350g, some others being in the same
equal conditions reaches 12-18 (22) kg per tree.
Maximum yield per tree is 65kg.
With a favorable combination of climatic and environmental factors in the flowering period of trees
of both sexes in the cluster of female inflorescences the maximum number of fertilized ovaries is
generated which is inherent to biological characteristics of each individual. This in its turn leads to
the formation of a good harvest and ultimately helps to preserve the rich diversity of fruit in the
plantation.
Based on the above stated, a good grade of kernel reflects the quality of a walnut. Grade also reflects
the skills of nutcracker who managed to ensure the integrity of the core at a grade so called a
"butterfly" when removing the shell, which is difficult to achieve when the walnut is dry. Therefore
the nutcrackers before removing the shell they soak nuts in water. Buyers of nut cores complain that
soaking nuts results to fungus and mold growth, since the kernel is not enough dried after soaking in
water.
Table 18: Overview of the characteristics of kernel grades
Grade
А
Б
В
Г
Д
Description of the grade
White Butterfly
Butterfly chopped and mixed
In large whole kernel, mixed with other particles
Remnants of partitions, chopped, reddish (used in bakery)
Brown, black, and sometimes moldy fines
Percentage of
grade core
recovery
40%
20%
20%
10%
10%
47
Table 19 shows the seasonal fluctuations in prices for different types of kernel in the market of
capital city of the Republic of Tajikistan. At the same time the trader’s margin is from 10% to 20% of
the wholesale price.
Table 19: Fluctuations in prices for different types of kernel in the market of capital city of the
Republic of Tajikistan (TJS)
Months
Grade «А»
Grade «B»
Grade «C»
Grade «D»
Grade «E»
18
23
23
23
27
30
33
33,5
33,5
12
20
20
20
24,5
26
28,5
29,5
29,5
11
15
15
15
20
24
26,5
27
27
7
7
7
8
10
13
16
16
16
1
1,5
1,5
2
2
2
2,5
2,5
2,5
September
October
November
December
January
February
March
April
May
Source: (agr12)
12 HONEY
12.1 Introduction
Honey is a natural product which contains high grades of vitamins, enzymes, minerals and other
beneficial to human body elements.
Tajikistan is a country of highest mountains. Its original nature is full of striking contrasts like a
complex and dissected topography, vertical zonation of climate and other geographical and climatic
factors contribute to have a rich and unique flora consisting of more than four thousand species of
flowering plants and over 200 honey bearing plants. Mountains cover about 93% of the territory of
the country and in spite of it the area of farmland and forests is about 4.4 million hectares, and their
honey reserves, estimated at minimum, is equal to 132 thousand tons, which enables to increase the
number of bee colonies to 480-500 thousand. However, the current level of use of honey production
reserves is no more than 6-10% (htt). The situation is similar in neighboring Kyrgyzstan, where the
use of honey reserves makes 6-7% (www12). In the Soviet period these figures were significantly
higher but due to the civil war in Tajikistan, political and economic reforms in the post-Soviet zone
bee-keeping industry suffered greatly up to the almost complete disappearance in some regions.
At present, along with reforms in this industry the situation is improving, the number of bee colonies
is increasing and the geography of apiaries is being restored and production of honey increases.
Honey is extremely valuable product that nature gives us.
Honey contains more than 300 substances, 30 trace elements, in small amounts its composition
include pollen, royal jelly, in nature there is no any other better food staff that can give us the
optimal amount of trace elements and vitamins to improve resistance to the action of harmful
factors and various diseases.
48
Honey has the ability to crystallize (to settle), the timing depends on the type and storage conditions.
It should be noted that if honey crystallizes, it shows its good quality. Crystallized honey, if desired,
can be easily melt in water bath without overheating
The most wide spread varieties of honey produced in Tajikistan and Kyrgyzstan, given the
geographical and climatic features of these republics, are cotton honey, Field (Mountain), clover and
sunflower honey. Some varieties of honey, due to insufficient amount of certain crops and the lack of
significant properties are of combined, such as cotton honey can be combined with clover honey, or
a field with cotton honey.
The quality of honey is often judged by its appearance, scent and taste. Many varieties of honey
differ from each other not only by color, but also by a variety of tints and shades. Honey varieties can
be defined by its aromaticity. Some varieties have a mild pleasant flavor, but there are varieties of
honey with a specific odor (tobacco, chestnut, etc.). There is light, medium and dark honey.
Bees produce many varieties of honey, which are distinguished by botanical, geographical and
technological characteristics.
According to its botanical origin honey is divided into:
 flower;
 honeydew;
 combined;
Flower honey is distinguished as monoflora amd polyflora honey. Monoflora honey is obtained from
the nectar of one major honey plants - linden, buckwheat, sunflower, acacia, etc. It is determined by
the color, taste, appearance, scent, texture, content of dominant pollen and other features.
Polyflora –s a honey collected from the various plants. It is also divided into forest, meadow, steppe,
fruit, mountain-taiga, etc.
Geographic feature points the country, territory or area, where honey plants grow.
Technological feature means the way of collecting and processing of honey: centrifugal, cellular, cell,
extruded. Thus, the centrifugal honey is obtained by pumping it from the comb by honey extractors,
cellular - in their natural packaging, perfectly clean and mature.
Cell comb honey is a honey contained in special cells made of thin plywood or food grade plastic,
such cell contains about 500 grams of honey.
Extruded means the honey received by compression: herewith cells are destroyed. When rendering
quality honey from the honeycomb of his deteriorating.
12.4 Comparison of the prices
Table 20: Analysis of the wholesale and retail prices of different varieties of honey in Tajikistan
Wholesale price
Retail price
Cotton
Field
Herbs
Clover
Sunflower
12
15
21
25
21
25
11
15
19
22
Source: (agr12)
49
12.5 Strategic Opportunities
Both in Tajikistan and Kyrgyzstan after gaining independence utilization of honey reserves reduced
sharply and today this figure for these two countries does not exceed a figure of 10%.
Starting from the year of 2000, the situation in the beekeeping sector in both countries began to
improve. In Tajikistan, the number of bee colonies and production of commercial grade honey in the
end of 2003, compared to 2000 increased from 29.1 to 42.8 thousand colonies and from 172 to 524.9
tons, or by 47.1 and 205.2% respectively. At that the majority of bee colonies (from 69 to 83%) and
production of marketable honey (55 to 96%) were in backyard apiaries of population.
Another important indicator –output of commercial grade honey from one honey bee colony has
increased in the country from 5.9 kg in 2000 to 12.2 kg in 2003.
Also in recent years the demand for packages of bees, honeycombs, hives, honey extractors and
other equipment that is connected with bee keeping has increased which is on the one hand caused
by wear and impoverishment of old ones and on the other by the increase in people's interest in
beekeeping. Small number of relevant tools and equipment delivered from Russia is clearly not
sufficient. Therefore urgent actions to rehabilitate the formerly existed workshops on fabrication of
equipment and establishment of new ones are required. The use of local resources should
significantly reduce the cost of manufactured products.
Lots of problems associated with organization of bee breeding have accumulated in both countries
and without doing this work one cannot expect progress in the industry. There is a need for
governmental support to restore the network of tribal apiaries whereby along with the conservation
and improvement of breeding and productive qualities of local bee populations works are to be
carried out on developing local purebred breeds. Moreover production of early queen bees and
packages is one of the cost-effective aspects of the industry in the country.
An issue of veterinary protection of bees from diseases, diagnostics and differentiation, especially
putrid ones remains extremely urgent. Development of comprehensive prevention and disease
treatment actions is a priority of regional, provincial and city veterinary services.
Poor quality of imported into the country drugs is another cause of concern. Beekeepers often
complain about the low efficiency of the medicines, there were cases of bees’ mortality after their
use.
Improved management of pests and combatting predators of bees plays an important role as well. In
recent years, wasps, philanthus, hornets and golden bee-eater cause considerable damage to
apiaries, sometimes destroying up to 10-30% of colony. From the end of July to mid-September,
when the cotton nectar abjection is underway the colonies almost in standstill from fear of massive
attack of bee eaters, solitary bees flying out are eaten by these birds.
Among the other prevailing industry challenges are economic problems, because at the market
conditions to rely on governmental support is not feasible. Sale of honey alone does not provide
profit, but in most cases little output per a bee colony makes apiary keeping unprofitable.
Meanwhile, international best practices show that the integrated use of bees for the production of
various kinds of products, including biologically active products is a promising direction. Thus, in
countries with well-developed beekeeping more than 400 types of health care substances based on
BAPP are produced. For Tajikistan, with its dozens of mountain spa clinics wide application of
apitherapy and BAPP in traditional medicine practice is of great socio-economic importance.
To solve the problem a diversified approach should be used whereby it is necessary to improve
production technologies of innovative products of beekeeping that are applicable to local conditions,
to ensure the optimal development of bee colonies, their resistance to disease and a good
winterization. Due to the location of beekeeping areas at different altitudes (from 300 to 2500 m or
higher above sea level) and climatic features migratory beekeeping is highly efficient in the country.
50
Along with honey in the mountains zone it is possible to produce ecologically clean BAPP: pollen,
propolis and royal jelly. It should be borne in mind that in the mountains beekeeping season is much
shorter and the longer the period of hibernation. Here, with the end of the main honey gathering
(end of July - mid August) inflow of pollen and nectar to the colony sharply reduces accordingly
growing brood reduces as well, while in the valley (provided irrigation) grow of brood in the hive
prior to hibernation lasts until October. Therefore, in the mountainous area different types of
products must be carried out in the optimum combination and with the timely and accurate
preparation of families for the winter. It should be stated that that the country a law on beekeeping
is adopted which provides legal field for it.
XXI century kicked off a new upsurge of beekeeping in Tajikistan and Kyrgyzstan. Practical
implementation of all the targets currently set forth for the industry requires solution of many
problems. However, an efficient utilization of advanced technologies and best practices of bee
beekeeping provides an opportunity to the sector to become a highly profitable agricultural activity.
51
13 PRODUCT QUALITY AND SAFETY STANDARDS
The requirements for the European market are quite high. There are some requirements which have
to be met by law or European regulations; some are requested by the buyers and others are
important for the consumers.
13.1 Product requirements by European law and Regulations
13.1.1 European standards
There are European standards set valid for all member countries of the European Union.
In addition there might be specific national rules – see 13.1.2
Standards exist for
 packaging, labelling, product safety, ..
 e.g. for food, textiles, electric products, toys,…
Here are the most important standards listed but in addition for each product the applying EU but
also national standards have to be checked.
Information about product labelling and packaging for food and non-food-products can be found on
http://europa.eu/legislation_summaries/consumers/product_labelling_and_packaging/index_en.ht
m
Information about the regulations for labelling of foodstuff can be found on:
http://ec.europa.eu/food/food/labellingnutrition/foodlabelling/proposed_legislation_en.htm
For Packaging and packaging waste more information can be found on:
http://ec.europa.eu/enterprise/newapproach/standardization/harmstds/reflist.html
Product safety law for toxic ingredients is valid e.g. for
 products for consumption
 products in direct contact with human body
An import ban is in force on goods containing mercury, PCB and PCT products/goods, CFC and HCFC
products/goods and goods that have been surface treated with a cadmium substance or which
contain such substances as stabilisers or dyeing agents.
Health control: most imports of products of animal origin and non-animal origin from non-EU
countries must enter the EU via an approved Border Inspection Post (BIP) under the authority of an
official veterinarian.
Each consignment is subject to:
 a documentary check,
 an identity check and,
 as appropriate, a physical check
52
Foodstuff of non-animal origin (like fruits,...) must be accompanied by a certificate issued by an
official authority in the country of export. This concerns especially contamination of food due to
 Microbiological criteria, like E. Coli, Salmonella, Listeria,…
 Contaminants, like dioxin, aflatoxin, cadmium, lead, mercury, radioactivity,...
 Pesticides residues
 use of food additives and flavourings
 plant hygiene
More
information
about
health
control
of
products
of
non-animal
origin:
http://exporthelp.europa.eu/update/requirements/ehir_eu11_01v001/eu/auxi/eu_heanahc_legislat
ion.pdf
The regulation EC 1881/2006 sets maximum levels for contaminants in food to be placed on the EU
market: http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:2006R1881:20100701:EN:PDF
13.1.2 Specific Product requirements
The European Union has set specific import requirements for each product category depending on
the country of origin. Apart from these basic import regulations each European country can request
additional requirements. All these can be found under
http://exporthelp.europa.eu/thdapp/display.htm;jsessionid=E5B03387141F7FC9C9FCFC3C310A7A06
?page=rt%2frt_RequirementsAndTaxes.html&docType=main&languageId=en
With this link all the necessary regulation and also the responsible authorities for the country of
import can be found.
For example the European requirements for the import of dried apricots into Austria are:






Control of contaminants in foodstuffs
Control of pesticide residues in plant and animal products intended for human
consumption
Health control of foodstuffs of non-animal origin
Labeling for foodstuffs
Plant health control
in case of organic apricots additionally: Products from organic production
In addition specific import requirements for Austria (button: AT at "Overview of Import
Procedures") have to be considered. This covers mostly regulation concerning packaging, labelling,...
and contacts for further detailed information.
13.1.3 Requirements for organic products
Very strict requirements apply for organic products. Information about these requirements can be
found on:
http://exporthelp.europa.eu/thdapp/taxes/show2Files.htm?dir=/requirements&reporterId1=EU&file
1=ehir_eu12_01v001/eu/main/req_sporgan_eu_010_0612.htm&reporterLabel1=EU&reporterId2=A
T&file2=ehir_at12_01v001/at/main/req_sporgan_at_010_0612.htm&reporterLabel2=Austria&label=
Voluntary+-+Products+from+organic+production&languageId=en&status=PROD
53
Imports of organic products from third countries into the European Union are allowed according to
the Commission regulation 1235/2008.
13.2 Product requirements by Buyers (distributors, wholesalers)
In addition to the legal requirements most of the buyers of food products will request following
quality standards:
13.2.1 High quality level
For the European market it is a need to offer products in high quality and with good packaging even
for the standard products. Otherwise the customers are not willing to buy this kind of products at all.
There are consumers who are very price concerned mostly because of limited budget but even these
consumers expect a certain product quality level and good packaging.
Quality food products are bought by the end consumers emotionally depending on the quality
perception of the product and its packaging. This is also helping to build trust into the product and
the brand. Certificates can enhance the trust building. Therefore the distributors expect this from the
supplier.
Product photos: very good photos on high quality packaging (concerning material and print)
54
Many customers look for all natural products: no additives, no sulphur,...
For products with a very good quality perception and for unique products customers are willing to
pay a high price otherwise it is a commodity for a low price.
Be aware that the judgement of quality by European consumers might be entirely different to
Tajikistan and Kyrgyzstan standards. For example most of the European customers will not except
too many or too large brown spots on dried apricots although it is something natural. Somehow
European customers expect almost "perfect" optical quality. They go very much for the "look" of a
food product and sometimes even sacrifice the taste.
13.2.2 Continuity
It is very important to keep the standard of quality always continuously on the same level.
Otherwise there will be no other order from this buyer.
The buyers will accept a shipping only if all the products are produced in the agreed quality.
In most cases if the quality was not as agreed the buyer refused to take over the goods and did send
the whole shipping on the costs of the producer back. There would not be any negotiations about a
discount or partly takeover of the shipping. Needless to say there would not be another contract
anymore.
13.2.3 High standards of delivery service
Delivery service means that the shipment was on time delivering the ordered products in the
ordered quality. Since warehousing is very costly in Europe distributors, shops and food producers
tend to minimize their stocks. The consequence is that it is very important for them that the agreed
delivery times are kept.
13.2.4 Product packaging
There are legal requirements (see 13.1.1 and 13.1.2) and requirements of the buyer.
Usually products are marked with the information about
 ingredients used
 usage instruction
 “made in …”
55



producer
bar code
use-by date
The requirements vary from product category, shop type and country.
13.2.5 Transport packaging
Transport packaging should be arranged and checked with the buyer and the transport company.
Preparing a shipment following issues should be considered and agreed with the buyer:

Packaging size, dimension:
o Are the standard sizes of the buyer? This is important because most distributors
have computerized warehouses which only can handle certain dimensions.
o Which size is needed to fit into a container?
o Which dimensions are suitable for space saving loading of the container?

Packaging material:
o Is the material strong enough to avoid damages?
o if wooden: does it need fumigation?
o weight of the material: esp. important in case of air freight e.g. for sample
sending or urgent delivery

Information on transport packaging:
o Is the material strong enough to avoid damages?
o What needs to be printed on?
o usually:
 product type: e.g. “dried apricots”
 article number
 number of units: e.g. “12 pieces/box, 8 boxes/ carton”
 bar code
13.3 Product requirements by Consumers
In addition to the requirements mentioned in chapter 13.1 and 13.2 consumers of quality food
products are interested in:

high quality of products – be aware of differences in the quality perception: see also
13.2.1

high quality of packaging: material, design, printing, ...

detailed information about content and advantages of the product, eventually with
background information about its origin

trust building elements: expertise, test results, image, design, food labels
More information about packaging and food labels see also in chapter 16.
56
14 EXPORT POTENTIAL OF RUSSIA AND KAZAKHSTAN MARKETS
According to reports of Russia and Kazakhstan research companies, consumption of dried fruit in the
markets of Russia and Kazakhstan has a tendency to increase. This will attract a large number of
global players to these markets and will create considerable competition in them. The main suppliers
of dried fruit to these markets are such countries as China, Turkey, Thailand, Pakistan, the U.S. and
the countries of Central Asia, where the main suppliers are Tajikistan and Uzbekistan.
Total consumption of dried fruits in Russia and in Kazakhstan amounts to more than 260 tons per
year and in the near future with an increase in economic welfare of population in these countries,
this figure could increase by several times. This may also contribute to reducing the price for this type
of product as the volume of production will increase.
Dried apricots – on the supply of this product to the markets of Russia and Kazakhstan's leading
positions belong to countries of Central Asia, including Uzbekistan and Tajikistan followed by Turkey
and China, dried apricots from Kyrgyzstan to these markets in dried form is not imported due to the
absence of a reliable supply chain from the country so they are delivered via Tajikistan and
Uzbekistan.
In the wholesale markets of Russia and Kazakhstan price for this product, according to the retail audit
for harvest of 2011, was from $ 2.3 to 4.5 depending on the variety and quality of the product.
According to statistical data products from Tajikistan and other Central Asian countries are very
competitive in terms of price and quality of the product.
Dried prunes
Dried prunes because of its medicinal qualities and contained vitamin have a wide range of
consumers. Prunes are widely used in cooking, confectionery and casual consumption.
Key players in the supply of prunes to Russia and Kazakhstan are the enterprises of Uzbekistan and
China and the countries of Latin America. The price of prunes in the wholesale markets of Russia and
Kazakhstan is slightly higher than the price of dried apricots and was at a level of 2.7 to 3.8 $ per 1
kilogram of processed product of 2011. The world market price for this product at FOB terms ranges
1.7-2.1 $ per 1 kg.
In Kyrgyzstan, Osh oblast annually more than 1,000 tons of prunes is produced. This product also
goes to Russia and Kazakhstan through Uzbekistan and Tajikistan, it is re-exported.
Raisins (dried grapes)
Raisins are the most popular product among dried fruits. According to research reports, raisins
consumption is slightly higher than the consumption of dried apricots and accounts for a little more
than a third of the total consumption of dried fruit in potential markets of Russia and Kazakhstan.
The price of this product has perhaps the widest range of fluctuation depending on the product
quality and the method of processing, as well as the volume and availability in the market. At the
time of conducting a retail audit of retail and wholesale for harvest of 2011 the price range from $
2.0 to 4.5 per 1 kg was filed. In the world trade this product is mainly represented by large producers
like China, India, Iran and Uzbekistan. FOB price from the suppliers of these countries was from 1.4 to
2.2 $ per 1 kilogram of product.
57
Figs
The main supplier of figs to Russia and Kazakhstan markets is Turkey, followed by China, Iran and
Pakistan. Wholesale trade in Russia and Kazakhstan established a price for this product at a level of 4
to 5.7 $ per 1 kg of product. The price of this product in the world markets varies from 2.3 to 3.0 $
per 1 kg. For Tajik and Kyrgyz producers and exporters in view of inadequate production facilities to
compete with the world leaders in the production and supply of figs will not be easy, but to have this
product in their product line, even with a minimal margin, in our opinion is strategically justified.
Dried Apples
Dried apple is a common staple food of people in Russia and Kazakhstan. The main suppliers of dried
apples for consumption and confectionery production are China, Turkey and Iran. The average
wholesale price in Tajikistan and Kyrgyzstan according to the research was in October 2011, from 2.0
to 2.5 $ per 1 kilogram. And in China, a kilogram of dried apples at a price FOB can be purchased at $
1.7 per 1 kg.
According to the Federal State Statistics Service of Russia total imports of dried fruits to Russia is
more than 122 thousand tons for a total amount of almost 214 million dollars. It should be noted
that Tajikistan in total imports of dried fruits in Russia consistently ranked first for several years.
Table 21: Trade indicators of dried fruits imports to Russia in 2010
Volume of
import (million
U.S. $)
WORLD
Share in import
in Russia (%)
Volume of
imports
(tonnes)
Average price
(U.S. $ / tonne)
Rank countries in
world exports
Share of world
exports (%)
213844
100
122437
1747
100
Tajikistan
79968
37,4
62681
1276
8
4,6
Turkey
39788
18,6
14299
2783
1
20,3
Chile
28743
13,4
12602
2281
3
9
Argentina
16530
7,7
7489
2207
10
3,4
Uzbekistan
13774
6,4
9794
1406
14
1
USA
13450
6,3
5806
2317
2
16,5
Serbia
4538
2,1
1768
2567
21
0,7
Germany
4039
1,9
442
9138
4
6,1
Ukraine
3354
1,6
2476
1355
39
0,1
Moldova
2994
1,4
2122
1411
30
0,2
China
1963
0,9
737
2664
6
5
Kyrgyzstan
1824
0,9
1116
1634
44
0,1
Source: (Federal State Statistics Service Russia)
58
Chart 16: Trading indicators of imports of dried fruit to Russia in 2010
100%
90%
37%
42%
80%
50%
70%
60%
50%
40%
30%
20%
10%
0%
2008
2009
Imports from other countries
2010
Imports from Tajikistan
Table 22: Trade indicators of dry fruits imports to Russia in 2010
WORLD
Tajikistan
Turkey
Chile
Argentina
Uzbekistan
USA
Serbia
Germany
Ukraine
Moldova
China
Kyrgyzstan
Volume
of
import
(million
U.S. $)
213844
79968
39788
28743
16530
13774
13450
4538
4039
3354
2994
1963
1824
Share
in
import
in
Russia
(%)
100
37,4
18,6
13,4
7,7
6,4
6,3
2,1
1,9
1,6
1,4
0,9
0,9
Volume
of
imports
(tons)
122437
62681
14299
12602
7489
9794
5806
1768
442
2476
2122
737
1116
Average
price
(U.S. $ /
ton)
1747
1276
2783
2281
2207
1406
2317
2567
9138
1355
1411
2664
1634
Rank
countries
in world
exports
8
1
3
10
14
2
21
4
39
30
6
44
Share
of
world
exports
(%)
100
4,6
20,3
9
3,4
1
16,5
0,7
6,1
0,1
0,2
5
0,1
59
Table 23: Trade indicators of imports id dried fruits to Russia in 2010
Dried
apricots
Mixtures of
dried fruits
and nuts
other dried
fruits
Dried prunes
dried apples
Import to Russia
from Tajikistan (U.S.
$ thousand)
Tajikistan's share in
Russian imports (%)
Tajikistan's share in
world exports. (%)
37 487
44,9
8,6
31 799
81,2
11,8
5 183
36,6
1,1
4 242
5,7
0,9
1 258
56,3
1,3
Leading indicators of Tajikistan in the Russian market are very stable, in previous years, the share of
Tajikistan in Russian imports exceeded even 50%. In 2010, this figure has dropped significantly.
Chart 17: Trading indicators of imports of dried fruit to Russia in 2010
100%
90%
80%
42%
37%
50%
70%
60%
50%
40%
30%
20%
10%
0%
2008
2009
Imports from other countries
2010
Imports from Tajikistan
The surveys of Tajik exporters suggest that currently dried fruits from Tajikistan are mainly sold in
Russia and Kazakhstan markets. They state that provided improvements in the quality of products
produced in Tajikistan and Kyrgyzstan and compliance with international standards, they have all
chances to penetrate to other markets, including the markets of Europe.
Tajikistan exports to Russia several categories of dried fruit, the main ones are dried apricot, mixture
of dried fruits and nuts.
60
It should be noted that Tajikistan has quite strong competitive position in almost all product ranges a blend of dried fruits and nuts, dried apples. The weakest category is dried prunes.
Table 24: Trading indicators of imports of dried fruit to Russia in 2010
Import to Russia
from Tajikistan
(U.S. $ thousand)
Dried
apricots
Mixtures of
dried fruits
and nuts
other dried
fruits
Dried
prunes
dried
apples
Tajikistan's share
in Russian imports
(%)
Tajikistan's share
in world exports.
(%)
37 487
44,9
8,6
31 799
81,2
11,8
5 183
36,6
1,1
4 242
5,7
0,9
1 258
56,3
1,3
Another important traditional export market for dried fruits and vegetables produced in Tajikistan is
Republic of Kazakhstan. In 2009, annual imports of dried fruits to Kazakhstan amounted to about
4,600 thousand tons worth U.S. $ 2.7 million. Like the Russian market, the market of Kazakhstan is
quite attractive for exporters of dried fruits.
The main types of products imported to Kazakhstan are:
-
Mixtures of nuts and dried fruits (28% of imports),
Dried apricot (20%),
Prunes (19%).
These three categories of products cover more than 65% of total imports.
Chart 18: Category dried fruits imported to Kazakhstan
Mixed nuts and dried fruit
27%
30%
Dried apricots
Prunes
4%
20%
Dried Apples
19%
Other dried fruits
61
In contrast to the Russian market, where Tajikistan holds stable leading position in the category of
"dried fruit", in Kazakhstan, Tajikistan is only a 6th place after China, Uzbekistan, Germany, Turkey
and the United States.
Tajik exporters, considering their competitive position in the Russian market are not fully using their
potential in Kazakhstan market. If the volume of raw materials allows, Tajikistan can quite easily take
following Russian the market of Kazakhstan as well. This is also confirmed by wholesalers and
retailers who sell dried fruits in the three major markets of Kazakhstan.
Considering the natural conditions of Tajikistan and Kyrgyzstan, as well as proximity to Kazakhstan,
the market of this country is considered to be promising for the producers of Tajikistan and
Kyrgyzstan.
An important area for conservation of export and holding sustainable market segment is to work
with foreign partners.
In recent years products distribution networks of Russia and Kazakhstan are developing rapidly. More
and more new market players - both organizations in wholesale and retail trade as well as mediation,
distribution and transportation companies are emerging. Trade networks are being expanded, trade
infrastructure is developing (shopping areas, warehouses, etc.) market participants intensity in the
field of marketing increases, more and more companies are developing on-line trading.
Dried fruit distribution system is considered as part of food distribution system, as it does not require
separate actions and is integrated into existing commercial structure.
There are only differences related to the origin of goods: domestic or foreign.
Food distribution system consists of three main levels:
First level: Sales of goods produced abroad (distributors, sales representatives) and, in some cases,
local producers.
Second level: resellers of various levels (wholesale markets, bases, warehouses and so on.)
Third level: retail (shops of different categories and markets)
General requirements of trading companies to the suppliers of goods:
- The level of quality, that obligatorily meets state standards;
- Stable high quality of products;
- A wide range of goods;
- Good design of packaging and labels;
- Preferably having a good brand;
- Stable regular supply;
- Acceptable agreed price.
All of these requirements are quite versatile and are equally important for the distributor and its
partners from the retail trade. Violation of any of these requirements greatly reduces the
attractiveness of partnership, because the effects of any instability quickly affect the behavior of
consumers, on the marketing and commercial results. For example, the uncertainty of supplies
causing confusion among consumers, facilitates their transition to other goods.
In Kazakhstan, many market participants at the time of the study were impersonal and unknown to
consumers. Tajik and Kyrgyz exporters have the opportunity to enter the market, even with relatively
large volumes.
Dried fruit market in Kazakhstan is not so competitive and just from the surface it seems to be fully
saturated, however, the range of products is not wide enough and the food is too "standardized." In
the market there are almost no dried fruit produced by modern technologies, which are
62
advantageous in appearance and usefulness. In this situation, there are great opportunities for the
market penetration to the new enterprises having advanced technologies.
The market offers 53% of packaged products, 35% of producers sell their products by weight, which
reduces consumer confidence to the quality of the goods. Packaged products intended for wholesale
buyer, in 68% are packaged in 1 kg bags. Among the smaller packages 200 gr ones are leading. It is
advisable to consider the possibility of entering Kazakhstan market with packaged product.
The market researched does not use trademarks at all, suppliers are working on their traditional,
long-established way using the wholesale level of distribution. Lack of emphasis on brand awareness
offers opportunities for Tajik and Kyrgyz producers to gain a niche through introducing their brands
into the market and ensuring consumer confidence in their product quality.
The price range for dried fruit has a wide spread and depends on the quality of the product and
category of commercial enterprise. The bulk of buyers seek to acquire packaged products with
guaranteed purity and high quality product. The current price level enables producers to supply
goods through official distribution channels and get quite a reasonable profit.
15 PRODUCT MARKETING IN THE DOMESTIC MARKETS
At present, both in Tajikistan and in Kyrgyzstan, most of the produced dried fruits are sold open
without appropriate packaging.
Dried fruit market, Khujand and Isfara, Tajikistan
63
Dried fruit market, Osh and Jalal-Abad, Kyrgyzstan
Wholesale market for dried fruits, Isfara, Tajikistan
64
In retail and wholesale markets the main products are stored and offered openly in plastic bags (PE)
of 30-40 kg. In these large bags it is also sold in wholesale, while in retail it is mainly sold in smaller
plastic bags of 1 to 5 kg. On the packaging there is mostly no description of the product
characteristics and no price printed. However, on these markets buyers have the opportunity to taste
the product before buying it.
It should be noted that at the time of the study dried fruits in supermarkets and large stores are
mainly offered and sold in plastic containers with 100 to 500 grams but the product packaging is not
attractive at all.
Dried apricots in a quality orientated supermarket in Osh
Shelf with dried fruits, candied fruits and nuts in a quality orientated supermarket in Osh
65
As research and surveys show customers on the domestic market do not have any information about
local producers and processors. There is no distinct brand in Kyrgyzstan. Over the past two years the
manufacturers of the Batken region produce products under the brand of "Treasure of Batken" but
the majority of consumers do not know of this brand.
HWA and USAID have in a joint project in Tajikistan associated processors and exporters of
agricultural products. A joint brand was developed for the association but the brand is known only to
few customers.
16 PRODUCT MARKETING IN EUROPEAN MARKETS
Marketing is very important for all products on the European market. This is especially true for end
consumer goods.
But also wholesalers and producers who buy bulk products are marketing concerned. For them the
quality of the product with the corresponding price is key. Quality does not only mean product
quality but also service quality in connection with the sales and the after sales process.
The markets in Europe are very saturated for almost all kind of products. A large variety of products,
qualities, brands and packaging are on the market. So the consumers have a huge choice. Therefore
good product marketing is very important to be selected between the competitors.
Europe cannot be seen as one single market. Entering the European food market means facing a
variety of different perceptions of taste and quality, different expectations, different price
sensitivities and cultural aspects depending on the country. In addition the language issue has to be
considered, esp. in marketing for packaging and advertising but also brand name.
Before starting to develop products with packaging and brands the target group has to be selected,
defined and their needs analyzed.
Only after selecting the target group and knowing more about them a marketing strategy can be
developed. For a good marketing strategy the development of the product strategy is the first step
before selecting the price strategy and developing a communication and advertising strategy.
Within the Product strategy following sub-strategies have to be considered and developed if
applicable:
•
•
•
•
•
•
•
Product features and Assortment strategy
Differentiation from the competition: Unique selling proposition (USP)
Brand development and Brand strategy
Quality level
Packaging
Warranty
Services and After sales strategy
66
Before developing any strategy sufficient market-research of the target market and the target group
on this market needs to be done. As said already in chapter 13 consumers in other markets might
have a different quality perception and do definitely have a different market surrounding with a
different product range of various competitors – even within the European Union if not within the
country itself. For example in Germany the consumers in former Eastern-Germany have still partly a
different buying behavior than the consumers of the rest of Germany. The same is true in Italy
between the Northern part and Southern-Italy.
After a careful market analysis an own product positioning within the product category should be
found and developed in order to differentiate your products from the competition and create
uniqueness.
16.1 Price strategy
Price setting for end consumers is a very sensitive topic. By setting a price level somehow
automatically a quality level goes with it. Especially if consumers cannot evaluate the product quality
themselves they look at the price for orientation. A higher product price means mostly the product
has a better quality which needs to go together with a nicer packaging – see also 16.2.1.
Price setting with retailers, wholesalers and other distributors can be very challenging. Especially the
big retail chain and larger wholesalers know their market power and use it widely. Once given in
there is mostly never a chance to come back to the original level even if discussed during the
negotiation. Since the supplier competition for food products (also for dried fruits and nuts) is very
high the buyer have an easy talk to find an alternative supplier offering the same product for less or
better customer service.
16.2 Packaging
Packaging is a very good marketing tool and has to fulfill many functions:
1 wrapping of the product / holding the product (e.g. if it is liquid like honey)
2 protecting the product from damage and spoiling
3 offering information about the product and its origin
4 giving usage information
5 “marking” the product (brand, design, form,...) so that it can be easily recognized again
6 working as communication tool (advertising, image,...)
So apart from wrapping and protecting a product the packing has many more marketing functions.
Looking at the product packaging examples shown in chapter 15 only the basic functions (1 and 2)
are fulfilled.
67
For the European market all these function must be fulfilled in a very good way to be successful.
Especially with limited marketing and advertising budget the marketing needs to focus on the
packaging and its design in order to develop a successful product.
The label on the packaging for retail products must be in the language of the country where the
product is sold. This is consumer law in the European Union.
16.2.1 Packaging and price
Very often the packaging is setting the price level for the product. The consumers usually are not
able to differentiate the quality in the store. Therefore they orientate themselves by the packaging
and the price for the product.
Table 25: Price comparison for candied fruits
Candied Fruits
g
Brand
unit price
price per 100g
Euro
Euro
Som
Bella
simple pack
100
0,39
0,39
22
Back Mit
brand pack
150
1,29
0,86
48
Hauswirth
with chocolate
250
2,99
1,20
67
Brand BELLA
68
BACKMIT
HAUSWIRTH
The product of the brand BELLA and the brand BACKMIT are more or less of the same quality.
Comparing the taste and the visual appearance there is no real difference recognizable for a normal
consumer. The only visual difference is that the fruits in BACKMIT are mixed; BELLA sells the product
by fruit type.
A big difference can be recognized in the packaging design and packaging material. Resulting from
this the price for the BACKMIT product is more than double compared to BELLA: 0,86 Euro / 100g
compared to 0,39 Euro / 100g.
An additional step further is the product HAUSWIRTH: it contains candied fruits dipped / covered
with chocolate. This makes the product more sophisticated and adds an additional value for the
consumers. The price per 100g is 1,20 Euro. Of course this is also a result of the nicer and higher
value showing packaging.
69
16.2.2 Packaging on the Austrian market
Various dried apricot
brands:
see comparison
in chapter 15.
Various nut brands:
70
Honey:
Clearly recognizable brand SEEBERGER: assortment of dried fruits and nuts
71
16.3 Food labels
Food labels on the packaging can create a positive product image and can help to build trust into the
brand.
16.3.1 Eco-labelling
Consumers in Europe are quite sensitive towards nature. Therefore an eco-labelling to proof
environmental friendliness growing and production can be advantageous. Examples for individual
eco-labels are: “organic”, “environmentally friendly”, “earth friendly”, “all natural”, ...
The European Union Eco-label (“Flower logo”) is voluntary and can be put onto the packaging if the
ECO-label
criteria
are
established.
More
information
on:
http://ec.europa.eu/environment/ecolabel/index_en.htm
16.3.2 Social-labelling
Some Consumers in Europe care much for social issues and therefore prefer products with a social
label who proof that social standards (fair trade conditions for small farmers in poor regions, against
child labour,...) are kept. This target group is usually willing to pay a higher price for these products.
"Fair trade" is the most recognized social label in Europe. Fairtrade is an alternative approach to
conventional trade and is based on a partnership between producers and consumers. Fairtrade offers
producers a better deal and improved terms of trade. More information on www.fairtrade.net
16.3.3 Food quality label in Austria
Since customer very often cannot evaluate the quality of a food product some certified quality labels
have been developed. The labels can only be used after extensive audits and an issued certificate by
an authorized organisation.
Well-accepted food quality labels in Austria are:
"certified quality from Austria"
"good food from the farm"
72
Certified organic labels:
"Organic Austria"
"Organic Austria out of organic farming"
16.4 Quality
Product quality is an important issue for success on the European market - see also chapter 13.
Many consumers buy food by the look of the product and packaging and less by the taste. Unless
they know the brand already they cannot evaluate the quality of a product in the supermarket
because there is no possibility of tasting the product before buying. Therefore they need to trust the
brand, the information on the packaging and the design of the packaging and judge by it.
16.5 Cross cultural aspects
If entering into new markets and also if targeting more than one market in Europe cross cultural
issue need to be considered. In the Marketing strategy it concerns almost any kind of communication
to the target group like product features, branding, packaging but also advertising like leaflets,
folders and promotions.
Cross cultural issue can also be a topic in the daily communication with buyers and distributors. It can
have an effect on the ways and "hidden" rules of the negotiation of a price or a contract. Some
cultures do not like to negotiate discounts too much where else other cultures "need" the "bazaar"
mentality as part of the game.
73
17 CONCLUSIONS AND RECOMMENDATIONS
Besides the Russian and the Kazakh market the European market is an attractive market for
producers of Kirgizstan and Tajikistan although it is very competitive.
Europe cannot be seen as one single market. Entering the European food market means facing a
variety of different perceptions of taste and quality, different expectations, different price
sensitivities and cultural aspects depending on the country. In addition the language issue has to be
considered, esp. in marketing for packaging and advertising but also for the brand name.
Most of the dried fruits and honey on European markets are produced either in one of the lower cost
European countries like Spain or Easter European countries (Hungary, Bulgaria) or these products are
imported from Turkey or Northern Africa (Egypt, Tunisia). Compared to these producers products
from Kirgizstan and Tajikistan have quite a long transport route to Europe which adds up to the
production costs for a considerable amount. In addition customs duties might apply.
Buyers in the European Union usually ask for a good customer service during and after the sales
process. This has to be thought of and a solution has to be prepared.
Considering all these issues and partly disadvantages for Asian suppliers on the European market
there are basically 4 strategic export approaches for Kirgiz and Tajik producers:
1. Value added products with unique product features (see also chapter 16) for a medium or
higher selling price. These products have to be of very good quality and could be (must not
be) a mixture of traditional Tajikistan and Kyrgyzstan ingredients (ways of living) mixed with
western ways of living.
Me-too products – products which have no special ingredients or product features - are
offered widely by the international (e.g. Turkish) competition and would have very little
chance.
2. Value added traditional Tajikistan and Kyrgyzstan-products with high quality to offer an
exotic Asian touch for westerners, esp. health products, would meet some of the current
trends in Europe (see also chapter 8.3)
3. Bulk products with no or little value added for a low competitive price especially to European
food processors or wholesalers
4. Value added bulk products for a competitive price especially to European food processors or
wholesalers. Food processors are usually interested in convenience oriented products (like
partly finished products) but also need to differentiate themselves from their competition by
using different innovative ingredients.
While the first two options require a higher amount of market know-how and marketing and are
therefore more demanding and costly the third option is much faster to implement.
The risk of the third option by selling bulk products which have no or little added value is that it can
be easily replaced by a supplier with a lower price and / or better customer service. This can be
avoided with the forth strategic option by developing and selling value added bulk products.
74
18 LIST OF TABLES, CHARTS AND BOXES
TABLES
Table 1: Numbers of agriculture companies and organizations in the agriculture sector...................... 8
Table 2: Number of agricultural enterprises and organizations in agricultural sector ......................... 10
Table 3: Costs for production of various agricultural crops Sughd region, Tajikistan, 2010................. 11
Table 4: Production costs are various agricultural crops, Osh, Kyrgyzstan, 2011................................. 12
Table 5: The profitability of production of main agricultural crops in Tajikistan.................................. 14
Table 6: Profitability of manufacture of main agricultural crops in Kyrgyzstan.................................... 14
Table 7: Productivity of the main crops (t / ha) .................................................................................... 14
Table 8: Area of apricot orchards in Sughs region of Tajikistan, 2010 .................................................. 18
Table 9: The most common varieties of apricot and their brief description ........................................ 18
Table 10: Costs of growing and maintenance of 1 ha of apricot garden ............................................. 20
Table 11: Average price of apricots in the major markets .................................................................... 21
Table 12: Profitability of apricot in various stages of selling (somoni) ................................................. 22
Table 13: Countries in the European Union (EU) .................................................................................. 24
Table 14: Household structure Austria 2010 ........................................................................................ 28
Table 15: Food retail stores in Austria .................................................................................................. 31
Table 16: Content of minerals in walnuts, pistachios and almonds ..................................................... 45
Table 17: Content of minerals in walnuts, pistachios and almonds ..................................................... 46
Table 18: Overview of the characteristics of kernel grades .................................................................. 47
Table 19: Fluctuations in prices for different types of kernel in the market of capital city of the
Republic of Tajikistan (TJS) .................................................................................................................... 48
Table 20: Analysis of the wholesale and retail prices of different varieties of honey in Tajikistan ...... 49
Table 21: Trade indicators of dried fruits imports to Russia in 2010 .................................................... 58
Table 22: Trade indicators of dry fruits imports to Russia in 2010 ....................................................... 59
Table 23: Trade indicators of imports id dried fruits to Russia in 2010 ................................................ 60
Table 24: Trading indicators of imports of dried fruit to Russia in 2010 .............................................. 61
Table 25: Price comparison for candied fruits ...................................................................................... 68
CHARTS
Chart 1: Structure of areas under agriculture crops (thousand ha) ........................................................ 7
Chart 2: Structure of gross yield of agricultural crops (percentage of total) .......................................... 7
Chart 3: Structure of sown areas of crops (ha). ...................................................................................... 9
Chart 4: Structure of gross harvest of agricultural crops (percentage of total)...................................... 9
Chart 5: Costs structure for production of principal agricultural crops in Tajikistan. ........................... 11
Chart 6: Overall cost structure of production of major agricultural crops. .......................................... 12
Chart 7: The cost structure for the production of major agricultural crops in Kyrgyzstan ................... 13
Chart 8: Overall cost structure of production of major agricultural crops in Kyrgyzstan ..................... 13
Chart 9: Profitability of apricots at various stages of selling (before and after processing) ................. 21
Chart 10: Buying behavior 2005 and 2010 ............................................................................................ 28
Chart 11: Total organic market in Austria 2010 (by turnover) .............................................................. 30
Chart 12: Grocery market in Austria by Market shares ........................................................................ 33
75
Chart 13: Scheme of movement of dried fruit or dried fruit added value chain .................................. 37
Chart 14: Sources of import of apricots to Russia................................................................................. 42
Chart 15: Sources of import of dried grapes in the Russian Federation. .............................................. 42
Chart 16: Trading indicators of imports of dried fruit to Russia in 2010 .............................................. 59
Chart 17: Trading indicators of imports of dried fruit to Russia in 2010 .............................................. 60
Chart 18: Category dried fruits imported to Kazakhstan ...................................................................... 61
19 REFERENCES
Agriculture department of Sughd region [Bericht]. - 2010.
AS Marketing The analysis of imports of dried fruit hazelnuts, almonds and cashews in Russia 20092010 [Report].
Bio Austria Biomarkt [Report]. - Wien : Bio Austria, 2010.
EUROSTAT EC.Europa Taxation [Online]. - 2012. - 20 12. 2012. http://ec.europa.eu/taxation_customs/resources/documents/taxation/vat/how_vat_works/rates/va
t_rates_en.pdf.
EUROSTAT Eurostat Income [Online]. - 2011. - 20 12. 2012. http://epp.eurostat.ec.europa.eu/tgm/table.do?tab=table&init=1&plugin=1&language=en&pcode=t
ec00113.
EUROSTAT Eurostat Population [Online]. - 2012. - 20 12. 2012. http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-QA-09-031/EN/KS-QA-09-031-EN.PDF.
Federal State Statistics Service Russia [Report]. - Russia : [s.n.].
National Statistical Committee of the Kyrgyz Republic [Bericht]. - 2010.
OECD Better life index [Report]. - 2012.
State Committee on Statistics Tajikistan [Bericht]. - 2010.
Statistik Austria [Report]. - Wien : Statistik Austria, 2010.
TES - Center [Report]. - 2011.
The Nielsen Company Trade in Austria [Report]. - Wien : [s.n.], 2011.
www.agroinform.tj [Online]. - 2012. - www.agroinform.tj.
www.beelife.org [Online]. - 2012. - http://www.beelife.org/pchelovodstvo-zarubezhja/tadzhikistan-ipchelovodstvo.html.
www.kabar.kg [Online]. - 2012. - http://www.kabar.kg/economics/full/39171.
www.trademap.org [Online]. - 2012. - http://www.trademap.org/Country_SelProductCountry.aspx.
www.еморехи.рф [Online]. - 2012. - http://www.xn--e1aajokm0b.xn--p1ai/home/greckij-oreh.
76
77

High Value Agricultural Products (HVAPs)

Transcrição

Documentos relacionados

CADAP NEWSLETTER

DRYING STARCH NATIVE YAM Renata Duarte Almeida

TESTS OF ANTIMICROBIAL ACTIVITY OF 6

Super Crew - American Institute for Cancer Research

Packaging and Shipping Services

Booklet NEU

Ptelea trifoliata Common Hoptree

FLAVOR BIOGENERATION IN MANGABA (Hancornia speciosa

certificate

Manual of Environmental Etiquette 2.0 - Planeta Sustentável