The path to successfully placing a food product on the market can be challenging, especially for those who are just embarking on this adventure. More and more ambitious and risk-prone individuals realize that agriculture is much more than selling fresh produce at the local market, and branding processed fruits and vegetables is becoming an attractive idea for many novice entrepreneurs. Their enormous ambitions are now supported by platforms that allow them to market their products much better, and ‘organic’,’sustainable’,’gluten-free’, and light are slowly becoming key terms that every producer must consider when it comes to food products.
Marketing Guru Lessons
Of course, this is best known by micro-producers, small and medium producers who create incredible products in the domestic market even without dizzying investments.
– OPG Anto Jurić is celebrating twenty years of existence this year, since registration, although my parents have been engaged in agriculture their whole lives. When your parents have an OPG, then as a kid, you have to help all the time. We used to spend almost the entire summer holidays in greenhouses. By nature, I am quite creative and have always looked at things outside the box. I ordered seeds of all sorts of strange and unusual plants from Thailand, from the Amish in America, but that was where it ended because I didn’t sell it to anyone. But then the idea was born: why not create a brand, because I am close to Zagreb, yet in the countryside? I had already started working on a friend’s recommendation for some restaurants. Until I had the right idea for a brand, I didn’t want to go public with it. I was guided by the words Seth Godin from a book where he says that a brand name should not associate with what you do – said Ilija Jurić, owner of Tukan Greensa, a brand he runs within his father’s OPG.
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Young farmers mostly lack business education – knowledge and skills about running an OPG, product placement, communication with customers, negotiating with collectors, branding, marketing
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The name of his brand accurately defines what Jurić does – agriculture, but in a slightly different way. Tukan is just such a bird, he explains, specific and unique because of its beak.
Above Will, Work, and Effort
Otherwise, OPG Anto Jurić primarily deals with the cultivation of vegetable seedlings and successfully collaborates with about fifty agricultural pharmacies and garden centers in Croatia. As for the Tukan Greens brand, it is engaged in the cultivation of edible flowers, micro-vegetables, and various edible exotic leaves. Fresh herbs make up almost their entire assortment and are used by many domestic restaurants, but are also purchased by stores like Metro, Konzum, and Spar.
– What is needed to start? If we were to look at it in ratio, I would say 15 percent initial knowledge, 25 percent money, and 60 percent effort, along with will, work, and effort. Of course, financial investments are also needed, as well as some agricultural land. Knowledge comes by itself; I learn the most from my mistakes. Today, when there is an answer to everything on the internet, it is not difficult to learn something new. Young farmers lack knowledge in the form of business education for running an OPG, especially regarding placement, communication with customers, negotiating with collectors, branding, marketing… Today, being a young farmer is more challenging than ever because you also have to be a marketing expert, a delivery person, a seller, or an agri-manager – explained Jurić, who was, let us remind you, selected as the best young farmer in Croatia last year.
The Most Important Food Safety
And indeed, a farmer today must be much more than a person who spends days on the land and engages in cultivation. Goran Vrabec, the largest Croatian producer of hot sauces made from chili peppers, is also aware of this. His OPG in the Zagorje village of Igrišće, located about 25 kilometers from Zagreb, was established in mid-January 2013, and after just two years, the company Volim ljuto.
– Processing agricultural products has a high added value, but certain conditions must be met because it is still food production, so ignorance or non-compliance with all necessary procedures can have dangerous consequences for consumers. To start processing, you need a processing facility and equipment, which is a significant investment at the beginning of the business, but everything can be done gradually as the business grows. The most important thing is to adhere to the rules related to food safety, and for that, additional knowledge is required that is not related to agriculture but to production technology – describes Vrabec.
In the market, he emphasizes, there are many producers who market their products but do not have correct declarations, do not have any food safety control system, and generally do not know enough about processing for their products to be available for sale.
– Of course, we didn’t have everything at the beginning of our business either, but we learned a lot and over time brought it to the necessary level. I don’t want this to be a criticism or to discourage anyone from entering processing. I want to say that if you are engaged in food production, you must know that safety is very important because the consequences can be much worse than a possible fine for incorrect labeling – warns Vrabec, whose OPG produced about twenty tons of chili peppers this year, which is about 25 percent more than the previous year.
The Necessary Skill Set
He takes production and processing very seriously, as evidenced by the fact that Volim ljuto constantly has more than fifty products on offer, of which only a few are the foundation of his business. The rest is available in their online and retail store, and they do this in limited quantities on an annual basis.
– There is no guaranteed profit. Profit will depend on how the market accepts the product, and that will depend, besides market needs, on the marketing of the product or category. For example, when we started production, hot sauces were a relatively unknown product, consumed by very few people. Over ten years, we worked a lot on educating the market until we reached the point where today, more or less, everyone is familiar with what hot sauce is, but it is just a matter of whether they will use it or not – explains Vrabec.
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Today, being a young farmer is more challenging than ever because you also have to be a marketing expert, a delivery person, a seller…
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Explaining how much time and effort it takes for the market to truly accept a product that was not popular in Croatia until then, he emphasizes that entering agriculture must be understood as entering entrepreneurship. Vrabec believes that many potential farmers do not realize that agriculture today requires much more than just growing agricultural crops. Namely, a skill set is needed that is much broader than agricultural production.
– Before they start collaborating, small producers need to thoroughly research the market. This includes identifying potential suppliers and traders, understanding their business models and needs. Clearly stating one’s own values, mission, and goals helps attract partners who share similar values; due to strong branding, the producer is also attractive for collaboration.
How to Get Money
Small producers need to know how their products or services can contribute to the business of potential partners because they create opportunities for mutual benefit. In this regard, Volim ljuto is a good example because its product complements the restaurant offerings of business partners in hospitality. Participating in business events, fairs, and B2B platforms can help small producers establish contacts with other companies.
– The so-called networking plays a crucial role in business relationships – comments Jakov Kolega, CEO of Greengreen Advisory.
When a potential partner is found after extensive networking, Kolega emphasizes that it is important to negotiate the terms of cooperation. This includes prices, delivery conditions, payment deadlines, and other relevant factors. Once cooperation is established, it is crucial to maintain relationships. Regular communication, monitoring results, and adjustments according to partner needs help strengthen long-term relationships. Small producers must be flexible and adaptable to cope with market changes or specific partner needs, but for all this, capital is needed.
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Calls for obtaining non-repayable European funds are announced. One can expect from 5,000 to two million euros per project with a return of 50 to 85 percent, depending on the call
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– The largest source of financial support for entrepreneurs is EU funds. The calls currently announced are primarily aimed at the agricultural, manufacturing, and processing industries. In agriculture, calls for small farms, investments in solar power plants on agricultural land, or facilities for primary processing of agricultural products are expected by the end of the year. A call for investment in the agricultural processing industry, primary agricultural production, and the expansion of supplementary activities on the farm is also announced. For each project, one can expect from 5,000 to two million euros in non-repayable funds with a return of 50 to 85 percent, depending on the call. For other manufacturing and processing industries, a large call for small and medium enterprises focused on energy and resource efficiency is announced. Many calls are open and announced for cooperation between entrepreneurs and scientific organizations in the field of innovations. In general, a large number of calls are being prepared to invest in ecological activities, digitalization, and innovations – concludes Kolega.
