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Horticulture industry: production, preservation and processing of fruits and

berries in Estonia and Latvia

RIGA, JUNE 2010

„Horticulture industry: production, preservation and processing of fruits and berries in Estonia and Latvia” Industry analysis, Report 06/2010

CONTENT

Summary..........................................................................................................................................3THE DEVELOPMENT OF LOCAL ORIGIN PRODUCTS’ MARKET: THEORETICAL REVIEW..........................................................................................................................................7

Branch of local origin products...................................................................................................8Development of direct trade......................................................................................................17Promotion of processing products.............................................................................................22

HORTICULTURE INDUSTRY IN LATVIA..............................................................................27Characteristics of the sector.......................................................................................................28Trade balance.............................................................................................................................31Consumption of fruits and berries juices...................................................................................35Offer of fruits and berries juice.................................................................................................36Home manufacturing of plant origin foods...............................................................................43Positioning of home manufactured foodstuffs...........................................................................53Product flow in home food manufacturing................................................................................57Impact of external environment factors.....................................................................................60Legislative framework...............................................................................................................65

HORTICULTURE INDUSTRY IN ESTONIA............................................................................66Level of Estonian fruit and berry growing until 2008...............................................................67What are the reasons for small crops?.......................................................................................69The export and the import of fruits and berries in Estonia........................................................71The consumption of fruits and berries.......................................................................................77Data about the consumption in the 21st century.........................................................................78Organic products........................................................................................................................81Preservation conditions of fruits and berries in Estonia............................................................83Processing of fruits and berries in the best-known enterprises in Southern Estonia.................85Results of the survey carried out among Estonian fruit and berry growers...............................93

SOURCES OF INFORMATION................................................................................................106

Study developed: Dace Dance, Ģirts Kindzulis, Vilis Seleckis, Juris ČarbartsStudy translated: Linda Sūniņa

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Summary

Development of foodstuff industry

Development of foodstuff industry of local origin mainly is related with the possibility to

increase incomes of farms and development of rural area. Significance of the branch is

regularly underlined in documentation of rural development policy. Defenders of “local

foodstuff” together with researchers of the phenomenon of this branch have identified

two mutually connected directions of the branch: (1) Local foodstuff underlines the local

origin as closed or limited system, where foodstuff is produced, processed and sold in

geographically restricted area. In some way it establishes channel system for good

delivery as an alternative for conventional products. This system contains such product

channels as farmers’ markets, farm shops, food delivery baskets and other direct forms of

trade. (2) Local foodstuff can be as an added value for export. It means a particular

product is being labelled with the origin of place and certified, but it can be purchased

and consumed in other geographical place. In such case the local origin is being

associated with a special assortment, traditional products and quality of products.

Role of foodstuff manufactures

The activity of local foodstuff manufacturers gives not only the economic advantages in

form of profit for the manufacturers themselves, but establishes supplementary

advantages for the society in general: Firstly, their activity is a support for development

of common agriculture, small entrepreneurship and economic activity of the region.

Secondly, manufacturing of local products helps to establish loyalty between

manufacturer and customer. Thirdly, local foodstuffs are connected to identity of region;

their manufacturing helps to preserve sand bring forward traditional knowledge. Exactly

this can be done by manufacturers with their basic business.

Values of product manufacturers of various levels can differ. Research, which covers the

comparison of value of farms and conventional products, determines the basic value for

both manufacturing groups is the same – provide the highest quality products for their

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customers. Both abovementioned manufacturing groups have several significant factors

as: values of customer, care for employees, honesty, offer of tasty food, ethics and social

responsibility, as well as competitiveness.

Production trends of fruits and berries

In Estonia in the year 2001 the area of orchards and berry gardens was 18,526ha and the

total production amounted to 27,031 tons including 18,232 tons of fruits and 8,343 tons

of berries, in addition 456 tons of other berry cultures. By the year 2004 the area of

orchards and gardens had decreased to 15,690ha and the decrease was constantly

continuing being 8,100ha in 2008. Consequently, during a couple of last years the area of

fruit trees and berry bushes decreased almost by half in Estonia.

In Latvia areas of orchards and berry gardens in total has decreased from 13.6 thousand

ha in 2006 to 7.4 thousand ha in 2008. Accordingly total production has decreased from

46.3 thousand tons in 2006 to 32.4 thousand tons in 2008. Positive trend is seen in

production effectiveness on 1 ha – it has increased from 33.7 to 44 centers of one ton in

Latvia. According to official statistics there were 80ha of orchard seed-plots and 14ha of

berry seed-plots in Latvia in 2007.

The location of orchards and berry gardens

In Estonia concerning the area of orchards and berry gardens, the biggest area is in the

County of Tartumaa – 12% of the total area of agricultural enterprises in Estonia. The

following positions are occupied by the Counties of Võrumaa and then Viljandimaa. The

smallest number of fruit trees and berry bushes is grown on the islands of Hiiumaa and

Saaremaa where the population is the smallest. Also, the County of Läänemaa has few

fruit trees and berry bushes which are very few in the counties with the severest climate –

Eastern-Virumaa, Järvamaa and Jõgevamaa, also Western-Virumaa and Raplamaa.

In Latvia there is no data available on statistics of location of orchards and berry gardens

in Latvia.

Factors affecting crops

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In Estonia in the recent years winters were as if mild: long periods of thaw, the

temperature was rising in December and January even over +100 C. The plants stopped

resting and started life activities. Then there were some frosty day with the temperature

below -200C or -250 C (in some places -300C). It especially harmed buds of blossom but

also destroyed the branches of plums trees and currant bushes. In several years the

strawberry plants suffered from frost when there was no snow cover and the roots froze.

Many raspberry stalks perished.

The decrease of fruit and berry plantations was caused to a great extent by the growth of

the people`s incomes and the increase of the people`s labor engagement. On the basis of

the questionnaire we may reveal the absence of time, wish and need for producing garden

crops. A significant reason is also the easy access to fruits and berries, their cheap price,

high quality in retail trade. This is why many production gardens have been turned into

pleasure gardens. Old (large) farm gardens were not taken care of because the crop could

not be sold; in the end the fruit trees were felled and berry bushes rooted out. This is why

the area of berry bushes has been greatly reduced (Table 1).

The year 2009 gave good crops. Several entrepreneurs have extended their apple

orchards, planted berry cultures. There are also new beginners – the founders of apple

orchards. On the plots of new private houses young fruit trees have been planted.

Export and import of fruit and berries

Not all fruits and vegetables can be grown in Latvia and Latvian inhabitants are unable to

consume all domestic production. In 1st quarter of 2009 a total value of fruits, vegetables

and canned food group export comprised 6 millions LVL, and import – 24 millions. The

difference is explained by seasonality and market demand for exotic fruits and vegetables

during winter/spring months. Group of drinks and juices shows less difference in trade

balance. During first month of the year export comprised 20 MLVL and import

19 MLVL. The biggest export of fruits, vegetables and preserves was to Baltic States (3

MLVL). CIS countries were the second group of states accepting export of fruits,

vegetables and preserves (1 MLVL). In comparison, export of drinks and juices goes to

several groups of states. The biggest export of drinks and juices was to Baltic States and

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CIS countries (6 MLVL). A big amount of export also went to OECD states (total value

of export 5 MLVL).

The greatest import of fruits, vegetables and preserves during first months of the year was

from EU-15 states (total value of import – 11 MLVL), registered import from Baltic

States was 4 MLVL. The greatest import of drinks and juices was from EU-15 states

(7 MLVL). The greatest recent import of fruits came basically from Holland and

Lithuania. On its turn, the greatest import of vegetables was from Holland and Spain.

The total export of Estonian products in 2008 was 975 tons: 33.9 million EEK. Aannual

import of apples has mostly been twelve to thirteen thousand tons, in the years of a lean

harvest even more. The preferred sender was Poland. A quarter to one third of imported

apples come from Poland, in the year 2005 the amount was even 54%. The reason is the

cheap price of the Polish apples: in 2008 the declared price 6.13 EEK/kg. At the same

time the apples bought from Spain, the Netherlands and Belgium were two times more

expensive. In the previous year the second place by weight was occupied by apples

brought from the Netherlands (almost one fifth), the following place with 10-11% was

occupied by Belgium, Germany and Lithuania, then three times less was brought from

France and Spain. Even smaller amounts came from Italy, Brazil and China. Among

import countries there were also Latvia, Hungary and the South African Republic.

Main challenges for sector development

Main challenge for sector development is linked to product value development. To get

economical advantage and to become competitive producers need to proceed their

products (e.g. to make apple juice) not only to sell basic products (e.g. apples). In both

countries main challenger in this sector are cheaper imported products as well as sales

channels development issues, for example in small producers cannot sell their proceeded

products (e.g. jams) in the retail stores, but only in the direct sales channels that limits

production values and economical growth of the sector.

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7


THE DEVELOPMENT OF LOCAL ORIGIN PRODUCTS’ MARKET: THEORETICAL REVIEW

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Branch of local origin products

Factors affecting development of the branch

Development of a branch can be affected by interrelation of different environmental factors.

Development of such branches, which are based on small enterprises, is mainly affected by

availability of capital. If there are no sufficient financial resources for the enterprises themselves,

the credit reception from banks can be difficult. In such cases the state support mechanisms in

form of tax benefits and grants can be used as support for the development. The other significant

issue, which affects development of the branch, is the education level of managers and level of

knowledge necessary for establishment of successful business. (Brooks, Wheatherston 1997)

The most popular form for the analysis of external environment factors is PEST analysis, which

overviews the impact of political, economic, social and technological environment. The business

environment is inconsistent. It can be both as possibility and threats for the development. In

order to underline the significance of some factors, extended forms of PEST analysis are being

established, the acronyms of which in English are PESTLE, PESTLIED, STEEPLE, SLEPT. The

designation and explanation of main factors is the following: P stands for political factors, E –

economic, S – socio-demographic or socio-cultural, and T stands for technological factors. Other

instruments of analysis especially underlines different factors, for example C – competitiveness

etc. Brooks, Wheatherston (1997) considers classical analysis of external environment must be

supplemented with three more elements – legislation, as well as factors of ecology and

competitiveness. The abovementioned authors have worked out the extended model of LE PEST

C analysis:

Legal factors – legislation, rules and regulations, standards etc.;

Ecological factors – attitude to environment and its pollution, global and local activities

etc.;

Political factors – government attitude and directions of policy, investments of public

sector etc.;

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Economical factors – business cycles, currency exchange rates, availability of financial

resources etc.;

Socio-demographic factors – national culture, structure of society and different socio-

cultural changes, for example, perception of society in relation to issues of health

preservation can affect food producers;

Technological factors – development of new technologies for the improvement of

competitiveness etc.;

Competitiveness factors – development of a branch, threats of newcomers etc. (Brooks,

Wheatherston 1997)

Increase of interest on branch of product of local origin is connected with different political,

economic and socio-cultural factors of external environment. As the main factors can be

mentioned the income from agriculture (its decrease) and different ‘crises’ in circulation of

agriculture and food, for example, exacerbation of different diseases, which establish fears,

lessen loyalty of a customer to system of food safety and increase interest upon food production

process. Increase of interest can be also promoted by desire of customers and producers to react

on increasing mass production in food industry and globalized food economy, where the gap

between place of food production and place of consumption becomes wider. (Morris, Buller

2003, ER)

Nowadays customers can get food from all over the world. In markets, where supermarket chains

dominate as retail channel, the specific weight of import food is still increasing. There are

several factors, which help to promote these products in the market. The price of a product is a

significant factor since supermarket chains can operate with the price more easily than others.

The other factor is establishment of different national diaspora, which would like to use products

they know and are used to. The development of local products is based on government support

and customer interest about them. The customers pay more attention to traceability of products,

which are based on fears and desire to be convinced about safety of products. (Jones et al. 2004,

ER)

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According to aspects of environment, local products have the possibility to provide smaller so

called „product mile”, which is a distance from the place of product production to customer. It

reduces consumed amount of energy and atmosphere pollution. From the other side, small food

factories can be located not only in farms. Factories can be small processing factories in local

village, which just as big factories establish threats of environment pollution. (Jones et al. 2004,

ER)

Production of local food establishes such economic benefits as employment, support for local

entrepreneurship, and increase of local society income level. Estimated calculation in England

witnesses if every subject (physical person, tourist, enterprises) spent 1% from their incomes for

local products, it would give extra 52 million pounds to state economy each year. Secondly,

production of local products can be a beginning for further entrepreneurship and development of

business. (Jones et al. 2004, ER)

Development of foodstuff industry of local origin mainly is related with the possibility to

increase incomes of farms and development of rural area. Significance of the branch is regularly

underlined in documentation of rural development policy. Defenders of “local foodstuff”

together with researchers of the phenomenon of this branch have identified two mutually

connected directions of the branch:

1. Local foodstuff underlines the local origin as closed or limited system, where foodstuff is

produced, processed and sold in geographically restricted area. In some way it establishes

channel system for good delivery as an alternative for conventional products. This system

contains such product channels as farmers’ markets, farm shops, food delivery baskets

and other direct forms of trade.

2. Local foodstuff can be as an added value for export. It means a particular product is being

labelled with the origin of place and certified, but it can be purchased and consumed in

other geographical place. In such case the local origin is being associated with a special

assortment, traditional products and quality of products. (Morris, Buller 2003, ER)

From the other side the development of local products can not only establish new working places

in farms and small foodstuff processing enterprises, but also provide damages for foodstuff

turnover system in general – it can be lost working places in product delivery chain and newly

established working places in local enterprises of foodstuff processing can be inappropriate for

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the skills of inhabitants as a result of which enterprise must search for the skilled labour force

elsewhere. Producers of local foodstuff must take into consideration they will never reach such

incomes from the product manufacturing as it can be done by large-scale producers of

conventional products. (Jones et al. 2004, ER)

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Forces directed towards development

One of the founders of modern psychology, American psychologist Kurt Lewin (1890-1947)

revised organizations not through static analysis of current situation, but as search of dynamic

balance through interrelation of driving and restraining factors. The force-field diagram can be

used both in organizational and branch level. (Valuebasedmanagement 2009, ER)

Figure 1.1. Force-field diagram of driving and restraining forces

Source: Valuebasedmanagement 2009, ER; author Kurt Lewin.

Every development and change issue is affected both by driving forces and restraining forces.

The impact of them can be classified after the strength – weak, medium or strong. If the driving

forces are stronger, the changes are happening. If the restraining forces, in their turn, are

stronger, there are no changes. Force-field diagram of driving and restraining forces is method

in order to:

define correlation of forces, which affect particular issue;

identify the most important players and target audiences;

identify opponents and alliances;

identify the issues how to affect every target group. (Valuebasedmanagement 2009, ER)

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Role of local foodstuff production

The local foodstuff offers an alternative for global foodstuff system and more other benefits, for

example, decreased food road from manufacturer to customer, market possibilities for local

manufacturers, multiplier effect of incomes – more money has been spent on local product, more

monetary resources stay in local economy. Local foodstuff also means the development of rural

economy and information flow, namely, products are information providers since they give an

information where and how they have been produced. Local products are considered as more

sustainable products than their competitors – global products. (Morris, Buller 2003, ER)

Research (Morris, Buller 2003, ER), which are performed in the Great Britain (in

Gloucestershire county) has identified the place and role of local foodstuff production branch in

rural development. The British research determined the one of the challenging issues is to define

„local product”. The results of research witnesses that:

The local foodstuff is more connected to socio-administrative territory, not to product

quality signs directed by the EU – PDO (products with a protected designation of origin)

and PGI (protected geographical indication).

Drawing a line between sectors is a great challenge since there is no closed system. Also

the local manufacturers are not satisfied with the product sale in a particular territory.

Some manufacturers work in both ways, producing both local and global products.

(Morris, Buller 2003, ER)

In comparatively occasional cases customers can completely satisfy their needs by using the

local products only. Though, local products have very important symbolic value and economic

potential; therefore this branch is in the focus of attention for political discussions. (Morris,

Buller 2003, ER)

Product supply chain

As it was mentioned already previously, supply chain in local foodstuff branch differs from

conventional product system. The main difference is in amount of involved parties and also in

infrastructure, which is completely or at least partially focused on specialized food. Involved

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parties can construct alternative cooperation nets. The main elements in these nets are:

manufacturer, recycler of products, specialized distribution channels, for example, farm stores.

In developed countries this system is driven and established with financial support of state

programmes. (Starӕte 2008, ER)

In time, when new cooperation nets are just forming, there is a risk that alternative nets

conventional products will form a counteraction. Manufacturers can be "dragged” into segment

of standardized products where the main aspect is standardized quality of products. Involving in

such business system where supermarkets and great amounts are dominant is threat for the

development of branch. The success can be defined by the fact if local manufacturers are strong

enough to develop new segments of product quality. (Starӕte 2008, ER)

Amount of products is important factor in supply chain. In order to realize products in

supermarket chain, the defined amount of products and constant quality must be provided. Small

manufacturers of local products usually are not able to fulfil these requirements. The main

players in retail market do not take local market offerings seriously, though they are aware of

increasing interest of customers to local products. In particular cases it can be used as attracting

tools of customers to supermarket nets, establishing so-called „line of local products” and

designing „promoting actions of local products”. (Jones et al. 2004, ER)

The main challenge of small enterprise development is resisting the system of conventional

system and maintaining „alternatives”. The state support has an important role. Development

agencies and cooperation structures can have significant role in promotion of small enterprises

development. Great enterprises are in better position to some extent since they have a resource

base for the research and development. Though, great enterprises are subjected to standardized

requirements which diminish their possibility to diversify the alternatives of actions in foodstuff

production. (Starӕte 2008, ER)

Co-operation nets and cooperation

Efficiency of activities in every field can be increased by uniting forces. Analysing development

of cooperation, Kucinskis (2004) has divided several basic postulates of cooperation:

Cooperation is motion. For establishing it there is a necessity to prepare social thought,

perform many educational events.

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The need or problem, which cannot be solved with standardized methods, is very

important in the base of cooperation development.

Co-operations are socially economic organizations with united aims, for example,

cheaper issue of credits, manufacturing of goods, and selling.

The main difference of co-operations from other forms of united economic activities is in

attitude to people and capital. The main aim of it is a benefit from collaboration, which is

received by each member of cooperation. (Kucinskis, 2004)

Lamprinopoulou et al. (2006, ER) has identified two groups of factors for development of

collective activities among small and great companies of agriculture. First group of factors is

‘context’. This group contains such factors as: market type - greater possibility to form a

cooperation is in such product markets, which has a small direct competitiveness and there is no

monopoly of some companies; social joint - cooperation will develop more successfully in

places, where there is a strong socio-cultural joint among members of cooperation; institutional

support – support of local or national government for the development of co-operations.

(Lamprinopoulou et al. 2006, ER)

The second group of factors, which affects development of cooperation among small companies

of agriculture, is ‘attitude’. Factors or conditions in this group are: orientation towards market –

enterprises, which seek a possibility to offer their clients a higher value, will be able to establish

and use cooperation more successfully; desire to cooperate - though, this factor is related to

cultural traits (some nations are more oriented towards collective activities, for example, Japan),

there is an opinion that cooperation can be learnt; availability of initiators - the development of

cooperation basically will depend on qualification of cooperation initiator, since it is important

the initiator could identify possibilities and threats, and promote working strategy, which

corresponds to market situation. Lamprinopoulou et al. 2006, ER)

Small agricultural enterprises must use different co-operation forms. Basing on the theory, small

enterprises receive the following benefits from collective activities or cooperation:

Availability of resources. Collective activity gives availability to resources, as well as

increase possibility of resource control. Resources can be both tangible (capital, labour,

force) and intangible resources (market information, manufacturing and marketing

knowledge). Small agricultural enterprises using collective approach can employ

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marketing specialist or make a research, which they would not be able to afford each

separately.

Greater economic outcome and possibility to expand the action. For example, wine-

makers manufacture wine from their own raw materials, but those, who have an access to

wine filler equipment of co-operations, have the possibility to decrease costs for one

product unit. In co-operations there is a possibility of mutual cooperation in process of

raw material purchase and manufacturing.

Decreased costs and risks. Collective action decreases risks of individual enterprises and

also the possible costs due to loyalty and mutual exchange of information.

(Lamprinopoulou et al. 2006, ER)

Farmers’ markets are to be considered as certain trait of cooperation, since they are possible only

in the case of mutual cooperation. One person cannot establish market; there is a necessity of

certain offer in order to interest a customer. Factor of social environment is as important – the

more attractive market is to client, the greater possibility to attract a customer. On this score

farmers are mutually dependant from each other. Cooperation and co-operation gives advantages

for all involved parties. (Lawson et al. 2008, p.14, ER)

Role and value of local product manufacturers

The activity of local foodstuff manufacturers gives not only the economic advantages in form of

profit for the manufacturers themselves, but establishes supplementary advantages for the society

in general:

Firstly, their activity is a support for development of common agriculture, small

entrepreneurship and economic activity of the region;

Secondly, manufacturing of local products helps to establish loyalty between

manufacturer and customer.

Thirdly, local foodstuffs are connected to identity of region; their manufacturing helps to

preserve sand bring forward traditional knowledge. Exactly this can be done by

manufacturers with their basic business. (Morris, Buller 2003, ER)

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Values of product manufacturers of various levels can differ. Research, which covers the

comparison of value of farms and conventional products, determines the basic value for both

manufacturing groups is the same – provide the highest quality products for their customers.

Both abovementioned manufacturing groups have several significant factors as: values of

customer, care for employees, honesty, offer of tasty food, ethics and social responsibility, as

well as competitiveness. (Lea, Worsley 2006, ER)

Less known factors for both groups are - emphasis on manufacturing for already proven and

well-known products; decrease of costs is more important than high quality; profit increase at

environmental costs expenses; ignorance of ethics and social responsibility for the preservation

of competitiveness. Health and environmental factors are being evaluated higher among farmers,

and they are as following: development of sustainable development; care for society, offering

healthy products; social responsibility. Farmers as product manufacturers are more focused on

preservation of values in general, for example, preservation of traditional processing methods.

Foodstuff manufacturers, in their turn, are more focused on manufacturing of conventional

products and innovations. (Lea, Worsley 2006, ER)

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Development of direct trade

Development of trade channels

Last century has experienced rapid industrialization of food market, as a result of which several

big corporations play a great role and their success are more strengthened by consolidation of

supermarkets' positions. Without revising this tendency, both farmers’ markets try to regain their

place and role as a significant channel of products or marketing. Home-maid foodstuffs

basically come to customer through channel of direct marketing or direct trade. Regular market,

especially organized farmers’ market, trade are farm, place of residence of customer (product

delivery at home) can be physical environment for the direct trade.

„Marketing channels are the base for exchange relationship, which establishes client value for

obtaining and consumption of products and services.” (Pelton et al. 2007, p.11) Marketing

channels have several levels both in customer and business segment:

Zero level channel or channel of direct marketing is when manufacturer sells one’s

product directly to the final customer. Direct trade, orders via post from catalogue,

telemarketing or a store owned by a manufacturer – each of these types characterizes zero

level channels.

Channel of first level contains one sales intermediary, for example, trader who buys

products directly from manufacturer.

Channel of second level can be characterized by two trade intemediaries, such as

wholesale dealer and retailer.

Channel of third level contains three intermediaries - wholesale dealer, agent and retailer.

(Pelton et al. 2007)

Supermarket policy is based on a postulate „Anytime, anywhere, everything alike”. Market can

offer something different. Policy of product supply in supermarkets is centralized - big amounts

of products are ordered from competitive manufacturers and farmers. Usually supermarkets are

not interested in peculiarities of products and preservation of local traditions. It makes small

local manufacturers to look for other product distribution methods and trade channels in order to

offer customers production different from supermarket offers. (Lawson et al. 2008, p.14, ER)

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Farmers’ markets and supermarkets have ambivalent relationship. Small enterprises who

specialize on manufacturing products with added value initially distribute their products through

farmers’ markets. During the development there is a necessity to increase product distribution

channels and therefore attract supermarkets. From the other side, farmers and other

manufacturers, who have been under supermarkets for a long time, also appreciate a possibility

to sell product in direct trade. (Gurthrie et at. 2006, ER)

There is an opinion the main force of farmers’ market development is offer. When trade channels

are very concentrated and small manufacturers have to struggle in order to achieve product

distribution channels with corresponding economic output, the necessity of alternative product

distribution channel soon appears. Farmers' markets have low fixed costs if there is cooperation

with local municipality and if manufacturers cooperate among themselves, the barriers in market

entry also are low. As manufacturers need product channel, the customers need freedom of

choice. Market offers different shopping experience. This product channel gives great chances

for manufacturers of craft products, who can better fulfil customer desires according to product

quality. (Gurthrie et at. 2006, ER)

Development of direct trade types

Traders come together in market to offer wide assortment of products and services, as well as

define a social environment to customer. Last years’ phenomena in several countries, including

USA, Great Britain, Australia, and New Zealand were reappearance of farmers’ markets.

Though there are no many researches upon development of this field, it is clear that farmers'

market is a successful form of product distribution for many small product manufacturers.

„Success is based on detection of different approaches in establishing values, in comparison with

other product distribution channels”. (Lawson et al. 2008, p.12, ER)

One of main driving forces for revival of market position is increasing demand for foodstuff of

better quality, as well as increase in amount of quick-witted customers. These customers

evaluate the way, which products are being grown, manufactured, distributed, and sold. First

industrial revolution was based on acquisition of resources and money, but second industrial

revolution is based on saving the resources and values. In developed countries emphasis changes

20


from low price and quantity to quality and uniqueness, which also contains products produced by

qualified craftsmen. Emphasis changes from ‘synthetic’ to authentic foodstuff are being called

as ‘real foodstuff revolution’. It demonstrates the desire of society to move from striking

consumption to intentional consumption. (Gurthrie et at. 2006, ER)

One of market types is farmers' market, which has different definitions. In most cases farmers’

market is defined as periodic market with a fixed location, where farmer products sell farmers

themselves; in other words, at least some (if not all) traders must be also the manufacturers, who

sell their products. Farmers’ market is a traditional way of selling foodstuff. In such countries

as France, Spain, and Italy, which highly appreciate good-quality food, farmers’ markets have

existed or centuries without disruption. Other countries, such as New Zealand, Australia, Great

Britain, Canada, and USA farmers’ markets dissolved mainly due to appearance of supermarkets;

though farmers' markets have lately experienced revival also in these countries. They have been

called as farmers’ markets of new generation. (Gurthrie et at. 2006, ER)

Farmers’ markets are not only the place, where people meet and direct trade of products are

performed; it is also a place, which unites people with a past and establishes environment for

enjoyable social interrelation. Farmers’ markets are multi-shaped, whereas supermarkets are

being perceived as homogenous, sterile and in some way gloomy places. Analysing preferences

of farmers’ markets it is important to emphasize increasing interest of society on slower pace of

life and slow shopping. (Gurthrie et at. 2006, ER)

“Suburbs and small rural towns where there are no supermarkets receive products from farmers’

markets. It is a way how urban environment and rural area is united, giving a customer a

possibility to buy local foodstuff. Market also is a way how to support formation of sustainable

and ethical agricultural systems. Manufacturers of local foodstuff can offer fresh, highest-quality

products the demand of which is increasing all the time. Farmers’ market provides a greater

profit part for small-scale manufacturers than other trade alternatives; such market allows selling

small amounts and is as supporting point for implementation of new products into the market.

Customers with buying local products support local manufacturers, as well as help to embody

rural economy. Nature protection specialists will definitely support distribution of biological

foodstuff in such farmers’ market. Spokesmen of anti-globalization ideas will appreciate craft

21


business, including local foodstuffs. Farmers’ market, in its turn, can become as attractive

tourism object for tourists.” (Gurthrie et at., 2006, p.562, ER)

Why do customers give a preference to a market? Previous researches have identified several

considerations and reason of customer according to market as a place for purchase of products:

Harmony with a traditional lifestyle;

Preference to natural/biological products;

Belief in advantages from nature preservation;

Arrangement, availability of foodstuffs, and connection with a manufacturer;

Product quality;

Special assortment of products. (Lawson et al. 2008, ER)

There is an opinion the market as a place is more attractive for elder visitors and it is connected

to the belonging of this group to particular settlement or community. It must be taken into

consideration this group knows market as product distribution channel very well since they have

experienced times without supermarkets. “Elderly people want to be sure about their purchase.

Value is made by form of purchase since it gives a possibility to buyer, who is concerned about

different diseases connected to food like salmonella and rabies, to check product once again.”

(Lawson et al. 2008, p.13, ER)

Farmers’ markets more frequently has regarded as the main player in preservation of less

industrialized agriculture. As any break point also these changes give a possibility for a small

entrepreneurship. Is it emphasized that farmers’ markets give greater economic outcome for

small-scale farms and manufacturers. It ensures their survival in conditions of increasing

competition. (Gurthrie et at. 2006, ER)

Difference between income provided by direct trade or farm and income, which farmer receives

from selling of goods in supermarket is substantial. Fifty years ago farmer received

approximately half of the money buyer spent for food. Nowadays situation has changed.

Consolidation of supermarket positions has considerably decreased part of a farmer from price of

22


sold product. It can be even lesser that tenth part from product price paid by consumer. (Gurthrie

et at. 2006, ER)

Possibility to buy farmers’ products is a significant motivator for many people to visit particular

place. Therefore it is a significant factor for development of local economy. There is an

interrelation between form of direct trade and development of rural economy. Encouraging local

enterprises, including providers of catering industry and other services to use local products help

to reach several significant aims:

Firstly, money comes into local circulation;

Secondly, the dependency from seasonal buyers has been decreased;

Thirdly, increases visibility of local products, as a result of which both manufacturers and

sellers are winners. (Paddison, Calderwood 2007, ER)

Significant source of development for increase of local product amount is direct trade via internet

and post. Combination of direct trade with store trade ensures development of market and most

likely they are mutually supplementary than destroying flow channels of goods. (Paddison,

Calderwood 2007, ER)

Farm-gate sale is one more form of direct trade, where the costs for product trade are lower.

Manufacturer keeps the greatest part of income when selling the products directly to customer

since the costs for packaging and transport are minimized. Greater interaction between buyer

and seller allows improving the product quality in future because the feedback is received

immediately. Diversifications of activities, which are based on this type of trade gives

supplementary income, do not destroy the current types of business, as well as decrease

dependence from regular buyers. (Paddison, Calderwood 2007, ER)

There are over 3500 farm stores in the Great Britain and at least one third of households are

visiting them regularly. The further development of this industry is being prospected. It is

promoted by common marketing activities, which increase identification of regional products.

Development of direct trade forms is promoted also by increasing interest of customers about

origin of products and possibility to directly contact the manufacturer. Also the manufacturers’

23


investment has been significant in branch development, especially in connection with promotion

of product with higher quality in market. (Paddison, Calderwood 2007, ER)

Promotion of processing products

Segments of foodstuffs

Products on their merits can be divided into two groups: product can be as satisfactory mean for

processes or specific needs. For example, apples and wine – apple can be an early stage of wine.

Wine continues to ripen also after its purchase. When there is an optimal moment of wine

consumption customers can have different desires. Therefore wine is a product of process. The

question arises whether product quality forms in this moment and how product satisfies

particular needs of customers in concrete moment. (Starӕte 2008, ER)

Choice of customers or preferences of particular goods are not the only factors characterizing

demand since both buyers and sellers participate in process of product quality establishment.

Neoclassical economic theory characterizes a customer as sovereign human-being, who makes a

purchase decision without assistance, taking into consideration one's own needs. Starӕte (2008)

argues it is not a complete explanation because a buyer is only one of ‘actors’ who interprets the

quality of a particular product. In general, product quality is affected by relationship among

consumers and manufacturers. There is no meaning to manufacture a product, which is

promoted in market as local product, if consumer does not think the local origin gives a special

product quality. Product preferences connected to origin of a particular place usually does not

develop in vacuum; they have close connection also to other external factors, not only with the

customer oneself. (Starӕte 2008, ER)

Norwegian researcher Starӕte (2008) has devoted his scientific work to the research of

agricultural goods and rural development. He has established model of foodstuff quality. For

the base of his model the author has chosen two dimensions of product quality: (1) technological

dimension, i.e., manufacturing of conventional vs. organic products; (2) place dimension, i.e.,

level of belonging to a particular place.

24


Figure 1.2. Dimensions of food quality

Source: Starӕte 2008, ER, p.67.

According to Starӕte (2008) dimensions of food quality can be described by the following

segments:

Standardized food is the most available food sector. It is connected to dominating market

of agricultural goods. This sector usually contains standardized processing goods with

private, placeless brands. Sector is characterized by usage of standardized technologies in

food production in order to lower production costs. Usually products are promoted in

market without relation to a concrete location. It allows manufacturer to expand the

market of one's production unlimiting product with its belonging to concrete place of

location.

Segments of local conventional and organic foodstuffs usually contains specialized

foodstuff, such as craft or traditional food. Whether they are products of biological

agriculture or not, usually they are products of small entrepreneurs. In this segment

traditional methods in food production and local origin have been promoted as a

preference of these products.

Segment of organic agriculture goods can be mentioned separately since it has a peculiar

product quality. For example, this segment contains milk received during the process of

25


organic agriculture, and it is marked simply as ‘organic product’ without belonging to

concrete place. (Starӕte 2008, ER)

Dimension of product quality becomes more and more topical since the competition in food

sector is increasing. Starӕte (2008) though admits theoretical academically formed model could

work successfully in level of enterprises or micro-level combining different strategies of product

quality.

Small enterprises must establish their development slowly since they have no resources for

serious investments in development. Development frequently is made from fault-test base and

improvement of knowledge. Enterprises have to experiment with their products and establish

completely different relations in value chain, including relations among suppliers, service

providers, and sector of state governance. These enterprises have to search for alternatives

beyond conventional innovation system. (Starӕte 2008, ER)

Starӕte (2008, ER) thinks the quality model can apply not only for product, but also in level of

category and industry. National programs of food labelling are attempted to promote local

qualities or traits of category in the market. In such cases local origin means all country, and

imported products are being put contrary to them. Promotion of national values is binding only

in cases, when there is an international competition – promotion of such quality has a small

meaning without it. (Starӕte 2008, ER)

Product promotion in market and perception of ‘home-made’ quality

Manufacturing of local foodstuff is based on emotional connection since these products most

likely are grown or prepared by customers themselves in the near past. And this ability to unite

emotionally manufacturers and customers is the main value of this industry. The most important

benefit from this branch in general, in its turn, is health factor – provision of fresh foodstuff

circulation, supply of qualitative products, promotion of healthy lifestyle, and establishment of

eating habits. (Jones et al. 2004, ER)

Starӕte (2008) associates product quality with relationship among manufacturers and customer,

stating the segment of product quality or dimensions mutually interacts. Pelton et al (2007), in

his turn, emphasizes close relationship between client and seller is based on long-term

26


cooperation, win-win exchange and mutual confidence. Exactly relationship dimension affects

marketing of goods and services in market of agricultural products. (Pelton et al 2007, Starӕte

2008)

“Relationship marketing is establishment of long-term mutually satisfactory relationship among

different parties – customers, suppliers, and distributors with an aim to maintain preferences

from long-term relationship." (Kotler 1997, p.12)

Manufacturers of industrial or conventional foodstuff use such terms as “as home-made”,

“traditional recipes” in order to increase the value of product quality in eyes of customer. One of

researches dealing with perception of ‘home-made’ quality has been performed in Scotland. The

research has come to conclusion that ice-cream as other foodstuffs has changed over time and

has moved away from home-made product. Not only desire of manufacturers to standardize the

product, but also customer demands according to two factors – care for health and desire for

luxury goods can be mentioned as reasons for the issue mentioned above. Health considerations

make customers to choose product with lower content of fat. The most typical preconception is

that home-made ice-cream contains higher content of fat. (Bower, Baxter 2000, ER)

Quality cannot be compromise for luxury goods, therefore manufacturers try to offer products

with more natural content. In ice-cream manufacturing it means choice of natural raw materials,

which give higher content of fat. Usually these products are promoted in market as ‘traditional’.

Quality perception in ice-cream category in generally does not differ from any other foodstuff

category. In process of purchase product can be evaluated only visually by external traits –

shape, price, package, and brand of a product. Customer can also remember one’s previous

experience and therefore evaluate taste of a particular product. Customer opinion is affected by

different ‘quality attributes’ such as neutrality and exclusiveness of a product. It is also important

how customer visualizes the product manufacturing methods. (Bower, Baxter 2000, ER)

The customer knowledge about the real quality of a product usually is low. Research of product

quality perception in ice-cream market has identified factors, how customer percept home-made

and manufacturing ice-cream and after what parameters of quality they divide and distinguish

both categories. Bower, Baxter (2000) discovered the products achieve a higher quality value in

that case when the origin of the products is known, i.e., home-made ice-cream was evaluated

27


higher in those cases, when respondent was informed upon its origin. And vice versa –

industrially made ice-cream received comparatively lower quality value though in "blind"

(without knowing the origin of a product) test of taste did not prove lower quality of a product.

Overall, the fact it was home-made was perceived as a supplementary benefit to other qualities of

product, especially to the taste of product. (Bower, Baxter 2000, ER)

28


HORTICULTURE INDUSTRY IN LATVIA

29


Characteristics of the sector

In 2007 398 farms specializing in vegetable production were registered in Latvia, and they

independently employed 1.5 thousands of workers. 3.9 thousands ha of agricultural land were

utilized in vegetable growing and it is only 0.5% of the total area of used land.

In accordance with data of Central Statistical Bureau, more than 11 thousands farms are involved

in combined crop husbandry, including growing of different cultures, also vegetable growing.

Number of self-employed exceeds 20 thousands, and the total area of land used in agriculture is

92 thousands ha, comprising almost 12 % of the total land area used in agriculture. Field-crop

cultivation has the greatest specific weight in land use – 86 %. Data are shown in Table 1.

Table 1

Data provided by Central Statistical Bureau show a great number of husbandries having small

areas for vegetable growing – averagely each husbandry has 0.3 ha of land for vegetable

growing, and the total number of husbandries exceeds 25 thousands. Comparatively bigger

amount of husbandries is located in Latgale region (more than 10 thousands), basically growing

vegetables for own consumption (only 77 husbandries grow vegetables for market).

However, 1300 husbandries in Zemgale region have registered their activities as vegetable

growing for market. Number of husbandries in this region comprises almost 6 000, and this is the

biggest number in comparison with other regions. Total area for vegetables growing exceeds

2 500 ha, averagely 0.4 ha in each husbandry. The second place is taken by Kurzeme region with

Number of husbandries

Used land of in agricultural land,

thousands ha

Total standard

gross coverage, thousands LVL

Number of self-employed in agriculture, thous.

Field-crop cultivation 30 757.0 669.1 88 102.8 55.6Vegetable growing 398 3.9 2 447.5 1.5

Growing perennial cultures 3 255.0 10.8 2 092.1 5.3Mixed plants cultivation 11 105.0 92.1 9 933.1 20.6

Husbandries by specialization2007

Notes: Source: Central Statistical Bureau of the Republic of Latvia

30


more than 4 000 husbandries. Total area of land for vegetable growing is 1 023 ha, averagely

0.2 ha in each husbandry. Data are shown in Table 2.

Table 2

Latvia shows a trend of reduction of foil greenhouses areas. In 2008 (68.2 ha) it was twice less

than in 2007 (32.1 ha). Operated area of glass greenhouses, in its turn, slightly increases – from

40.2 ha in 2007 to 43.4 ha in 2008. In 2008 at greenhouses areas more than 12 thousands tons of

various vegetables have been grown; it is almost 3 thousands tons less than in 2007. Data are

shown in Table 3.

Table 3

In 2007 there were 2 203 thousands m² of greenhouses areas registered in Latvia, and almost

70 % were taken by foil greenhouses. Areas of greenhouses used for strawberry growing

comprised 10 thousands m². Growing of these berries mostly utilizes foil greenhouses, and only

0.2 thousands m² take glass greenhouses. Glass greenhouses have bigger specific weight in

Number of husbandries with vegetable areas, ha

Vegetable areas, ha

Vegetable areas for market, ha

Average per husbandry, ha

Latvia 25 426.0 7 154.0 2 715.0 0.3Riga region 3 564.0 1 510.0 743 0.4Vidzeme region 1 684.0 619 275 0.4Kurzeme region 4 127.0 1 023.0 321 0.2Zemgale region 5 972.0 2 591.0 1 300.0 0.4Latgale region 10 079.0 1 411.0 77 0.1

Open-air vegetable areas in regions

2007

Notes:

Source: Central Statistical Bureau of the Republic of Latvia

2006 2007 2008Area used in glass greenhouses, ha 41.6 40.2 43.4Area used in foil greenhouses, ha 128.5 68.6 32.1

Produced vegetables in all covered areas, tons 19 131 14 882 12 071

GREENHOUSE AREAS AND PRODUCTION

Notes:


31


flowers growing (almost 60 % of total greenhouse area are taken by glass greenhouses). Data are

shown in Table 4.

Table 4

Area of Latvian planting of trees and berry-fields has reduced recently, but the productivity has

increased (in hundreds kilograms per hectare). In accordance with data provided by Central

Statistical Bureau of the Republic of Latvia, in 2008 total area of fruit trees planting and berry-

fields was 7.4 thousands ha, ensuring yield of 32.4 thousand tons. Data are shown in Table 5.

Table 5

In accordance with data provided by Central Statistical Bureau of the Republic of Latvia,

husbandries of fruit trees nursery plants in 2007 took 80 ha, and berry-field nursery plants

husbandries – 14 ha. Data are shown in Table 6.

Total area glass greenhouses foil greenhouses

Total 2 203.5 677.7 1 525.7For vegetables growing 1 884.1 554.1 1 329.9For strawberry growing 10.1 0.2 9.9For flowers growing 185 107.7 77.3For growing decorative plants 60.6 0.5 60.1For growing nursery plants 63.6 15.1 48.5


Greenhouses areas (thousands m2)

2007

Notes: Areas used during last 12 months.

Total area of fruit trees and berry fields,

thousands ha

Total yield of fruits and berry-fields, thousands t

Productivity of fruits and berries, hundred kg per hectare

2006 13.7 46.3 33.7

2007 10.3 37.1 35.9

2008 7.4 32.4 44

PLANTATIONS OF FRUIT TREES AND BERRY-FIELDS

Notes:


32


Table 6

Trade balanceNot all fruits and vegetables can be grown in Latvia and Latvian inhabitants are unable to

consume all domestic production. In 1st quarter of 2009 a total value of fruits, vegetables and

canned food group export comprised 6 millions LVL, and import – 24 millions. The difference is

explained by seasonality and market demand for exotic fruits and vegetables during

winter/spring months. Group of drinks and juices shows less difference in trade balance. During

first month of the year export comprised 20 MLVL and import 19 MLVL. Data are shown in

Chart 1.

Chart 1

The biggest export of fruits, vegetables and preserves was to Baltic States (3 MLVL). CIS

countries were the second group of states accepting export of fruits, vegetables and preserves

(1 MLVL). In comparison, export of drinks and juices goes to several groups of states. The

biggest export of drinks and juices was to Baltic States and CIS countries (6 MLVL). A big

2007Fruit trees nursery plants husbandries 80Berry-field nursery plants husbandries 14

Areas of open-air nursery plants husbandries and flowers (ha)


Source: Database of market and prices information improvement

6

2420 19

05

1015202530

Export Import

Distribution of total value of trade balance in 2009, MLVL

Fruits, vegetables,canned food

Drinks and juices

33


amount of export also went to OECD states (total value of export 5 MLVL). Data are shown in

Chart 2.

Chart 2

The greatest import of fruits, vegetables and preserves during first months of the year was from

EU-15 states (total value of import – 11 MLVL), registered import from Baltic States was

4 MLVL. The greatest import of drinks and juices was from EU-15 states (7 MLVL). Data are

shown in Chart 3.

Chart 3

The greatest recent import of fruits came basically from Holland and Lithuania. On its turn, the

greatest import of vegetables was from Holland and Spain. Data are shown in Chart 4.


6 6

2

5

1 1

3

1

01234567

Baltic states

CIS EU-15 OECD CEEC-9 Other states

Distribution of total amount of export in 2009, MLVL


Drinks and juices


11

43

12

4

7

5

2

5

1

0

2

4

6

8

10

12

EU-15 Baltic states

CEEC-9 CIS OECD Other states

Distribution of total value of import in 2009, MLVL


Drinks and juices

34


Chart 4

Of the total amount of juices export mostly exported was tomato juice (4 426 409 kg or 29 % of

the total amount of juices export in 2007) and orange juice (4 109 500 kg, or 27 % of the total

amount of juices export in 2007). Apple juice was the third most exported juice – 2 648 944 kg

or 17 % of the total amount of juices export in 2007.

Chart 5

Three most imported juices of the total amount of imported juices are orange (4 144 458 kg or

22 % of the total amount of juices imported in 2007), apple (4 288 409 kg or 23% of the total

amount of juices imported in 2007) and mixed fruit juice (5 295 488 kg or 28% of the total

amount of juices imported in 2007).

Products with small export and stable or growing import amount in 1st quarter Fruit import 2007-2009, MLVL Vegetable import 2007-2009, MLVL

0

9

18

2007 2008 2009

Other statesGermanyPolandTurkeySpainEgyptLithuaniaHolland

0

4

8

2007 2008 2009

Other statesEstoniaItalyTurkeyPolandLithuaniaSpainHolland

Orange juice27%

Apple juice17%

Grape juice2%

Pineapple juice2%

Other non-mixed fruits juice2%

Tomato juice29%

Grapefruit juice9%

Multifruit juice12%

35


Chart 6

Pineapple juice5%

Grape juice4%

Other non-mixed fruits juice8%

Orange juice22%

Grapefruit juice3%

Tomato juice7%

Multifruit juice28%

Apple juice23%

36


Consumption of fruits and berries juices

Top 10 of drinks consumed worldwide includes tea on the first place, presently taking almost one

fourth of all drinks consumed worldwide, still its specific weight is tended to decrease;

carbonated drinks are on the second place with 14 % of the total drinks consumption; third place

is taken by milk; fourth – by water; fifth – by coffee; and sixth – by beer. Juices, nectars and

syrups take the seventh, eighth and ninth place respectively. And the wine is the tenth most

consumed drink in the world.

Consumption of fruits and juices nowhere in the world presently exceeds 10 liters per capita per

annum, still this amount tends to increase. Since 1998 consumption of juices and nectars shows

annual growth by 2.8%, and specialists envisage that as a result of growing demand for healthy

products and instantly consumable refreshing drinks, grow rate of juice consumption will grow

accordingly.

Of 35 LVL spent by an average Latvian resident per annum for beverages, only 11 % (or

3.85 LVL) are spent for fruit and berry juices. However, of 35 LVL spent by each resident for

alcoholic drinks, 18 % (or 6.3 LVL) are spent for fruit and berry wines, including grape wine.

Generally an average Latvian resident in 2007 consumed almost 51 liters of beverages, of which

24 liters of mineral water, 15 liters of carbonated drinks, 11 liters of fruit juice and 1.3 liters of

vegetable juice. In accordance with data provided by Central Statistics Bureau, the biggest

consumption of fruit juice is in cities (averagely 12 L per annum). Data are shown in Table 7.

Table 7

TOTAL In citiesIn rural areas TOTAL In cities

In ruralareas

Fruit juices (L) 10.26 11.56 7.5 11.1 12.57 7.96Vegetable juices (L) 1.03 1.12 0.82 1.31 1.5 0.92


2006 2007

Notes: Excluding consumption in restaurants, cafes etc. catering companies.

37

AVERAGE JUICE CONSUMPTION PER ONE MEMBER OF A HOUSEHOLD PER ANNUM


Offer of fruits and berries juice

Generally the Latvian market of fruit and berry juices is rather stacked. The biggest market

players are SIA Cido Grupa and A/S Gutta, specializing in production of refreshing drinks and

offering very wide variety of fruit and berry juices in Tetra-packs. Both companies are members

of the juice market since 1994. Recently production of fruit and berry juices has been launched

by fruit and vegetables processing companies – SIA Pure Food and SIA Spilva, and also several

smaller companies, offering certain types of juices. The most active juice producers at the

Latvian market advertise their products in different ways. SIA Cido Grupa and A/S Gutta market

their products not as “natural juices”, but as “100% juices” and specify they are produced from

concentrates. SIA Pure Food markets its juices as produced from “natural concentrates and

purees” and “free from preservatives”. On its turn, “Pai” juices, recently introduced by SIA

Spilva, are marketed as “natural juices free from preservatives”. Juices from smaller producers –

SIA Lienama, SIA Pārsla 2 , as well SIA Pūres dārzi and apple juice of SIA Kronis are also

marketed as “natural juices”.

SIA Cido Grupa

Ostas street 4, Riga, LV-1034, Latvia, +371 7023401, [email protected].

Founded in 1994 by privatizing former state company – beverages producing plant Milgravis.

Initially produced only mineral water Mangali. In 1996 started production of juices. In 2004

Cido Grupa becomes a part of one of the biggest Scandinavian beer producers Danish Brewery

Group AS. Markets its product as “100% juice”.

SIA Cido grupa fruits and berry juice assortmentName Package Description

Apple juice Cido200 ml, 1 liter, Tetra-pack 100% juice. Free from preservatives.

14 sweet apple juice Cido 1 liter, Tetra-pack 100% juice with apple pulp, made of sweet apple sorts. Free from preservatives.

Apple nectar Cido 500 ml, 1 liter, 1.5 liter, Tetra-pack

50% juice content, contains sugar, lemon acid. Free from preservatives.

Apple nectar Amigo 1 liter, Tetra-pack 50% juice content, contains sugar, lemon acid. Free from preservatives.

Orange juice Cido 200 ml, 500 ml, 1 liter, Tetra-pack

100% juice with orange pulp. Free from preservatives.

18 sweet oranges juice Cido

1 liter, Tetra-pack 100% juice with orange pulp, made of sweet orange sorts. Free from preservatives.

38

mailto:[email protected]


Orange nectar Cido 1 pack, 1.5 liter, Tetra-pack


Orange nectar Amigo1 liter, Tetra-pack


Pineapple nectar Cido 200 ml, 1 liter, Tetra-pack

90% juice content, no sugar added. Free from preservatives.

15 multifruit juice Cido 1 liter, Tetra-pack 100% juice from 15 fruits, contains fruit pulp. Free from preservatives.

Multifruit nectar XL 1.5 liter, Tetra-pack 50% juice content, contains sugar, lemon acid. Free from preservatives.

Multifruit nectar with vitamins Cido

1 liter, Tetra-pack 50% juice content, contains sugar, lemon acid, 11 vitamins. Free from preservatives.

Pink grapefruit juice Cido 1 liter, Tetra-pack 100% juice with grapefruit pulp. Free from preservatives.

Peach nectar Cido 200 ml, 1 liter, Tetra-pack


Pear nectar Cido 1 liter, Tetra-pack 50% juice content, contains sugar, lemon acid. Free from preservatives.

Orange-apricot nectar 1 liter, Tetra-pack 50% juice content, contains sugar, lemon acid. Free from preservatives.

Mango nectar Cido 1 liter, Tetra-pack 40% juice content, contains sugar, lemon acid. Free from preservatives.

Grape nectar Cido 200 ml, 1 liter, Tetra-pack


Blackcurrant-apple nectar Cido

1 liter, Tetra-pack 25% juice content, contains sugar, lemon acid. Free from preservatives.

Plum nectar Cido 1 liter, Tetra-pack 35% juice content, contains sugar, lemon acid. Free from preservatives.

Lemon nectar Cido 1 liter, Tetra-pack 25% juice content, contains sugar, lemon acid. Free from preservatives.

Tomato juice Cido 1 liter, 1.5 liter, Tetra-pack

100% juice, contains salt with iodine. Free from preservatives.

15 tomatoes juice Cido 1 liter, Tetra-pack 100% juice, contains marine salt for food consumption. Free from preservatives.

Tomato juice Amigo 1 liter, Tetra-pack 100% juice, contains salt. Free from preservatives.

Vegetables juice Cido 1 liter, Tetra-pack 100% juice, contains salt, natural extracts. Free from preservatives.

A/S Gutta

Maskavas street 240, Riga, LV-1063, +371 67033101, [email protected].

Founded in 1994. Presently is owned by a Scandinavian investment company NP Confectionary

AB. Along with juices and nectars produces mineral water Ramava and Everest, lemonades and

kvass. Markets its product as “100% juice produced from concentrate”.

A/S Gutta fruits and berry juice assortmentName Package DescriptionOrange juice 1 liter, Tetra-pack 100% juice. Produced from juice concentrate.

Free from preservatives. Store in cool place after

39



opening.Apple juice 1 liter, Tetra-pack 100% juice. Produced from juice concentrate.

Free from preservatives. Store in cool place after opening.

Apple-white grape juice 1 liter, Tetra-pack 100% juice. Produced from juice concentrate. Free from preservatives. Store in cool place after opening.

Grapefruit juice 1 liter, Tetra-pack 100% juice. Produced from juice concentrate. Free from preservatives. Store in cool place after opening.

Tomato juice 1 liter, Tetra-pack 100% juice. Produced from juice concentrate. Free from preservatives. Store in cool place after opening.

Multifruit nectar 1 liter, Tetra-pack Produced from juice concentrate. Natural product. Free from preservatives. Store in cool place after opening.

Red grapefruit nectar 1 liter, Tetra-pack Produced from juice concentrate. Natural product. Free from preservatives. Store in cool place after opening.

Pineapple nectar 1 liter, Tetra-pack Produced from juice concentrate. Natural product. Free from preservatives. Store in cool place after opening.

Pineapple-mango-lemon nectar

1 liter, Tetra-pack Produced from juice concentrate. Natural product. Free from preservatives. Store in cool place after opening.

Blackcurrant nectar 1 liter, Tetra-pack Produced from juice concentrate. Natural product. Free from preservatives. Store in cool place after opening.

Peach nectar 1 liter, Tetra-pack Produced from juice concentrate. Natural product. Free from preservatives. Store in cool place after opening.

Plum nectar 1 liter, Tetra-pack Produced from juice concentrate. Natural product. Free from preservatives. Store in cool place after opening.

Orange-apricot nectar 1 liter, Tetra-pack Produced from juice concentrate. Natural product. Free from preservatives. Store in cool place after opening.

Lemon nectar 1 liter, Tetra-pack Produced from juice concentrate. Natural product. Free from preservatives. Store in cool place after opening.

SIA SpilvaZvaigžņu street 1, Babite, Riga region, Latvia, LV-2101, +371 67063000, [email protected].

A fruits and vegetables processing company Spilva started its activities in 1992 and presently is

one of the leading food additives producers in the Baltic. This year it has also started production

of fruits and berries juices. Markets its products as “natural fruits and berries juices”.

SIA Spilva fruits and berry juice assortmentName Package DescriptionPai Orange-mango natural juice

0,3 L, plastic bottle Natural juice, free from sugar and preservatives. Storage in non-opened package – 3 months. After

40



opening store in cool place and consume in 48 hours.

Pai Natural vegetables juice

0,3 L, plastic bottle Natural juice, free from sugar and preservatives. Storage in non-opened package – 3 months. After opening store in cool place and consume in 48 hours.

Pai Natural orange-carrot juice


Pai natural raspberry-blackcurrant juice


SIA Pure FoodDaigones street 22, Pure, Tukums region, LV-3124, +371 3101200, [email protected].

Founded in 1994. Processes and sells berries and fruits. Along with juices also produces food

additives, jams and canned cucumbers.

SIA Pure Food fruits and berry juice assortmentName Package DescriptionApple juice 3 L, glass jar Produced from natural juice concentrates and

purees. Pasteurized, free from preservatives. After opening consume in 48 hours.

Tomato juice 3 L, glass jar; 300 ml glass bottle

Produced from natural juice concentrates and purees. Pasteurized, free from preservatives. After opening consume in 48 hours.

Apple-cherry nectar 3 L and 1,74 L, glass jar; 300 ml glass bottle


Apple-strawberry nectar

3 L and 1,74 L, glass jar


Apricot nectar 3 L and 1,74 L, glass jar; 300 ml glass bottle


Peach nectar 3 L un 1,74 L, glass jar Produced from natural juice concentrates and purees. Pasteurized, free from preservatives. After opening consume in 48 hours.

Plum nectar 3 L un 1,74 L, glass jar Produced from natural juice concentrates and purees. Pasteurized, free from preservatives. After opening consume in 48 hours.

Apple nectar 300 ml, glass bottle Produced from natural juice concentrates and purees. Pasteurized, free from preservatives. After opening consume in 48 hours.

Orange juice 300 ml, glass bottle Produced from natural juice concentrates and purees. Pasteurized, free from preservatives. After opening consume in 48 hours.

Blackcurrant juice 300 ml, glass bottle Produced from natural juice concentrates and purees. Pasteurized, free from preservatives. After opening consume in 48 hours.

41



Apricot nectar with inuline

1 L, Tetra-pack Pasteurized, free from preservatives, contains natural sweetener – inuline. Inuline has a positive affect on health – improves activity of intestine, facilitates calcium ingestion, reduces cholesterol level and improves immune system.

Orange juice with inuline


Apple juice with inuline


Apple-cherry nectar with inuline


SIA Kronis Founded in 1996 by acquiring former Bauska food production unit. Along with juices also

products soups, canned food, sauces, salads, lecho, jams and sweets. Markets its products as

“Grown and produced in Latvia”, apple an quince juice as “natural juice”, and plum nectar as

“environmentally sound” product.

SIA Kronis fruits and berry juice assortmentName Package DescriptionApple-cranberry nectar 3 L, glass jar; 750

ml, glass bottleMade generally from fruits, berry juice and pulp. Grown and produced in Latvia.

Blackcurrant nectar 3 L, glass jar; 750 ml, glass bottle

Grown and produced in Latvia.

Cranberry nectar 3 L, glass jar; 750 ml and 30 ml, glass bottle

Natural product made of smashed cranberry mass, sugar and water. Grown and produced in Latvia.

Plum nectar 3 L, glass jar; 750 ml, glass bottle

Environmentally sound, produced from domestic raw stuff – plums. Grown and produced in Latvia.

Carrot nectar 3 L, glass jar Carrot nectar. Grown and produced in Latvia.Apple and beetroot juice 750 ml, glass bottle Made of fresh apples and beetroot juice. Grown

and produced in Latvia.Apple juice 3 L, glass jar; 750

ml, glass bottle100% natural juice of fresh apples. Grown and produced in Latvia.

Quince juice 3 L, glass bottle 100% natural juice of fresh quince. Grown and produced in Latvia.

SIA Pūres dārziPure, +371 3191146, +371 9249450, e-pasts: [email protected]

42



SIA Pūres dārzi fruits and berry juice assortmentName Package DescriptionApple juice 5 L, Tetra-pack,

cardboard boxNatural apple juice. Made of apples grown at Pūres dārzi.

SIA Pārsla 2"Stabulnieki”, Stabulnieki rural district, Preili region. Biologic husbandry. Markets its products

as “biologic products free from preservatives”.

SIA Pārsla 2 fruits and berry juice assortmentName Package DescriptionApple juice 3 L, jar; 750 ml,

bottleBiologic apple juice without sugar.

Blackcurrant nectar 750 ml, bottle Biologically grown blackcurrant, water, and sugar.

Plum juice 3 L, jar; 750 ml, bottle

Plum juice 80%, water 15%, sugar 5%.

Cherry juice 3 L, jar; 750 ml, bottle

Cherry juice 2 L, water 1 L, sugar.

Redcurrant juice 3 L, jar; 750 ml, bottle

Redcurrant juice 70%, water 25%, sugar 5%.

Cowberry drink 3 L, jar; 750 ml, bottle

Cowberry juice 25%, water 70%, sugar 5%.

Apple and strawberry juice 3 L, jar; 750 ml, bottle

Apple and strawberry juice with sugar. Free from preservatives. Apple juice 70%, strawberry juice 29%, sugar 10g/L.

Apple-cowberry juice 3 L, jar; 750 ml, bottle

Apple-cowberry juice with sugar. Free from preservatives. Apple juice 90%, cowberry juice 9%, sugar 10g/L.

Apple-chokeberry juice 3 L, jar; 750 ml, bottle

Apple-chokeberry juice with sugar. Free from preservatives. Apple juice 90%, chokeberry juice 9%, sugar 10g/L.

SIA Lienama"Kalna purvs" , Gaujienas rural district, Aluksne region, LV-4339, +371 29296517.

Grows blackberry and cranberry since 2005 and produces berry juice. Company employs

15 persons including administration. Produces approx. 10-20 thousands of juice 300 ml bottles

per annum. Distributes in supermarkets.

43


SIA Lienama fruits and berry juice assortmentName Package DescriptionBlackberry juice 300 ml, glass bottle 100% juice. Produced by mechanical pressing of large

blackberry grown on big-berry bushes. Free from preservatives and food additives. After opening consume in 3-4 days.

Raspberry juice 300 ml, glass bottle 100% juice. Produced by mechanical pressing of raspberry grown in Latvia. Free from preservatives and food additives. After opening consume in 3-4 days.

Cranberry drink 300 ml, glass bottle 20 % cranberry juice. Produced by mechanical pressing of cranberry grown in Latvia. Free from preservatives and food additives. After opening consume in 3-4 days.

Cranberry juice 300 ml, glass bottle 100% juice. Produced by mechanical pressing of cranberry grown in Latvia. Free from preservatives and food additives. After opening consume in 3-4 days.

Blackberry-cranberry juice

300 ml, glass bottle 100% juice. Produced by mechanical pressing of berries grown in Latvia. Free from preservatives and food additives. After opening consume in 3-4 days.

44


Home manufacturing of plant origin foods

Analysis of data for November 2009 witnesses that the greatest specific weight among registered

home manufacturers forms home manufacturers of plant origin foods (36%) and home

manufacturers of milk products (30%). Comparatively smaller specific weight is for home

manufacturers of meat products (14%), as well as home manufacturers of flour products and

bread (11%). Procession of fishing products in home conditions forms only 7% of total home

manufacturers’ amount.

Table 4.3. Dynamics in product sectors of home producers registered in Latvia: July – November, 2009 (FVS 2009a, ER, FVS 2009b, ER, calculations made by author)

Manufacturing of meat products and minced meat in home conditions

Manufacturing of milk products in home conditions

Processing of fishery products in home conditions

Manufacturing of vegetable oil and fat in home conditions

Manufacturing of plant origin foods in home conditions

Manufacturing of flour products and bread in home conditions

Manufacturing of egg products in home conditions

Manufacturing of specific foor of animal origin in home conditions

Manufacturing of non-alcoholic drinks and ice in home conditions

07/2009(number)

87 187 43 6 224 65 2 0 4

11/2009(number)

93 200 47 2 237 76 1 0 6

Changes (number)

6 13 4 (4) 13 11 (1) - 2

Changes (%)

7 7 9 (67) 6 17 (50) - 50

Analysis of indicator dynamics show that there are no significant changes in register data of

home food manufacturers in 4 months’ time (from 28 July 2009 to 5 November 2009); the

number of home manufacturers in more popular categories has increased, though the groups with

small number of home manufacturers or zero of them still are underdeveloped. If the register

data of FVS is analysed, the most popular category still is manufacturing of plant origin foods in

home conditions. 13 enterprises have registered during these 4 months; the same number of

enterprises has registered in the second most popular category – manufacturing of milk products

in home conditions.

45


What is the geographical overlay of registered home food manufacturers?

The number of registered Latvian home manufacturers is not even. There can be registered more

than a hundred home manufacturers in several regions, but some regions have only few or one

home manufacturer.

14

8

4

53

37

3

4

19

6

14

6

11

15

2

14

836

17

7

28

26

20

1

1

28

64

14

11

47

415

5 17

Aizkraukles rajons 8 Limbažu rajons 17Alūksnes rajons 14 Ludzas rajons 7Balvu rajons 4 Madonas rajons 28Bauskas rajons 53 Ogres rajons 26Cēsu rajons 37 Preiļu rajons 20Daugavpils 3 Rēzekne 1Daugavpils rajons 4 Rēzeknes rajons 1Dobeles rajons 19 Rīga 28Gulbenes rajons 6 Rīgas rajons 64Jēkabpils rajons 14 Saldus rajons 14Jelgava 6 Talsu rajons 11Jelgavas rajons 11 Tukuma rajons 47Jūrmala 2 Valkas rajons 4

Krāslavas rajons 15 Valmieras rajons 15Kuldīgas rajons 14 Ventspils 5Liepāja 8 Ventspils rajons 17Liepājas rajons 36 KOPĀ 559

Figure 4.6. Geographical overlay of registered home food manufacturers in territories of ex-municipalitiesSource: FVS 2009a, ER, calculations of the author.

Revising the geographical overlay after the registered locations of home manufacturers, it can be

seen the greatest concentration of manufacturers is in Riga region (64), Bauska region (53),

Tukums region (47), Cēsis region (37), Liepāja region (36). Less than 30 home manufacturers

have registered in other regions. Participants of home manufacturing sector explain the situation

with positive cooperation with controlling institutions, as well as the closeness of trading places,

especially in Riga.

If the data of registered enterprises are analyzed after their belonging to particular region, it can

be seen the greatest concentration of home manufacturers is in Riga region (33%). The smaller

specific weight has Latgale region (10% from total number of registered home manufacturing

enterprises perform their economic activity in this region). For the summary of region

information the division of planning region has been used, i.e., Riga region consists of Riga,

Riga local municipality, Jūrmala, Tukums local municipality, Limbaži local municipality, and

Ogre local municipality.

46


Figure 4.7. Distribution of geographical overlay for registered home manufacturers after their economic activitySource: FVS 2009a, ER, illustration and calculations of the author.

There is different regional overlay for groups of different products. After register data of home

manufacturers the manufacturing of plant origin foods in home conditions is the most popular

type of home manufacturing. Also in this category Riga region has the greatest specific weight

(30%). 25% home manufacturers of this group have registered in Zemgale, 20% in Kurzeme,

and 16% in Vidzeme. Comparatively smaller amount of plant origin foods manufacturers are

registered in 8%.

Which factors affect intensity of registration?

The main motivator for registration is a possibility to realize own production. Registered home

manufacturers can safely go with their production to the market and realize it in the direct trade.

Interviews of experts and home manufacturers identify also other factors, which indirectly

implements the number of home producers in different territories:

Closeness of market and customers

“There are more registered enterprises around Riga since customer is more available. A

possibility to trade is the main motivation to register.” (Freimane 2009)

Establishment of new trading place and civil initiative

14

7

36

26

171916

2521 1920

8

30

16

2521

0

67

12

0

14

6

3431

15

0

25

50

75

Kurzeme Latgale R?gas re?ions Vidzeme Zemgale

%

2. Manufacturing of

meat products and minced meat

in home conditions , 3. Manufacturing of milk products in home conditions

7. Manufacturing of plant origin products in home conditions

4. Procession of fishing productsin home conditions

8. Manufacturing of flour productsand bread in home conditions

Base: all registered home manufacturers in corresponding industry (07/2009): Meat, n=87, Milk, n=187, Products of plant origin n=224, Bread n=65, Fish, n=43; Those industries, which have less than 30 home manufacturers are not presented in the chart.

47


“The green market was made very close to our farm. Of course, we had to use the

possibility. I studied in courses, learnt how to make cheese and currently direct incomes

from direct trade helps our farm to bear this time.” (RMR)

“In meetings of confederate groups we had the idea to establish a green market in

Straupe. The further progress of idea was undertaken by initiative groups. But we had to

convince people thy can do much by their own, they only must show and prove they are

able to do it. Farmer has to prepare for the market. Many of them are lacking enterprise,

some of them are afraid. Those who work, grow vegetables, manufacture and prepare

interesting things do not have any free time to revise all documentation; therefore to our

meetings we invited specialists of SRS and FVS. (Roziņa 2009)

Cooperation with Food and Veterinary Surveillance.

“Implementation and start of activity largely depends on inspector of FVS since there

exist a biased factor. It is impossible to prompt everything. The farmers must provide risk

evaluation, but our inspectors are more directed towards prepared documentation where

one can go and check whether everything is done correctly. In places, where inspectors

are more reasonable and understand the small entrepreneurship is a base of all country’s

welfare, all this issue is formed more easier. (Melece 2009)

How do registered home food manufacturers implement the stated requirements?

The information on results of last inspection in a particular home manufacturing can be found in

data bases of FVS. The results are classified in the following manner: (A) fully corresponds to

requirements of regulating rules and regulations on food circulation, (B) corresponds to

requirements of regulating rules and regulations on food circulation, but there are some faults,

which do not affect the harmlessness and safety of food; (C) does not correspond to requirements

of regulating rules and regulations on food circulation

Summarized information states 22% of all registered home manufacturers have received level A,

but more than a half, 55% home manufacturers have some faults, which do not affect the

harmlessness and safety of food (level B). 2 food home manufacturers have received level C. It is

important to underline that 23% of food manufacturers are uncontrolled yet. If the uncontrolled

manufacturers are excluded from the data analysis, the results are as follows: A level during the

last inspection received 28% home manufacturers, but level B – 72%.

48


Figure 4.8. Results of last inspections in registered home manufacturers according to their economic activitiesSource: FVS 2009a, ER, calculations of the author.

During the provided inspections 25% of home manufacturers of plant origin foods received the

highest level A, but 52% - level B. Comparatively better results showed flour products’

manufacturers (31% received level A and 43% - level B), whereas home manufacturers of milk

products showed comparatively worse results (15% received level A and 60% - level B).

Indicators have been calculated among all home manufacturers, and the number of uncontrolled

food manufacturers was taken into consideration.

Specific weight of organic food processors in home manufacturing industry

Participants of organic agriculture can be mentioned as a separate subgroup – in other EU

countries they form significant part of small-scale processing production manufacturer and it is

as analogue for home food manufacturing in Latvia.

In generally, there are 401 enterprises of organic agriculture registered in Latvia. There are 55

enterprises of organic agriculture registered as product processors and manufacturers. There are

several popular brands as „Lāči” Ltd, farm „Ķelmēni” (bread and flour products), JSC „Trikātas

siers” among them. Basically, these enterprises have a status of recognized enterprise, which

allows them to sell their production in all circulation channels. According to FVS register data

20 22

57

1

24

15

60

1

23 25

52

0

2631

43

0

9

26

65

00

25

50

75

Not evaluated A B C

%

Base: all registered home manufacturers in corresponding industry (07/2009): Meat, n=87, Milk, n=187, Products of plant origin n=224, Bread n=65, Fish, n=43; Those industries, which have less than 30 home manufacturers are not presented in the chart.

49


of enterprises only 13 organic farms are registered as home food manufacturers; 7 enterprises of

them have registered themselves in the field of milk processing. (PVD 2009b, ER)

Executive director of Association of Latvian Organic Agriculture Mairita Blūma indicates the

main restraining factor currently is a price of organic products, which affects the competitiveness

of products in the market.

„Organic raw materials are very expensive if they are compared with conventional

products. For example, the price for organic eggs is twice as expensive as the price for

simple ones. Wherewith the product has decreased competitiveness in the market and

purchasing power of customers is declining. Of course, we need to invest active work in

the development of organic products and society opinion, which could help to justify the

price of a product.” (Blūma 2009)

What are the motivators and barriers for registration the home manufacturing?

Home manufacturers shall take into consideration the same regulating base as any other

manufacturing enterprise, which participates in food circulation. The main part of unregistered

home manufacturers (61%) claims they could register if the obstacles for legislation are lesser.

Almost half (48%) of unregistered food home manufacturers claim they have no such

manufacturing amount for registration. But every fourth has no information on registration and

the requirements of it.

50


Figure 4.9. Diagram of driving-forces: registration of home foods manufacturingSource: adapted from Valubasemanagment.net 2009, ER; summary by the author, focus group discussion data and direct interviews of home food manufacturers.

From the total data of the research (both quantitative questionnaires, and interviews) it can be

concluded the driving forces for registration of home foods manufacturing are:

availability of information;

development f trading places;

family support.

These three factors generally form the main group of driving forces, which positively affect

process of registration. Positive impact on initiation of registration also gives the knowledge of

home manufacturing, for example, technological process. Confidence about product and

previous experience also are positively affecting factors. If home food manufacturer understands

he will be able to sell it, the one receives encourage for registration. Certain positive affect is

established by fear from control and desire to be honest.

Driving forces Restraining forces

Number of unregistered HM Knowledge

Small amount vs. legal expenses of HMAvailability of information and cooperation with FVS

Changes

L?dzsvars

There are no changes

Registration of home manufacturing

WorriesInattention and lack of knowledge

Rumors

Family support

Confidence about product

Development of trading places

Possibility to sell primary product

51


“I am food technologist after my profession therefore the manufacturing things do not

threaten me; simply I could sell my product without registration. Actually I wanted to

register myself already long time ago since I did not want to worry.” (NMR)

“I want to sleep well at nights and be aware that the documentation is correct and I am

honestly done everything from the viewpoint of legislation.” (RMR)

Restraining forces act contrary. The most significant ones are the following:

Small amount against registration expenses;

Lack of enterprise and knowledge;

Possibility to sell the primary product.

Comparatively insignificant restraining forces are rumors on the issue the registration is

complicated, as well as the amount of unregistered home manufacturers. Of course, registered

home manufacturers have to take into consideration the costs will be greater than unregistered

home manufacturers and this factor affects both product price and competitiveness in the market.

Exactly this factor inhibits home manufacturers from registration.

It is significant to mention that though customers in the market may consider their choice, the

registration itself does not provide a significant contribution. In the process of purchase the most

important thing is a "picture" of a manufacturer and quality of a product, which is stated after its

taste. Customers of home manufacturing goods admit they try to perform repurchase and buy

products of sellers they already know.

“I buy products from that farmer because I know he has a tasty production. I do not know

whether he has registered his manufacturing. Maybe it is not important for me. Of course, it

would be better if his documentation was in order though, I do not know whether it affected the

quality of products. It depends on a farmer himself, his nature and how dutifully he settles such

issues. (Client interview, rural area)

52


Case study: Manufacturing of plant origin foods in home conditions

Manufacturing of plant origin foods in home conditions (table provided by the author,

direct interviews of food manufacturers, observation data)

Story of a manufacturer #1: manufacturing of plant origin foods in home conditions

Manufacturing of plant origin goods in home conditions is performed by an individual

entrepreneur, who has an experience in related field and previously owned a farm, the main

activity of which was manufacturing of plant origin goods. Entrepreneurship has developed, there

have been several branch offices in Riga, but due to several factor the business has ruined.

Currently home manufacturer appreciates the possibility to wok individually and use her sills as

technologist. The turnover per annum is almost 10 000 LVL. Employed accountant settles issues

of book-keeping.

The main motivation for registration was a desire to establish a working place for her. As

important motivation was a possibility to define her daily schedule and dedicate more time for

children. Family support is very important. Production of home manufacturer is being

transported to different trading places, usually all family participates in this process. She admits it

would be hard to do it alone, therefore the highly appreciates her husband helps her by going with

her to the trading places.

Assortment of production is formed by different mixtures of seeds, content of which are both

local and imported raw materials. Not all raw materials are available in Latvia; therefore there is a

necessity to use raw materials from other countries. Materials grown in Latvia not always have a

competitive price, for example, dried garlic from China costs 6LVL/kg. Home manufacturer

thinks dried garlic could cost ten times as much in Latvia.

Home manufacturer has a bad experience with suppliers of local raw materials since farms are

affected by weather conditions. It always has been a choice to buy a cheaper imported raw

materials or more expensive local one. And though – the main is a product quality. Home

manufacturer has excellent knowledge about nutritional value of products. In order to be

confident on quality of her products, analyses of product nutritional value have been ordered. It

needs to be mentioned all family uses the products.

During the realization process a particular attention has been paid to communication with the

client. Home manufacturer is accordingly dressed (stylized national costume), also the design of

53


trading place is adequate to the situation. There is a possibility for clients to try each product.

Home manufacturer has a story about each product – the peculiarities in taste and its usage. It

attracts attention of a client and establishes an interest to by the product.

Development of direct trade in generally can be evaluated as positive. Though, there is a

tendency that market organizers demand disproportionately high participation fees for trading

place, especially in capital city. Home manufacturer says: “I could pay if organizers took care the

large numbers of buyers actually came to this place. Otherwise it is impossible to recover those

400 lats, which are demanded for a trade in December in Riga.

Currently the biggest challenge is decrease in amount in relation to decrease of customers and

their purchasing power. Exactly in December home producer experienced first losses and returned

from two trading places without recovery of her investments. Of course, it makes her to worry

about future development. The closest aims are connected to preservation of production amount,

but future vision in relation to foods home manufacturing is more educated customers and more

qualitative and available products.

54


Positioning of home manufactured foodstuffs

The customers of home manufacturing goods both from Riga and outside Riga were interviewed

during the research. Perception of home manufacturing foodstuffs is different in city and rural

area. The main difference, which affects perception of product, is a personal recognition of a

home manufacturer. In order to be safe for one’s choice, a customer wants to establish closer

relationship with a seller, find the more appropriate product and if the customer is satisfied with

the product, he will purchase regularly. City inhabitants underline it is quite difficult to buy

products form one and the same seller. Rural inhabitants admit their preferences are a personal

recognition with local manufacturers.

“It is very important to know a home manufacturer, but it is impossible in Riga if you do

not go regularly to the same market and in one and the same time. There are cases when

products are delivered directly to offices. By the way, home manufacturers could use this

opportunity more frequently. But of course, product must be of good quality and tasty."

(Client interview, Riga)

“I personally know a woman who makes cheese. I have been in her house and know she

is very accurate. It is important for me.” (Client interview, rural area)

Home manufacturing foodstuffs in customer perception currently are similar to industrial goods.

Clients interviewed in Riga expressed critique for product assortment and identified unused

possibilities for improving the current situation. Rural inhabitants mentioned price of a product

as one of most significant factors of choice and admitted the product of home manufacturers

often are more advantageous than industrial products available in stores.

„I have an opinion many home manufacturers produce very similar production, which

often are based on more or less tradition recipes. There are few original products or

products with different quality. Practically I have not seen pastry-cook from flour of a

rough grinding – healthy and tasty.” (Client interview, Riga)

55


Figure 4.5. Strategic canvas: Home manufactured products vs. industrially manufacturedSource: Adapted from Kim, Maborna 2007, p. 46, illustration by the author, data from client interviews.

Comparing products of home manufactures with industrially produced or conventional products,

the main differences in target group of customers are whether it is organic, local origin of a

product and relationship with a manufacturer – in these factor groups the products of home

manufacturers are evaluated with a higher level than industrially manufactured. Respondents

admitted there is a necessity to clearly underline the differences in this factor group.

Availability for facts circulation products is one of the main significant factors. Availability of

products has been evaluated higher for industrially produced that home manufactured products.

It is also one of the imperfections regarding the home food manufacturing - comparatively great

work has been invested in the manufacturing of a product, there are good relations with the

buyer, who would like to buy a product, but it is difficult to purchase a product or the purchase

are very complicated, for example, the customer must go after the product. The price has been

evaluated equally between both categories, though interviews show the price is not a primary

factor, why people chooses products of home food manufacturers.

Recommendations from friends and colleagues are very important for me. The price is

not the most significant – it is not as important as it is in a shop, where there are several

similar products I can choose. (Client interview, Riga)

Price Quality of raw materials

Taste quality

Healthy product

Organic product

Enjoyable shopping

Food safety Food traceability

Availability of products

Relationship with manufacturer

Local product

Home manufactured products Industrially manufactured products

Low level

High level

56


Quality of raw materials, wholesomeness and quality of taste are received as better for home

manufacturers though the differences are not great. Traceability of foodstuff has been evaluated

as higher for products of home manufacturers. The food safety, in its turn, has been evaluated

equally both for industrially produced and home manufactured products. Interviewed clients

admitted they like to taste product during the purchase and identify its quality after its taste. The

relation with a manufacturer/seller also is very important since it gives an additional value to a

product. Client likes to know something more about the origin, quality and taste of a product.

“It is better to buy sauerkraut and vegetables from farmer than in a store, since they are

not packed in some plastic bag and I see the product, can choose. It is more ecological. I

especially like pavilion of roots because everything smells as a marinade and I can taste

and choose the best one.” (Client interview, Riga)

Interviewed clients admitted the foods home manufacturers and their production is very

different. Currently foods home manufacturers do not have a strong position of products, though

there are available several good products of home manufacturing in the market. Clients’

suggestions to the home manufacturers:

Take care of food hygiene in reality and create an impression and confidence for a

client that everything is all right with the quality and cleanness of product;

Think about packaging and design, and choose more natural packaging;

Improve the product labeling, which is the guarantee the home manufacturer is

subjected to the control;

Manufacture more qualitative and different foodstuff, create something new and

interesting;

Improve the product availability, take their products to the city (to offices, at

supermarkets, more active trade in markets), form separate stands of home

manufacturing in food departments of supermarkets (for city inhabitants),

materialize their product in local shops (for rural inhabitants);

Search for a possibility to decrease product prices;

57


Inform society about the quality of one's product in more active manner; increase

the identification and popularity of products, advertise one's production in local

mass media.

Educate society, for example, with several campaigns in supermarkets

(degustation), explaining the healthiness of products and significance of food

consumption, which is manufactured in Latvia.

58


Product flow in home food manufacturing

According to Chapter 3 Section 4 Clause 6 of the law “On the Supervision of the Handling of

Food” (1998) „Food manufactured or processed in home conditions can be distributed in local

market directly to a customer, taking into consideration hygiene requirements for food

manufacturing and processing.” Direct trade in Latvia is considered as regular trade places, as

well as so called street trade - fairs and itinerant trade.

Research of participants of home food manufacturing branch states the greatest part of registered

food processing home manufacturers use a possibility to take their production to the market

(86%), as well as the possibility to transport product directly to a client (57%) and sell it to

clients, who come after the products themselves (52%); only 19% of the respondents give their

production to dealers. Unregistered home manufacturers use a possibility to transport product

directly to clients (75%) and more than a half sell their products to clients, who come after the

products themselves (56%). It needs to be mentioned 47% also transports their products to the

market, but 9% give production to dealers.

59


Figure 4.2. Product flow of home food manufacturing in total food circulation in LatviaSource: Illustration by the author, grounded on information acquired from the research.

The figure shows a product flow in local market and place of home manufacturers in it. Red

pointers show forbidden flow channels for home food manufacturers. Consequently, home food

manufacturers are allowed to trade their production in direct market: (1) if a client comes after it

(‘from hand’); (2) in market, fairs, itinerant trading places, (3) shop of their own.

According to information provided by the Ministry of Agriculture, home manufacturers are

forbidden to transfer their production to retail shops. Cooperation shops are disputable issue.

Currently there are several cooperation shops in Latvia, which also trades home manufactured

products, but the research shows that potential manufacturers and sellers in a process of new

shop establishment meet with resistance from controlling institutions since transfer of products to

cooperative shop is defined as transfer of products to the third party.

Ministry of Agriculture (food circulation)Food and Veterinary Surveillance

Registered manufac-turersof primary products

Importers of raw materials

Unregistered home manufacturing enterprises

Consumer of meat products

Recognized food manufacturers

Registered home manufacturing enterprises

Receivers of small amount primary products

Wholesale

Retail shopsHome manufacturer/ cooperation shop

Ministry of Economics (economic activity)State Income Agency

Production of primary products

Processing of primary products

Markets ofdirect trade

Public catering HORECA

Direct trade ‘from hand’

Trade

HORECA

Unregistered manufacturers of primary products

Final consumer

Establishers of policy, controllers

Product flow in the local market (Latvia)

60


Home manufacturers also are not able to sell their products to the local cafes, restaurants. Home

manufacturers do not need to ask to clients their documents in the market and there are several

stories when some chef regularly buys home manufactured cheese or any other tasty product for

the needs of one's restaurant. Home manufacturers would like a legal possibility to provide their

production to catering enterprises.

“It is necessary to allow home food manufacturers giving their production to local cafes.

The traceability would not disappear. And local entrepreneurship would gain from it.”

(RMR)

Products of home manufacturers can be as a driving force for tourism since exactly the

traditional food is one of the things a tourist wants to try in our country. Currently such

possibility for tourists is provided only during fairs (before Christmas, Midsummer Day) or in

farm markets (such as Berga bazārs or monthly farm markets outside Riga). Permanently home

manufactured products are not available in retail shope, except some shops of organic production

in Riga and outside it.

“Traditional products are more available in developed European countries and they are

used for attraction of tourists.” (Ziemele 2009)

“Nobody has the interest to come to Latvia and eat synthetic jam. It would be wonderful

if local restaurant offered jam of local red bilberries together with game meat. If the jam

is not qualitative, no owner of the restaurant or a chef will take the particular product.”

(Melece 2009)

By no means all home manufacturers would like to give their products to retail shops. Those

home manufacturers who basically work with home manufacturing alone are aware they want to

receive the maximum price for their products to completely pay for the invested work.

Secondly, worries of home manufacturers are connected with the struggle between market and

store nets.

Without taking into consideration the economic situation, new retail shops appear in the regions

and they base their activities on trade of local products. Shop owners have expressed wishes they

would like to trade home manufactured food products. Regional or small shops as alternative

way of product trade in generally are supportive idea among home food manufacturers and

clients, who still pointed out that not all home manufactured products are to be sold in shops and

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initially they would like to try the product, buy it from the manufacturer and only afterwards buy

it in the more available trading place.

“If I gave my production to store, they will put a surcharge, but I already know sell my

products with a small surcharge. Will be I be able to sell both in the market and store in

one city?” (RMR)

“Some home manufactured products are so tasty and qualitative I would be glad to use

them more frequently, but I will not go 20 km after them; I would like to buy the products

in some nearer store.” (Client interview, rural area)

Impact of external environment factors

For the identification of external environment factor several research methods are used. Data have been gathered from quantitative questionnaire of home food manufacturing branch, deep interviews and expert interviews. Table 4.2. External environment factors affecting development of home food manufacturing (adapted from LE PEST C model (Brooks, Wheatherston 1997)), summary of the author, data from home manufacturing questionnaires, direct interviews, discussions and expert interviews)

Restraining factors Driving factorsLegal environment

Interpretation of legislation Interpretation of legislation

Ecological environment

Customer has not identified the ecological factors as significant

Quality of raw materialsNatural productsSmaller packaging

Political environment

Unpredictable political environmentLack of lobby for home manufacturers

Support of local municipalities for organizing trade places

Economic environment

Recession of economyDecrease in customer purchasing powerLack of support for small businessesUndifferentiated tax policy

Demand for qualitative products with profitable priceDevelopment of micro-crediting

Social environment

Increasing level of unemployment in countryDecrease in number of inhabitantsDecrease of middle classDesire of inhabitants to find a new occupation

Changes in society attitude and support for farmersFormation of civil initiative groups and activities of social organization Mass media support for the industry

Technological environment

Availability of the Internet for home manufacturersDevelopment of publicly available data bases

Not identified

Competition Increase of common competition in food marketRegistered vs. unregistered home manufacturers

Increase of common competition in food marketThreats of newcomers

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Every factor of external environment can be both restraining and driving for development of

business, sector or industry. Table 4.2 provides factors regarding impacts of external

environment on home food manufacturing, which were identified during the research.

Currently the possibilities for legislation interpretation are very wide. There are no precise

requirements for home food manufacturers and application of them depends on FVS inspectors

of a particular territory and their interpretation of legislation. The research participants have

identified it as a restraining factor and think the home food manufacturing in Latvia has been put

on the same level as industrial manufacturing (55%). Of course, one part of home manufacturers

make gains from interpretation of legislation, for example, lower expenses from interpretation of

legislation is for them, who does not have to give the water analysis since they use centralized

city water-mine and use water in home manufacturing only for hand washing.

Restraining factor also is an unidentified dimension of customers about ecological quality of

food. Customers pay few attention to significance of ecological factors and, for example, smaller

„product mile” (a distance from the place of product production to customer) has not been

received as important significance. A customer desire for natural product and certain origin can

be mentioned as positive ecological environment factor; also a smaller packaging can be

evaluated positively, though the thoughts of interviewed clients about the particular issue varied

according to the purchased products.

„I always buy cream in a new plastic package, though the packaging cannot be

considered as ecologic. It is possible to use this packaging elsewhere, but still there is too

many plastic material." (Client interview, rural area)

Political environment can be evaluated as very unstable and, in generally, it affects home food

manufacturing negatively. Often changes in legislation, unavailable explanation establishes

advantageous ground for rumours and low motivation of home manufacturers to follow the

changes of regulating requirements. Also the lack of representation of home food

manufacturers’ interests is identified as restraining factor. Currently there is no organization,

which could validly represent interests of home food manufacturers in political level. There are

organizations of different sectors where one of the issues is more advantageous conditions for

food processing, for example, Association of Latvian Organic Agriculture, Association of

Latvian meat manufacturing and meat processing etc. Also the support of local municipalities in

organization of trade is identified as positive factor of political environment.

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The main economic environment factor, which affects home food manufacturers, currently is

decrease in customers' purchasing power. Every interviewed home manufacturer has observed

this issue in one's economic activity. The purchasing power of customers is related to decrease

in total amount of money and caution, i.e., the amount and regularity of purchases is decreasing;

purchases are more advised and everyone tries to buy only the most necessary products. It also

means losses for home food manufacturers since they are not always able to sell their production.

„In four years’ time I did not experienced any losses, but now for two weeks in turn I was

not able to sell all my production in fairs, where I go regularly.” (RMR)

Also the lack of support for small enterprises and undifferentiated tax policy such as equal rate of

income tax etc. can be identified as significant factors of economic environment. Planned

support program for micro businesses has not approved yet, there are not unbiased information in

order to evaluate the impact of the program to home food manufacturer.

Increase in demand for qualitative products with competitive prices is identified as another factor

of economic environment. It is a challenge for home food manufacturers, but in the meantime it

is also a great possibility since in this economic situation customers are looking for new

consumption solutions. The one, who will know how to use this tendency and change the

accidental product consumption into habit, will be able to plan further manufacturing amounts in

a more successful manner. Of course, it also means the provision of product quality.

Development of micro crediting is a perfect solution for this purpose.

„50 micro credits were issued to rural women in 2009; currently some of them are

successful home manufacturers. Amounts of micro credit available for 2010 will be more

significant, which means there will be some financing possibilities.” (Freimane 2009)

Social environment affects home food manufacturing both in a positive and negative manner.

Changes in number of inhabitants, increasing unemployment rate has been identified as

restraining factor. CSB forecasts: „Number of inhabitants in Latvia in 2009 will be around 2

million and 249 thousands or 12 thousands less than in the beginning of the same year.

Statistical data witness the amount of emigration flow will increase this year. Amount of persons

left in order to change their permanent place of residence in first ten months of the year (6.3

thousand people) is greater than amount of emigrants in 2008 in total (6 thousand people),

whereas the amount of immigrants will be approximately for a thousand less this year in

comparison with year 2008.” (CSB 2009, ER). “Level of registered unemployment in the country

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in the end of November, 2009 was 15.1% from economically active inhabitants.” (SEA 2009,

ER)

A desire of inhabitants to find occupation in current economic conditions has increased the

interest about home food manufacturing. It can be generally considered as potentially restraining

factor since the interest groups consist not only from farms, which have the necessary raw

materials for product manufacturing, but also the unemployed city dwellers often without

appropriate education of food technologist. Their activities and performance in general can affect

the reputation of all sectors and perception of food quality among customers.

Changes in society attitude about farmers and their manufactured products are identified as

positive social factor. There appears interest of inhabitants to support local manufacturers – it is

proven by development of farm markets, which often is a base for civil initiative, for example,

Green Market in Straupe.

Attention to this sector paid by the mass media, which analyses the sector itself and popularizes

successful stories and concrete home manufacturers affects home manufacturing in a positive

manner. Of course, the greater attention to issue is paid by the mass media specialized in

development of agriculture and countryside. „Latvian Gazzette” („Latvijas Avīze”), other

regional press, Latvian Radio (Latvijas Radio), LTV1 Regional News etc.

Technological environment or availability of technologies is identified as one of the main

restraining factors. Questionnaire of participants in home food manufacturing sector provided by

the author witnesses that only 19% of all home manufacturers have the Internet. Of course,

official information and explanations of legislation can be basically found in the Internet. The

second aspect of technological environment is more connected to the non-usage of possibilities,

namely, home page of FVS contains data base of registered home food manufacturers. It is hard

to find and initially it is difficult to orient in it. Participants of home food manufacturing, clients,

also several experts interviewed during the research were not informed about such data base.

Total competition in market of foodstuffs is increasing. There is a struggle not only among

manufacturers, but also among trade channels – supermarkets try to attract buyers lowering

product prices; also the number of direct trading places, which offers production of farmers, is

increasing. Increase of competition can be evaluated both as restraining and driving factor.

Competition of unregistered home food manufacturers shall be evaluated as negative. To a

certain extent it is affected by a customer who does not ask whether home manufacturer is

65


registered or not. Threats of newcomers are comparatively high since there are no significant

obstacles for becoming the home food manufacturer, for example, currently there are no

requirements the home manufacturers shall process only one's own products.

66


Legislative framework

Normative acts regulating home manufacturing of food sector in Latvia (Ministry of Agriculture 2009a, ER, Marcenkova 2009, table prepared by the author)Sectors Manufacturing

of meat products and minced meat in home conditions

Manufacturing of milk products in home conditions

Processing of fishery products in home conditions

Manufacturing of vegetable oil and fat in home conditions

Manufacturing of plant origin foods in home conditions

Manufacturing of flour products and bread in home conditions

Manufacturing of egg products in home conditions

Manufacturing of specific foor of animal origin in home conditions

Manufacturing of non-alcoholic drinks and ice in home conditions

LV Law of the Republic of Latvia „Law on the Supervision of the Handling of Food” (19.02.1998)Regulations of the Cabinet of Ministers No.964 23.11.2004 „Regulation regarding the Labelling of Food Products”Regulations of the Cabinet of Ministers No. 235. 29.04.2003 Mandatory safety and quality requirements for drinking water, order of monitoring and controlRegulations of the Cabinet of Ministers No.203. 01.06.1999 Order of disinsection, disinfection and derazitation measuresRegulations of the Cabinet of Ministers No. 158. 27.02.2007. Regulations regarding mandatory safety requirements for food supplements and food with food supplements, as well as requirements for labelling the food supplements. Regulations of the Cabinet of Ministers No.409. 14.06.2005. Professional qualification requirements for persons employed in food circulationRegulations of the Cabinet of Ministers No. 494. 27.11.2001. Regulations regarding works connected to possible harm for other peoples’ health and where employed persons are subjected to mandatory health careRegulations of the Cabinet of Ministers No.486. 10.07.2007. Regulations on state tax regarding reception of allowance and order for allowance delivery for vehicle groups, which need an allowance for transportation of foodstuffs.

EU Regulation No. 852/2004, 29.04.2004. On hygiene of foodstuffsRegulation 853/2004 (29.04.2004)* N/A Regulation 853/2004

(29.04.2004)*N/A

1935/2004, 27.10.2004. Regulation on materials and articles intended to come into contact with food and repealing Directives 80/590/EC and 89/109/EEC 1924/2006, 20.12.2006. Regulation on nutrition and health claims made on foods1925/2006, 20.12.2006. Regulation on the addition of vitamins and minerals and of certain other substances to foods178/2002, 28.01.2002. Regulation laying down the general principles and requirements of food law, establishing the European Food Safety Authority and laying down procedures in matters of food safety

Notes: Distribution of sectors is formed in accordance with classification of FVS data base.* Regulation of the European Parliament and Council (EC) No. 853/2004 (29 April 2004), laying down specific hygiene rules according to foodstuffs of animal origin.

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http://www.vvc.gov.lv/export/sites/default/docs/LRTA/Likumi/Law_on_the_Supervision_of_the_Handling_of_Food_.doc


HORTICULTURE INDUSTRY IN ESTONIA

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Level of Estonian fruit and berry growing until 2008

In the year 2001 the area of orchards and berry gardens was 18,526ha and the total production

amounted to 27,031 tons including 18,232 tons of fruits and 8,343 tons of berries, in addition 456

tons of other berry cultures (including sea buckthorn, cultivated bilberry, bullace).

By the year 2004 the area of orchards and gardens had decreased to 15,690ha and the decrease

was constantly continuing (Table 1) being 8,100ha in 2008. Consequently, during a couple of

last years the area of fruit trees and berry bushes decreased almost by half.

Crops have fluctuated because of the weather but until the year 2008 they were extremely bad

(the good crops were hoped for the year 2009). In the years 2004-2008 the best total crop was

received in 2005 being round about 16,800 tons, including 10,663 tons of apples (and pears). In

other years the total crop was two to three times smaller. If we compare the apple crops in 2004,

2006 and 2008 with the crop of 2005, these crops constitute almost only a quarter of the crop of

2005 and sixteen times less than in 1993.

In 2004 the plum crop was 913 tons. In 2006 the crop was 282 tons, in the following years even

less, The plum crop of 2007 was more than 50 times smaller than in 1993 and 19 times smaller

than in 2004. It should be added that a good plum crop (2,334 t) was received in 2001.

The biggest fruit and berry crop – 48,200 tons – was received in the newly independent Estonia

in 1993. The apple crop in that year was about 40,000 tons. Two years later there was again a

good apple-year with the crop of 30,000 tons. The best plum-years were 2001 and 2002 when the

total crop was almost 2,500 tons. The best year of cherry production was 2002 with more than

1,400 tons. The best berry production years are also at the beginning of the 21st century.

Table 1. The area of orchards and berry gardens (ha) and the crop (tons) in the years 2004-2008. The data of the Estonian Statistics Board

Total area Total crop2004 2005 2006 2007 2008 2004 2005 2006 2007 2008

Total 15,690 11,733 9,408 8,575 8,148 8,163 16,798 5,855 6,625 5,486Apples and pears

8,895 6,538 5,118 4,331 4,039 2,159 10,663 2,835 4,087 2,248

Plums 1,298 836 623 569 538341

913 507 282 48 11498Cherries 846 528 397 350 96 181 191 108

Red and white currant

994 671 480 402 447 366 1,117 139 325 500

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Black currant

1,137 785 553 614 615 738 933 427 158 234

Gooseberry

589 362 264 230 231 487 74 52 69 121

Raspberry 382 328 299 210 220 317 544 236 210 256Strawberry

1,095 865 814 648 564 2,293 2,323 1,523 1,500 1,512

Other fruits and berries

454 820 860 1,221 1,153 794 456 170 120 403

The location of orchards and berry gardens

Concerning the area of orchards and berry gardens, the biggest area is in the County of Tartumaa

– 12% of the total area of agricultural enterprises in Estonia, (Table 2). The following positions

are occupied by the Counties of Võrumaa and then Viljandimaa. The smallest number of fruit

trees and berry bushes is grown on the islands of Hiiumaa and Saaremaa where the population is

the smallest. Also, the County of Läänemaa has few fruit trees and berry bushes which are very

few in the counties with the severest climate – Eastern-Virumaa, Järvamaa and Jõgevamaa, also

Western-Virumaa and Raplamaa.

The County of Viljandimaa has the biggest number of apple orchards, the County of Tartumaa

follows. The biggest area of plum trees is in the County of Tartumaa. The second and the third

place are occupied by the Counties Viljandimaa and Pärnumaa. The small area – less than 10 ha

in each – characterizes the Counties of Järvamaa, Hiiumaa, Eastern-Virumaa, Jõgevamaa,

Raplamaa, Saaremaa and Põlvamaa. The first place of cherry tree growing belongs to the County

of Pärnumaa, followed by the Counties of Viljandimaa and Võrumaa. The cherry trees are the

least numerous in the above mentioned counties of the severe climate and the County of

Hiiumaa.

Concerning the berry bushes, the County of Tartumaa has the largest area: occupying the first

place in growing the red and the white currant, the second place in growing the black currant and

strawberry. The County of Pärnumaa grows more raspberry than any other county.

The islands and Läänemaa are noteworthy because of their small degree of growing raspberry

and strawberry. In general, there is a small area for berry bushes. The same is true of the

Counties of Eastern- and Western- Virumaa, Läänemaa, Järvamaa, Raplamaa and Harjumaa.

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Table 2. The location of the orchards and berry gardens of agricultural enterprises in counties (ha)The data of the Estonian Statistics Board for 2008County Garde

ns in total

Apples and pears

Plums Cherries

Red and white currant

Black currant

Raspberry

Strawberry

Harju 279 146 18 14 14 12 8 10Hiiu 83 54 6 4 3 3 1 2Ida- Viru 121 56 7 6 4 5 6 17Jõgeva 213 94 11 7 15 12 16 28Järva 133 80 5 3 8 4 1 3Lääne 181 111 16 7 9 6 2 8Lääne-Viru

265 112 10 6 11 21 26 19

Põlva 349 182 13 10 14 21 12 59Pärnu 547 201 32 18 20 60 34 26Rapla 296 84 12 7 12 17 3 6Saare 173 98 12 10 9 6 1 8Tartu 949 358 51 16 71 100 15 80Valga 315 137 20 14 18 21 5 59Viljandi 624 403 35 18 29 41 25 25Võru 766 231 26 18 40 111 7 83

What are the reasons for small crops?

First of all, we should remind ourselves of the weather in the recent years. Winters were as if

mild: long periods of thaw, the temperature was rising in December and January even over +100

C. The plants stopped resting and started life activities. Then there were some frosty day with the

temperature below -200C or -250 C (in some places -300C). It especially harmed buds of blossom

but also destroyed the branches of plums trees and currant bushes. In several years the strawberry

plants suffered from frost when there was no snow cover and the roots froze. Many raspberry

stalks perished.

The apple and pear trees were harmed in several years by strong night frosts in May. When

during the first frosts the blossoms of some varieties were preserved, then after some days new

frosts appeared and killed them. The owners of orchards were not prepared to alleviate the harm

of night frosts: there were no heaps of material placed evenly in the orchard to make smoke

cover. They were not prepared for repeated frosts. In some places the apple trees in blossom

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were sprinkled with water. As avoiding the harm of night frosts needs knowledge and well-

organized activities, the owner could not cope with it. Repeated frosts on the wide territory

became fatal in these years to our crop of fruits and berries. Protection work is also expensive.

We can present for comparison the apple tree crop (Table 3) in our neighbouring countries and in

the best country of the world: Austria.

Table 3. Apple tree crops kg/ha in 2006 and 2007. The FAO data

2006 2007Eesti 554 944Soome 5,135 5,344Läti 3,589 4,145Leedu 6,696 3,051Austria (maailma parim) 84,016 78,845

It should be mentioned that the FAO data (only apples) and the data of the Estonian Statistics

Board (apples and pears together) are different to a small extent. According to the Enterprise

Estonia the crops in Estonia were 594 kg/ha in 2006, in 2007 – 972 kg/ha, in 2008 – 569 kg/ha.

In these years the differences with our neighbouring countries were from three to ten times. The

best crops were in Austria, the crops of Poland were 7-13 times smaller than in Austria.

The decrease of fruit and berry plantations was caused to a great extent by the growth of the

people`s incomes and the increase of the people`s labour engagement. On the basis of the

questionnaire we may reveal the absence of time, wish and need for producing garden crops. A

significant reason is also the easy access to fruits and berries, their cheap price, high quality in

retail trade. This is why many production gardens have been turned into pleasure gardens. Old

(large) farm gardens were not taken care of because the crop could not be sold; in the end the

fruit trees were felled and berry bushes rooted out. This is why the area of berry bushes has been

greatly reduced (Table 1).

The year 2009 gave good crops. Several entrepreneurs have extended their apple orchards,

planted berry cultures. There are also new beginners – the founders of apple orchards. On the

plots of new private houses young fruit trees have been planted.

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The export and the import of fruits and berries in Estonia

Import

In the following tables the further export to other countries of imported goods has been

subtracted, consequently, the figures show the amounts of fruits, berries and nuts left for the

consumption in Estonia (Tables 1 and 2).

The amounts of many goods decreased in comparison with the previous year 2007. The amount

of the most imported fruits – citrus fruits – decreased by about a thousand tons, mainly by

tangerines and oranges. Lemons, limes, grapefruits and pomelos were imported in bigger

amounts. The success of limes is notable: within the last eight years the import had increased

more than twenty times and in 2008 it was almost as large as the import of avocados. In

comparison with the previous year the smaller amount of apples, pears, peaches (including

nectarines) and kiwi-actinidias was imported but the import of fresh plums, pineapples and

apricots increased. The popularity of avocado increased radically in 2007 and the level of import

in 2008 even grew a little.

Beside citrus fruits the amounts of other most important import goods – bananas and grapes –

increased. The amounts of berries have been fluctuating in different years. In 2008 fresh and

frozen strawberries were imported in a smaller amount than in the previous year but more frozen

raspberries were imported. Statistics show (Table 1) that among imported goods high bush

blueberry (Vaccinium corymbosum) is separately shown. This species of bilberry originating in

Northern America has big sweet juicy berries, the juice of which is colourless and the species as

a cultivated plant is gaining importance in the whole world. By the way, its bush is 2-3 m high,

in the case of hybrid varieties it may be less than 2 m or even 1 m.

Among the import of dried fruits (Table 2) the amounts of raisins and black plums, also dried

plums and apples have increased. The amounts of other goods, for example, apricots and

peaches, have decreased.

The import of nuts decreased in 2008, only hazel nuts were imported in bigger amounts.

Table 1 and 2 also show us the price of the imported goods. Limes, strawberries, sweet cherries,

avocados, especially star fruits, lychees, figs and bilberries belong to the more expensive goods.

Frozen raspberries are expensive, brambles are especially expensive. Also, the dried fruit

belongs to the expensive goods, especially apricots, figs and especially some tropical fruits

73


(lychees, star fruits, granadillas). The declared prices of nuts are 55-75 EEK/kg. The fruits of

native Australian macadamia (also grown in Hawaii, the Southern African Republic, Brazil and

New Zealand) are expensive with the import price of 160 EEK/kg. It is natural that it is imported

in small amounts to test what the future sales could be like. Coconuts and chestnuts are cheaper.

The percentage of fruit and berries constituted 6% from the import of agricultural goods. If we

subtract the further exported goods, this indicator decreases to 4 – 4.5 per cent.

Export

In the present overview only the export of fruits and berries produced in Estonia is observed.

Consequently, the further export of our imported goods is not analyzed.

It can be seen in Table 3 that the amounts of fruits (apples, plums, sweet cherries) are so small

that they do not constitute an export amount worth mentioning. Bilberries, which were mainly

exported frozen, belonged to the most important export goods. The export of bilberries picked in

the forest constituted in the monetary value 78% of the general amount of export (fruits and

berries). The export of low bush bilberry (Vaccinium angustifolium) 34.3 tons is noteworthy. It

also demonstrates that the cultivation of a new culture has been successful.

Among the export of garden berries, in 2008 red currants (frozen) with 73 tons occupied the first

place. The export of strawberries and black currents was small.

The last bigger export of strawberries – 215 t of frozen berries and 2 t of fresh berries – took

place in 2001. In the two following years it fell to 25-26 tons (fresh and frozen berries in total).

In the years 2004 and 2005, 7 t and 16 t respectively were exported. In the recent years the

export has not exceeded 6 t.

In 2001 the black currant export was 66 t and in 2002 – 98 t. In the export of the following bad

years (in most cases 1-11 t) the year 2004 is exceptional with 110 tons. After that no significant

black currant export has taken place.

In 2008 the raspberry export (total 7.2 t) was the biggest amount in the 21 st century. After the

export amounts of 5-7 tons in 2001-2003 there were three years when raspberry was not exported

at all or only 1 ton was exported in 2005. Only in the year 2007 the export was somewhat bigger

– 3.4 tons.

The total export of Estonian products in 2008 was 975 tons: 33.9 million EEK.

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Table 1 The export of fresh fruits and frozen berries in 2008Description of goods Amount t Declared

price EEK/kgChange of amount in comparison with 2007

Fresh fruits and berriesCitrus fruit 14,204 - Incl.tangerines (7,101) 10-15 - oranges (4,202) 10.2 - grapefruit and pomelos (1,383) 12 + lemons (1,386) 16.5 + limes (132) 23.3 +bananas 12,558 12.5 + apples 12,211 - grapes 6,774 17.5 + pears 4,775 12-13 - peaches 2,374 16 - Incl.nectarines (1,386) 18 - kiwi-actinidias 1,102 17.3 - plums 1,091 11.4 + pineapples 848 12.7 + apricots 292 16.6 + sweet cherries 208 34.9 - mango,guava,mangostan 182 16.2 + avocados 137 25 + dates 50 22.6 - sour cherries 31 16.9 - papaia 30 10.7 -star fruits,lychees 12 39.4 - quince 4 15.8 - figs 3.6 42.9 -fresh garden berries - species not indicated 733 18 - strawberries 468 29 - red currant 12 15.3 + high bush blueberry (Vaccinium corymbosum)

7.6 32.5 +

raspberries 69.4 39 +black currants 0.4 -fresh forest berries .bilberries 1,128 39.7 -cowberries 870 22.7 +frozen berries and fruitsstrawberries (incl.with added sugar 118t) 437 about 20 -

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raspberries 227 34.7 +sour cherries 83 22.2 +black currants 34 21.4 -species not indicated 14 33.5 -tropical fruits 13 27.6 - sweet cherries 5 - brambles 5 75.8 -

Table 2. The import of died fruits and nuts in 2008 Description of goods Amount (t) Declared

price EEK/kg

Change of amount in comparison with 2007

Dried fruits Raisins 1,019 mostly20 + Black plums 199 33.4 + Apricots 155 39.4 - Pears 132 15.2 + Apples 100 21 + Bananas 55 21.3 - Lychees,star fruits,granadillas,etc. 13 62.7 Figs 8.7 43.9 - Peaches 5 24.6 - Papaia 4.7 22.9 - Mixtures 121 32 – 87 -Nuts Almonds 273 mostly 60 Pistachio nuts 254 62.6 - Nacrate (Indian nuts) 180 63.4 - Hazel nuts 144 76.2 + Greek nuts 103 70.2 - Copra 50 17.9 - Full coconuts 20 15.7 - Para-(Brazil) nuts 4 55.8 - Macadamia nuts 0.3 159.7 Chesnuts 0.1 22.5 - Not indicated 19 74Remark: 1) The hazel and Greek nuts are mostly cleaned from nutshells. 2) Dried granadillas (a loan word: marakuja from Portugese) have a dried and hard wrinkled outer skin, the inner arils are very juicy.

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Table 3. The export of fruits and berries produced in Estonia in 2008.a.Description of goods Amount (t) Sum total thousand

EEKFresh fruits Apples 1.4 23.1 Sweet cherries 0.4 26.3 Strawberries 1.2 50.3 Raspberries 4.3 50.7 Cowberries 10.8 334.5 Bilberries 10.7 637 Other 33.8 1,601.3Frozen fruits Raspberries 2.9 186.7 Black currants 1.3 50.8 Red currants 72.6 902.5 Bilberries 562.2 25,836.9 Low bush bluberry (Vaccinium angustifolium) Berries, species not indicated

34.3

222.9

1,400.4

2,091.1Dried apples 00.2 1.4Remark: Also plums (50 kg) and brambles (20kg) were exported in very small amounts.

Looking back to the Estonian independence before World War 2, I shall present the data of our

apple export in 1933-1935 on the basis of the Yearbooks of Foreign Trade (in comparison with

the import of oranges and lemons in the same years).

Apples were exported Oranges and lemons were imported1933 93,654 kg (26,888 crowns) 213,201 kg (74,907 crowns)1934 56,0453 kg (15,8795 crowns) 467,802 kg (151,543 crowns) 1935 126,975 kg (46,731 crowns) 509,226 kg (204,720 crowns)

(The source: K. Randma: Transactions of the Experimental Council No 77, 1938)

The biggest amount was exported from the variety “Antonovka” (1933 and 19349 which was

exceeded in 1935 by the variety “Liivi sibulõun”. Other important varieties were “Sügisjoonik”,

“Seerinka” and “Liivi kuldrenett”. Apples were mainly exported to Finland and soon Finland

began to limit it with the purpose of the protection of its domestic market. Later, Estonian apples

were exported to Germany and England. The amount of apple export in tons was: 1936 - 371,

1937 – 480, 1938 – 284, 1939 – 472.. But, however, in the pre-war years the biggest amount of

export was constituted by forest berries: the biggest in 1938 -1,217 tons and in 1939 -830 tons.

(A.Prima`s article in the journal “Aed”, 1940 No3, pp.89-92).

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From where were the apples imported in 2008?

The annual import of apples has mostly been twelve to thirteen thousand tons, in the years of a

lean harvest even more: in the table below the further export of apples has been subtracted.

Initial figures originate from the Estonian Statistics Board.

Table 1. From the imported apples the following amounts remained in Estonia (tons)2001 2002 2003 2004 2005 2006 2007 200813,100 12,972 16,524 18,229 13,440 9,038 12,636 12,210

The preferred sender was Poland. A quarter to one third of imported apples come from Poland, in

the year 2005 the amount was even 54%. The reason is the cheap price of the Polish apples: in

2008 the declared price 6.13 EEK/kg. At the same time the apples bought from Spain, the

Netherlands and Belgium were two times more expensive. In the previous year the second place

by weight was occupied by apples brought from the Netherlands (almost one fifth), the following

place with 10-11% was occupied by Belgium, Germany and Lithuania, then three times less.was

brought from France and Spain. Even smaller amounts came from Italy, Brazil and China.

Among import countries there were also Latvia, Hungary and the South African Republic.

Table 2. The import of apples from import countries in 2008

States Precentage of weight Value,thousand Price EEK/kg crownsPoland 35.4 26,600 6.13

Netherlands 19.2 29,170 12.39Belgium 10.7 14,080 10.74Germany 10.3 13,700 10.81Lithuania 10.2 12,320 9.89France 3.7 5,630 12.27Spain 3.1 4,830 12.87Italy 2.1 2,760 10.89Brazil 1.7 2,430 11.45China 1.6 2,030 10.68Latvia 1.2 1,760 12.01Others 0.8 1,100

In the earlier years apples have also been brought from other South American countries -

Argentina, Chili und Uruguay.

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In an ordinary crop year the weight of imported apples has been 80-90% in comparison with the

self-production of Estonia (for example 2001 and 2002). In the recent years there have been quite

many years with a low or a lean harvest. Then 3.4 times (2003) or even 8.7 times (2004) more

apples were imported than received from Estonian orchards. In the year 2006 there was a very

low apple crop.

Very often people complain that Estonian apples are not on sale. We should draw the attention to

the fact that in the recent years the reason was the climate, primarily the strong (and repeated for

several nights) frosts in May which have destroyed the blossoms on wide areas. The Estonian

apple crops all over the country have been so small that practically nothing was left for sale. But,

however, there are quite many gardening farmers who plant apple tree orchards. There are also

some older orchards

The consumption of fruits and berries

The data of the fruit production and consumption in the Republic of Estonia have been published

in the journal “Aed” 1940, No 1 (pp.11-13). K.Luud presents the average fruit and berry

production per capita in 1936-1938 which was 32.2 kg consisting of 23.o kg apples, 0.4 kg pears,

1.4 kg plums, 1.4kg bullace, 0.8 kg cherries, 1.3 kg gooseberries, 3.0 kg red currants, 1.1 kg

black currants, 0.1 kg white currants, 0.4 kg strawberries and 0.3 kg raspberries. The total crop of

fruit trees was 26 kg, the crop of berry bushes only 6.2 kg, consequently more than four times

less. K.Luud mentions an especially small strawberry crop in the case of the low production of

berries. He also says that the export of apples (0.3-0.5 kg per capita) coincides more or less with

the import. At the same time people are reminded of the advice of the nutritionists that the

Estonian consumption should be four times higher, also adding that it is unrealistic. The

catastrophic winter of 1933/1940 killed most of the fruit trees. In addition, the weakened

surviving trees perished later, the fruit trees were harmed by the war in the summer and the

autumn of 1944. In 1945 only 15% of the fruit trees, growing in Estonian orchards in 1939, had

survived. There were 16% of apples trees, 11% of pear trees, 7% of plums trees and 10% of

cherry trees.

Elsa Kukk, an expert of fruit production economy, in her book “Instructions to fruit growers”

published in 1970 (the Publishing House Valgus), presumes that in the 1960s in the good years

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about 40% of the population`s needs could be covered, in low harvest years only 5-10%. I add

that then the best crops were in 1964, 1967, 1970 (also 1971). In the meanwhile there were the

worst lean years in Estonia which were caused by frosty winters killing many trees, branches and

buds of blossoms.

The consumption in the end of the Soviet period is shown by the data of the Estonian Statistics

Board published in 19921* (Table 1)

Table 1. Consumption of fruits and berries per capita in 1980-1991 (kg)

1980 1985 1990 1991Fruits and berries 38 44 36 27

This time is also characterized by the decrease of vegetables (1980 - 83 kg, 1991- 57 kg) and

potatoes (1980 – 122kg, 1991- 104kg)

Data about the consumption in the 21st century

Since the year 2000, when the newly independent Estonia`s economic life had become stable, the

consumption of fresh fruits and berries per capita has remained between 40 and 47 kg a year. The

Estonian Institute of Economic Research (IER) specifies (see: Maamajandus (Rural Economy),

March 2008) that these figures stand for the fruits consumed at home, data received as a result of

the family household research of the Estonian Statistics Board (ESB). Fruits and berries received

without a pay (grown in the family garden) are included (Figure 1). This research does not

include the fruits consumed in restaurants, outside home at parties and when visiting people, also

the fruit added to school meals.

The differences between years are big. The smallest amounts of fresh fruits were consumed in

the years 2001-2203 (40.3-41.5 kg) the biggest amount in 2006 (46.8kg). The consumption of

processed fruit and berries (jams, juices, etc.) has constantly grown (ESB research, IER

calculation): in 2000 it was 75.3 kg, by 2005 it increased up to one hundred kilograms (98.4 kg)

and in 2006 it was already 108.3 kg, recalculated to the fresh fruit.

1 Estonia. A statistical profile. The Estonian Statistics Board, Tallinn, 1992, page 106.

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The research of the Estonian Statistic Board (the ESB Yearbook 2007) reveals that the monthly

average amount of bought apples was 0.6-1 kg (other fruits are not indicated) which equals to

7.2-12 kg of apples a year. In the years of the lowest price (2004 and 2005) more apples were

bought. It must be added that in 2006, 3,700 family households were studied.

Fresh fruit and berries processed fruit and berries

Figure 1. The consumption of fruits and berries at home, kg/per capita in a year. The processed fruit is recalculated to the fresh raw material. Data of IER and ESB.

The proportion of fruits and berries produced in Estonia in consumption greatly fluctuated

depending on the crop of the year. At the beginning of the first years of the decade the Estonian

proportion of fresh fruits and berries was 19-21 kg, in the bad years 2004 and 2006 it was only a

couple kilograms. In the years 2003 and 2006 there were practically no Estonian plums. For four

years running (2003-2006) there were no cherry crops. In 2000 raspberry gave a small crop, also

the crop in 2006 (all in all 236 tons) was small. The consumption of pears is based on the

imported goods. The imported plums are not popular and this is why the proportion of import is

not bigger than a quarter or a third of the production in Estonia (the lean year 2003 was an

exception).

The consumption of Southern fruits

Separately I tried to show the consumption of Southern fruits taking the import amounts as a

basis. It is not possible to calculate the consumed amount exactly because I have no information

about the spoilt fruit (in depositories, places of sale)

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Table 2. Southern fruits: the imported amounts of fresh fruit per capita in a year, kg.

2001 2002 2003 2004 2005 2006 2007Citrus fruit 8.2 8.7 9.2 9.3 9.4 9.4 11.2Including: tangerines 4.6 4.5 4.9 5.0 5.2 4.9 6.1 Oranges 2.2 2.88 3.0 2.9 2.8 2.8 3.4 Lemons

0.96 1.0 1.0 1.0 1.1 1.0 0.95

Grapes and pomelos 0.21 0.27 0.26 0.46 0.39 0.6 0.77Bananas 7.5 6.7 9.0 10.0 7.5 7.5 7.5Grapes 3.4 2.8 4.0 4.2 3.6 4.7 4.4Peaches (including nectarines)

1.2 1,5 1.1 1.4 2.2 2.2 2.0

Among southern fruits the biggest group of consumed fruits is constituted by citrus fruits (Table

2) in which two times more tangerines than oranges have been brought to us. Lemons are

consumed about 1 kg per capita in a year. Limes have been left out of the table. The import of

limes in 2001-2002 was on average 10 grams per capita a year and by the year 2007 it grew up to

about 60 grams.

During Soviet times bananas were greatly in deficit. Perhaps, this is why the demand increased

so much that in 2004 more bananas than citrus fruits were imported. In the recent years the

banana import has most constantly been about 7.5 kg per capita in a year. The import of grapes

has notably increased: when in 2001-2005 the import amounts of grapes were more than a half

smaller than the import of bananas, then in the last two years the proportion of grapes constitutes

more than a half.

The import of peaches has also grown greatly and in some years has exceeded 2 kg per capita in

a year, while nectarines are preferred (without hair or uncovered fruits), for example, in the year

2007 nectarines constituted 62% of the total amount of peaches. On shop-counters kiwi-actinias

(ealier called:kiwi berries) and pine-apple are on everyday sale. In fact these are the fruits with a

small degree of consumption, the average consumed annual amount per capita being some

hundred grams. It can be said – one small pine-apple per capita in a year.

The amounts of fresh apricots, avocados and mangos are several times smaller. It can be said that

a big number of people have never bought them. If a lover of avocado or mango buys several or

some thirty-forty fruits year, it means that some hundred people do not buy a single fruit.

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In big department stores it is also possible to buy guava, mangostan, lychee, kinkane, papaya,

pomegranate, duriane, star fruit, tamarillo, granadilla (other name: marakuja), fruits of prickly

pear, hurma (or persimmon) and some ofter fruits, on average some grams of them per capita in a

year are consumed. These fruits are eaten by curious people or real specialists who are very few

in number.

Dried fruits and nuts

The first place of dried fruits is occupied by raisins which in some year are imported 1 kg per

capita, but in most cases less. The second place (data of 2006 and 2007) equally belongs to dried

apricots and plums but in comparison with raisins in a six times smaller amount. Suprisingly to

the first five places of fruits have entered dried pears. Dried bananas and dates are imported in

the amount half smaller than of plums. On sale there are also dried (imported) apples, figs,

peaches and papaya. The amount of papaya per year (2007) was 4 grams per capita.

Consequently, try to imagine how many consumers there are. It is true that we should add the

mixtures of dried fruits also containing exotic fruits.

Among nuts almonds have the first place: in different years the imported amounts fluctuate 150-

230 kg per capita. Hazel nuts were imported in the years 2002 and 2003 as much as almonds but

less at present. Greek nuts also belong to the nuts which are not more consumed. Nacrate`s

(Indian nuts) popularity is radically growing. People also buy coconuts, copra or the

product which is grated from the pieces of kernels and adding a good taste to food. Many people

like pistachio nuts, others like paranuts from Brazil and macadamia from Australia or chestnuts

rich in starch which can be tasteful when baked on coals.

Organic products

Among certain people the products grown without poisonous plant protection chemicals and

mineral fertilizers are in great demand. Organic production is constantly being discussed and a

development plan (the present plan until 2013) for promoting organic production has been

established.

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In 2006 the production of organic fruits and berries in Estonia was 327 tons, being 249 grams per

capita (see: Eve Ader “Rural Economy” May 2008). Only very few consumers can have it.

Quick and significant increase of production cannot be seen. According to the quoted source in

Estonia there are 7 producers of organic fruits and vegetables who produced 31.6 tons of

products. In some towns – Tallinn, Tartu, Kuressaare, Viljandi and Pärnu ecoshops have been

opened but the sales amounts are small, procurement is unstable and the quality is changeable. A

part of organic fruits is sold at markets without labels and consumers do not know where to look

for them. Ecological trade imports foreign organic goods because of the absence of domestic

produce.

When dealing with organic growing of fruits and berries, it is important to say that in 2007 the

main cultures were sea buckthorn with 547 ha (34 ha had passed the transition stage), apple trees

(206ha) and black currants (118 ha), raspberry (18 ha) and strawberry (34 ha) while the area of

strawberry had decreased by 8 % in comparison with the previous year.

The purchase of organic products is based on the belief that these products are healthy. In the

case of conventional products people are afraid of pesticide residues, the caused allergy and the

accumulating harm to the health especially in the case of chronic deceases.

Research has shown that garden products sold in Estonia contain the residues of chemicals used

for plant protection and weed control. In a part of analyzed samples the residues have exceeded

the norm. It is especially bad when there are several different residues at the same time which in

acting together strengthen the reciprocal effects (it is called synergy when the whole exceeds the

sum of parts).

Anne Luik writes in “Rural Economy”, December 2007, that in all the imported grapes and citrus

fruits pesticide residues have been detected during analysis; in the imported apples there have

been five residues of plant protection chemicals at the same time while in many cases the norm

was exceeded. Also, in Estonian products, for example, in strawberry plant protection chemical

residues have been found. The results of the mentioned research become known mainly after

having sold the fruits and berries. The facts are learnt afterwards. It is one of the reasons why the

people, who take care of their health and have a careful attitude to the goods on sale, buy

organically produced food. The organic product is much more expensive and this is why such

products are bought by wealthier people.

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Preservation conditions of fruits and berries in Estonia

Most of the storehouses used in Estonia were built in 1960-1980 and today the majority of them

have amortized. Also, significant improvements of storehouses have not been made primarily

because of the lack of resources of producers.

In the years 2004 and 2005 the investment support was provided to 11 applicants through the

Measure 3.1 for improving storage, and investments were made first of all for building and

improving storehouses for potatoes and vegetables. Sufficient investments have been made for

the short-term preservation of vegetables and fruits in retail and wholesale trade.

The estimated loss, caused by the bad conditions in apple storage (Figure 1), based on the

questionnaire carried out among apple growers is, depending on the crop of the year, 6-20% of

the stored apples. We must also add the short sales period of domestic apples (which the bigger

producers finish in December-January).

In the period of springtime the small preserved amounts of domestic fruits sold at the market are

of very low quality and therefore of low price and the quality of the apples on sale in shops falls

quickly. (Table 1). The main problem in a short-time preservation of berries in Estonia is the

quick cooling of products and the lack of corresponding coolers. The so-called “cold-chain” of

the products on the way to the consumer is unsatisfactory.

Table 1. Price dynamics of exported and local apples at Estonian markets (The Estonian Statistics Board)

The price of apples at the market 2005-2008Price EEK/kg

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At the same time, the producers` argument for making additional investments in the storage is

the consumer`s preference of high-quality domestic fruits and berries and the growing price

trend of apples from the period of harvest to the midsummer of the next year. Making new

investments into storehouses, for achieving the suitable temperature and humidity regime, is of

utmost importance from the point of view of the preservation of fruits and berries in Estonia.

This is why it is important to consider it a positive tendency that in Estonia in the years 2007-

2008 the biggest fruit and berry growers made investments into purchasing cooling equipment

and additional insulation of the fruit storehouses.

Figure 1. Amortized fruit storehouses in Estonia in 2008.

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Processing of fruits and berries in the best-known enterprises in Southern Estonia

1. BACULA AS, Viljandi road 1, Rõngu 61001, County of Tartumaa

produces in a wide choice jams, ointment, syrups for large-scale kitchens, industry and

confectioners, jams are safe for baking. Different berries (garden berries – red currant, black

currant, raspberry, strawberry, quince, aronia, forest berries – bilberry, cowberry, bramble,

mountain ash), apples and other fruits are bought.

The products:

DARK JAMS LIGHT JAMS

( in 1.3kg, 3kg and 12 kg plastic buckets) (in 1.3kg, 3 kg and 12kg plastic buckets)

Bilberry jam Sea buckthorn jam

Raspberry-black currant jam Orange marmalade

Cherry jam

Tropical jam

Cowberry jam for the black pudding Apple-quince jam

Strawberry-red currant jam Apple jam

Cranberry jam Rhubarb jam-green

Cowberry jam Rhubarb jam

Forest berry jam

Apple-black currant jam

Fruit jam

Garden berry jam

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JAMS SAFFE FOR BAKING SYRUPS

(in 1.3kg,3kg and 12kg plastic buckets) (bottled into 2 l and 5 l plastic bottles)

Cowberry jam with berries Cherry syrup

Black currant jam with berries Black currant syrup

Apple-raspberry jam, safe for backing Raspberry-black currant syrup

Garden berry jam, safe for baking Apple-red currant syrupˇ

2. AS SALVEST, Põllu 2, 50303 Tartu

has been producing preservatives since 1946 which has given the company noteworthy

experience and laid the strong foundation for guaranteeing high quality and stability of products.

Products:

Salads

Pumpkin salad (560g), Sweet maize (340g), Pickled red beet (550g),

Apple sauce (530g),

Cowberry salad (310g), Green peas (690g), Salad “GEMÜSE” (300g)

Salad “PIKNIK” (280g), Salad “TERVIST” (520g), Salad “TOOME” (520g)

Salad cucumber (520g), Salad carrot (530g)

Fruit nectar “Mahlakas”

Bottled into 750 ml glass bottles.

Apple squash with carrot and strawberry, Carrot-sea buckthorn mesh, Carrot- quince squash,

Carrot squash, Tomato squash with capsicum and carrot.

Children`s food Põnn

Packed mainly into 190 g glass jars.

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Vegetable-noodle meal with turkey meat, Vegetable – rice meal with chicken fillet, Vegetable-

buckwheat meal with beef, Vegetable puree soup with chicken fillet, Apricot-cottage cheese

dessert, Apricot squash, Banana-peach squash, Delicate apple puree/soup, Oat porridge with

bilberry and raspberry, Potato-cauliflower puree, Pumpkin-broccoli meal with pork and rice,

Pumpkin-potato puree, Pumpkin squash, Vegetable ragout, Strawberry-cottage cheese dessert,

Maize pudding with banana and pear, Pumpkin puree with semolina, Bilberry squash, Four-corn

porridge raspberry, Apple puree with milk, Pear squash, Plum squash, Carrot squash, Carrot

squash 480ml, Carrot puree with liver, Puree soup with meat, Puree soup with meat and tomato,

Pumpkin puree with rice, Apple puree with rice, Rice pudding with pear and bilberry, Apple

puree with sugar, Full-corn porridge with banana, Raspberry-yogurt dessert, Peach-yogurt

dessert, Peach squash.

Products to the large-scale consumer

Home-made seljanka (3.0kg), Pumpkin salad (3.1kg), Delicate cucumber (4.2kg), Mulgikapsad

(Mulgi cabbage, 3.0kg), Apple jam (povidlo) (7.0kg), Pancake jam (3.1kg), Plum jam (povidlo)

(7.0kg), Cowberry salad (960g), Fried cabbage (3.0kg), Sour cabbage borschch with pork(3.0kg),

Seljanka (3.0kg), Pea soup with smoked meat (3.2kg), Hot tomato sauce (5.0kg), Sliced carrots

(3.0kg), Sliced sweet cucumber (2.9kg).

Meie Mari (our Mari`s) jams

Packed into 440g glass jars.

Raw cranberry jam (pasteurized), Cherry jam, Strawberry jam, Ham, Bramble jam, Bilberry jam,

Apple-sea buckthorn jam, Pancake jam, Plum jam, Cowberry jam (pasteurized), Raspberry-black

currant jam, Raspberry jam.

3. AS LARGO Sepa 1, Võhma 70603, County of Viljandimaa

Produces different juices from concentrated juices. The juice contains 100% of the fruit or berry,

no sugar is added. Does not contain preservatives.

Largo is the only company in Estonia which produces functional nectars or juice products with

added value enriched with vitamins, minerals and fibers..

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Juice drinks are even lighter than nectars. Consequently, the juice drinks occupy the third place

by their content. In the juice drinks the content of juice must be at least 10%. The remaining part

is water and different added substances. Juice drinks can be compared with the home-made juice

drink “morss”.

The products are packed into 1-litre tetrapacks

Orange juice, apple juice, tomato juice, pineapple juice, pineapple nectar + L-carnitine, plum

nectar+ inuline, peach nectar + vitamins, multivitamin nectar + vitamins, orange nectar + Ca,

grape nectar + Mg, cranberry drink, cowberry – black currant drink, cherry juice drink, tropical

drink with carrot juicy.

4. AS PÕLTSAMAA FELIX Tallinn Road 1, Põltsamaa 48103. The roots of

production at Põltsamaa date back to 1920 when the predecessor company, then titled the

Estonian Consumer Cooperation Central Union (Eesti Tarvitajateühistute Keskühisus). At

Põltsamaa spirits, potato chips, coffee, starch, fruit and vegetable preserves and berry wines have

been produced in different times.

At present AS Põltsamaa Felix makes and markets such high-quality foods like juices and juice

drinks, preserved vegetables, ready-cooked food, sources, jams, bread spreads, wines, fish

products, desserts and several others.

The products containing berries and fruits are the following:

Jams in glass and plastic packaging

Põltsamaa Apple jam (460g glass jar)

The product contains the allergens:

Sulpher dioxide and sulphites SO2>10mg/kg

Põltsamaa Black currant jam (480g, glass jar)

Põltsamaa Strawberry jam (480g glass jar)

Põltsamaa Raspberry jam (480g glass jar)

Põltsamaa Apricot jam (500g glass jar)

Põltsamaa Cowberry jam (460 g glass jar)

Põltsamaa Pancake jam with strawberries (460g glass jar)

Põltsamaa Forest berry jam (480g glass jar)

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Põltsamaa Strawberry jam (425g plastic bottle)

The recipes of jams contain potassium sorbate as a preservative and calcium chloride as a

congealing agent.

Juices, nectars and juice drink are packed into 1-litre tetrapacks.

Põltsamaa apple drink

Põltsamaa apple juice

Põltsamaa orange juice

Põltsamaa multijuice

Põltsamaa tomato juice

Põltsamaa apple-peach nectar

Põltsamaa cranberry drink

Põltsamaa apple-orange-carrot nectar

Põltsamaa plum nectar drink

Põltsamaa bilberry-apple drink

Põltsamaa alcohol-free glögg

Põltsamaa apple-black currant nectar

Põltsamaa orange juice squash

Põltsamaa yellow plum nectar

Põltsamaa apple juice

Large drinks have been packed into 1-litre tetrapacks

Põltsamaa Large Orange Drink

Põltsamaa Large Multijuice Drink

Põltsamaa Black currant-apple-raspberry drink

Põltsamaa Large Apple drink

Straw drinks, 200 ml tetrapack

Põltsamaa apple drink

Põltsamaa orange-apple drink

Põltsamaa multijuice drink

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Smuties have been made from the concentrated juice, no sugar has been added, moderately

sweet taste comes from the fruit sugar which the berries and fruits themselves contain .

Packing: 300 ml plastic bottle

Pai smutie 5-fruit juice with carrot-orange taste

Pai smutie7-fruit juice with raspberry-black currant taste

Pai smutie 5 –vegetable juice

Pai smutie 5-fruit juice with orange-mango taste

Pai smutie 7-fruit juice with pear-banana taste

Pai smutie 5 fruit fruit juice with banana-strawberry taste

Drink Concentrates, solution 1:4, package 250 ml tetrapacking

Põltsamaa Jug drink of bilberry-apple

Põltsamaa Jug drink of apple

Põltsamaa Jug drink of cranberry

Põltsamaa Jug drink of black currant

Põltsamaa Jug drink of apple-raspberry

Wines 0.7-liter glass bottle

The product contains allergens: sulphur dioxide and sulphites SO2>10mg/kg

Põltsamaa Tõmmu (Dark)

Põltsamaa Tõmmu 1998

Põltsamaa Punane (Red)

Põltsamaa Kuldne (Golden)

Põltsamaa Lossivein 19 (Castle wine)

Põltsamaa Lossivein 28

Põltsamaa Kirsisuudlus (Cherry Kiss)

Põltsamaa Vaarikamusi (Raspberry kiss)

Põltsamaa Fest Classic

Põltsamaa Klassikaline Glögg (Classical Glögg)

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5. AS RÕNGU MAHL Tehase 4, Rõngu 6100, County of Tartumaa

In this enterprise concentrated juices from berries and fruits, juice drinks, salads and jams are

produced.

The main activity of the enterprise is to produce the Brix concentrates or juice concentrates. It

means making juice from berries and then steaming out water from the juice. Juice concentrates

are used for making concentrated juices, juice drinks and marmelades. The products of AS

Rõngu Mahl are used as a raw material by many producers of soft drinks, juices and alcohol.

Brix denotes the content of dry matter in the concentrate . Because of the specific features of the

raw material, concentrate is not made from sea buckthorn which is stored as a juice. As raw

material cranberry, cowberry, cherry, black currant, red currant, lime, sea buckthorn, strawberry,

raspberry, bilberry, apple, plum, peppermint, orange, choke-berry (Aronia), carrot are used.

Juice concentrates are packed into 0.350 l glass bottles, 2.0 l and 5.0 l plastic bottles and a 200

ml metal barrel with the solution of 1:10,1:9 and 1:6.

Jams are packed into 0.450 g, 1.3 kg, 3.2kg and 13 kg plastic packs.

Salad (cowberry, apple, carrot) is packed into 0.410 kg, 1.2 kg and 3.0 kg plastic buckets

In production citric acid is used as a regulator of acidity, potassium sorbate is a preservative,

calcium citrate as a congealing agent and pectine for condensing .

6. AS LINDA NEKTAR, Kobela village, Antsla rural municipality, 66405 County of

Võrumaa

AS Linda Nektar has specialized in the production of fermented drinks (non-condensed apple

and pear wine) for the drink producers. The products are used as a raw material for producing

cider and other alcoholic drinks. At present the production capacity of the enterprise is 10 million

litres of the raw material a year.

The aim of AS Linda Nektar is to supply drink producing industry with high-quality raw

material.

7. FIE (self-employed) Edgar Kolts – Taarapõllu farm, Varstu rural municipality,

Kangsti 66103, County of Võrumaa – is an entrepreneur who makes organic products. In

Estonian organic shops products are on sale, including juices, jams, purees, compotes made on

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the basis of natural juices, marinated meat and different dried products from garden and forest

crops (berry flour, dried berries, berry and apple chips). The farm was one of the first in Estonia

who used disseminating information about the home Kitchen and could officially enter the

market with home-made products.

The farm has organic production recognition and the products on sale have an organic product

label. No artificial congealing agents or preservatives are used, organic sugar is used for

sweetening the products. As raw material all the garden and forest berries, rhubarb, stone fruits

and apples are used.

Berries are grown on the farm`s fields or other organic farms and the forest areas recognized as

organic. The packing used is mainly made of glass. The goods produced on the Taarapõllu farm

are on sale in Tallinn and Tartu Department Stores, in ecological shops all over Estonia and also

elsewhere.

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Results of the survey carried out among Estonian fruit and berry growers

General Data of the Company

Respondents were asked to indicate their company's main activity, fruit growing or berry

growing, in the questionnaires. All 13 respondents answered. Four companies is active in fruit

growing and three is active in berry growing. Six companies have marked both answers, berry

growing as well as and fruit growing.

All interviewees responded to the question "How long has the company been in business?"

One fruit and berry grower, a berry grower and two fruit growers stated their period of activity to

be 1 to 4 years. One fruit grower answered that the company has been operating for 5 to 8 years.

9 to 12 years have operated one fruit and berry grower and two berry growers. Three fruit and

berry growers and two fruit growers have been in business for over 13 years. Figure 1 shows the

distribution of respondents by the duration of business action.

Figure 1. Distribution of respondents by duration of business activities

All 13 interviewees answered the question "What is your form of business?" Respondents’

distribution by business format is in the form of Figure 2.

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Figure 2. Respondents' distribution by the question “What is your form of business?”

One of the fruit and berry growing enterprises, three companies of berry growers and three fruit-

growing farms operate as limited-liability companies. One of the fruit-growing enterprises

operates as joint-stock company. Three fruit- and berry growing, one berry growing and one fruit

growing company are self-employed entrepreneurs. One of the fruit and berry growing

respondents indicated the response option as "Other" and explained the form of business as

public equivalent body.

All interviewees answered to the question "What is the acreage (h) of some fruit or berry?" The

areas marked were almost equal with a fruit growing area of 177 hectares of orchards and berry

growing area of 168 ha.

Preservation of fruits and berries

Respondents were asked to answer the question, "Do you store the fruits/berries?" All

interviewees replied "yes". Fruits and berries are stored for two purposes: to be sold fresh in the

winter period or to be processed.

All interviewees answered to question "Where do you store the fruits/berries?" Three

interviewees responded that the fruits are stored in the apple storage facilities in Polli

Horticultural Research Centre. Eight times the company's own storage or fruit cellar was

mentioned. Six companies indicated freeze store facility at the Polli Horticultural Research

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Centre as place were they store fruits, two companies indicated that they preserve fruits in the

stores of AS Maag and AS Saarek, one interviewer mentioned the company's own freezer.

12 respondents answered to the question "How big is the storage space?" 7 respondents said that

the storage area is under 100m ², 4 respondents answered 101-400m ², and one interviewer said

801-1200m ².

All the interviewees answered to the question "Where you keep your products?” 50% of the

respondents keep the berries in boxes. 35% of the respondents keep fruits in containers. 15% of

respondents, that is three companies, answered "other". As an additional remark paper bags were

mentioned twice and plastic boxes once. Berries are stored in paper bags in a freeze storage.

Berries have previously been quick-frozen in crates and then packed in paper bags. Respondent

who added storing plastic boxes as a comment stores their products in a freezer at home.

All interviewees answered to the question "Do you sort the berries and fruits before storage?"

Nine companies answered “Yes” and four companies “No”.

All interviewees answered to the question "How large share of the crop accounts for I selection?"

Distribution of respondents to this question is reflected in Figure 3.

Figure 3. Distribution of respondents by the question "How large share of the crop accounts for I

selection?"

Two berry growers and four fruit- and berry growers answered 100-85%. Three fruit and one

berry growers answered 84-70%, and one fruit grower marked 69-55%.

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12 interviewees answered to the question "What is the most important pre-harvest problem that

has affected the quality of harvest?" The biggest problem was the abnormal weather conditions

(frosts, drought, heavy rain), all 12 companies answered so. Major problems are defined also low

quality of fruits and berries caused molding and decay, due lack of sufficient plant protection (4

interviewees).

12 companies answered to the question "What is the most important problem in harvest time that

has affected the quality of your harvest?" The most important problems of during fruit and berry

harvesting are shown in Figure 4.

Figure 4. The most important problems of harvesting.

The most important problem is the weather, ten interviewers answered so. Rainy weather does

not allow for timely harvest of crop, resulting in the over ripening of the crop. Another major

problem for businesses is workers’ qualifications, seven interviewers answered so. Two

respondents thought that motivation of employees is also an important problem when harvesting

the crop. The reason for the low motivation workers can be the low level of wages in the

agricultural sector.

All 13 interviewees answered to the question "What is the most important problem in post-

harvest storage issues, what affects the quality of the harvest?” Factors affecting the post-harvest

storage are shown in Figure 5. The most significant problem was the weather condition during

time of harvest which was mentioned by six companies. The weather (rain) is a major problem

which affects harvesting. Four companies mentioned variety characteristics (summer, autumn

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and winter varieties) and define precise picking time. Storage humidity answered one and

cooling system marked by three companies.

Figure 5. To the question "What is the most important problem in harvest storage that affects the

quality of the harvest?"

If the cooling system of the storage is incomplete or is absent then it can greatly affect the quality

of preserving the harvest.

All interviewees answered to the question "How much of the preserved of the harvest gets fresh

to the consumer?" Seven companies noted that less than 50% of the harvest gets fresh to

consumers, i.e. part of the harvest goes to processing and some goes to composting. Two

companies answered that 69-50% and four companies that 89-90% of the harvest arrives fresh to

the consumer.

The questionnaire showed that less than 50% of the harvest will be composted. All interviewees

are of that opinion.

Nine companies responded that less than 50% of the harvest goes to processing. Three

companies noted 89-70% and one that 100-90% of the harvest goes to processing.

Processing of fruits and berries

12 interviewers answered to the question "Where did you get the information about Polli

Horticultural Research Centre experimental fruit and berry processing centre?” Mostly the

companies got the information about Polli Horticultural Research Centre experimental fruit and

berry processing unit on the internet, six companies had answered so. Four companies got the

99


information from newspapers and magazines and two companies received information from

training sessions and seminars.

12 companies answered to the question "Where you have got the information on processing

from?" Mostly the companies have got the information from training sessions and seminars,

which was named by six companies. Four companies got the information from the internet. Two

companies received information from newspapers and magazines.

The companies got the information of processing options also from trainings and seminars, six

interviewees marked that option.

The information on where companies can market “ready-made food” was mainly found from the

internet and magazines.

The questions "Which processing options you have used in Polli Horticultural Research Centre

experimental fruit and berry processing unit?" and "Which processing options you are planning

to use in the future in Polli Horticultural Research Centre experimental fruit and berry processing

unit?" were answered by all interviewees. In the Polli Horticultural Research Centre

experimental fruit and berry processing unit mostly are used juice preparation (16%) and

preparation of puree (12.5%), pasteurization of juice or puree (25%), and bottling and corking by

23.2% of the respondents. Seed oil pressing and drying of fruits and berries are not used yet. In

addition, the processes still planned use in the future are seed oil pressing (9.2%), fruit crushing

(10.7%), fruit and berry drying (9.2%), product packaging and labeling (9.2%).

The question "You are planning acquire some processing equipment in the future?" was

answered by five interviewees. Two of them wished buy a fruit crusher and juice press for their

company. One company wants to buy a fruit and berry dryer and two companies are planning to

buy a fruit and berry juice press and a juice pasteurizator.

The question "What you think, which processing options of fruits and berries should also be at

the Polli Horticultural Research Centre experimental fruit and berry processing unit ?" was

answered by all 13 interviewees. The following processes were suggested:

• cooking fruit and berry jam;

100


• facilities for sea buckthorn oil analysis in experimental fruit and berry processing centre unit

laboratory;

• filtering juice products;

• fruit and berry drying;

• vacuum packing;

• juice clarification;

• packing of frozen fruit and berries;

• preparation of stewed fruit and berries.

All 13 interviewees answered to the question “Are companies satisfied with the Polli

Horticultural Research experimental fruit and berry processing unit processing services or not?”

Mostly companies are satisfied with extracting juice, puree or juice pasteurization and pureeing,

which were mentioned by eight companies. Six companies are satisfied with the bottling and

corking and five companies are satisfied with fruit and berry crushing. One company was

satisfied with carbonating beverages. Four of the respondents are dissatisfied with the bottling

and corking. Two companies justified their answer as a problem of low quality caps and tare.

Two companies are dissatisfied with the juice pressing and one company is dissatisfied with fruit

and berry crushing.

The question "Has the test processing in Polli Horticultural Research Center helped the company

create a new product or a new group of products?" was answered by 12 interviewees. Ten

companies have received assistance from the Polli Horticultural Research Centre for creating the

product or product group, which is a very positive result.

Five interviewees answered the question "For the creation of which product or product group did

you get help for from the Polli Horticultural Research Centre experimental fruit and berry

processing unit?”

These are:

• preparation of pasteurized sea buckthorn juice;

• preparation of berry purée ;

• preparation of fruit juice;

101


• preparation of berry flour;

• preparation of carbonated juice products;

• fruit crushing.

Nine companies have got new ideas and four companies have not got any ideas from the Polli

Horticultural Research Centre experimental fruit and berry processing unit by test processing.

To the question "What kind of ideas you have got from the Polli Horticultural Research Centre

experimental fruit and berry processing unit ?” companies answered the following:

• preparation of carbonated juice drink;

• crushed fruit and berries;

• various packaging solutions for various products;

• products from berry mixture;

• pasteurized fruit and berry juice products;

• preparation of fruit and berry purée;

• preparation of different fresh jams.

The question "What do you think, is it necessary for the Polli Horticultural Research Centre

experimental fruit and berry processing unit to provide advice to entrepreneurs from processing

to marketing ready-made food?" answered by all interviewees. Nine companies thought that the

Polli Horticultural Research Centre for Product Development Center should give advice to

companies and four interviewers thought that advice is not necessary. Entrepreneurs who

answered “Yes” explained their response as follows:

• small-scale producers should join with others companies, then they can market products

together;

• for small-scale producers it is very expensive to deal with product development on their own;

• any advice is welcome.

Entrepreneurs, who replied in negative, explained their answer as follows:

• each company should deal with marketing on their own;

• the aim of the Polli Horticultural Research Centre for experimental fruit and berry processing

unit is foremost contributing to the development of the product.

102


The question "What kind of advice you needed from the Polli Horticultural Research Centre

experimental fruit and berry processing unit?" was answered by all the interviewees. Nine

companies mentioned choice of treatment, two companies needed advice with package selection

and one company needed help shaping the product label.

Marketing of products.

12 interviewers answered to the question "How do you assess the consumer demand in the

market for your product / product group?” Assessment of consumer demand is given in Figure

6.

Figure 6. Assessment of consumer demand for the product / product group.

Consumer demand in terms of its product / product group was evaluated very high by one

company, five companies replied “Rather good”. Two companies answered “Cannot say”. Three

companies marked “Rather bad” and very bad assessment came from one company.

The questionnaire revealed that three companies are very active in the development of new

products. Four companies responded that they are not actively engaged in the development of

new products.

Entrepreneurs believe that the biggest hindering factors in the development of new product /

product group are the following reasons:

103


• the absence or scarcity of the opportunity to use a test kitchen;

• scarcity of raw materials;

• finding suitable packaging for products;

• uncertainty about the storage time of the product and its conditions;

• unavailability of financial resources, time and lack of human resources.

What are the main marketing channels of the product / product group are shown in Figure 7.

Figure 7. Product / product group main market channels,%

12 interviewees answered to that question. The companies who marketing their product /product

group by direct sales is 38% (including exhibitions, fairs), and 34.5% of companies distribute

through stores. 17.2% of the companies distribute its products through usage of intermediary

companies. Products are also distributed to catering establishments (restaurants, cafes), and

educational institutions (schools, kindergartens).

In marketing the biggest problem for six companies selling fruit and berry products is the high

price. Five companies noted that consumer interest for products is low and two companies noted

the abundance of similar products. Three companies thought that a problem with marketing is

also the novelty products, small consignments and cheap imported fruit and berry products.

The question “Do you wish to join with other companies in marketing the products?” was

answered by all the interviewees. 11 companies would like to collaborate with other companies.

104


They justified their answer by explaining that then they can offer larger quantities of fruit and

berry products. It is also logistically expensive. Two companies thought that collaborating is not

necessary. They justified their response with the fact that Estonia is too small, volumes is small

and different for joint marketing and entrepreneurs should market on their own.

12 interviewees answered to the question what product quality evaluation services the companies

wish to get from the Polli Horticultural Research Centre experimental fruit and berry processing

unit laboratory,. Their answer was that they need food microbiology evaluation for products,

nutrition analysis and storing time tests. One entrepreneur thought that the product testing takes

very long and because of that it is too early to talk about a full analysis.

The price level of using the Polli Horticultural Research Centre experimental fruit and berry

processing unit for experimental treatment is too high, thought six entrepreneurs. Seven

entrepreneurs believe that the price is average.

Seven entrepreneurs thought that the test production should be funded by the state. Entrepreneurs

who noted that state funding is necessary explained their answers by the following:

• the risk is too high when coming out to market with a new product;

• it is a costly process.

2. Results of the interview with the fruit growers from Latvia.

2.1 General Data of the Company

The seven companies in Latvia, who were interviewed, involved in fruit growing business.

To the question "How long has the company been in business?". Two companies have been in

business for 6 years, three companies were nearly ten years and the two companies have been in

business for over 13 years.

105


To the question "What is your form of business?" the answers were as follows: three companies

operating as a joint-stock company and four companies operate as private limited liability

company.

To the question "How much acreage (ha) is under some fruit?" the answers were divided as

follows: two companies have fruit acreage of three ha, two companies have 12 ha, three

companies have 20-25 ha.

2.2 Fruit storage

All seven interviewees preserve their fruits.

The question "Where do you store the fruits?” was answered as follows: six companies preserve

fruits in boxes and one company preserves fruit/berries in wooden crates.

To the question "Do you sort the fruit before preserving?" all seven interviewers answered

“Yes”.

The question "How large share of the crop accounts for I selection?" was answered by all the

seven interviewees. Three companies answered that the first choice is 84-70%, three companies

69-55% and one company noted 54-40%.

The most important problem during harvesting in Latvia is the weather, which affects the quality

of the fruits. Harvest quality depends on the qualification of the workers.

To the question "Where companies preserve the fruit?" the three companies replied that they

preserve the fruit in a renovated fruit storage. Two companies have a rental space and two

companies preserve fruits in a cellar.

The most important problem in preservation for fruit growers is the humidity level and the

temperature of the storage space. All the seven respondents thought so.

106


To the question "How big are the harvest losses (for composting)?" five companies said that 20%

goes for composting and two companies said 10%.

2.3 Fruit Processing

Six fruit growers sell their fruit untreated.

One entrepreneur, who processes a small part of the harvest, answered to the question "Have you

bought or are you planning to buy some processing equipment in the future?" that he has bought

a juice line. Other six companies do not plan on buying any processing equipment.

107


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