Berry business: the Ukrainian market of berries is on rise amid increasing global demand

According to the forecasts, the consumption of berries will continue to steadily increase in the nearest decades. Berries gain popularity as a part of healthy diet. At the same time increase in revenues, improvement of transport logistics, as well as the year-round availability of berries, allows to broaden the area of their usage. The Ukrainian market of berries is just emerging but the proximity to EU countries as well as competitive prices and high quality make Ukrainian products attractive for foreign consumers. 

During the last decade the scope of berries trade has doubled and according to the forecasts, the growth will be even more intensive during next 5 years. The consumption of raspberries, blackberries, and blueberries will experience the fastest growth while the consumption of strawberries will remain relatively steady. Ukraine may potentially become an influential global producer and retailer of berries. During last 5 years, this agricultural sector is developing very fast even regardless the absence of the governmental support.  

European producers of food spent a lot of money and efforts on promotion of berries consumption via experts and celebrities. These efforts resulted not only in an increase of fresh berries consumption but of products (yogurts, deserts) containing them as well. It’s likely that this trend will continue to prevail in the nearest future. Frequent publications titled: «Researches prove that blueberries treat cancer» only stir up the consumers' interest to these «super fruits». 

The largest European consumers of berries are northern countries – Great Britain and Germany in particular. On average they consume 10% of berries more than other EU states. Leaders are followed by Denmark, Netherlands, Sweden, Poland and the Czech Republic, while Spain, France and Italy are at the bottom of the list. 

If to profile European countries according to the types of preferred berries, results will also differ. Nevertheless, there is one thing in common – affection with strawberries. 75% of berries consumed in Europe are strawberries. 

The population of northern countries prefers dark-colored berries, such as blueberry and black currant more, while in Sothern Europe they consume more red-colored berries such as strawberries and raspberries. 

The majority of berries producers are aimed at traditional markets represented by European and North American countries. At the same time, some of them actively search for new retail destinations. China is the most attractive option in this regard. Big manufacturers are already creating joint ventures in China in order to meet the permanently increasing local demand for berries. The growth of Chinese berries’ market is tightly connected with the improvement of transport infrastructure as well as improvement of local consumers' paying capacity. Within the last decade, China tripled the import of strawberries. The blueberries market demonstrates the same trend but is growing slower. In China, the demand for imported berries is substantially higher than for locally produced because the locals use a lot of pesticides for the cultivation of these cultures.   

In 2011 the South-African farmers created an association of berries producers. At the same time, the government prioritized berries cultivation as one of the major drivers of economic growth which allowed to create a lot of employment opportunities. In one of the country’s provinces, 500 hectares of land were allocated for the cultivation of blueberries. South Africa is planning to become the largest producer of these berries in Sothern hemisphere. Within several years the production of blueberries increased by 30%.

In 2015 the value of Ukrainian market of berries exceeded $250 million while Ukrainian manufacturers cultivated over 190 thousand tons of berries. Following the data provided by «APK-Inform: vegetables and fruits», the production of berries in Ukraine increases by 4% annually. At the same time, the level of berries consumption in Ukraine is 4 times lower than in Europe.  

Strawberries are leading the market of fresh berries. 60-70 thousand tons of these berries are consumed annually, while the production increase amounts to 2-5% per year. Ukraine is ranked 7th in Europe among top producers of strawberries cultivating 6% of the world’s amount of this culture. 

Raspberries are the second most largely cultivated berries in Ukraine. More than 6 thousand hectares of arable lands are planted with raspberries. In 2016 over 69 thousand tons of raspberries were harvested in Ukraine.  

Cultivation of blueberries is on the rise as well. Despite expensiveness of planting stock and very long first fruit-bearing period (up to five years), the cultivation of these berries is the most profitable in the long run. 

Demand breeds supply 

The Ukrainian berries market is only developing. Currently, key players of the market are farmers, big agricultural companies as well as entrepreneurs without relevant experience, who were never previously involved in berries’ business. If approached properly, the cultivation of berries may be very profitable, thus the competition on this market is expected to become tougher in the nearest future. This is quite a reasonable trend as the yield capacity of berries in Ukraine is 7-20% lower than for example in Poland – a country with a similar climate. 

Ukrainian berries’ market is highly dependable on foreign demand. That’s why it lacks diversity. Ukrainian farmers only start to get acquainted with such cultures as kiwifruit, chokeberry, honeyberry, magnolia-vine and others. There is also certain increase in production of blackberry, cranberry, and sandthorn. 

Until 2016 Russia was the main importer of Ukrainian-produced frozen berries with 47% market share. It also consumed 98% of Ukrainian export of fresh wild strawberries. 

Changes in export priorities resulted in manufacturers’ refocusing to the production of frozen berries which are easier and more profitable to export. In 2015 the export of frozen berries was three times more profitable compared to the export of fresh berries. 

Within last 5 years, the export of Ukrainian berries quadrupled. Among them, strawberries, blackberries, and cranberries are the most popular. On external markets, the price of Ukrainian berries is 30% higher than on the internal market. Nevertheless, only 8% of berries produced in Ukraine are exported. The low level of export is explained by the fact that Ukrainian farmers are not ready to invest funds in marketing and promotion of their products. It’s far easier, but at the same time far less profitable, to sell berries directly from the farms. 

Berries gain popularity and become more and more accessible around the world. Europe remains the most promising market for Ukrainian exporters of berries, while markets of the Middle East and China present unexplored business opportunities. Ukrainian products have all chances to succeed – they are cheaper and tastier than competitors’ analogs. Nevertheless, in order to compete with South African, Mexican and Chilean producers Ukrainian exporters have to invest not only in the improvement of production facilities and products’ quality but in marketing as well.