Ukrainian Exotics: Premium Products Produced by Ukrainian Farmers

The business based on the production of exotic products isn’t just interesting but is profitable as well: the competitiveness is low while the demand is permanently growing.   

The price of food increased substantially since the beginning of the economic crises in Ukraine. In particular, this trend is relevant for imported goods. The prices for premium products have increased several times. This situation encouraged some Ukrainian farmers to revert to such niches as the cultivation of exotic spices, breeding of ostriches and sturgeons. Below you’ll find a short overview of the Ukrainian premium foods’ market.   

Cultivation of truffles: favorable climate, free niche and the long payoff period

Until 1917 truffles and even pineapples were cultivated on the territory of contemporary Ukraine. Moreover, they were exported to France. Of course, during Soviet times, such bourgeois products became outcast. Nevertheless, some Ukrainian farmers decided to restore the tradition of these premium mushrooms’ cultivation. Thanks to Alexander Dzhiza and his company Sunberry Ukraine situated in Vinnitsa region, you now don’t have to travel to France in order to buy truffles. According to Alexander, Ukrainian climate is perfectly suitable for the cultivation of premium mushrooms. Furthermore, there are no competitors in this niche on the internal market. Another substantial advantage of this business is that truffles can be exported, to France, for example. Mushrooms yields in this country are gradually decreasing which, among other factors, is caused by the global warming.

At the same time, it’s worth mentioning that truffles cultivation is a long lasting project which on average requires €7’000 of investments per 1 hectare. The first harvest can be collected only during the 5th year of cultivation, while the ROI period is 9 years. Though, the Sunberry Ukraine founder thinks that the game is worth the candle: within 20 years 1 hectare of truffles will generate over €40’000 revenue and the profitability will only continue to increase.

Breeding of grapevine snails doesn’t require much investment while the demand for this product abroad is high

Kyiv resident Dmitriy Budenko breeds shellfishes for 8 years already. His farm is specializing in grapevine snails’ breeding. In 2009 the entrepreneur purchased 2 boxes of snails for €250, as well as spent some money for the construction of the farm and feed for snails. Just within 5 years, the farm became 100% self-reliant. Currently, it produces 10 tons of snails per year. The price of grapevine snails starts at 600 UAH per 1 kg. The “commercial” weight of 20-25 grams the snail gains within around 3 years.

HoReCa sector is the main internal market for snails. Statistics confirm that Ukrainian snails are also popular abroad: 347 tons were exported in 2016. Ukrainian snails are majorly purchased by Romania and Latvia as a raw material. Then snails are processed there and exported to other EU countries.

SAUP agency which among other activities facilitates Ukrainian export to France is looking for Ukrainian partners: the demand for grapevine snails – an important component of the French cuisine, is unsatisfied by internal producers. There are big companies among clients of the agency which are interested in the purchase of snails in batches over 40 tons.

«The king of spices» crocus can be cultivated in southern regions

Crocus is one of the most expensive species. The cultivation of this spice started in Ukraine two years ago. LLC «Agro-Focus» from Kherson region has already collected the second harvest of crocus. It’s still a pilot project, which, nevertheless, already generates profit.

Global prices for crocus fall between € 2’000 and € 12’000, while in Ukraine 1 gram of this spice costs around 135 UAH. Crocus is a plurennial plant with 7 years lifecycle. One hectare provides 4-12 kg of crocus per year. In order to collect 1 kg of the “red gold”, one has to process 70’000 crocus flowers which contain the spice. Investments per 1 hectare amount to €24’000-30’000. Though, even small harvests allow to gain profit just within 2-3 years.

After the capture of wild sturgeons became constrained the demand for the caviar spiked

Sturgeons, other premium types of fish as well as caviar are still produced in Ukraine. For example, the company «Osetr» in Kyiv region is the largest national caviar manufacturer. In 2006, the owners invested $30’000 UAH in the fish farm. In order to start producing caviar, sturgeons have to be 6 years old. Thus, already in 2013, the company produced 50 kg of caviar. In 2016 the production volume reached 500 kg, which equals to $500’000 annual turnover.

Furthermore, national fish farmers produce organic fish. The company «Sadovskiy stav» situated in Donetsk region is the only one enterprise in Ukraine certified for the production of organic aquaculture. Taking into the account the drastic decrease of internal production of fish and derivative products this niche looks quite promising.

Breeding of ostriches: income can be generated not only from sales of healthy meat but from excursions as well

10 years ago ostrich meat was something exotic for Ukrainian consumers. Today, it’s difficult to impress somebody with such meat: up to ten ostrich farms are located in every region of Ukraine. It’s also possible to observe the process of ostriches’ breeding as the majority of specialized farms conduct excursions for visitors. At some farms, they also propose to taste dishes and products made out of ostrich meat in their own restaurants.

The ostrich meat is even healthier than beef: its reach for protein and at the same time contains small amounts of fats and cholesterol. The price of such product is on average 500 UAH per 1 kg depending on the producer. You can also buy sausage, pastrami, liver, paste, and forcemeat made of ostrich meat. It’s worth mentioning that an adult bird provides 45-55 kg of meat. At the same time, the production process is practically wasteless: you can sell everything – ostrich eggs (starting from 250 UAH per item), skin, fat, and feathers.  

Factors worth considering before launching an ostrich farm: the space of the stall should be not less than 5-6 square meters per 1 adult ostrich. During the winter time, the temperature in a stall shouldn’t drop below +10°C. The price of an adult bird is 25’000 UAH, while one-month ostrich chick costs 3’500 UAH.

The competitiveness of the Ukrainian market of premium food products is low and local producers are unable to satisfy the existing demand. Even though the creation of business related to the production of gourmet foods requires substantial financial and intellectual investments, the payoff period is relatively short and revenues are stable.