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Balkans Trends & Outlook

Balkans Trends & Outlook. USDA Foreign Agriculture Service. Trends. Big Buyers Big Producers Product Diversity Increasing Regionalizing Production / Supply Storage Warehousing Is Scarce Efficiency Dominates Marketing. Foreign Owned Rapidly Growing Market share = 33%

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Balkans Trends & Outlook

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  1. Balkans Trends & Outlook USDA Foreign Agriculture Service

  2. Trends • Big Buyers • Big Producers • Product Diversity Increasing • Regionalizing Production / Supply • Storage Warehousing Is Scarce • Efficiency Dominates Marketing

  3. Foreign Owned Rapidly Growing Market share = 33% At the expense of … Green Markets Regional Procurement Have fewer than 300 total suppliers Roughly 3 per category Operate with a Real Estate Management Perspective Hypermarkets/Supermarkets The supply of Supermarkets is starting to overwhelm the market, and margins are falling. This may create a Producer opportunity as the Retailers seek to find non price ways to differentiate themselves.

  4. Retail Market Structure, Romania, 2004-2006

  5. Retail market structure, Bucharest, 2004-2006 Hypermarkets take their share from small stores – growing at 7 to 10% annually.

  6. Can be Quite Large Operating Old Infrastructure Typically Financed with High Levels of Debt Lack “Marketing” Feel and Resource Commitment Market Information is Unequally Distributed in the Trade Logistics are Lacking or Redundant Trade Remains Locally Focused Big Regional Producers

  7. Trade Balances • 25 of the top 42 imports are meat and meat by-products • Meat and Meat Products Account for More than 38% of the Regional Trade Imports • Exports are nominal sums of live animals and very little meat cuts

  8. Romanian Agricultural and Food Trade $ million, nominal prices

  9. Poultry Cost Parity Romania, Serbia have a rough 10% cost advantage over Bulgaria, Croatia, and Macedonia; 13% over Bosnia and 22% over Albania and the EU. The “Region has Cost Advantage”

  10. The Region Lacks Revenue Parity Premium cut values generate a greater live animal value in developed markets than in developing markets.

  11. Trade Balance Strategy • Developed markets produce FOR the premium cuts, and dump the balance where ever at whatever they can. • The only way to stop that, is to Supply the developed markets. The Balkans Region MUST export premium cut values to Developed markets (EU / USA) to stop / reduce the trade deficit.

  12. You Must Be …Year Around – Non Seasonal Suppliers Buyer’s Say

  13. Severe Seasonal Price Variations

  14. Returns to Storage Volatile, but large, averaging 50 to 100%

  15. Changing Market • Market Changing to Hypermarkets • Lacks Supply Chain Integration • Lacks Regional Focus • Needs Revenue Parity • Needs “Storage Warehousing Solution” • … will have collaborative opportunities as retailers face increased competition

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