Ever since Russia invaded Ukraine in February 2022, concerns of food insecurity and supply chain instability have been rife all over the world, particularly concerning commodities such as sunflower oil that both countries have long been major exporters of.
Despite the ongoing conflict, Ukrainian food and beverage firms are striving to stay in business by figuring out ways to strengthen their supply chain.
One of this is Ukraine and Turkey-based food firm Vtc Foods, which primarily deals with commodities such as frozen chicken products, eggs and dairy, and has managed to navigate the ongoing situation by focusing its efforts on staple food trade with the Middle East and Africa, as well as diversifying its supply chain.
“We realised early on that it is best to focus on [mainstream] regular products that can be handled as regular shipments and can be steadily and stably traded,” Vtc Trade General Manager Valeriia Verbytska told FoodNavigator-Asia at the recent Gulfood 2023 trade event.
“We have also diversified our supply chain to build relationships and ensure steadier incoming supply from producer partners in markets like Turkey and Poland, as we continue to see widespread demand for food products under our banner.
“This is important to ensure we can continuously maintain a presence in the market and take advantage of more opportunities out there no matter the situation.”
The firm sees the GCC region as one of its main target markets, and as such has streamlined its focus according to local needs. As an example, the firm has steered away from more products that are more costly and premium in the Middle East such as dry milk powders, but moved to things such as ice creams and butter.
“Understanding what consumers in each market really want is crucial right now even when it comes to these staple foods,” she added.
“For instance, GCC consumers primarily consume white eggs and there is no demand for brown eggs – this is just a mentality and preference, as there is fundamentally little difference between the white and brown eggs, but it is what they want so we have moved to focus on white eggs for the Middle East and ensure a steady supply into this market.
“It is this sort of understanding that can help us to stay relevant in the Middle Eastern market, and even given the situation in our country now, there is still a need and demand for these staple regular everyday items like chicken and eggs so that is an opportunity for us.”
Ukraine as a food exporter
Prior to the war, Ukraine was estimated to export some six million tons of food-related commodities to its major markets like the Middle East and Asia – much of which was essentially blocked as a result of the crisis with Russia blocking the majority of its export routes.
Apart from sunflower oil, Ukraine is also a major player in the global grains sector, and the situation there has essentially led to a global shortage in various commodities.
While MNCs such as Nestle, or those such as Vtc Foods which have the advantage of having offices in other markets, have escaped relatively unscathed, the outlook remains precarious for many Ukraine-based manufacturers and suppliers.