ZAGREB, July 23, 2020 - A strategic turnaround in the fruit and vegetable sector requires a better organisation of production, the association of producers, i.e. stronger horizontal and vertical integration, a conference heard on Thursday.

Due to the corona-crisis and marked drop in tourist consumption, Croatia's fruit and vegetable market has undergone big changes which have affected offer and demand as well as prices, which depend on the global offer and demand, and the availability of domestic product, it was said at a presentation of the situation on the fruit and vegetable market organised by Smarter, a consulting company specialising in agriculture and the food industry.

"Due to climate conditions, it's already evident that Croatia will see a drop in the production of most leading fruits - apples, mandarins, plums - while market prices are mainly somewhat higher than last year," said Denis Matijevic, head of Smarter and chairman of the Board of ENNA Fruit.

Smarter estimates that due to the spring frost this year's apple production will drop to 55,000 tonnes. Insufficient precipitations and lack of irrigation are expected to reduce mandarin production to 30,000 tonnes.

As for vegetables, Matijevic said there had been no extreme disruptions in production so the yield was expected to be the same as last year, "while on the market there is a visible drop in prices between 12% and 20%."

It is estimated that this year will see the production of 175,000 tonnes of potatoes, 33,000 tonnes of tomatoes and 25,000 tonnes of watermelons, the same as last year.

Will the coronavirus pandemic actually provide what Croatia needs in the end to step up its game when it comes to not only digitalisation, but the production and processing of its own produce?

As Jadranka Dozan/Poslovni Dnevnik writes on the 8th of May, 2020, the invitation to Croatian farmers to cooperate is a move from the company ENNA Fruit for the organisation of the production, purchase, distribution and processing of fruits and vegetables. It was created by connecting several companies, with all of them recognising the great synergy potential in the move.

ENNA Fruit has, as such, invited Croatian farmers to cooperate, and that is the title of a press release that was distributed to the media from that company. As we're living in the coronavirus era and we're hearing about more and more companies, associations and businesses needing to further adapt the ways in which they do business in order to stay afloat, such an press release sounds almost like a "routine" announcement, but the story could have more far-reaching consequences and could suggest a significant step forward for Croatia's fruit and vegetable production.

Namely, ENNA Fruit is a new company created by connecting the business and interests of Enna Agro and Marinada, and as was pointed out in the aforementioned press release/announcement, this new company is now taking the leading position in the organisation of production, purchase, distribution and processing of fruits and vegetables from Croatia and its immediate region.

"The Croatian fruit and vegetable market is relatively small and market consolidation is of strategic importance, both for agricultural producers and for buyers. Manufacturers have been given specialised infrastructure that will provide them with the easiest access to the market, and customers are given high-quality goods prepared for use to the highest standards. ENNA Fruit connects primary agricultural production and the market through cooperative relations, its own purchasing centres, involving the processing and distribution of the entire range of fruits and vegetables. This approach ensures quality, continuity and quantity for customers,'' they explained from the company which was registered less than a month and a half ago, with its headquarters in Vukovar.

Its headquarters are at the same address as ENNA Agro, and it is the company by which Pavao Vujnovac, also the owner of PPD, expanded his business portfolio to the field of agriculture. Among other things, ENNA Agro has stepped into the supply of fruit to the massive Konzum sales chain.

This new step forward of this equally new company, in addition to the financial strength of its founder, is also interesting in light of the fact that Vujnovac's PPD, through a joint venture with INA, is also the main shareholder of Petrokemija, a domestic producer of mineral fertilisers.

Marinada, on the other hand, is a company specialising in the production, purchase, storage, packaging and sale of fresh and processed fruits and vegetables. The company's headquarters in Slatina boasts one of the most modern production plants for pasteurised fruits and vegetables in the entire region, and it also has several purchase centres, as well as an established sales office in Zagreb.

All in all, it has a solid infrastructure, and Denis Matijevic, one of the co-owners and members of the company, has long been engaged in expertise in the field of agriculture, among other things, and participation in the development of agricultural development strategies.

Linking the business of ENNA Agra and Marinada is thus considered a logical move with potentially significant synergy effects, especially since the coronavirus pandemic seems to have had a stimulating effect on recognising the importance of food production for Croatia and raising the question of self-sufficiency in general.

Thus, the statement from ENNA Fruits points out that "agriculture, in order to be competitive and sustainable, must be horizontally and vertically integrated."

Through integration, they say, the company wil provide all the necessary inputs for production, knowledge and technology transfer, added value for the products, as well as for the sales market. They added that the situation caused by the coronavirus outbreak only further confirmed the need for the stable organisation of agricultural production and distribution and the integration of the entire process from production to product placement, with the aim of optimising the entire chain.

For more on Croatian agriculture, follow our business page. For all you need to know about the coronavirus pandemic in relation to Croatia, stay up to date with our dedicated section.