UNDP will promote the entry of Ukrainian agricultural and food enterprises to the international market through developing an export-oriented umbrella brand for the sale of several kinds of products.

Kyiv, 27 October 2021 – The United Nations Development Programme (UNDP) in Ukraine is to develop and launch an export-oriented umbrella brand for micro, small and medium agricultural enterprises (MSMEs) and food industry enterprises, in cooperation with the Ukraine Investment & Trade Facilitation Centre (ITFC).

The initiative is being implemented under UNDP’s “Building Forward Better: Post-COVID Recovery of Ukraine’s MSMEs towards Resilience and Sustainability” project, in cooperation with the Ministry of Digital Transformation of Ukraine, the Entrepreneurship and Export Promotion Office, and Diia.Business.

The marketing practice of umbrella branding involves using a single brand name for the sale of several products from different manufacturers. Over the next four months, in partnership with a business membership organization (BMO) to conduct the initiative, pilot products and market categories will be selected, a brand concept, export strategy and umbrella brand management plan will be developed, and meetings of Ukrainian MSMEs with potential partners on target markets will be organized.

At least 30 Ukrainian MSMEs, half of them led by women, will derive several benefits from the umbrella brand, including higher product quality, reduced risks and barriers, and synergistic savings in advertising, logistics, transportation and other operating costs. The BMO that administers the umbrella brand will work to build the firms’ long-term potential, develop management and support business services for member MSMEs, and help assure their commitment to exporting under the umbrella brand over the long term.

Valeriia Ionan, Deputy Minister of Digital Transformation for European Integration, said that within the framework of the Diia.Business national project for developing entrepreneurship, the Ministry of Digital Transformation of Ukraine is helping small and medium-sized entrepreneurs, particularly in the field of agriculture.

“We organise educational events, and provide counselling and infrastructure support,” Ionan said. “State support promotes the development of Ukrainian exports. As an example, grain exports from Ukraine increased by a quarter in the first half of 2021, and overall exports of goods from Ukraine increased by a third. Therefore, we fully support the development of the umbrella brand for the export of agricultural products from MSMEs as another step to helping domestic exporters.”

Andrii Remizov, Deputy Director for Entrepreneurship Development and Acting Director of the Entrepreneurship and Export Promotion Office, noted that MSMEs often lack competencies to successfully access international market on their own.

“Obstacles to the export of MSMEs include a lack of experience and knowledge about how to profitably deal with international buyers, a lack of information on quality and certification requirements or product characteristics to meet international market requirements, and a lack of production and financial resources to upgrade their facilities,” Remizov said.

Maksym Boroda, UNDP Project Manager, said one way to tackle these problems is to collaborate with other MSMEs who also want to enter the international market.

“The approach works best when there are strong social ties and trust among partners, which is often the case for MSMEs who are members of the same BMO,” Boroda said. “Umbrella brands are traditionally seen as ‘bonds of quality’, through which sellers can signal higher quality to the buyer and reduce the buyer’s perceived risk. The establishment, launch and development of such an export-oriented umbrella brand for agri-food MSMEs aims not only to achieve short-term goals, but also boost the brand evolution and financial stability of the BMO as an umbrella brand administrator in the long run.”

Ihor Sanzharovskyi, Head of the Initiative “Development and Launch of Export-Oriented Umbrella Brand for Agricultural Products and Food Industry,” said that Ukrainian business should accelerate its integration into the global economy.

“The blockage of the Russian market, the COVID-19 pandemic and, consequently, the destruction of the usual supply chains has opened a window of opportunity for business to intensify integration,” Sanzharovskiy said.

“Some companies and industries have already achieved some success here, while others are just starting. The initiative supported by UNDP provides an opportunity to focus on the most vulnerable, such as micro-, small- and medium-sized enterprises, including those led by women, and helps them find their way into global markets. Their experience will serve as a good example for others.”

Iryna Tytarchuk, Executive Director of the Ukraine Investment & Trade Facilitation Centre (ITFC), noted that in 2020, agricultural export amounted to USD 22.2 billion and accounted for 16 percent of Ukraine’s GDP.

“At the same time, the share of MSMEs in the export direction by type of product ranges from 26 percent to 97 percent,” Tytarchuk said. “The largest share belongs to niche products: fruits and berries, nuts, and some vegetables. The project provides an opportunity for MSMEs and the BMO that will conduct the promotion of the umbrella brand to expand the range of products for export. We are proud that our centre, together with partners, will implement this initiative.”

According to a UNDP study on the socio-economic impact of COVID-19 on households and businesses in Ukraine, which was conducted in collaboration with UN Women and FAO, the crisis has had a stronger impact on women business owners: 79 percent of women entrepreneurs reported negative consequences of the crisis compared to 68 percent of men. Therefore, the initiative will give priority to MSMEs in the agricultural and adjacent sectors that focus on better resilience and sustainability, and in particular on enterprises owned or led by women.

Background

The “Building Forward Better: Post-COVID Recovery of Ukraine’s MSMEs towards Resilience and Sustainability” project aims to strengthen the capacity and sustainability of the micro, small and medium enterprises sector in Ukraine, with a special focus on enterprises owned or led by women, boosting their ability to apply resilient and sustainable business models, gain better access to business development services, and access local and global markets and financing through using digital solutions.

Media enquires

Yuliia Samus, UNDP Communications Team Leader, yuliia.samus@undp.org