From Banana Boxes to Brand Recognition
Produce brand names often arise from the region where the commodity being branded is produced. Such is the case with Crimean table grapes, which enjoy brand recognition with Ukrainians similar to how North Americans view Florida oranges or Idaho potatoes.
When three founders of a successful grain enterprise in Crimea decided to diversify and started switching gradually from grain production to vineyard management, they discovered that simply cultivating table grape varieties is not enough: the produce must also be effectively marketed. They also found that the usual practice of utilizing banana boxes to package the table grapes gave no brand identity to the produce and did not allow them to capitalize on the reputation of the Crimean grapes they grew.
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Nikolay Choropita shows Crimean table grapes bunches
Photo Credit: Mykola Havrylyuk |
Regional specialists from USAID’s Agricultural Marketing Project (AMP) persuaded the company, Agro-Yukos Ltd., to apply new packing and marketing practices to it grape production. The specialists then played on the similarity the shape of the Crimean peninsula to a grape bunch to develop a brand label for newly registered Agro-Yukos Ltd.
Nikolay Choropita, a Agro-Yukos Ltd. manager, understood the importance of having a brand as an important tool for advertising his product. He gave a sample of what he was looking for to a local box manufacturer. Today, instead of banana boxes, buyers receive Agro-Yukos grapes packed in their own cardboard boxes with the company brand affixed to a label. In addition, the new specialized packaging has reduced produce loss to about 5% (compared to 50% in banana boxes), another source of increased profits.
The popularity of Agro-Yukos Ltd. table grapes brand was indirectly proved in Yalta. There, after the Agro-Yukos Ltd. grapes supply ran out, the company discovered that vendors continued to use Agro-Yukos Ltd.-labeled boxes to sell imported table grapes. To discourage abuse of it brand, Agro-Yukos Ltd. is now working to register its trademark.
It also has plans to aggressively enter the Crimean South Coast market, where table grape prices average $5/kg during the tourist season. The group also has plans to construct a cold storage facility to keep the table grapes longer and sell them when prices are higher.
Initially a hobby, table grape production has turned out to be a profitable business for the three owners of Agro-Yukos. Table grape yields are about 25 tons/ha; while grain crop yields are about 1.2 tons/ha. In addition, table grape production compared to grain production is about 1,000 times more profitable: $50,000/ha for grape and $30-40/ha for grain crops. No less important, table grape production creates additional employment opportunities. Today, seven full-time and up to 30 seasonal employees work with Agro-Yukos Ltd. each season.
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