Tuesday, November 4, 2014

Scope for even further collaboration in berry and mushroom picking industry in Finland

Along with differentiation and upgraded products, collaboration between different actors is a prerequisite for a success of Finnish berry and mushroom products on international markets. This becomes apparent in interviews conducted by Pellervo Economic Research among berry and mushroom wholesalers and processing companies as a part of MULTIEFFORT project financed by Karelia ENPI CBC. The interviewees estimated that there is a lot of growth and developmental potential on Finnish natural products sector. Considering raw material resources in Finland even a substantial growth would be possible. Collaboration between different actors is well established in certain steps of the value chain, but should be further developed in others.

Collaboration between pickers, wholesalers and processing companies seems to be well organized. The Arctic Flavours Association has been founded already in 1993, and works actively for gathering, processing and use of natural products. Picking is put into action mainly by wholesalers whereas berry processing companies do not usually buy berries directly from pickers. They prefer wholesalers, who freeze berries before delivering them to buyers. Wholesalers were preferred especially by companies producing special products.

Photo: Paula Horne

The interviewees described berry and mushroom sector as a small and export driven one. The main export markets of berries and berry products were Central Europe and Asia. As to mushrooms, Italy is the main market. The importance of Asia has also grown substantially. Potential markets for natural products were assessed remarkable in Russia, and the chances of Finnish natural products were regarded as good there. In order to gain success on the Russian market products need to be premium ones and clearly differentiated from competitors’ products.

Export markets present great potential for expansion of the trade. However, common problems faced by companies were related to investment and maintenance costs vital to the business. Distant location and company’s small size were also recognized as problems of many firms. These facts made it difficult to recruit competent employees, and they also restricted possibilities to expand operations. Further collaboration between small companies might alleviate some of these size-related problems.

Another concern faced both in berry and mushroom companies is the drastic drop of domestic pickers in recent years. This problem was regarded even more serious in mushroom companies, because exact identification of mushrooms is crucial in picking. This makes it challenging to use foreign pickers, because the mushroom species are manifold in Finland. On the other hand, cross-border cooperation with Russian Karelia might provide a solution for this problem, because there is a traditionally strong culture of mushroom picking in Russia, and the mushroom species there are mainly similar to the Finnish ones.

One aspect that is not covered by the study report is the need for collaboration with the local land owners. Widely published conflicts in berry picking could be partly resolved by better integration of the land owners into the value chain. Hopefully the industry will be able to expand, not only to bring business opportunities to the different steps of the value chain, but also to bring tasty and healthy products to consumers’ tables.  

Paula Horne & Anna-Kaisa Rämö, Pellervo Economic Research PTT

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