Horticultural Crop Marketing

Strategy

Prepared by:
Cesar Flores, East-West Management Institute

Prepared for:
International Rescue Committee
RURAL ECONOMIC DEVELOPMENT PROJECT (RED)
RURAL ECONOMIC DEVELOPMENT PROJECT (RED)

Project Goal:

To establish profitable and sustainable agricultural

production and processing systems in order to improve
food security, increase farmer income and assist in the
building of integrated rural market chain systems in nine
targeted regions of Azerbaijan.

• 9 Demonstration Farms with Greenhouses

Comparison of Greenhouse Systems

Wood construction
Single sheet plastic

Steel tube construction

Double layer UV resistant cover

Traditional Azerbaijan Demonstration Farm

Greenhouses Greenhouses
 Comparison of Greenhouse Systems:
Open Flame Heating
Flood Irrigation
Soil
Traditional Azerbaijan Greenhouses
• Less Expensive to construct
• Easier technology to adopt
Support for thermal blanket
Thermostat controlled
Forced air heating
Drip irrigation
Sterile media
Demonstration Farm Greenhouses
• Longer structural lifespan
• Higher yield per plant
• Lower heating fuel costs
• Lower pesticide costs
• Labor saving automation
 Constraints:

• Cool season greenhouse crops generate higher

per kilogram production costs than field crops

• Horticultural crops have strong seasonal price

movements

• Lack of marketing cost information may result in

growers accepting lower than fair prices

• The 9 demonstration farms are located in regions

with poor road conditions and are generally far
from urban markets
Objectives:
• Identify crops with the highest returns in the highest priced
target markets

• Plan production to coincide with a limited competing supply

• Provide marketing information that empowers growers to

negotiate from a position of strength

• Prevent excessive losses through coherent grading,

packing and shipping solutions
 Export Market Analysis:

44% of food
consumed in Russia
is imported

60-80% of fresh Azeri
produce is grown for
export to Russia

Outdoor Moscow
vegetable markets
are Azeri controlled
Tomato Cultivar Selection Criteria:
• Long shelf-life to withstand
potentially long, difficult road
transport and other post-harvest
delays

• A medium fruit weight to appeal

to established consumer
preferences

• Indeterminate, widely resistant

varieties, suitable for early and
cooler temperature production
in plastic greenhouses
Selected tomato cultivars:
Marissa F1 An early-maturing indeterminate tomato hybrid with
vigorous plants and a high yield potential. Produces firm, round to
flat round fruits that weigh 150-170 g, have good shipping
capability and hold well, without loss of quality, for over two weeks
after picking. Suitable for the fresh market.

Marfa F1 An indeterminate tomato hybrid with an early maturity, very

good vigor and excellent root system. Produces firm, round fruits that
weigh 130-160 g and hold for up to 15 days at room temperature after
picking. Suitable for fresh market. Fruit setting is very good even at
subnormal temperatures

Jaguar F1. A new indeterminate tomato hybrid of early maturity.

The plant is vigorous, with an open habit. The outstanding cold
tolerance of Jaguar makes this variety suitable for a wide range of
growing techniques and areas. The uniform, flat round-shaped and
nicely ribbed fruits are medium-sized and have an average weight
of 160-180 g and long shelf life. Fruits can be harvested green.
Market Timing: 2 harvests set to coincide with
cool season high prices
10

6
W

1000
AZM J F M A M J J A S O N D

Spring Harvest Fall Harvest

March through May Oct through Dec
Create Horizontal Linkages to
the 9 farms:

Reduce costs through bulk input purchases

Increase efficiency by exchanging market

information, production skills and resources

Ensure product quality through shared

production standards

Reduce transportation and transaction costs

by consolidating shipments
 Unified Branding:
Caravanserai Tomato

“Aran Shirvan” or
“Caravanserai” or
“Kur ”

…or similar Geographic

trade name

Caravan graphics?
printed on the box label

“Product of Azerbaijan”
 Export Market Value Chain:
0.75

US Dollars per
kilogram
0.10

0.17
3.00
0.44

0.20
1.34

Farm gate Transport Middleman Tariff Market Trader Moscow

Price Margin 15% Fee Margin wholesale
price

Knowing the real costs that accrue after the product leaves the
farm, gives the grower negotiating strength
Total Potential Production:
• 9000 tomato plants (1000 per greenhouse)
• 90000 kg
• 90 Tons
• 11,250 total crates
• 125 crates per day average
• 9 truck loads
• One 10 ton truck every ten days for 3 months
 Supply Chain Coordination:
• Transplanting the same seedlings on the same date to
synchronize production

• Growing out the crops using similar fertigation regimes

• Harvesting fruit at the same maturity and ripeness

• Sorting and grading produce using shared standards

• Packing into standardized packaging at the greenhouse

• Assembling shipments and transporting on a fixed schedule

Consistent Product:

9,000 seedlings propagated in one centrally located greenhouse

and distributed to the 9 greenhouses for transplanting
Consistent Product:
Harvest tomatoes when “mature-green” and not “firm-ripe”

• Mature means: that the tomato has reached the stage of development which
will ensure a proper completion of the ripening process, and that the contents
of two or more seed cavities have developed a jelly-like consistency and the
seeds are well developed. (USDA)

• Green means: "the surface of the tomato is completely green in color. The
shade of green color may vary from light to dark (USDA)
Standardized Packaging:
• Currently in use: 15-18 kg wood crates 4-5 tomatoes deep

• Small grocery shops in Russia prefer a smaller weight container that will sell out
before spoiling and can be used for retail display

• 8 Kg crate gets a higher price per kg

• Fewer layers of tomatoes reduces losses

• Corrugated fiberboard marginally more expensive than wood, lighter and stackable

8 kg Two layer corrugated fiberboard 8 kg One layer corrugated fiberboard

Consolidated Transport:

Consolidation and transport scheme

Consolidated Transport:
Roundtrip 1600 km Azerbaijan to Moscow = 0.20 USD per kilo
GAZ-53 5 ton truck

GAZ-53212 10 ton truck

• 10 ton truck can run the 9 greenhouse route every ten days and
collect up to 130-140 crates from each greenhouse.
• The trip to Moscow takes 2-4 days, tomatoes ripening in transit
 Fall Crop Schedule:
Align the supply chain with the marketing strategy

1. Sow a minimum of 9000 certified "Marissa F1" seeds into plug seedling trays in one centrally
located greenhouse on or about June 30th

2. Propagate the 9000 seedlings for six weeks

3. Distribute 1000 seedling starts to each greenhouse and transplant no later than August 14

4. Grow out tomato plants using standardized drip fertigation regime

5. Harvest October-December when tomatoes are "mature green".

6. Pack into standard crates at the rate of approximately 13 crates per greenhouse per day.

7. Load a 10 ton truck every ten days with 130 crates from each of the nine greenhouses making
up 1200-1300 total crates. Transport 3 days to Moscow. Sell out in 2 days and return

8. December 16 - remove plants and sterilize beds