UNDP will promote the effective output of micro, small and medium enterprises of Ukraine into the international market through the creation of an umbrella brand, which involves the use of one brand to sell several products.

Kyiv, October 27, 2021 - UNDP begins development and launch of an export-oriented umbrella brand for agricultural micro, small and medium enterprises (MSMEs) and food industry enterprises in partnership with the Ukrainian Center for Investment and Trade Promotion (ITFC). The initiative is implemented within the UNDP project «Building a Better Future: Restoring SME Ukraine after COVID to Strengthen Sustainability and Sustainable Development» in cooperation with the Ministry of Digital Transformation of Ukraine, State Enterprise «Entrepreneurship and Export Promotion Office», Diia.Business.

The marketing practice of umbrella branding involves the use of one brand to sell several products from different manufacturers. During  next four months, as part of work on the initiative in partnership with the selected business association, it is planned to identify pilot product and market categories, develop a brand concept, export strategy and umbrella brand management plan, and organize a meeting of Ukrainian SMEs with potential partners in the target market.

At least 30 Ukrainian SMEs - half of which are run by women - will benefit from the umbrella brand through a number of benefits: higher product quality, reduced risks and barriers, and synergistic savings in advertising, logistics, transportation and other operating costs. And the business association that will manage this umbrella brand will continue to work for long-term potential, develop management and support business services for SME members, and ensure a commitment to export under the umbrella brand.

Valeria Ionan, Deputy Minister of Digital Transformation for European Integration, noted that within the national project for the development of entrepreneurship  Diia.Business Ministry of Digital Transformation  helps small and medium entrepreneurs, in particular, in the field of agriculture. «These are educational events, advisory and infrastructure support. State support promotes the development of Ukrainian export. For example, grain export from Ukraine increased by a quarter in the first half of 2021, and overall export of goods from Ukraine increased by a third. Therefore, we fully support the development of the umbrella brand for the export of agricultural products to small and medium-sized businesses as another step towards domestic exporters», - said Valeria Ionan.

Andriy Remizov, deputy director for entrepreneurship development - acting director of Entrepreneurship and Export Promotion Office, noted that SME often lack the capacity to successfully enter the international market on its own. «Obstacles to the export route of SME include lack of experience and knowledge on how to work with international buyers, information on quality and certification requirements or characteristics of products that meet the requirements of the international market, lack of production and financial resources to upgrade their facilities», - added Andriy Remizov.

Maksym Boroda, UNDP project manager, said that one way to overcome these restrictions for SME is to work with other companies that have similar intentions to enter the international market. «This approach works best when there are strong social ties and trust between the partners, which often happens with SMEs that are members of one organization, a business association. Umbrella brands are traditionally seen as «guarantees of quality» by which sellers can signal to the buyer about higher quality and less risk. The creation, launch and development of such an export-oriented umbrella brand for agri-food SMEs aims not only to achieve short-term goals, but also the potential of brand evolution and financial stability of the business association as its administrator in the long run», - said Maksym Boroda.

Ihor Sanzharovskyi, head of the initiative «Development and launch of an export-oriented umbrella brand for agricultural products and food industry» said that sooner or later Ukrainian business had to accelerate its integration into the global economy. «The closure of the Russian market, the COVID-19 pandemic and, as a result of the destruction of the usual supply chains, opened a window of opportunity for business and intensified integration. Some companies and industries have already achieved some success in this, while others are just beginning its way. The initiative, supported by UNDP, provides an opportunity to focus on the most vulnerable - micro, small and medium-sized enterprises, including those run by women - and help them find their way into global markets. And their experience will be a good example for others», - says Ihor Sanzharovskyi.

Iryna Tytarchuk, executive director of the Ukrainian Center for Investment and Trade Promotion (ITFC), noted that in 2020, agricultural export amounted to 2 billion, while in GDP agricultural production accounted for 16%. «At the same time, the share of SMEs in the export direction by type of product ranges from 26% to 97%. And the largest share is niche products: fruits and berries, nuts, some vegetables. The project provides an opportunity for SMEs and the organization that will accompany the promotion of the umbrella brand, to expand the range of products for export. We are proud that our Center, together with partners, will implement this initiative»,- Iryna Tytarchuk said.

According to a UNDP study [1] on the socio-economic impacts of COVID-19 on businesses and households in Ukraine, conducted in collaboration with UN Women and the Food and Agriculture Organization of the United Nations, the crisis has had a stronger impact on women business owners: 79% businesswomen reported the negative effects of the crisis compared to 68% of men. Therefore, the initiative will give priority to SMEs in the agricultural and related sectors, which focus their business on improving sustainability and sustainable development - with a focus on enterprises owned or managed by women.

Additionally

«The initiative to develop and launch an export-oriented umbrella brand for agricultural and food products» is implemented by the NGO «Ukrainian Center for Investment and Trade Promotion (ITFC)» within the project «Building a Better Future: Rebuilding SMEs Ukraine after COVID to Sustainability and Sustainable Development», which is funded and implemented by the United Nations Development Program in Ukraine (UNDP) in cooperation with the Ministry of Digital Transformation of Ukraine, State Enterprise  «Entrepreneurship and Export Promotion Office», Diia.Business.

The project «Building a Better Future: Rebuilding SMEs Ukraine after COVID to Sustainability and Sustainable Development» aims to strengthen the capacity and sustainability of the micro, small and medium enterprises sector in Ukraine, with a special focus on women-owned or managed enterprises, ability to apply sustainable business models, gain better access to business development services, local and global markets and finance through digital solutions.

Reference source: Український центр сприяння інвестиціям та торгівлі - ITFC