SPECIALITY GROUP STUDIES -
Our Speciality Group research helped us to better understand specific aspects of partner regions’ markets. Through a questionnaire distributed among partners, we collected answers and tried to help SMEs from these regions to look at certain areas of business development and market growth in a new way. Two studies were conducted and now we would like to share their highlights in this paper.
SG1: Market reach
Speciality Group Study 1 (SGS1) focused on figuring out how local products from partnering regions are reaching national and international markets. As well as what kind of support these companies can expect from their local and national institutions in promoting their products. It turned out that most of the partner regions do have and promote a local label. However, with exception of Germany, the national labelling schemes are generally much more developed compared to local branding and they are available for all products that fit official requirements. It was proved in all regions that using labelling increased customers’ trust in the quality of the product. In most of the regions, local producers can count on legal and promotional support both on the national and local level.
Local chambers of commerce make sure that entrepreneurs receive support, but its extent varies greatly between regions. The situation is similar when talking about promoting local products on international markets - each region has a different approach to this issue. In some countries - Hungary, Belgium and Finland, businesses can receive education in market research and marketing to help them conquer the market at home and abroad.
To close the SGS1, entrepreneurs were asked about the impact of COVID19 on their operations. In countries like Romania and Hungary, where a significant portion of goods was sold on local markets and fairs, the impact was greater than in other regions. Others argued that the pandemic potentially helped them, as the appreciation of local food producers increased during the crisis. However, these are just exceptions to the rule, and in general for many SMEs the turnover decreased, and they have to simply fight for survival.
To summarise, customers do values labels and local branding because they allow them to make a fast choice. Regions without their labels should develop one. Another important takeaway is that companies in every surveyed region are supported by local organisations both on the national and international level. However, the quality and extent of that support differs between regions and to improve it, implementing good practices is advised.
SG2: Investments into new machinery, increasing productivity
Speciality Group Study 2 (SGS2) focused on the business development side of things. SMEs from all six partnering regions were asked about their approach to investment priorities, investment tools and opportunities their companies face, as well as to learn more regarding the effect that the pandemic had on food industry SMEs.
Thanks to the questionnaire, we learned that in the last 5 years, almost all interviewed companies invested in new machinery. The main motivation was a want to increase productivity and profitability, but also a want to be more eco-friendly. Three of the most popular ways of financing these upgrades were company’s own funds, bank loans and tax support.
The majority of businesses also invested in their facilities – constructing new and refurbishing old ones. Again, increasing productivity and profitability were listed as the top reasons for such investments. Interviewees claimed that investments concluded in improved work satisfaction through better working conditions. Several answers highlighted that these investments allowed them to survive through the pandemic and preserve the number of employees. Extending on human resource policies, we asked about additional training and development workshops offered to employees, and only bigger companies offer such services to their staff members.
Coronavirus has caused disruption in operations of all interviewed parties. The most common impacts were the reorganisation of work routine, downsizing, reduced working hours. It also created unsold inventories and forced the rescheduling of some investments. Thankfully, none of the interviewed companies went bankrupt.
As a result of the study, we can make a conclusion that investments in new machinery and facilities are indeed positively affecting the productivity and competitiveness of a company. They not only affect the customer/consumer side but also human resources. Employees are significantly happier to work with newer, more efficient, and usually safer machinery, as well as, to perform their work in a renovated and more environmentally friendly space.
Full summary of the study on FRIDGE websites: Summary of Specialty Group 2 Study.