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24 February 2016

WorldFood Tour. What should be done to make a bigger pie?

Alex Vartanian, the Macvar (macaroni production) owner talks about competition, partnership and healthy life business.

WFT: Alex, share with us your experience in starting your business.

Before my macaroni business started to run, I operated with local businessmen on the base of goods made on commission. Back then in mid 90’s, imperfect legislation and total control encumbered business development on the beaten track. And one day, I decided to change my business profile. Having borrowed some money from my friends, I bought a macaroni pressing machine. The absence of open news resources covering the market of manufacturers was an obstacle to competitive media research even within a local market. In several months, I discovered 12 competitors. The struggle between us came to price policy, damping and occasionally to manufacturing competition. I was confronted by product appearance problem for my principle position did not allow any synthetic additives.

WFT: How did you survive within such a tough competition?

At the beginning, I did not compete. As times goes by, one of my close people diagnosed gastrointestinal disturbance, and this situation made me begin to think of the way of life the children and adults live as well as of consequences produced by incorrect nutrition. All these factors like concern of my family people, the necessity to be apart from competitors and increase profitability spoke to the effect that it was necessary to create my originality and occupy my niche. One day, when preparing an ordinary composition, I decided to mix up wheat flour and bran.  The mix contains high concentration of cellular tissue, and it’s known that cellular tissue slows down sugar secretion into blood and, therefore, this factor is extremely important for the people suffering diabetes. Macaroni came out: they kept shape, and their organoleptic property was excellent!

WFT:  How did you organize production distribution?

My first clients were specialty stores selling diabetic products in Vinnitsa. And then, the rumours spread. People started to share the news. One day, I got a call from a woman from Kiev, who asked me to send her a couple of packs to try. The cost of carriage equaled the price of macaroni. However, she agreed to pay the expenses. Thus, I got an acknowledgment that I was on the right way, and my product was in great demand. So, there was a necessity to diversify the product line especially as a group of my standing clients had been already formed. I proceeded studying the options of all possible additives, with evident medicinal and preventive properties such as schrot of pumpkin seed, grape pits; linen, pigweed, sílybum mariánum, artichoke seed and so on. My clients readily shared information with me and suggested to what they would like to get. My aim was to put all that into processing.

Today, the product line amounts to 50 SKU. I opened the Internet shop of healthy food. The shop offers not only my products, but also the produce of my partners, including plant oils, confectionery, etc. I am not afraid of involving my partners. I believe that we should consolidate our efforts and search for marketing outlets. The partnership main objective should not be a wish to snatch a bigger part of a pie; the partners have to work hard in order to make the pie grow.

WFT:  What is your vision of further development?

I have to note that exhibiting is very important in the development of my business. It is especially relevant in the times of crisis. I began to exhibit in local fairs in Vinnitsa and then started to move out to other regions. Now, I participate in international trade fairs on a regular basis and win tasting contests that bring direct dividends in the form of signed contracts and result in a higher growth of sales. Moreover, I get feedback and responses of clients to my products. I find partners and, most of all, I gain inspiration for development.

WFT: Do your plans include the conquest of foreign markets?

Certainly they do! Having exhibited in many European fairs, we held some serious talks. We have aroused interest of exporters as the Europeans appreciate “healthy” foodstuff. As our products are patented, I hope in the near future our macaroni and flour will see the shelves of supermarkets in Poland, Italy, Spain and other countries. 

WorldFood Tour
Helena Sinitsina
Inna Kosinskaya
Kiev-Vinnitsa-Kiev, February 2016

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