A neighboring country with great potential, but also specificities, concerning its economy and the way things work in the food and beverage sector, and the market in general. Mr Marios Belibassakis, First Counsellor for Economic & Commercial Affairs, Head of Economic & Commercial Affairs Office at the Greek Embassy in Tirana talks to Ambrosia magazine about the economy on the rise, current trends, and the importance of having local partners if one truly wants to penetrate the Albanian market.
Interview: Charitomeni Vonta
What would you say is the greatest asset of Greek f&b products in your market?
The majority of Albanians are familiar with Greek gastronomy since many of them have either lived in Greece, or have relatives and friends who live there, or simply visit our country frequently. That provides a competitive advantage for our products. Albanian cuisine is Mediterranean cuisine, which means it has elements that most people will recognize from familiar Greek foods. Moreover, Albanian consumers have associated Greek foods with high quality standards. In addition to that, the recent shift towards organic, natural ingredients provides a field where Greek products have greater added value.
Which Greek products have the greatest potential, and how could their dynamics improve?
Before we answer that, we should ask ourselves a rhetoric question: What do Albanians like when going for vacations in Greece? It is the cuisine as a whole, rather than specific brands. Therefore, products have to be related to cuisine and the whole experience, for example, meat /dairy products, wine (which is not promoted at all), ouzo, and organic cosmetics (EU organic).
Greek food products are innovative, both in terms of the product but also in terms of packaging. Many companies in the food sector achieved significant market shares abroad by leveraging the combination of traditional Greek ingredients and innovative marketing and packaging.
As the economic situation in Albania improves, rebounding remarkably from the “double impact” of the devastating earthquake (Nov. 2019) and the Covid crisis, the domestic disposable income is on the rise, boosting consumption and especially increasing sales in the mid-to-upper segments. In other words, high-end f&b products and specialty/delicatessen markets are going to gain traction in the medium to long term. In addition to the above mentioned products, other items like olives, olive oil, beer and traditional spirits are examples of Greek products that could potentially stand out in the Albanian market.
What is the biggest challenge for companies or brands who want to do business in your country?
Generally speaking about the Albanian market, the biggest challenges are three: price value positioning towards market segments, the distribution network, and human resources (low salaries, resulting in low level of competence).
Despite its small size, the Albanian market is quite open to products from around the world, making it rather challenging for product entry and placement. At the same time, consumers are more focused on affordable products, making product cost the most critical selling factor.
Talking specifically about Greek products in Albania, the biggest challenges are the relatively low purchasing power of consumers and the competing countries. Italian food companies, in particular, have for many years monopolized the market and controlled the distribution networks.
We should also note that in “value for money” terms, Turkey and Serbia are well positioned whereas Italian products have higher quality and medium-to-high price. As local production increases, Greek products market presence and sales volumes have been decreasing slowly. Still, brands such as Misko, Agrino, Jotis etc can be found in Albanian supermarkets. Last but not least, olive oil (especially from Crete in 5+ Liters packaging) is currently being replaced at a very high extend by local production. The same goes for oranges and lemons (replaced at high extend by local production), sea salt (home use), feta and kefalotiri cheese (replaced by local products). Brands like Alfa, Mythos (beers) were promoted heavily, but never took off.
Please share with us some targeted actions taken to improve the position of Greek f&b products and enhance exports to your market.
Generic actions would have to comprise quantitative/qualitative market study on segments and products, positive promotion of Greek brands (through both contemporary and traditional means) and guidance for Greek brand importers to market and position correctly the specific products.
For a company or brand aiming to enter and do business in Albania, I would advise 2 things as sine qua non:
- First and foremost, a rigorous analysis of the local market as well as the specific segment or segments of interest.
- Onboarding from the get-go a local partner with a strong network in Albania and thorough knowledge of market conditions and doing business on the ground. It is no coincidence that the most important ‘players’ of Greek food in Albania of a Greek origin are Albanian citizens.
Companies that specialize in the food products may work solely through agents or local distributors. Greek companies that seek to enter the market and distribute goods can find a considerable number of merchants, agents, intermediaries, wholesalers, and retailers in Albania. Most distribution channels are in place and several large retailers have entered the Albanian market in recent years. The primary distribution centers are in the capital Tirana and its neighboring city Durres, both of which house close to 40% of the nation’s population. Majority of sales occurs in outlets across the country, while the online, telemarketing, door-to-door sales are still in their infancy. Small private shops, many of which sell Italian and Greek goods, dominate the retail sector, though retail chains, including international supermarket chains Spar and Conad, have proliferated in recent years. Local chains of grocery markets have also gained market share in recent years.
Please name the best-selling Greek f&b products in your market.
There have been several brands, recognized as Greek, that were positioned well in the market (indicatively Karelia tobaccos, Agrino, Chipita, Jotis, Amita etc) and managed to secure solid market shares.
Albeit neighboring country, it would be rather safe to say that Greeks know little about Albania and its economy…
That is true, so we might as well say a few words. Albania is an agriculture-based country with exceptional geographic location, outstanding landscapes, rich in culinary and gastronomy offerings. Combined with a great tradition for hospitality, Albania has great potential for agritourism development. Whilst the sector has only emerged over the last few years, fast growth is expected in the near to medium future. Untapped potential for agritourism development exists almost countrywide. The most promising regions in combining agriculture with touristic attractions are Korça, Berat, Gjirokastër, Vlora, Shkodër, Kukës and Dibër. The most common agritourism models are farm-to-table restaurants with some limited accommodation capacities.
Last, but not least, could you please share with us some more information on the agritourism sector in Albania?
Agritourism is defined as a high priority sector on the government agenda (10 million euros of investment in the last two years). Most central and local level strategies consider agritourism important for agriculture and rural diversification. Regarding public sector efforts to support agritourism, there seems to be no conflict in roles, only in coordination, establishing better information sharing among public institutions would bring vital benefits and more cohesive development results. Synergies between public institutions and donor projects with a focus on agritourism are also important in generating greater effects. A better formal definition of agritourism (best international practices) would speed up policy reforms and better integrate grant financing with sustainable development.
Furthermore, the sector is benefiting from fiscal incentives that include reduced VAT to 6 %, corporate income tax to 5% and exemption from the infrastructure tax on investment. These fiscal stimuli are expected to incentivize investments and expand the base of certified agritourism units. However, existing and new agritourism units must meet the criteria for certification in order to benefit from support schemes. There are several ongoing donor projects aiming to promote agritourism, including financial support. These projects are designed to holistically promote sustainable rural development, by creating additional revenues and employment for agritourism. Most national donor schemes, however, are focused on promoting the supply side, whilst little is done to create demand.
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