Vitmark includes the poor in its value chain.
Vitmark, a leading beverages producer in Ukraine, includes the poor at various points of its value chain: as suppliers of locally grown quality produce, as employees, and as low-income consumers through the offering of low-price juices.
Annually Vitmark, a leading beverages producer, purchases about 40,000 tons of fresh fruits and vegetables from small–scale farmers (more than 2,500 employees) and from about 25 large domestic agricultural suppliers in Ukraine. Vitmark invests in building up these capabilities among farmers, providing informal training and face-to-face or phone consultations.
At the beginning of each agricultural season (April–May), up to 50 farmers participate in a free four hour training hosted by the company and conducted by Vitmark`s supply chain officers, lawyers and accountants. Vitmark provided training to over 600 personnel in 2008. Farmers receive practical information about the appropriate quality and technical standards of the fruits and vegetables (appearance, ripeness, damage etc.) and their production methods. This enables the small-scale farmers, who are considered low-income producers, to become Vitmark’s suppliers.
The sourcing of local products increases farmers` incomes and employment in four regions of Ukraine. The company currently employs about 2600 people of whom about 1000 are from regions where most of the population is classified as poor by national income levels. Salaries offered are one-third higher than the regional average. This is the first of three strategies that Vitmark employs for the inclusion of low income people in its business model. Vitmark includes the poor at various points in its value chain – not only on the supply side as suppliers of local produce or as employees, but also on the demand side, by adapting its products to the needs of low-income consumers.