ANNUAL REPORT (APRIL 20, 2017 MARCH 31, 2018)

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ANNUAL REPORT (APRIL 20, 2017 – MARCH 31, 2018) SERBIA COMPETITIVENESS SYSTEMS STRENGTHENING (CSS) ACTIVITY

April 30, 2018

This report is made possible by the support of the American People through the United States Agency for Interna-tional Development (USAID). The contents of this report are the sole responsibility of Cardno Emerging Markets USA, Ltd. and do not necessarily reflect the views of USAID or the United States Government.

ANNUAL REPORT (APRIL 20, 2017 - MARCH 31, 2018) SERBIA COMPETITIVENESS SYSTEMS STRENGTHENING (CSS) ACTIVITY

Submitted by: Cardno Emerging Markets USA, Ltd. Submitted to: USAID Contract No.: AID-169-C-17-00003 Serbia Competitiveness Systems Strengthening (CSS) Activity DISCLAIMER

The author’s views expressed in this publication do not necessarily reflect the views of the United States Agency for International Development or the United States Government.

Annual Report Y1 Page 3

TABLE OF CONTENTS

ACRONYMS ....................................................................................................................................................................... 5

EXECUTIVE SUMMARY .................................................................................................................................................. 6

INTRODUCTION ................................................................................................................................................................ 7

SUMMARY OF RESULTS ............................................................................................................................................. 12

TECHNICAL ACTIVITES ............................................................................................................................................... 13

1. SUB-PURPOSE 1: MARKET COMPETITIVENESS OF SELECTED VALUE CHAINS INCREASED ................................ 13 A) PROMOTION OF SERBIAN FOOD PRODUCTS AND PROCESSOR ................................................................................. 13

1.1 Development of umbrella brand – “Serbia Does Food” .............................................................................. 13 1.2 Facilitate visits to Trade shows for new firms ............................................................................................... 14 1.3 High-profile international food event (Belgrade Food Show) ..................................................................... 17

B) SPECIFIC MARKET LINKAGES EFFORTS .................................................................................................................... 19 1.4 F&V Industry Market Strategy Development ................................................................................................ 19 1.5 Supporting facilitation of export of fruits, vegetables and niche food products to targeted markets .... 20 1.6. Key industry associations improving member services ............................................................................. 22 1.7 Markets Information System - bridging the gap between foreign markets and Serbian companies .... 23 1.8 Establishing product innovation hubs (Premium Food Design Hubs)....................................................... 24 1.9 National Wholesale Market ............................................................................................................................. 25

2.SUB-PURPOSE 2: BUSINESS SUPPORT SYSTEMS COORDINATION STRENGTHENED ............................................... 26 2.1 Consolidation for the F&V frozen sector with PKS ...................................................................................... 27 2.2 Promotion of modern models of cooperation with research and building strong cooperative models for high value fresh segment – Industry Leaders concept ...................................................................................... 28 2.3 Technology exposure day ............................................................................................................................... 30 2.4 Workforce development / internship programs for young graduates ........................................................ 31

3. SUB-PURPOSE 3: RESOURCES FOR ENTERPRISE GROWTH MOBILIZED ................................................................. 33 3.1 Financial trainings for SMEs organized to stimulate demand for finance ................................................ 33 3.2 Credit guarantee line with MOA/banks/USAID ............................................................................................. 36

4. OTHER PROJECT EVENTS ......................................................................................................................................... 38 Stakeholders networking event (July 2017) ........................................................................................................ 38 Road show events / regional panel discussions (November 2017) ................................................................. 39 The Global Innovation Index 2017 Report Conference (December 2017) ..................................................... 39

OUTREACH ...................................................................................................................................................................... 40

MEDIA MONITORING ....................................................................................................................................................... 40 ONLINE PRESENCE ......................................................................................................................................................... 40

Facebook page ........................................................................................................................................................ 41 LinkedIn page .......................................................................................................................................................... 42 Twitter page.............................................................................................................................................................. 42

GRANTS AND SUBCONTRACTS ............................................................................................................................... 43

ANNEX A: QUATERLY REPORT #4 ........................................................................................................................... 46

1. INTRODUCTION ........................................................................................................................................................... 46 1.1. Administrative and Logistical Organization .................................................................................................. 46 1.2. Development and Delivery of Contracted Deliverables ............................................................................. 46

2. REVIEW OF PROJECT PROGRESS.............................................................................................................................. 46 2.1. Progress Versus Second 6-month Workplan – Technical Activities ........................................................ 46

3. ACTIVITIES PLANNED FOR NEXT QUARTER ............................................................................................................... 52 1. Access to Markets ............................................................................................................................................... 52 2. Building Business Support Services and Networking .................................................................................... 52 3. Access to Resources .......................................................................................................................................... 53

ANNEX B: PERFORMANCE MONITORING PLAN .................................................................................................. 54

PMP TARGETS TABLE .................................................................................................................................................... 55 CSS ANNUAL SURVEY FOR 2017.................................................................................................................................. 58

Survey questions ..................................................................................................................................................... 58 Survey results analysis ........................................................................................................................................... 60

ANNEX C: STATUS OF GRANTS AND SUBCONTRACTS ................................................................................... 64


ANNEX D: CSS ORGANIZATIONAL CHART ............................................................................................................ 66

ANNEX E: SELF-ASSESSMENT OF PROGRESS ................................................................................................... 67

ANNEX F: SMES FINANCING IN SERBIA ................................................................................................................. 69

ANNEX G: QUARTERLY ACTIVITY REPORTS TO MOA ...................................................................................... 72

1. INTRODUCTION ........................................................................................................................................................ 72

2. OVERVIEW OF ACTIVITIES IN THE RELEVANT TIME ................................................................................. 72

3. APPENDICES ............................................................................................................................................................... 75

1. INTRODUCTION ........................................................................................................................................................ 76

2. OVERVIEW OF ACTIVITIES IN THE RELEVANT TIME ................................................................................. 76

ANNEX H: THE MARKETING STRATEGY FOR SELECTED SERBIAN FRUIT AND VEGETABLES SUBSECTORS................................................................................................................................................................. 78

(EXECUTIVE SUMMARY) ............................................................................................................................................. 78

CREATING A SUPPORTIVE ENVIRONMENT FOR THE IMPLEMENTATION OF THE MARKETING STRATEGY ....................... 78 • Developing export marketing plans.............................................................................................................. 79 • Market research .............................................................................................................................................. 79 • Compliance with market requirements ........................................................................................................ 79 • Promotion of individual enterprises .............................................................................................................. 79

INCREASE IN EXPORTS AND SPENDING ON FOREIGN MARKETS ..................................................................................... 80 1. Foreign markets research ............................................................................................................................. 80 2. Organizing trade missions to target markets .............................................................................................. 80 3. Advertising in specialized media sector ...................................................................................................... 80 4. Organizing of visits for buyers in Serbia ...................................................................................................... 80

THE INCREASE IN DOMESTIC MARKET CONSUMPTION (SPENDING) ............................................................................... 81


ACRONYMS

AOFI Serbian Export Credit and Insurance Agency

AMEP Activity Monitoring and Evaluation Plan

ARDA Accredited Regional Development Agencies (Akreditovane regionalne razvojne agencije)

BSO Business Support Organization

CAP Competitiveness Area Partner

CLA Collaboration, Learning, and Adaptation

CSS Competitiveness Systems Strengthening

DF Development Fund

EaSI Employment and Social Innovation

EBRD European Bank for Reconstruction and Development

EIF European Investment Fund

FAO Food and Agricultural Organization

FP Facilitation Partner

F&V Fruits and Vegetables

FY Fiscal Year

GiZ German Corporation for International Cooperation

HoReCa Hotel/Restaurant/Café

IPARD Instrument for Pre-Accession Assistance in Rural Development

MIS Marketing Information System

MoA Ministry of Agriculture, Forestry and Water Management

MoE Ministry of Economy

NTOS National Tourist Organization of Serbia

PKS Chamber of Commerce and Industry (Privredna Komora Srbije)

PPD Public-Private Dialogue

RPKS Regional Chambers of Commerce (Regionalne privredne komore Srbije)

RAS Serbian Development Agency

RF Results Framework

SDC Swiss Development Corporation

SIPPO Swiss Import Promotion Program

SSG System Support Group

SME Small and Medium Enterprise

UNDP United Nations Development Program

VC Value Chain

VCAP Value Chain Action Plan

VCSA Value Chain Selection Analysis

WB World Bank

USAID Serbia Competitiveness Systems Strengthening (CSS) Activity


EXECUTIVE SUMMARY

Serbia’s agricultural system, specifically the fruit and vegetable sector, is becoming increas-

ingly competitive in regional and domestic markets. It is apparent, however, that as the primary

production expands, the storage and processing capacities are lacking, as well as the integration

with high value, export markets. The Project is designed to develop collaborative models that

can be used as examples for addressing these issues, while focusing on increasing sales and

exports.

The processing sector, which includes frozen, fresh and hot processed products is complex,

and each value chain is unique in production, processing, logistical and marketing capacity.

Therefore, CSS has taken a systemic approach to development, focusing on companies’ needs

to develop marketing, operational, resource management and workforce capacities that will

allow them to upgrade and compete in high-demand markets, rather than focus on resolving

individual value chain problems. Companies do come, however, from the most important sec-

tors of Serbian processing industry, which is dominated by the industrial frozen segment

(mostly raspberries), primarily sold in the EU; fresh fruit segment (dominated by apples to

Russia, blueberries emerging as high potential crop for EU export, and other fruits); and fresh

vegetable segment (which is almost exclusively domestic and regional, with some crops like

peppers and gherkins penetrating the EU market). Most profitable segment, the high-value,

retail products, are almost nonexistent outside of regional markets. Organic, which is cross-

cutting to all and has the most apparent market potential, is slowly expanding (almost entire

export comes from frozen raspberries).

Through analysis of the sector and baseline survey process, market access has been identified

as the key obstacle for all firms. This is further compounded by the lack of recognition of

Serbia in international (and domestic) markets as a source of high quality products. Systemic

availability of information, education about trends and new products, technologies etc. is fre-

quently not available for small companies. A problem for the near future is also an eroding

labor-force, and lack of integrated, hub-and-spoke models which would help sustain the pro-

duction base and life in rural areas. Finally, insufficient entry of young, creative people in the

industry slows innovation and product diversification.

This is why CSS collaborative models are designed to specifically address these issues – all

key partners and companies will be engaged in streamlined and standardized marketing and

promotional efforts with aim to build market linkages and improve visibility and reputation of

Serbia and its key products in export markets, while setting up financial, technological and

educational resources to support firms engaged in this process, and integrating youth (through

career development or entrepreneurship programs) and women into project operations. This

model should be replicable to other sectors of the food processing industry as well, once results

start to confirm its effectiveness.

Collaboration with relevant State, financial, private sector and donor institutions is critical to

ensure successful implementation, but only if it leads to greater collaboration between firms

and appropriate service providers in the market. Already during year 1, CSS has established a

strong working relationship with several entities on the ground, most notable being the Ministry

of Agriculture, the biggest and most important provider of services to the industry. Equally

important is the partnership with the Chamber of Commerce and several buyers, distributors,

financial and educational partners. It is these relationships that have allowed CSS to quickly

launch several pilots in Year 1 and collect early results, which are described in detail in the

report, and prepare to launch the rest early in Year 2. The aim of the project is to utilize CLA

by the end of Year 2 to evaluate and selected the most promising sub-sectors and models for

scale-up during the last two years of the project.



INTRODUCTION

Building on previous investments, successes and lessons learned from USAID and other donor

initiatives in Serbia, USAID’s Competitiveness Systems Strengthening Activity (Project) is a

four-year activity initiated in April 2017. The project aims to strengthen Serbia’s agriculture

processing sector (the sector), while focusing on the growth of sales as the key benchmark for

evaluating performance. The Project approach takes market system perspective and focuses on

addressing competitiveness issues that are systemic—rather than particular—thereby testing

and proving the collaborative methodologies required to resolve these gaps.

While the approach is being tested on a narrow set of value chains (VCs) within the sector –

fruits and vegetables, it should create a “ripple effect” into other sectors, so that strengthening

of Serbia’s overall competitiveness system gathers momentum and takes on a life of its own.

For this reason, the Project approach to implementation is organized functionally—not tied to

a specific product or VC, but certainly targeting products and VCs with highest competitive-

ness potential for Serbia.

Figure 1. CSS Theory of Change

Goal and purpose: The Logical Framework for the project is the key guiding document for

interventions and monitoring of project performance to ensure the goal is met. On a broader

level, the logical framework links to the USAID/Serbia Mission’s CDCS’s Development

Objective 2: “Improved conditions for broad-based, inclusive economic growth are essential

to Serbia’s democratic, free-market, and Western-oriented transformation” which will set forth

the exit path of USAID from Serbia and leave behind sustainable results that will further the

country’s Euro-Atlantic integration.

CSS Theory of Change

The guiding theory of change assumes that if CSS can strengthen relationships between stakeholders in se-lected VCs, supported by effective communication, monitoring systems and capacity building, then CSS will stimulate investment in VC upgrading, elevating the competitiveness of the entire VC, leading to increased sales and replication of the approach in other sectors (Figure 1.)

This theory of change rests on working through and strengthening capacities of local partners. The critical as-sumption is that these stakeholders will remain actively engaged in implementation. Market system programs are, by default, market-driven and mostly rely on the private sector’s response to project activities, which may change with time. The activity plans thus must be flexible and modified occasionally as the market response might suggests alternative approach may be more beneficial. The desired impacts of the program will remain the same, while changes in program activities lead to modifications in expected outputs and outcomes.



The project purpose is to “Eliminate obstacles to Serbian competitiveness to generate export-

led growth and greater integration with European and global markets,” which is supported by

the three mutually reinforcing sub-purposes, designed to address underlying constraints of

industry underperformance and create necessary conditions for increased growth:

o Sub-Purpose 1: Market Competitiveness of Selected Value Chains Increased

o Sub-Purpose 2: Business Support Systems Coordination Strengthened

o Sub-Purpose 3: Resources for Enterprise Growth Mobilized

Logical Framework is provided with Figure 2. below.

Approach: In order to ensure sustainability of all project operations, interventions are de-

signed under the following principles:

- Focused on developing a transparent and realistic picture of sustainability, which rec-

ognizes that ownership within market systems is vital to achieving enduring change;

- Activities must be facilitative in nature, permitting flexible, multifaceted interventions

aimed at stimulating market players and functions; and

- Activities must be time and resource appropriate.

To achieve this, the project identified a strong facilitation partner (FPs) for each intervention,

tasked with planning the Project activities with the CSS team. Jointly, CSS and FP select key

service providers (competitiveness area partners, or CAPs) needed to support planned efforts.

Effectively, collaborative partnership networks are formed and jointly execute project inter-

ventions, effectively addressing tasks outlined in sub-purpose 2, leading to increased systemic

capabilities, VC upgrading and ultimately increased sales and competitiveness of the industry.

Technical activities overview: Most of the FPs are market entry enablers whose task is to

diversify and open new markets, and they differ between various segments of fruit and vegeta-

ble industry - depending on industry needs, they engage CAPs who are resource/infor-

mation/service providers, as seen in table 1.

Table 1. Table of CSS Interventions for F&V Priority Segments

F&V Priority Segments

Frozen products

Fresh products (apple, blueberry/ber-

ries, vegetables)

High-value products (organic, niche, retail)

Promotion (Trade Shows)

National level branding through international publications, trade show attend-ance, conference organization/attendance and Serbia-based trade show event

(PKS and/or MOA)

PLMA Amsterdam (PKS)

Fruitnet Belgrade (MOA)

• Fancy Food Show NYC (Association for the Promotion of Serbian Food - APSF);

• Biofach (PKS/Serbia Organica);

• Belgrade Food Show (APSF)



F&V Priority Segments

Frozen products

Fresh products (apple, blueberry/ber-

ries, vegetables)

High-value products (organic, niche, retail)

Access to Markets

• B2B: Cold Storage Association

• Industry leaders

• MIS

• Industry consolida-tion: PKS

• B2B: Apple producers association in UK – London Fresh Pro-duce Show

• International distribut-ers: Greenyard, Kuehne

• Wholesale market: MOA

• Industry leaders

• B2B: Serbia Organica; Dry Plum Association

• Distributers: Blue Zeppelin

• Serbia trade show: APSF

• Retail: Hubs/incubators

• MIS

Access to Resources

DCA: banks

• IPARD: Consultants

• Technology Mission: Association of Food Technologist

• Trade certificates: University

• SME fund: Fund man-agement firm

• Investments: Agriscape

• IPARD: Consultants

• Technology Mission: Association of Food Technologist

• Trade certificates: Uni-versity


• Investments: Agriscape


• Technology/design/pro-motion: Hubs/APSF

For general promotional efforts, which include standardized branding and messaging, the key

partners are PKS, MOA, industry associations and APSF, considering that most of the trade

shows activities, membership in international organization, product promotional activities/do-

mestic seasonal campaigns, international publications, and organization of the trade show event

in Belgrade are their responsibility. PLMA is organized with PKS this year considering that

private label firms export highest value products out of Serbia; FruitNet trade show in Belgrade

will build on efforts started by REG and will bring buyers of fresh produce to Serbia; Biofach

attendance has been organized with PKS, SO and GIZ to stimulate linkages for the high value

organic industry; NYC Fancy Food Show will be organized by the APSF in order to bring

together exporters of Serbian products to the US and new, innovative firms, while announcing

and promoting Belgrade Food Show; and finally, Belgrade Food Show is organized in partner-

ship with APSF and Fresh Montgomery to position Serbia as a regional center of excellence

and give opportunities to micro and small firms to meet international buyers, and a number of

seasonal campaigns will be conducted in conjunction with this event.

Industry associations for frozen fruit, apples, dry plums and organic segments already exist and

will address issues most relevant to their members – each will invest in professional manage-

ment, work closely with MOA, consolidate the sector or conduct market research and B2B

event organization:

- For frozen fruits (mostly raspberries), this is consolidating a huge number of suppliers

and resolving inspection and quality control issues (an area for cooperation with CFG);

- For apples, diversification from Russia market is a priority (UK has price and market

potential to offer);



- For dry plums, this is education and production expansion considering the massive

sources base Serbia possesses;

- And organic will need expansion and linkages for products other than raspberries (90%

of Serbia’s export).

An MIS system with one of the associations that informs the industry about the most critical

trade and market information and provides a platform for increased online trading will be es-

tablished as well.

For general fresh segment, which is underdeveloped and fragmented, international distributers

with capacity to integrate numerous small firms have to be engaged as well. Greenyard and

Kuehne bring scale, reputation and standards much needed for the fresh sector to grow, specif-

ically blueberries, but also other VCs. Work with MOA on producing a revised Wholesale

Market strategy document could lead to an impactful industry consolidating effort.

Both frozen and fresh segment will also rely on partnerships with industry leaders: in frozen

segment, these will be the firms with highest value export products and capacity to integrate

other suppliers into their value chain, drive standards adoption down the chain, and possibly

replace imports. In fresh segment, firms that can build linkages between research in order to

renew variety stocks in Serbia, and deploy hub-and-spoke models that will be used as industry

examples will be targeted. For example, Brestovik has been targeted as a partner for Greenyard

for the region to manage blueberry and other produce supply – Brestovik in return will intro-

duce supply chain consolidation and new varieties to producers.

In niche sector, Blue Zeppelin is a distributor that will work with firms on penetrating Halal

markets in Europe and the Middle East, and provide capacity building for firms to upgrade

labeling and standards needed for these markets. Four hubs have been engaged to develop a

Food Incubator model, and integrate innovative products into retail chains, such as Maxi and

DM.

Current efforts by the Mission and MOA to bring the DCA program back to Serbia will com-

pliment these efforts. A dedicated set of trainings with a selected group of partners will be

focused on targeting specifically DCA identified target geo/tech areas, while also addressing

opportunities with IPARD. The first SME private equity fund will also be established to pro-

vide additional resources to project partners, while addressing one of the biggest obstacles in

the industry – operational management.

Information on new technologies will be introduced with the Association of Serbian Technol-

ogist and selected FPs through domestic events and international exposure visits. Simultane-

ously, short trade certification courses for firm managers will be set up with Belgrade Univer-

sity, with a new set of certifications coming out every year in response to industry needs.



Table 2: Results Framework

Activity Purpose: Eliminate obstacles to Serbian competitiveness to generate export-led growth

and greater integration with European and global markets

USAID/Serbia GOAL: Serbia’s Stability and Euro-Atlantic Integration Advanced

Development Objective 2: Conditions for Broad-based, Inclusive Economic Growth Improved

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Indicators: 1. Networking index

Indicators: 1. Number of firms receiving USG-funded technical assistance to export 2. Number of private sector firms that have improved management practices or tech-

nologies as a result of USG assistance 3. Number of business linkages between Serbian food processors and local, regional

and international buyers established

INP

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Activities

• PKS capacitated to facilitate consolida-

tion/vertical integration of supply chains

• International food event in Serbia organized

• Key industry associations capacitated to im-

prove member services

• Export and business improvement educa-

tional programs established with RAS

and/or PKS and/or University

• Coordination platform between industry

and MoA inspection unit established

Activities

• Facilitate visits to at least three international events per year – food

show, technology mission and buyers mission – for selected high-po-

tential firms

• Distributors/traders engaged for supporting SMEs to access domestic and international markets; online sales platforms established with se-

lected partners

• Lead firms engaged to integrated other firms into export value chains

• MIS system for market information established

• Product innovation accelerators established

• Regulatory change for establishing a national wholesale market facili-tated

• New technology trainings/info sessions organized

Cross-Cutting themes: (1) Communication/Marketing/Creative Industry – promotion, branding, packaging, awareness creation at all levels; (2) Gender mainstreaming – integrated in all efforts with specific focus on promotion of female entrepreneurship, leadership, and asset ownership; (3) Youth inclusion – promotion of entrepreneurship and innovation.

Critical Assumptions: (1) Enabling environment conducive to trade and export linkages; (2) Weather and natural conditions do not hamper primary produc-

tion; (3) Government participation and cooperation remains open

Activity Sub-Purpose 1: Market Competitiveness

of Selected Value Chains Increased (Sub IR 2.2.1: Selected Value Chains Developed)

Sub-Purpose 2: Business Support Systems

Coordination Strengthened (Sub IR 2.2.2:

Economic and Business Development Services

Enhanced)

Sub-Purpose 3: Resources for En-

terprise Growth Mobilized (Sub IR 2.2.3: Resources for SME

Growth Mobilized) Indicators:

1. Percentage of SMEs in the selected value

chains using external sources of finance 2. Value of new private capital sector invest-

ment in targeted value chains leveraged

through USAID

Activities

• Financial trainings for SMEs orga-

nized to stimulate demand for fi-

nance

• IPARD support system established

with PKS/MOA

• Possible mobilization of an SME

fund with focus on ag. and ag.-pro-

cessing sector

• Support as needed efforts by

USAID Mission establish a credit

guarantee line with

MOA/banks/USAID

Indicator: P-1 Percentage increase of sales of firms impacted by USG-funded assistance (total and export sales)

Context Indicator: C-1 Sector Performance Index

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SUMMARY OF RESULTS

The project initiated a number of these efforts in Year 1

and laid the groundwork for launching the rest early in

Year 2. By launching the PFDH initiative with four

hubs, attending the Biofach, working with Serbia Organ-

ica and Dry Plum association, working with distributors,

and launching a set of financial trainings aimed at estab-

lishing an SME fund, CSS has already managed to reach

117 firms from all corners of Serbia (picture 1). PKS, as

the main industry consolidator, was the key partner in

the initial project presentation to the public and later as-

sisted with hosting the initial set of financial trainings.

Since all efforts are still in pilot phase, it is too early to

extract results that are most relevant to the Project - in-

creased sales, competitiveness index and networking in-

dex. However, it is not too early to learn from initial

efforts and make appropriate adjustments going into

Year 2. These efforts are discussed in detail in the report.

STAKEHOLDERDS - PROJECT PARTNERS AND BENEFICIARIES engaged in CSS Activities Chambers of Commerce 5 PKS, PK Vojvodina, Reg.PKS Novi Sad, Zaječar and Leskovac

Government institutions 4 MoA, RAS, NTOS, City of Niš Agriculture Dept.

Other international donors 1 GIZ Business Associations 7 Serbia Organika, Youth Business Forum, Impact hub, Business Innova-

tion Programs, Center for Advanced Economic Studies (CEVES), Limska dolina, Leskovacki ajvar,

CSS impacted firms 117 From 63 towns/cities

SMEs at Trade Fairs 14 See below

Organizations trained 96 87 MSMEs, 6 cooperatives, 2 associations, 1 educational Grantees 8 PKS, Serbia Organika, ICT hub, Youth Business Forum, Desing, Nova Is-

kra, Business innovation Program, Impact Hub

TRADE FAIRS

Trade Fairs 1 Biofach 2018, Nurnberg, Germany. Firms attending 14

Partners 3 Serbia Organika (association), PKS, GIZ

Number and value of contracts signed 15 240,000 USD

Anticipated number and value of near-term contracts 11 1.5 million USD Business meetings held with potential partners (at the fair)

213 Meeting potential partners from 35 countries, 164 buyers, 49 suppliers.

TRAININGS Title / Partner Trainings Firms People Locations

Financial awareness raising workshops for SME’s (WM Equity)

4 71 88 Novi Sad, Leskovac, Užice, Zaječar

Sustainable agriculture production and global market (Lukowa)

6 27 333 Šabac, Loznica, Ljig, Prijeplje, Ratkovo and Vranje

British Retail Consortium (BRC) Global Standards one-on-one preparation trainings for London Produce Show (Agrobrand)

2 2 5 Mladenovac (Green Energy Group), Krčedin (Verda Vivo)

TOTAL 12 94 426

PRODUCT INNOVATION HUBS (Premium Food Design Hubs)

Hubs 4 Desing, Nova Iskra, Business innovation Program, Impact Hub

SMEs applied to Hubs for support 115 18 SMEs will be selected in Y2Q1

Picture 1: Geo locations and density (heat map) of firms reached



TECHNICAL ACTIVITES

1. Sub-purpose 1: Market Competitiveness of Selected Value Chains Increased

USAID Serbia Sub IR 2.2.1: Selected Value Chains Developed

The starting point for every activity is understanding that every decision in the market is driven

by the end markets – from consumers, to retailers, distributors and aggregators, passed down

to suppliers/processors. Access to markets activities are thus focused on changing behavior of

both buyers, in terms of how they perceive and engage Serbian firms, and suppliers, in terms

of how they respond to market demands and position/market themselves in the markets. Ulti-

mately, this should lead to improved market access for an increased number of firms, and di-

versified market opportunities.

Considering that the Project identified high value western markets, and domestic re-

tail/HORECA markets as priorities for developing niche and fresh segments, and private label

for developing frozen, strong promotion of Serbia as a quality food/product destination and

intensive integration with aggregators and distributors in these markets is needed.

a) Promotional activities – development of umbrella branding for Serbian food products, bring-

ing Serbian food producers together under a unified brand at international trade shows, and

launching an annual specialty food fair - the Belgrade Food Show - as an integrating event for

all other project-related initiatives and efforts;

b) Creating market linkages – strengthening associations, work with traders/distributors to fa-

cilitate exports of fruits, development of a Markets Information System (MIS) portal to serve

as an online platform for connecting Serbian companies with international buyers, product

innovation through the Premium Food Design Hubs initiative, and provision of technical sup-

port to the MoA for the National Wholesale Market for collection and distribution of goods,

and creating new market opportunities for agricultural producers.

a) Promotion of Serbian food products and processor

1.1 Development of umbrella brand – “Serbia Does Food”

Promotion and branding of Serbian food products is a cross-cutting theme of the project. The

Project aims to establish a basic, unified umbrella brand with a recognizable visual identity.

All efforts under the umbrella brand will have the same attributes and message:

• Promoting Serbia as a destination where food is naturally healthy and deeply rooted in

tradition and culture. This message is in line with NTOS’ promotional campaigns pre-

senting Serbia as a place of Soul Food;

• Unified branding for international trade shows, buyer missions, and other events;

• Increasing domestic consumption through seasonal campaigns and building an emo-

tional connection with local products;

• Branding and promotion of the Markets Information System (MIS) portal, the Premium

Food Design Hub (PFDH) initiative, and other project-related interventions.

The Project’s Communications Team leads these efforts, working closely with the Project’s

Markets and Operations Teams. Draft designs were developed during Q4 of the Y1, and the

final design will be presented during Q1 of the Y2 (2nd quarter of 2018).



Preliminary design work for the “Serbia Does Food” umbrella brand. Final design expected in Y2Q1

1.2 Facilitate visits to Trade shows for new firms

Trade shows attendance remains the key promotional tool for

firms in the sector to learn about international markets, buyers and

new technologies. Considering that PKS covers most large trade

show events, CSS is partnering to support only trade fairs that are

identified as high value opportunities for the food processing in-

dustry. In year 1, in consultation with PKS, the Project agreed to

support selected companies to exhibit at Biofach, one of the

world’s leading trade fairs of organic products.

From February 14-17,

2018, in Nuremberg, Germany, the National Associa-

tion Serbia Organica, with joint financial support

from USAID, GIZ and PKS, organized participation

of 14 Serbian companies with Ecocert Organic Stand-

ards (EOS)/National Organic Program (NOP) certi-

fied products to attend the trade fair under a joint

“Serbia Organica” brand. Specifically, CSS provided

a grant to Serbia Organica to prepare and take 7 exhibiting companies and 7 new visitor firms

to attend the show. The list of exhibiting companies included: All-Natural Foods, Eco Mele,

Ecoagri Serbia, Jovanjica, Mondi Lamex, Suncokret and Zadrugar; and the following compa-

nies participated as visitors through the Project’s activity: Elixir, Flory, Herba, Olda Group and

Timomed. Significant effort was invested to include new companies that have never attended

this trade show in the past. Prior to the fair, Serbia Organica, with support from the Project,

organized preparatory briefings for the companies, and facilitated business contacts with for-

eign buyers and distributors leading up to the fair. At the fair, key market trends were identified,

promising new products and potential distributors with capacity to increase sales in export

markets and/or provide relevant services that are significant to the organic industry. Addition-

ally, the Communications and Markets Teams assisted in preparing a visual design for Serbia’s

stand at the fair, as well as a promotional brochure to showcase the companies attending the

fair.

IMMEDIATE RESULTS

• 14 companies at 1 international Trade Fair;

• Business linkages: 213 meetings with 164 potential buyers from 35 countries;

• Value of new contracts: $238,000 with $1.5 million anticipated



Furthermore, this was the

first step to systemically

improve practices of the

national association to pro-

vide support to companies

to more effectively prepare

for trade shows.

This matches with the Pro-

ject’s Sub-Purpose 1 by di-

rectly increasing market

competitiveness of F&V

value chains. It is also part

of the Y2 Work Plan and it

is identified as activity I1-

2: Facilitating visits to

trade shows for new firms

Due to collaborative ef-

forts invested by USAID-

CSS, GIZ, PKS and Serbia

Organika, the 14 Serbian

companies that partici-

pated at BioFach 2018

achieved the following re-

sults:

• 7 companies exhibited

their products, 5 partic-

ipated as visitors and 2

were represented in

promotional materials

and by their association Serbia Organica.

• In total, these 14 companies collectively had 213 registered meetings, met with 164 poten-

tial buyers from 35 countries, out of which, 87 were estimated as high-potential buyers, 61

as medium-potential buyers and 16 as low-potential buyers, and met 49 potential suppli-

ers/partners at the fair;

• Signed contracts in total value of approximately 238,000 USD;

• Potential sales value of near-term contracts of 1,549,000 USD;

• Majority of potential buyers are from EU-based countries; and,

• CSS staff facilitated over 30 contacts with international companies, some of which are po-

tential buyers of Serbian F&V organic/healthy products, such as: Tree of Life UK, Agrana,

Greenyard, Berrico, NatureFavours, Naturz, Natura-Ingredients and others.

Collaboration. To organize participation of Serbian companies at BioFach 2018, Project col-

laborated with PKS, Serbia Organika, and GIZ. GIZ co-sponsored attendance of Serbian or-

ganic food companies, and significantly contributed to the success of Serbian companies at the

trade fair by engaging IPD (German Import Promotion Desk agency). IPD enabled many busi-

ness meetings between Serbian exhibitors and international buyers at the Serbian stand.

Figure 2. Top 10 countries with the highest number of potential part-ners from Biofach 2018 organic food trade show in Germany

Country Meetings

held w/

Buyers New

Buyers Old

Buyers w/ Sup-pliers

1. Germany 59 51 43 8 8

2. Italy 17 10 8 2 7

3. Netherlands 12 11 11 1

4. Austria 12 8 7 1 4

5. France 10 8 7 1 2

6. Poland 10 9 9 1

7. Spain 10 8 7 1 2

8. Slovenia 6 6 6

9. Turkey 6 5 5 1

10. Switzerland 6 6 4 2

Countries outside of the Europe, the Middle East and Africa region: Peru (3 meetings with business leads), USA (2), Canada (1)



Following the same model, CSS is currently collaborating with the British Serbian Chamber

of Commerce and the Embassy of the Re-

public of Serbia to the United Kingdom to

organize B2B meetings in London for apple

association/producers attending the London

Produce Show at the beginning of June

2018. Additionally, to promote Serbian

companies in the most effective way at the

Summer Fancy Food Show in New York in

late June 2018, the Project is co-working

with the newly formed Association for the

Promotion of Serbian Food (APSF) to es-

tablish a long-term relationship with the

Specialty Food Association (SFA) to suc-

cessfully represent Serbia’s premium food

segment in the US market and beyond.

Learning. Most international food trade

shows are usually covered by Serbian busi-

ness support organizations (PKS and RAS),

but available space is mostly reserved for

high profile, larger companies. Therefore,

limited assistance in organizing participa-

tion of Serbian companies is required. CSS

learned that more effective assistance could

be provided by assisting companies/associ-

ations to get in contact with potential inter-

national buyers through organization of

dedicated B2B meetings in-country and

abroad, as this type of assistance is less ex-

pensive and focuses solely on Serbia and

Serbian companies. Thus, if trade shows are

conducted in the future, activities will only

focus on Serbian companies that have not

had an opportunity to exhibit internation-

ally.

Adaptation. Based on the lessons learned,

the Markets Team quickly recognized the

need and opportunities to develop alterna-

tive ways for assuring SMEs receive expo-

sure to buyers and new markets. In addition

to the above-mentioned associations, trad-

ers/distributors need to be engaged in active

capacity building targeting firms so that

long-term linkages are built through em-

bedded service provision. For example, one

of the domestic trade partners (“Agro-

brand”) will lead the effort in organizing attendance at the London Produce Show in June 2018,

together with leading Serbian apple producers.

NEXT STEPS …

Project worked with partner organizations to pre-

pare attendance of Serbian food companies at the

following events in Y2:

PLMA, Amsterdam, Netherlands

May 29-30, 2018 –

Provides the best

opportunity to build a

private label busi-

ness in the food sec-

tor. Project is part-

nering with PKS to

take 12 Serbian

companies to attend

the show. Private la-

bel B2B contacts are very important for Serbia’s

food sector, since through this channel large vol-

umes of high-quality foodstuffs can be exported

and distributed in collaboration with the world’s

largest FMCG/retailers.

London Produce Show, UK

June 6-8, 2018 – A prominent

British trade exhibition for

fresh fruit and vegeta-

bles. This is a B2B

event for apple pro-

ducers that happens

to integrate well

with the trade

show. Serbia’s

seven largest apple

producers will attend in an effort to diversify from

increasingly difficult Russia market.

Summer Fancy Food Show, New York, USA

June 30 – July 2, 2018 – One of the world’s largest

specialty food fairs, and the premier showcase for

industry innovation. Together with the Association

for Promotion of Serbian Food (APSF), Project is

assisting in vet-

ting candidate

companies and

selecting the

best to exhibit at

the show.



Outputs. The aim of this activity, according to Y1/Y2 Annual Work Plans was to increase the

number of Serbian firms attending trade shows and buyers missions (T1-2) and to increase the

overall value of products exported to the EU and North America (T1-7). Based on the sheer

number of business meetings held (213) at the fair and the total value of contracts signed and

potential sales contracts still under negotiations (over 1.3 million USD), this activity fully met

the expected outcomes.

Outcome. The goals set by the Project for this activity proved to be realistic. Solely through

BioFach, the Project supported 14 companies (O1-1.) to attend the trade fair, which represents

93% of the planned number of companies for Y1. Also, through this event, each company

achieved approximately 12 B2B meetings, which is 46% more than initially planned. During

BioFach, CSS recorded 213 business links/meetings, which represents 70% more than the

planned annual total (O1-3.)

Evaluation. The activity proved to be very effective and was highly appreciated by partner

organizations, particularly Serbian companies that have not previously exhibited at interna-

tional fairs, as they need assistance in this area and strongly support continuation of trade fair

support and assistance. On the other hand, CSS evaluated that Serbian associations need ca-

pacity building to improve their performance at international trade shows and B2B meetings,

and to upgrade their services for member companies.

Next steps. The Markets Team will continue to implement planned sub-activities, including:

co-organization with PKS of attendance of Serbian SMEs at PLMA in May 2018; the London

Produce Show in June 2018; and the Summer Fancy Food Show in early July 2018, which will

also serve as a promotional event for the planned Belgrade Food Show in November 2018.

Link to Logical Framework. CSS Intervention I1-2 Facilitate visits to Trade shows for new

firms. This activity directly supports Sub-Purpose 1 of the project: Market Competitiveness of

Selected Value Chains Increased (Sub IR 2.2.1.: Selected Value Chains Developed).

1.3 High-profile international food event (Belgrade Food Show)

The Project has undertaken a series of activities to improve Ser-

bia’s market competitiveness for the fruit and vegetable value

chains. Through coordination with the Association for the Promo-

tion of Serbian Foods (“The Association”), the Project started pre-

paring for the establishment of an annual specialty food show in

Belgrade. The Project will work with the Association to organize

the Belgrade Food Show in November 2018, which will allow up

to 100 Serbian and regional specialty food companies to exhibit

their products to international buyers and distributors from the re-

gion, Asia, Europe and the US.

In Year 1, the Association for the Promotion of Serbian Foods

requested the Project’s support in the development and launch of

an annual regional specialty food show in Belgrade. The Project

has assured that the Association has the commitment, the personal

and three-years of coordination to secure a solid foundation for

the Belgrade Food Show to become sustainable. The Association’s commitment was crucial in

the decision by the Project in providing technical support to the Association. Furthermore, the

Association and CSS are in intense discussion with Fresh Montgomery, the premier specialty

food show organizer, to become a partner in the Belgrade Food Show.

IMMEDIATE RESULTS

• “Serbian Food Promotion Alliance” (un umbrella association for promotion of Serbian food) established by the “Association for promotion of Serbian food” and CSS;

• Branding and Communication Strategy for the Association;

• Initiated preparation for the “Belgrade Food Show” (Nov 2018), as a business and promotional event promoting Serbian and regional food and connecting foreign buyers with domestic companies.



By the end of Year 1, the Association started implementing all prelaunch activities needed to

successfully organize the show. The Association formed the Serbian Food Promotion Alliance

to function as an umbrella association for all relevant stakeholders (PKS, NTOS, retail and

HoReCa, etc.) to successfully prepare, coordinate and promote Serbia’s food offer and to or-

ganize the Belgrade Food Show in November 2018. The specialty food fair will showcase Ser-

bian companies with shelf-ready, high-value innovative products, and will be oriented toward

international and regional markets.

In Year 2, the Project will continue to provide extensive technical assistance to the Association

to support the fair to become a leading food business event in South East Europe. Going for-

ward, as the Association builds its internal capacity to lead the event over the coming years,

the Project plans to scale back technical assistance to ensure long-term sustainability of the

fair.

Collaboration. The Association has a broad network of contacts in the business community

and extensive expertise in organizing business and promotional events. Meetings with potential

partners have and will continue to take place in an effort to attract international traders and

distributors, as well as to secure financial participation.

Learning. The Project engaged a consultant with experience in organizing similar events in

Serbia under previous project, to build upon lessons learned and to learn from previous failures

to ensure sustainability and resilience of the Belgrade Food Show going forward. Only efforts

that are led by people/companies with keen commercial interest in executing the show will be

supported.

Outputs. The Association for the Promotion of Serbian Food established and the Serbian Food

Promotion Alliance formed to promote Serbia’s food offer and help organize the Belgrade Food

show.

Outcome. The Association has raised the profile of Serbia as a place of innovation in the food

processing industry, helped position the City of Belgrade as a hub for specialty food in South

Eastern Europe and raised international awareness of Serbia as a hot-spot for delicious, healthy

and natural food.

Next steps. Provision of technical support and promotional activities to the Association for

organize the Belgrade Food Show.

Link to Logical Framework. CSS Intervention code I2-2 High-profile international food

event organized in Serbia (Belgrade Food Show). This activity supports Sub-Purpose 1 of the

project: Market Competitiveness of Selected Value Chains Increased (Sub IR 2.2.1.: Selected

Value Chains Developed) and Sub-Purpose 2 of the project: Business support systems strength-

ened (Sub IR 2.2.2.: Economic and business development services enhanced).



b) Specific Market Linkages Efforts

1.4 F&V Industry Market Strategy Development

From November 2017 to April 2018 CSS, in collaboration with

MOA, engaged Autentika Global, a local market research com-

pany, to conduct an export market analysis and develop a market-

ing strategy for top Serbian exported fruits and vegetables in tar-

geted markets (Annex H). The findings and recommendations

from the research will serve as the foundation for all other market

and export-related initiatives that will be carried out throughout

the duration of the Project:

- Informing project partners – PKS and MOA - about good practices in the industry;

suggestions for promotional and funding efforts;

- Providing leads for identifying new buyers;

- Used as a tool for market research trainings when needed; a sample research identified

UK as a strong market to target this year for fresh segment (apples, berries) as well as

frozen (range of fruits and vegetables);

- Foundation for industry associations development

The research findings highlight the importance of creating viable and functional national sec-

toral associations, i.e. assistance in improving existing sectoral associations, as this is a critical

component to strengthening market access services. In addition to the Serbian Chamber of

Commerce (PKS), industry associations have been recognized as key support organizations in

export promotion. The strategy offers a plan to improve associations’ key functions by deploy-

ing professional management and ensuring long-term financial support from MOA for interna-

tional promotion of Serbia’s F&V sector. To further improve export performance the strategy

focuses on continuous market research, organization of B2B events, membership in key inter-

national organizations and collaboration with international and domestic media outlets. The

marketing strategy also includes an approach to increase overall consumer demand in the do-

mestic market, in part due to the health benefits of consuming fruits and vegetables, particularly

for young people.

As previously described, this activity aims to strengthen the business support system of Ser-

bia’s F&V sector (Sub-Purpose 2). It also represents a foundation for many other activities that

the Project supports to increase market competitiveness of selected value-chains (Sub-Purpose

1).

Immediate results of this activity include: 1) Draft Marketing Strategy; 2) Final Marketing

Strategy for the F&V sector; 3) Detailed Market Research of the UK market; 4) briefing/train-

ing for Serbian Chamber of Commerce (to be performed by the end of April 2018).

Collaboration. The strategy was designed namely to support capacity building for PKS and

industry associations. Both entities have been engaged throughout the marketing strategy de-

velopment process to provide input and feedback for the final strategy document.

Learning. Industry associations, PKS and PKS-supported companies expressed a high level

of interest in this type of intervention, as PKS works with large export-orientated companies

that have an interest in strengthening product standards and quality control.

Adaptation. The process allowed the Project to identify potential partner associations: Serbia

Organika, Dry Plum Association, Cold Storage Associations and National Apple Growers As-

sociation (to be established). The Project’s partnership with PKS was built on consolidating

IMMEDIATE RESULTS

• F&V Industry Marketing Strategy;

• Detailed Market Research of the UK market for apple association



the frozen fruit sector and joint promotional activities in targeted trade shows, such as Biofach,

PLMA, Belgrade Food Show etc.

Outputs. The initiative resulted in the creation of three reports (a draft strategy, the final strat-

egy and the UK market research). Industry companies, associations and business support or-

ganizations were informed about the results of the research.

Outcome. The direct outcome of this activity is a new, systemic approach to strengthen com-

petitiveness within the sector. Activity offered unique solutions for sustainable sector support,

through the associations and via long-term support from the industry and government re-

sources.

Evaluation. The activity produced the expected results. The subcontractor still needs to organ-

ize a briefing meeting for PKS to present training materials for export and promotion of the

F&V sector. It is anticipated that the task will be accomplished during April 2018. While PKS

only partially appreciated the results of this activity, leading companies (e.g. big apple produc-

ers) immediately recognized the benefits of the marketing strategy’s recommendations and

agreed to participate in B2B events in the UK in 2018, and to assist with establishing the Na-

tional Apple Growers Association.

Next steps. Project used the results from this initiative to develop a series of activities. For

example, based on the Marketing Strategy, associations will prepare presentation of the Serbian

F&V industry at the London Produce Show from June 6-8, 2018. Strategy will be applied on

other national associations in Year 2 (e.g. Serbia Organika, Serbian Dried Plum Association,

Cold Storage Associations and National Apple Growers Association, etc.)

Link to Logical Framework. CSS Intervention I1-1 F&V Industry Market Strategy Develop-

ment. This activity directly supports Sub-Purpose 2 - Business Support Systems Strengthened

(Sub IR 2.2.2.: Economic and Business Development Services Enhanced).

1.5 Supporting facilitation of export of fruits, vegetables and niche food products to targeted markets

Serbian companies operating in the F&V sector need better under-

standing of specific end-market requirements and international

buyers’ expectations and demands. Considering the size of firms

and fragmentation of the industry, consolidators such as traders and

distributors play a critical role in getting the product to domestic

and international retail. This is especially true in fresh and niche

segments.

These activities include:

• Selecting reliable international and domestic traders/distrib-

utors as FPs/project partners

• Identification of market opportunities for Serbian products and potential partners

abroad;

• Identification of Serbian SMEs with capacity to meet the demands of foreign markets;

• Organization of technical trainings for companies to improve their products, standards

and overall performance; and

• Promotion of Serbian products through buyers and trade missions.

During Y1, CSS selected two domestic facilitating partners – Blue Zeppelin and Agrobrand –

respectively targeting a fast-growing Halal market in Europe and fresh market, mainly apples.

Both successfully recognized markets with the best chances to export Serbian products (e.g.

IMMEDIATE RESULTS

• Markets with a high potential to export Serbian products identified (UK, Romania, CIS countries, Gulf countries and Muslim population in the EU)

• 14 promising Serbian SME exporters identified; technical trainings initiated



UK, Romania, CIS countries, Gulf countries and Halal certified food for the Muslim population

in the EU), selected more than 14 Serbian companies to work with and commenced with im-

plementing a set of trainings for selected SMEs. At this point it is too early to report on the

progress of concrete achievements, such as the number and value of trade contracts resulting

from this activity. The full results from these activities are expected to emerge during the third

quarter of Y2.

Simultaneously, Greenyard, a global market leader in distribution of fresh and prepared fruit

and vegetables, will visit Serbia (May 2018) to sign an agreement with “Brestovik Cold Storage

and Coop”, one of the industry leaders working with the Project.

Collaboration. Distributors are actively covering firms engaged in other project implementa-

tion activities, the above listed Greenyard-Brestovik connection, or Agrobrand-apple associa-

tion connection. This is due to active collabora-

tion between the project teams which helps in-

crease the chances of selecting the most compet-

itive and viable firms in the F&V sector.

Learning. The Project learned that steps within

this activity cannot always happen on time, as

planned. For example, facilitating partner “Ag-

robrand” relatively quickly managed to select the

biggest Serbian apple (fresh) producers and

started with planned trainings related to the UK

market which was identified in the marketing

strategy. Although “Agrobrand” initially

planned to support B2B mission and/or trade

mission in the UK in the Fall of 2018, an oppor-

tunity presented itself in June 2018 to attend the

London Produce Show. On the other hand, as the

Project expected, facilitating partner “Blue Zeppelin” spent more time to carefully select eligi-

ble Serbian companies, as the portfolio consists of high-value, processed F&V products that

require various certifications and highly targeted branding. Greenyard, on the other hand, as a

reputable international firm, requires time to develop its business model.

Adaptation. To adapt and respond to ad hoc business opportunities with international trade

partners, the Markets Team routinely coordinated with stakeholders to achieve the best possible

results. For example, the Markets Team quickly reacted to include the London Produce Show

on the list of supported trade fair initiatives in Y2 (see activity I1-2: Facilitate visits to trade

shows for new firms). As a result, one facilitating partner will have an opportunity in June 2018

to leverage the London Produce Show as a platform to introduce Serbian fresh produce com-

panies to the UK market.

Outputs. Initially, the Project engaged two foreign trade expert teams (facilitating partners) to

increase sales in targeted export markets. CSS plans to organize at least two buyers missions

(or trade missions) for 15 selected Serbian SMEs (O1-1.). FPs will train SMEs to improve

practices (O1-2.) necessary to export. It is expected that FPs will optimally achieve three high-

volume contracts with foreign buyers (O1-3.) in Y2.

Outcome. The Project expects to facilitate access to new international markets for Serbian

products and services (T1-4). CSS is also investing efforts to increase the total value of prod-

ucts exported to the EU and North America (T1-7), and to increase the number of firms utilizing

distributors/consultants to achieve greater sales (T2-7).

Facilitating Partner “Agrobrand” quickly reacted to an opportunity for companies to attend the London Produce Show in June 2018. Soon after, it commenced with one-on-one trainings for companies selected to attend the trade fair. Photo taken at the premises of “Verda Vivo,” a large apple producer based in Krcedin.



Evaluation. This initiative has already been evaluated as highly effective by both the Project

and its beneficiaries. Serbian SMEs are directly working through facilitating partners and the

selection process is purely market driven. This way SMEs receive hands-on information about

end-market demands, requirements, necessary certificates, branding and promotional strate-

gies, packaging requirements, assortment lists, logistics and other important elements needed

to successfully enter new international markets.

By engaging facilitating partners, SMEs gain direct access to buyers in specific markets. Fa-

cilitating partners have the capacity to arrange highly efficient and cheap B2B visits for inter-

national buyers to Serbia and organize trade missions for Serbian F&V processors in targeted

markets. By introducing companies to new buyers and vice versa, negotiations have a greater

likelihood of success. Additionally, any misunderstandings and concerns that arise throughout

the negotiation process can potentially be resolved by the facilitating partner.

Next steps. The Project will consider engaging up to two more facilitating partners to assist

SMEs with exports in Y2.

Link to Logical Framework. CSS Intervention I1-3 Supporting facilitation of export of fruits,

vegetables and niche food products to targeted markets. This activity clearly falls under Pro-

ject’s Activity Sub-Purpose 1 (Market Competitiveness of Selected Value Chains Increased)

by engaging facilitators/traders to support Serbian SMEs to access international markets.

1.6. Key industry associations improving member services

As already discussed in previous sections, CSS identified the fol-

lowing three industry associations as potential project partners

within the Fruits and Vegetables sector: Serbian Cold Storages

Associations (Unija Hladnjacara Srbije), Dry Plum Association

and Serbia Organika, with apple association in the making. The

marketing strategy (activity I1-1) is the key guiding tool used to

capacitate associations and improve their marketing performance

and services to members.

In the Y1 CSS awarded a fixed amount grant to the National Association for Organic Agricul-

ture “Serbia Organika”. The grant helped raise visibility of Serbia as an organic production

destination in international markets, facilitate marketing access of Serbian companies with or-

ganically certified products and increase export of domestic organic products. The grant sup-

ported participation of fourteen companies, members of the National Association for Organic

Agriculture “Serbia Organika,” to attend the Biofach trade fair in Nuremberg, Germany in

February 2018.

As trade fair support was the sole activity undertaken within this intervention, please refer to

Section 1.2 Facilitate Visits to Trade Shows for New Firms of this report for the further infor-

mation.

Next steps. Training strategy and plan developed for partnership with three identified Business

Support Organizations and one in the making.

Link to Logical Framework. CSS Intervention I2-3 Key industry associations capacitated to

improve member services. This activity directly supports Sub-Purpose 2 of the project: Busi-

ness support systems strengthened (Sub IR 2.2.2.: Economic and business development ser-

vices enhanced).

IMMEDIATE RESULTS

• Three industry associations identified

• One association “Serbia Organica” support to organize trade fair participation for 14 firms



1.7 Markets Information System - bridging the gap between foreign markets and Serbian companies

For many Serbian SMEs, access to information about interna-

tional markets and the latest global food trends and production

standards remains limited. As a result, many actors in the food

processing value chain do not have export strategies. To over-

come these obstacles, the project will support development of a

web-based portal to provide information to Serbian food exporters

about international markets and export opportunities. To this end, in Year 1, the Project, in

cooperation with a major local partner, set out to develop a unique Markets Information System

(MIS) portal for Serbian F&V companies that was initially to be hosted by PKS.

The planned Markets Information System (MIS) portal will bridge information gaps that exist

between Serbian companies and international market opportunities. Once fully operational,

MIS will serve as a go-to resource for Serbian businesses to learn about real-time export op-

portunities and end-market requirements. MIS will also function as a two-way platform to im-

prove match-making between Serbian food processing companies and foreign buyers.

In Year 1, the Project organized a study visit to one of the world`s best export promotion plat-

forms – UK`s Exporting is GREAT – that offered participants insight into the world`s best

match-making platform for SMEs. The study trip helped participants prepare for designing a

modern MIS platform. Information and lessons learned from the London study visit were used

by the Project’s subcontractor (Souktel) to define the system’s functional requirements, and to

perform an analysis and get feedback from relevant stakeholders to further customize the fea-

tures of the MIS system. All information gathered was incorporated to finalize and publish the

ToR for the development of the MIS portal.

Following the Project’s decision to select a local subcontractor to continue development of the

system, CSS published a RfP to solicit proposals from specialized software firms on March 27,

2017. The deadline for submission of proposals was set for April 26, 2018.

Collaboration. A series of meeting and workshops were held with stakeholders to better un-

derstand the needs of Serbian F&V companies. All gathered inputs were used for preparing a

SoW needed for developing an RfP to solicit proposals from local software companies to de-

velop the portal.

Learning. While learning that a MIS-type portal was clearly needed, CSS realized that select-

ing a local subcontract to develop the system is a critical aspect to ensuring its successful com-

pletion. With PKS initially targeted as a partner, it quickly became clear that maintenance and

utilization of this system would require a commercially oriented entity with the capacity to

engage companies and attract users.

Mockup design of a company profile for the future MIS portal

IMMEDIATE RESULTS

• Detailed functional and technical specification of the system and ToR prepared.

Proposed mock-up design of the MIS portal



Adaptation. The project is currently considering several partners for the MIS system. CSS is

also searching for a local developer company to successfully accomplish all set out tasks and

requirements.

Next steps. CSS will continue to develop the Markets Information System with a selected local

vendor over the next two years. It is anticipated that at least 6 months will be needed for the

development of the MIS portal.

Link to Logical Framework. CSS Intervention I1-4 MIS system for market information.

1.8 Establishing product innovation hubs (Premium Food Design Hubs)

Many promising business ideas and/or food products may already

exist in the market but frequently do not reach the final consumer

due to numerous obstacles. CSS designed the Premium Food De-

sign Hub (PFDH) initiative to develop a new, hub-type business

model to leverage creative industries, new technologies and inno-

vative solutions in the food industry. The Project recognized de-

sign hubs as entrepreneurial “hot spots” with the capacity to pro-

vide a range of support services to food start-ups and SMEs to

enter domestic and international markets.

In Year 1, as part of the PFDH initiative, the Project selected and

signed agreements with four design hubs – Nova Iskra, Impact

Hub, BIPs and Desing Taste Centar – to develop a viable business model for supporting SMEs

and start-ups to produce high quality food products for domestic and international markets.

Design hubs will support development of new, innovative food products and help increase the

overall number of food startups in Serbia. Selected hubs will provide a wide range of support

services to improve overall product quality and production processes, such as product design

and packaging, food technologists, promotional storytelling, product innovation, etc. By help-

ing food start-ups and SMEs create new, innovative premium products, it is expected that the

PFDH initiative will help attract domestic and foreign consumers, and lead to higher sales/ex-

ports for companies.

Towards the end of Y1, all four hubs started their selection process and began short-listing

potential candidates. Next quarter, it is expected that 20 SMEs and/or start-ups will undergo an

educational “boot camp” to build their knowledge about premium product development and

go-to-market strategies.

The PFDH initiative aims to strengthen the business support system of the F&V sector in Serbia

(Sub-Purpose 2), but also represents a foundation for many other activities that the Project

supports to increase market competitiveness of selected value-chains (Sub-Purpose 1).

Collaboration. Design hubs, with support from the Project, will conduct a series of tailor-made

mentoring sessions and trainings for selected start-ups and SMEs to help them develop new

premium products and increase sales and exports. The Project’s Communications Team and

hubs will collaborate to support promotional efforts by organizing media events and pitching

sessions for potential investors and retail/HoReCa markets.

Learning. The concept of “hubs” and their potential is still not well-known and recognized by

entrepreneurs and food start-ups in Serbia. The Project faced a lack of available information in

evaluating past performance of existing hubs in supporting scale-up efforts of startups in tradi-

tional industries (e.g. the food industry). CSS, however, recognized that previous support pro-

vided by hubs to the ICT industry could serve as a model to be replicated in the food industry.

IMMEDIATE RESULTS

• Four design hubs engaged through the Premium Food Design Hub initiative to support SMEs to develop innovative food products;

• 115 SMEs applied to enter hubs;

• 3 SMEs pre-selected to exhibit at the Summer Fancy Food Show 2018 in New York.



Adaptation. Project adapted to improve the PFDH initiative in several areas. It was agreed that

the core team to lead the PFDH initiative within each hub would be led by experts in four key

areas: technology, finance, retail and creative industries. These core teams will work on de-

signing a methodology tailored to company’s specific needs. Selected companies will enter an

educational “boot camp” program that will result in a product mock up. The Project also iden-

tified a need to potentially provide additional funds to increase the total number of supported

companies in the next PFDH cycle.

Outputs. Project awarded grants to four design hubs to kick-off the PFDH initiative. Through

the PFDH initiative, the Project will increase the number of high-value, niche Serbian products

in new markets (T1-1) and increase in number of food start-ups and SMEs to introduce better

marketing, sales, branding and packaging and technology practice. In final run, activity will

support shift in Serbian exports structure towards more high-end products by adding value to

existing food products (T1-6).

Outcome. The PFDH initiative will provide a new, systemic approach to improve competitive-

ness of the F&V sector. Project signed contracts with four selected design hubs to facilitate up

to 20 start-ups and SMEs to help create new or re-branded, innovative, premium products for

export. It is expected that 20 new products will be launched p.a. ready for retail/HoReCa/export

(O1-1., O1-2., O1-3.).

Evaluation. The PFDH initiative has been positively reviewed by all stakeholders - design

hubs, food startups, SMEs and cooperatives. The large number of applications suggests that

the PFDH has been successfully piloted.

Next steps. In mid-April, selected startups and SMEs will start working with hubs to upgrade

their products. Promotional marketing campaigns will be organized to raise awareness about

the PFDH initiative. PFDH will be supported by other Project-related activities e.g. I1-3 Sup-

porting facilitation of export of fruits, vegetables and niche food products to targeted markets.

Link to Logical Framework. Activity I1-5 Product innovation Hubs established

1.9 National Wholesale Market

During Y1, the Project actively participated in the development

process of the National Wholesale Market Working Group under

the MOA.

The National Wholesale Market will support wholesaling of a

wide variety of food produce, improve collection and distribution

of goods, and create new market opportunities for agricultural

producers. The Project is working with the MoA, the key entity providing technical and finan-

cial assistance to the food processing sector, on producing a wholesale market feasibility study.

The initial step was to reorganize the MoA’s Working Group which took place in February

2018. The Working Group was expanded by four members (two from the Ministry of Agricul-

ture, Forestry and Water Management and two from the Ministry of Trade, Tourism and Tele-

communications). The expansion allowed for a more expedient realization of activities, starting

with the Feasibility Study.

The Working Group steadily made progress towards defining the Project’s involvement with

the new Feasibility Study. It was agreed that the Project would provide consulting services to

assist with the preparation of the Feasibility Study and other documents and services related to

the creation of the National Wholesale Market Act. Preparation of the feasibility study is ex-

pected to commence in April 2018.

IMMEDIATE RESULTS

• CSS established its presence in the MoA’s Working Group, supporting development of the National Wholesale Market



CLA. To date, CSS engaged a consultant to work directly with the MoA on all activities de-

fined by the Working Group. This expedited the decision-making process and the reorganiza-

tion of the Working Group.

Outputs/Outcome. The Project’s task was to support creation of the Feasibility Study.

Evaluation. Through the consultant contracted to work with the MoA, CSS achieved two goals

– its role as a consultant was clearly presented and communicated, and the entire process within

the MoA was expedited.

Next steps. The Project will support preparation of the Feasibility Study and other documents

and services relating to the creation of the National Wholesale Market Act. Work on the feasi-

bility study is expected to commence during April 2018.

Link to Logical Framework. Activity I1-9 Regulatory change for establishing National

Wholesale Market facilitated

2. Sub-Purpose 2: Business Support Systems Coordination Strength-ened

USAID Serbia Sub IR 2.2.2: Economic and Business Development Services Enhanced

The key market access interventions for SMEs must be supported with strong business support

services that are responsive to FPs and SMEs needs. These support systems should enable

SMEs to access new markets, consolidate value chains by accessing information about new

practices and technologies, and increase responsiveness to changing market conditions. There

are few critical points that have been highlighted by the project for addressing:

- Frozen sector which makes up more than 50% of the total industry exports is plagued

with fragmentation and low-value output, and in recent years, with reputational issues

in export markets due to Nora virus. PKS is the lead partner on organizing key actors

in this industry segment (working group) to analyze the industry, provide recommen-

dations to RAS on funding programs for micro and small firms, and organize training

sessions between suppliers and leading exporters for addressing tractability issues. This

is a potential area for CFG to work with MOA inspection and build on these efforts as

well.

- Similarly, the companies are facing problems with labor force which is either not avail-

able of poorly trained. Some of the most developed F&V industries in the world, like

Italy for example, are based on hub-and-spoke/cooperative models, which are used to

keep people in rural areas and allow them to live from their work. This concept is still

underdeveloped in Serbia, which is visible in raspberry sector where a lot of cold stor-

ages do not have developed supplier models, or in apple segment, where large orchards

increasingly face problem finding sufficient labor force. Industry leaders that have

successfully resolved this issue need to be promoted and companies need to have ex-

posure opportunities to successful supplier models domestically and abroad.

- Finally, trade and market research are the key problem for the overwhelming number

of companies in the industry. However, no entity or educational institution offers prac-

tical, hands-on training through certification courses to the firms – management or staff.

There are indications that RAS will soon develop export programs, but it’s likely that

traditional and new universities which are the main source of employees for the industry

would achieve bigger impact and be more industry responsive.



2.1 Consolidation for the F&V frozen sector with PKS

CSS received a grant application from the Serbian Chamber of

Commerce and Industry (PKS) within the framework of the

signed LOI. In accordance with the industry needs and PKS ca-

pacity building, the proposed sole-source grant proposal set out to:

1. Boost PKS business services capacities i.e. conduct industry analysis (diagnostics),

identify gaps and needs of SMEs and end-market requirement;

2. Support development of export-oriented value chains. Based on industry analysis, or-

ganize B2B meetings between export leaders (anchor companies) and SMEs, and ex-

port leaders and producer organizations. The purpose of this activity is to develop inte-

grated supply chains and export oriented value chains and reduce market ambiguity

present amongst SMEs and producers;

3. Organize key info sessions with companies on available sources of finance, market dis-

covery systems and other opportunities such as IPARD, RAS support programs, etc.;

4. Integrate and share market findings and share recommendations with the public sector,

namely Development Agency of Serbia (RAS) and the Ministry of Agriculture (MoA)

to secure tailored support for the industry;

5. Execute buyers’ missions for Serbian companies under PKS’ umbrella – develop a prep,

welcome and post-visit follow up program.

The proposed project activities are in line with the cooperation agreement with PKS which

aims to conduct joint activities focused on improving economic development in the Republic

of Serbia. It was agreed that the duration of the agreement would last 12 months, covering the

January-December 2018 period.

PKS was identified as a facilitating partner by CSS as it is the only government body with a

clear mandate to provide business support services to all Serbian companies. The Project as-

sessed that PKS’ capacities to provide specific support services to the food industry could be

improved. PKS also showed interest to collaborate with the Project to increase its technical

capacities and establish new services to support SMEs operating in the food processing indus-

try in collaboration with CSS.

The CSS project team intensively discussed potential activities with PKS representatives which

resulted in a signed LOI. The LOI and accompanying action plan was signed in November

2017.

During December 2017, the Project’s proposal was discussed with PKS representatives, and

both parties agreed on activities to be undertaken. The grant agreement was signed in January

2018.

Initial activities focused on developing a methodology for reviewing the needs of SMEs oper-

ating in the food industry; creating a database of Serbian food industry companies to be inter-

viewed; and organizing capacity building trainings for Regional Chambers of Commerce staff.

At this stage PKS chose project consultant. A draft methodology with outlined activities was

developed, but it is in the acceptance phase in the PKS.

Collaboration. PKS and CSS collaborated to identify activities with the potential to develop

the F&V sector, support SMEs within the sector and capacity building of PKS staff. This re-

sulted in a signed LOI and an accompanying action plan. The action plan defined mutual efforts

IMMEDIATE RESULTS

• Draft methodology developed



to contribute to the development of the sector and coordinated interventions between PKS and

CSS.

The Project’s proposal was intensively discussed with PKS representatives and, through a con-

sultative process, a few modifications were made in relation to the proposed activities and

methodology.

Learning. The main lesson learned was that PKS required technical assistance and support to

strengthen internal capacities to implement project activities.

Adaptation. An explanation for the delay in implementation of project activities was re-

quested. An explanation for the delay was submitted by PKS and accepted by CSS.

The CSS project team remained in daily communication with PKS with goal to determine if

there was a need to make changes to the original grant agreement.

Outputs / Outcome / Evaluation. As the activity is still ongoing, it is too early to report on

the outputs of this initiative.

Next steps. PKS’ limited technical capacities for implementing project activities indicates that

CSS should reconsider existing support models in Y2. Further support to PKS should be based

on clearly defined, simple activities that can be implemented by PKS, such as trade fair organ-

ization.

Link to Logical Framework. CSS Intervention I2-1 PKS capacitated to facilitate consolida-

tion/vertical integration of supply chains. This activity directly supports Sub-Purpose 2 of the

project: Business support systems strengthened (Sub IR 2.2.2.: Economic and business devel-

opment services enhanced).

2.2 Promotion of modern models of cooperation with research and building strong cooperative models for high value fresh segment – Industry Leaders concept

During Y1, the Project actively sought partnerships with key in-

dustry stakeholders that would develop models which would be

recognized as innovative in addressing key industry issues – sup-

plier management, research integration, and linkages to educa-

tional or financial institutions.

To this end, CSS issued an Annual Program Statement (APS) on

March 14, 2018, to support firm-level interventions to consolidate

agribusiness value chains. Towards the end of Y1 and throughout

the remainder of 2018, the Project started, and will continue, to

support best practices at the firm level for consolidating supply

chains.

Supported activities are:

1. Expanding supplier base amongst micro and small firms with no market access, and

developing hub-and-spoke models with producers to introduce production standards,

facilitate certifications and improve market access;

2. Linkages to research, scientific or public organizations to secure better supply chain

management practices, control of product quality and introduction of new varieties re-

sponsive to market opportunities;

3. Building capacities for research and development to create new varieties or products;

4. Linkages to education system for workforce capacity building in the fields of financial

management, trade, processing technologies and other relevant support ideas.

IMMEDIATE RESULTS

• In a pilot program with Lukowa, 27 companies and 333 individual producers attended trainings in six cities on today’s market standards and sustainable agricultural practices to become suppliers for high value exporter.

• The Project launched the APS 2018 to solicit proposals from interested firms on a rolling basis



In Year 1, the Project initiated the first pilot project with Lukowa, one of Serbia’s largest ex-

porters of fresh and high value frozen berries. Due to its size and trading experience in the F&V

sector, the Project selected the company to develop a training program to raise industry aware-

ness and support higher quality and greater standardization of agricultural products.

From February to March, in cooperation with the Project, Lukowa organized a series of six

trainings for agricultural producers and traders focused on today’s market standards and sus-

tainable agricultural practices. These education workshops provided an opportunity for small

and large producers of fruits and vegetables to learn from experts on key topics in this area (see

table). At each event, CSS

staff presented how the Pro-

ject will support the food in-

dustry through facilitating bet-

ter access to international mar-

kets and creating new finance

opportunities for small and

medium enterprises. Trainings

were organized in the follow-

ing cities: Sabac (Feb 3), Loz-

nica (Feb 10), Ljig (Feb 17),

Prijepolje (Feb. 24), Ratkovo

(March 3) and Vranje (March

10). Additionally, the Pro-

ject’s Communications Team

supported these events with sustained promotional efforts – social media campaign, PR activ-

ities, posters and roll-ups, etc. The training events generated positive media coverage in local

and regional media outlets.

Towards the end of Y1, on March 22, the Project’s Grants Selection Committee (GSC) met to

evaluate an Expression of Interest (EoI) received in response to the APS. The GSC reviewed

an application from Van Drunen Farms to develop, market and sell a high-value shelf-ready

product (freeze-dried fruits and vegetables) as a healthy snack alternative for consumers in the

form of a ready-to-eat meal. The Project seeks to build R&D capacities to create new, re-

branded, and innovative products and implement best practices at the firm level for consolidat-

ing supply chains of Serbian fruit and vegetables producers. The concept note was approved,

and Van Drunen Farms was invited to submit a full project proposal for further review. In Year

2, it is expected that the Project will support this initiative. Application from Brestovik for

developing a distribution model with Greenyard, and RZ Agro for expansion of fresh vegeta-

bles production for export to Germany while developing a capacity of foundation seed produc-

tion in Serbia are also expected.

Collaboration. Industry leaders are leveraged for all project efforts. They participated in fi-

nancial training sessions, were key advisors in initial planning for the SME fund development

and will likely be key users of some of the financial programs that are being set up the project.

It is in their case, along with distributors, that the theory of collaborative networks is the easiest

to implement.

Learning. The activity undertaken so far showed that the level of knowledge about agricultural

product standards in the F&V sector is very low. Although training for supply chain consoli-

dation might appear as a simple effort, it is these activities that are frequently most attended

Table 3: “Sustainable Agriculture Production of the 21st Century – Challenges of Global Market” Training topics and evaluation score

# Topic Avg. score

1 Combating diseases and pests and pesticide use 4.67

2 Modern raspberry production technology 4.64

3 Environmental impact of the agriculture 4.57

4 Food safety and its importance today 4.54

5 Organic food production 4.48

6 HACCP system 4.45

7 The attitude towards workers in agriculture 4.44

8 Global G.A.P. standard 4.43

9 Incentives of the Ministry of Agriculture and IPARD prog. 4.35

All Topics average score 4.51

Trainers’ average score 4.70



and impactful, showing that small producers and suppliers need simple and constant guidance,

and secured markets.

Adaptation. The goals of the APS will be defined and modified based on the results of the

piloted initiatives. The primary strategic area for supporting supply chains was extended. The

Project, through the APS, will also steer companies to cooperate with other institutions (scien-

tific, educational, research etc.) to create synergies and improve internal capacities.

Outputs. In total, 27 companies and 333 individual producers attended the six trainings on

sustainable agricultural practices.

Outcome. SMEs and 3 agricultural producers educated on today’s market standards and sus-

tainable agricultural practices.

Evaluation. An evaluation of the trainings indicated that suppliers were very satisfied with

the information presented at the seminars - out of 333 participants, 252 positively evaluated

the training, giving an average mark of 4.5 for the training material, and 4.7 to the trainers (on

a 1-5 scale). According to the evaluation, participants cited information related to production

issues and standards as the most important. Participants based in geographic areas traditionally

known for F&V production were keen to learn more about production standards and improve-

ments, while in geographic areas not known for F&V production, the information provided at

the trainings was mostly new to participants.

Next steps. In Year 2, CSS expects to continue to receive more applications in response to the

APS. The Project’s GSC will continue to evaluate project concepts on a rolling basis through-

out Y2.

Link to Logical Framework. CSS Activity code I2-8 Lead firms engaged to integrate other

firms into export value chains. This activity directly supports Sub-Purpose 2 of the project:

Business support systems strengthened (Sub IR 2.2.2.: Economic and business development

services enhanced).

2.3 Technology exposure day

In Year 1, the Project held discussions with the Ministry of Sci-

ence and Technological Development and the Association of

Food Technologists to potentially organize a Serbia Technology

Day focused on international markets and product trends, and new

technologies driving these trends, as well as successful models in

hub-and-spoke and cooperative development efforts. Interna-

tional partners shortlisted to support this effort are Inova and Mintel, both recognized for ex-

cellence in this field. As part of the event, the Project plans to invite domestic and international

producers and distributors of agricultural equipment.

CSS continues to evaluate potential international partners to work with to organize a technol-

ogy day. In year 2, CSS plans to support organization of the technology exposure day through

the APS 2018.

Next steps. The Project will continue to plan for the organization of a technology conference,

and a follow-up technology visit for short-listed firms to one of the markets (US or an EU

country), where food processing technology is advanced and sets new standards for the indus-

try.

Link to Logical Framework. CSS Activity I1-6 New technology trainings/info sessions or-

ganized, followed by I1-8 International technology missions organized.

IMMEDIATE RESULTS

• “Technology exposure day” idea presented to local partners

• Potential international partners shortlisted



2.4 Workforce development / internship programs for young graduates

In Year 1, the Project worked on developing a sustainable intern-

ship program to pave the way for young graduates to get practical,

hands-on entrepreneurial training, and to consider entrepreneur-

ships as a viable career option.

To this end, in December 2017, the Project awarded a grant to the

Youth Economic Forum (YEF), a youth-led organization, to cre-

ate a research-based, inclusive and sustainable model of effective

business cooperation. Throughout Y1, YEF worked to promote

youth entrepreneurship in the food processing industry, through

development of comprehensive and inclusive internship model

for young faculty graduates. As part of the research, YEF held

meetings with key stakeholders in the agricultural sector, including private sector businesses,

technical faculties, agricultural faculties, PKS, research organizations, international donor or-

ganizations and local municipalities. By the end of Y1, YEF developed a draft methodology

for the internship model that will be further developed and implemented in Y2.

From December 13-15, at the Zira Hotel in Belgrade, YEF, with support from the Project,

organized a Youth Entrepreneurship Fair with the goal of promoting youth entrepreneurship

and establishing closer ties between recent graduates and the business community. At the event,

keynote speakers included: Laura Pavlovic, Director of USAID’s Office of Democratic and

Economic Growth; Nenad Popovic, Minister without portfolio responsible for innovation and

technological development; Snezana Klasnja, Assistant Minister for Youth and Sports; Daniel

Berg, EBRD Director for Serbia; Zoran Martinovic, Director of National Employment Service;

and Marko Cadez, President of Serbian Chamber of Commerce and Industry. The fair provided

an opportunity for young entrepreneurs to showcase their products and exchange experiences.

At the event, over 60 university students competed in a case study challenge titled “Creating a

brand: Fruits from Serbia - How to present it internationally?”. The event brought together over

300 students across Serbia, public and private sector representatives, entrepreneurs, food start-

ups, hubs, and media. The three-day event was visited by over 1450 people and 63 start-up

companies exhibited at the fair.

Collaboration. Stakeholders were engaged through various communication channels. In Year

1, meetings were held with Happy Honey, Moje Gnezdo, PKS and University of Belgrade’s

Faculty of Agriculture, MK group, Dr. Oetker, Philip Morris and Vojvodina’s organic cluster

companies (scheduled). Additionally, google forms were sent to over 60 companies, and

through social media channels of Impact Hub, Nova Iskra, BIPs, Desing Taste Center, and

Vojvodina’s organic cluster).

Learning. The Youth Entrepreneurship Fair demonstrated YEF’s capacity to effectively or-

ganize high-level events. YEF’s comparative research on existing internship models in Serbia

and Europe offers a broad range of possibilities for implementing a new sustainable internship

model in Serbia.

Adaptation. Based on YEF’s demonstrated event management skills, the Project expects that

the internship model will be executed and implemented accordingly. YEF, however, still needs

support and guidance with drafting the research and analysis of the methodology for the intern-

ship model. CSS will continue to provide strategic guidance in developing the final version of

research paper.

Outputs. Youth Entrepreneurial Fair gathered 63 exhibitors, 24 speakers, 1450 visitors and 46

university students from four faculties participated in Case Study Challenge, inspiring students

IMMEDIATE RESULTS

• Youth Entrepreneurship Fair held with 63 exhibitors and 1450 visitors

• 60 university students participated in the “Creating a brand: Fruits from Serbia” Case Study Challenge

• Methodology and draft internship model developed.



to consider food entrepreneurship as a viable career opportunity. YEF developed a methodol-

ogy for the internship model and proposed a draft internship model.

Outcome. YEF managed to raise awareness among young people about the opportunities of

entrepreneurial ventures and food startups in general.

Evaluation. The startup and entrepreneurship fair had a good impact by connecting diverse

stakeholders needed to create a sustainable internship model in Serbia. In Y2, the Project ex-

pects YEF’s efforts will increase the number of young people with internship/employ-

ment/business opportunities.

Next steps. Selection of participants and training plan to be finalized; Case Study Challenge

and Pilot training program to be delivered; Pilot internship program test phase to be finalized;

and Final model on internship with recommendations to be delivered.

Link to Logical Framework. Activity code I2-11 Internship-entrepreneurship program estab-

lished for young graduates. This activity directly supports Sub-Purpose 2 of the project: Busi-

ness support systems strengthened (Sub IR 2.2.2.: Economic and business development ser-

vices enhanced).

Youth Entrepreneurship Fair (Dec 13-15, 2017) promoted youth entrepreneurship and establish-ment of closer ties between recent graduates and private sector businesses. 60 university students

participated in “Creating a brand: Fruits from Serbia” Case Study Challenge



3. Sub-Purpose 3: Resources for Enterprise Growth Mobilized

USAID Serbia Sub IR 2.2.3: Resources for SME Growth Mobilized

Access to resources is the final critical service element needed to improve performance of the

SMEs, as they need to be fully educated about all available sources of finance, including State

funds, EU funds, commercial banking options, and other sources of finance. This includes the

upcoming IPARD program which is viewed by most SMEs as a critical chance for improving

capacity of Serbia’s industry.

During Year 1, WM Equity Partners has been contracted to produce a training program for

SMEs on all topics mentioned above. The financial training program will also be used to

shortlist SMEs to create a pipeline of companies to offer to potential investors and establish an

SME growth fund – the first one of its kind in the local market for this industry.

3.1 Financial trainings for SMEs organized to stimulate demand for finance

Serbian enterprises with growth plans to scale-up existing opera-

tions and/or plans to invest in innovation and new technologies

require financial resources. Lack of access to finance has been

frequently cited by Serbian SMEs as an obstacle hampering their

growth and expansion. SMEs also suffer from a lack of infor-

mation concerning availability of financial products and instru-

ments. Financial market opportunities for Serbian SMEs come

from government institutions, European institutions (grant

schemes and subsidized lines, particularly IPARD), commercial

banking options and, potentially, other alternative sources of

funding (i.e. equity markets). Full utilization of these financing options, however, is only taken

advantage of by a few number of domestic companies operating on the market. As such, a

greater number of food processing companies need to strengthen their capacities for accessing

various sources of financing.

In an effort to stimulate demand for growth finance and make finance more accessible and

borrower-friendly, the Project published on November 29, 2017, an RFP to select a subcon-

tractor from the financial sector to organize and develop support programs enabling selected

Serbian SMEs to better understand all financing options available on the market and to improve

their capacity to utilize the most suitable financial product

for their particular company. Following a competitive pro-

curement process, the Grant Selection Committee awarded a

subcontract to WM Equity Partners (WMEP). In consulta-

tion with WMEP staff, and with guidance provided by

USAID, the Project agreed on the terms and activities to be

undertaken by WMEP.

During January and February, as part of the contract agree-

ment, WMEP conducted a comprehensive desk and field-

based research of the Serbian banking/financial sector and

other potential sources of long-term funding opportunities for SMEs operating in the F&V

industry. The research provided an overview of the financial terms and conditions of the fol-

lowing funding sources: 13 commercial banks, IFIs funding sources, funding available from

the Republic of Serbia Government and EU institutions, particularly IPARD, and other donor

programs, as well as equity-based financing options (See Annex F). It examined current de-

IMMEDIATE RESULTS

• 4 financial awareness trainings held in 4 cities

• To date, 88 participants from 71 organizations attended the trainings

• Comprehensive research of Serbia’s banking / financial sector and informative brochure developed



mand for external financing of targeted companies, obstacles faced by SMEs obtaining finan-

cial sources and provided recommendations on how to overcome existing supply and demand

gaps. Based on the research, WMEP developed an informational brochure that breaks-down all

available finance sources in an easy-to-understand format, with a clear overview of terms and

conditions, and general information about financial management and corporate governance

practices. The research also helped guide the development of a training curricula and develop

a methodological approach to select 100-plus SMEs to participate in financial awareness train-

ings across the country. It was agreed that the format of the trainings would include a panel

discussion with expert representatives from financial institutions, donor organizations and

large-scale private sector companies to provide SMEs with a broad overview of practical in-

formation related to availability of finance sources, and the role of large firms in agricultural

value chains and how smaller SMEs can play their part in the value chain.

During March, in cooperation with the

Serbian Chamber of Commerce and In-

dustry (PKS) and Regional Chambers of

Commerce, WMEP organized financial

workshops in the following four cities:

Novi Sad (March 15), Leskovac (March

21), Uzice (March 23) and Zajecar

(March 26). At the Regional Chamber of

Commerce in Novi Sad, WMEP orga-

nized the first in a series of five planned

financial trainings for SMEs to stimulate

demand for finance titled “Access to

more favorable financing and grants for

SMEs in Serbia”. Panelists from financial

institutions explained the various finan-

cial options available to SMEs, including

EU funds, state funds, and commercial

bank loans, while panelists from the pri-

vate sector discussed the role of lead

firms in engaging other companies in ex-

port value chains and the importance of product standardization. All participants received an

informative brochure that explains the differences between various finance options available

to SMEs. Information related to the upcoming phases of the IPARD program and potential

alternative sources of finance generated substantial interest amongst attendees. All information

related to these trainings was promoted over the Project’s website and social media channels.

In total, these four training events were attended by 108 participants from a total of 79 organi-

zations (73 SMEs, 3 regional chambers, and one bank, a faculty and a local government de-

partment). The fifth and final training of the first cycle is scheduled in Belgrade on April 12.

Due to a high level of interest in these trainings, the Project will organize a second cycle of two

additional training events in Kraljevo (April 18) and Valjevo (April 24).

In parallel to implementing the training cycle for SMEs, WMEP started to evaluate potential

investors and equity sources of finance, with the end goal of establishing a domestic private

equity fund. Next quarter, these financial awareness trainings will serve to create a shortlist of

approximately 30 SMEs with high growth potential that will be invited to attend a three-day

in-depth financial training in May and June 2018. Training sessions will focus on improving

financial management and corporate governance practices, equity valuation knowledge and



other issues related to increasing capacity of targeted SMEs to obtain external financing. Ad-

ditionally, in-depth financial trainings will help participants produce a concrete business plan

that will enable SMEs to either apply for commercial loans and/or to pitch potential investors

to take an equity stake in the company. The goal is to position these selected businesses as

prime potential candidates for equity financing through a future planned SME growth fund.

Collaboration. Participants for the one-day training were selected based on the following cri-

teria: production and/or processing of fruit and vegetables (F&V), company size (micro, small

and medium), geographical proximity near Regional Chambers of Commerce, and reputational

risk. WMEP used two public databases to filter potential candidates based on the above criteria,

which generated a list of 447 Serbian companies

operating in the F&V sector. The list of companies

was narrowed down to five groups of twenty com-

panies, with additional companies proposed by

our strategic partner (PKS) and CSS staff. Com-

pany participation was confirmed by sending a

registration list requiring details of company

name, number of attendees and their position in

the company. A location for the training was re-

served based on the number of expected partici-

pants.

Learning. Feedback from the one-day workshops

was received through a questionnaire that was

filled out by participants at the end of each work-

shops. The questionnaire asked SMEs to express

their interest to take part in an advanced, three-day

financial training, with a suggested list of training

topics, which were ranked by participants accord-

ing to level of interest. Participants also ranked the

usefulness of training topics and quality of panel-

ists and presenters.

WMEP also developed an internal checklist to

evaluate SMEs at the event. The evaluation pro-

cess took place following the interactive group

discussion. Evaluation criteria was used to gather

qualitative information from SMEs, including

general awareness of funding sources, present

business model and growth prospects, business

planning methodologies, general understanding of

modern financial management principals and cor-

porate governance policies, as well as openness

towards business improvement interventions.

Lessons learned will be known following the conclusion of the first cycle of financial trainings

at the end of June 2018.

Adaptation. Following the financial awareness trainings, it is expected that SMEs in Serbia

will be more informed and knowledgeable about all sources of finance available on the market.

The companies selected to participate in the three-day, in-depth trainings will develop a full

business plan that can be used to apply for IPARD and/or commercial loans for further business

development and growth.



Outputs. The main goal of each training session will be to prepare participants to access the

most suitable funding source or to combine different sources of financing to increase sales and

exports and expand business operations.

The output will include concrete documents (detailed business plan and financial statements)

that SMEs can use to obtain additional financing to grow their businesses. The training sessions

will provide SMEs with in-depth financial knowledge and available funding sources (grants,

debt and equity) from partner financial institutions that will participate in the training process

and continue to support their businesses after the Project ends.

Outcome. The outcome of this activity will include concrete recommendations for establishing

the first domestic private equity fund targeting high-potential companies that underwent the

training. In order to successfully raise capital for the private equity fund, a pipeline of potential

candidate companies will be created. Information about each company, including a short over-

view of company activities, business plan, investment needs, current ownership structure and

rough valuation, will be provided to potential investors. WMEP will define the fund profile,

investment strategy, timeframes and available exit options. To create a list of potential inves-

tors for the fund, WMEP will contact all relevant domestic and regional investors, financial

institutions and IFIs to gauge potential interest to invest in the fund. WMEP also will develop

an investment roadmap that outlines the steps needed to establish the private equity fund.

Next steps. If the first round of financial awareness trainings generates sufficient interest from

firms to continue the training, the Project may consider organizing a new round of similar

trainings in other cities.

Link to Logical Framework. CSS Intervention I3-1 Financial trainings for SMEs organized

to stimulate demand for finance. This activity directly supports Sub-Purpose 3 of the project:

Resources for Enterprises Growth Mobilized (Sub IR 2.2.3.: Resources for SME Growth Mo-

bilized).

3.2 Credit guarantee line with MOA/banks/USAID

In emerging markets, seven out of ten small businesses cannot access the loans they need to

grow. USAID’s Development Credit Authority (DCA) uses risk-sharing agreements to mobi-

lize local private capital to fill this financing gap. This is especially important in light of the

recent launch of IPARD financing in Serbia. According to research, 90% of SMEs from the

F&V sector in Serbia are interested in taking advantage of IPARD funds1, however, a large

number of respondents pointed out the problem of offering adequate collateral to banks, as

applicants need to self-finance part of the IPARD application.

Throughout Year 1, the Project facilitated meetings between USAID’s Development Credit

Authority (DCA), the Ministry of Agriculture (MoA), commercial banks and SMEs operating

in the food processing industry. DCA representatives visited Serbia to examine possibilities for

introducing a guarantee scheme as a support mechanism for development of small-and me-

dium-sized companies operating in the F&V sector. The DCA partial credit guarantee, which

is backed by the full faith and credit of the U.S. Treasury, is designed to reduce risks and

generate additional lending to underserved markets and sectors by expanding availability of

new, innovative financial products for agribusinesses.

In coordination with the USAID Mission, the Project organized several meetings between DCA

representatives and the MoA to discuss a potential risk-sharing agreement and loan guarantee

to increase access to finance and promote growth in the food processing industry. Throughout

1 WMEP report (Annex F)



the negotiations, it was tentatively agreed that for each million dollars pledged by the MoA in

support of expanding financial institutions’ lending capacity to the agribusiness sector,

USAID’s DCA would contribute a factor of forty times, thereby creating a $40 million credit

line guarantee for pre-selected commercial banks. Additionally, throughout the negotiation

process, the initial proposal by the DCA (Multi-bank loan portfolio guarantee) was abandoned

and replaced by the DCA MSME multi-bank DCA with a first-loss account (“first loss facil-

ity”). By the end of Y1, DCA and the MoA also commenced negotiations over the terms of the

MoU which represents the first step in the execution of this arrangement. It is expected that the

MoU will be approved by the Government of Serbia in early April.

In mid-December, DCA representatives visited Serbia to meet with commercial banks to dis-

cuss participation in the DCA’s credit guarantee program and to conduct an initial bank screen-

ing process. The Project organized meetings between DCA representatives and Senior Man-

agement Teams of the following financial institutions: Halk Bank, Erste Bank, Jubmes Bank,

Addiko Bank, Opportunity and UniCredit bank. These meetings helped DCA representatives

learn about the main problems and risks faced by banks in terms of lending to agribusinesses,

get a better understanding of the banks geographical reach, including the number of bank

branches located in underdeveloped regions, and discuss in-person banks’ financial statements,

balance sheets and portfolios (percentage of non-performing loans). Later in February, to

broaden the pool of potential banks, the Project coordinated conference calls between DCA

representatives and several other banks, including Banca Intesa, Eurobank, OTP bank. Follow-

ing its initial bank screening review, DCA decided to move forward with the following banks

– Banca Intesa, Eurobank, Unicredit and Erste Bank.

Next quarter, in April, DCA representatives will revisit Serbia to meet with banks to conduct a

pre-due diligence process that is needed prior to preparing an initial term sheet for banks. The

term sheet will cover specifics, such as: maximum cumulative disbursement, associated fees

and costs, time frames, and contingencies, etc. By end of June, it is expected that the DCA will

complete its due diligence process and finalize a term sheet for banks. Then in July and August,

to finalize the legal agreement, DCA representatives will meet with banks to explain the term

sheet and get confirmation from banks that they agree in principal to all the terms and condi-

tions. By end of August, DCA and banks are expected to sign the final legal agreement that

will activate the DCA guarantee scheme.

Collaboration. CSS actively facilitated and coordinated communication between MOA,

USAID Serbia and DCA representatives by organizing several meetings and conference calls

between key stakeholders. CSS was involved in the preparation of all necessary documents,

including the visual aids and translation of the working documents to facilitate the negotiation

process.

Learning. DCA initially collected and reviewed information from the official website of the

National Bank of Serbia (NBS) and banks’ websites. Afterwards, the Project organized one-

to-one meetings between DCA representatives and banks and/or conference calls where the

rest of information was collected. Additionally, DCA sent a questionnaire to banks to collect

financial information based on external auditor reports examining banks’ financial statements

over the past three years.

The direct communication approach between DCA and banks should have maybe been con-

ducted differently, as the MoA asked the Project/DCA to create a public call open to all Serbian

banks interested to participate in the risk-sharing agreement. This represents one of the takea-

ways from this process since the MoA and the NBS asked for more transparency throughout

the entire selection process. Additionally, given the different goals, corporate cultures and legal



frameworks of the key stakeholders (MoA and USAID), the key lesson learned is that all con-

straints regarding scope, schedule and cost should have been documented and communicated

in writing from the Day One.

Adaption. As the MoA will directly participate in the credit guarantee scheme with approxi-

mately 1 million Euros, the portion of the DCA’s contribution will be changed from an initially

planned multiple of seventeen times the amount pledged by the MoA to a multiple of forty,

which will change the structure of deal between the MoA and the DCA.

Output. The expected output is a credit guarantee scheme in the amount of 40 million Euros,

with a coverage ratio of 60% over a 12-year period, which will be made available to 3-4 Serbian

banks.

Outcome. Expected outcome is the establishment of a new credit guarantee scheme, available

in dollars and dinars, for selected Serbian banks. The risk-sharing plan will benefit banks by

covering their risk exposure up to 60% of commercial loans made to agribusinesses. This ar-

rangement will also benefit Serbian SMEs operating the F&V sector by enabling them to access

new sources of finance, such as bank loans and IPARD funds. Additionally, the credit guaran-

tee scheme will contribute to rural development in underserved areas in Serbia.

Evaluation. The DCA guarantee scheme is expected to become operational in September

2018. To date, banks pre-approved by the DCA have expressed a soft commitment for this

facility as it represents a good financial vehicle to finance projects through the IPARD program.

Next steps. The Project will develop IPARD-related training program for pre-approved banks

in order to increase utilization of the guarantee scheme. Additionally, the Project will continue

to coordinate negotiations between USAID DCA and MoA on the commitment by the MoA in

terms of necessary funds, the final agreement and the communication/negotiations with the

commercial banks regarding their involvement in the project.

Link to Logical Framework. CSS Intervention I3-4 Support as needed efforts by USAID

Mission establish a credit guarantee line with MOA/banks/USAID. This activity directly sup-

ports Sub-Purpose 3 of the project: Resources for Enterprises Growth Mobilized (Sub IR 2.2.3.:

Resources for SME Growth Mobilized).

4. Other Project Events

Stakeholders networking event (July 2017)

On July 21, 2017, CSS organized a networking event with USAID representatives and project

stakeholders from government agencies, financial institutions, food industry companies, busi-

ness associations, and international donor organizations. The event gatherer stakeholders in-

troduced during the start-up phase of the project and invited them to actively participate and

contribute through joint efforts in strengthening competitiveness of Serbia’s food processing

industry. This was the first in the series of networking gatherings for partner stakeholders to

share information and exchange experience, integrate CSS’ efforts to those of the Government

of Serbia and further coordinate activities with other partner institutions. These types of events

will help avoid duplication and scale-up the Project’s interventions to achieve systemic impact.



Road show events / regional panel discussions (November 2017)

In Year 1, CSS, in cooperation with

the Serbian Chamber of Commerce

(PKS), organized two promotional

events and panel discussions with

fruit and vegetables processing

companies in Nis on November 6,

and in Uzice on November 8. The

events served to present the Project

and discuss trends, challenges and

opportunities for improvement of

business, increase sales and exports

of Serbia’s F&V sector, and solicit

inputs from stakeholders to further

refine project interventions. Partic-

ipants stressed the need for strengthening private-public dialogue, improving networking for

producers, jointly promoting Serbia’s F&V products under one umbrella brand, and helping

SMEs access diverse sources of finance. The events gathered over 70 stakeholders from the

F&V processing industry, regional development agencies, regional Chambers of Commerce,

food cooperatives, business associations, and local and regional media representatives. Both

events received good coverage in national and local media outlets and generated over 20 broad-

casts and articles about the Project.

The Global Innovation Index 2017 Report Conference (December 2017)

The Project supported the organization of the “Global Innovation Index (GII) 2017 Report”

Conference at the ICT hub Playground in Belgrade on December 18. The main theme of the

conference “Innovation in Agriculture and Food Systems” helped initiate a public debate

among key stakeholders about viable options to increase Serbia’s competitiveness and innova-

tion potential in the field of agriculture and food production. At the event, Drasko Draskovic,

Innovation Ecosystem Specialist and Marija Dordevic, PhD student at INSEAD, presented the

GII research methodology and provided an overview of Serbia’s ranking according to the GII

2017 report. Keynote speeches were followed by a panel discussion on the status of innovation

in Serbia’s economy and business environment and how to improve innovation and competi-

tiveness of the food processing industry. Panelists included Drasko Draskovic, Innovation Eco-

system Specialist; Jovana Tomic, Head of R&D Desing Company; Goran Pitic, Professor at

the FEFA faculty; and Marija Cvetkovic, Senior Vice President at Delta Holding. All partici-

pants at the conference received the Building Serbian Innovation Capacity publication related

to the research results and recommendations. The event received extensive coverage in national

and local level media outlets, generating over 40 announcements and release about the event.

Regional panel discussion in Nis, Nov. 6, 2017.



OUTREACH

Media monitoring

In Year 1, media coverage about the Project and outreach activities of CSS grant-supported

organizations generated a total of 103 articles in national, regional and local media outlets. The

largest number of recorded articles

were published on online media

portals (69), followed by TV (12),

print media (21) and radio (1). The

largest number of registered arti-

cles was recorded in March (43 ar-

ticle releases), which coincided

with a higher level of project activ-

ities launched during this period.

Out of the103 registered articles, 72 were positive and 31 were neutral. There were no negative

articles.

Online presence

The Project developed a website in accordance

with the approved Branding and Marking Plan

and received approval from the COR for the de-

sign and content of the website in November

2017. Soon after, CSS proceeded with obtaining

clearance from USAID Chief Information Secu-

rity Officer (CISO), for its launch and mainte-

nance. Due to changes to USAID’s approval pro-

cedure, the Project’s website was launched in

March 2018 following an extensive approval pro-

cess.

During Year 1, the Project started utilizing new media technologies and social networking sites

to inform project partners and beneficiaries about the work of the project. To raise awareness

about the Project, CSS organized social media activities with project partners. The Project

launched a promotional social media campaign in November over its newly opened profiles on

Facebook, Twitter and LinkedIn. In accordance to the Project’s Branding and Marketing Plan,

CSS’ Facebook profile, Twitter account and LinkedIn page served as an effective communica-

tion tool for the Project to enhance overall visibility and outreach efforts.



Facebook page

Launched on 27th November 2017.

Total number of posts: 54

Total number of impressions: 89,429,747

Total number of reach: 27,481,930

Total number of viral impressions: 5,013,277

Total page engaged users: 1,829,942

Following launch, the Project’s

Facebook page continued to be

routinely updated with important

CSS-related information and ac-

tivities, video content, and pho-

tos, as well as stories about the

F&V sector. The Facebook page

serves as an effective tool for

CSS to inform the public about

CSS-supported grantees and other project-related issues. Each new post and interaction with

its core audience helped build a base of loyal Facebook fans. The Project’s trainings events and

seminars organized with partner organizations contributed to generating more and more viral

impressions.

Reach - insight into unique users

Impressions - number of times a post from page is displayed, whether the post is clicked or not

Engagement - actions on page such as post clicks, likes, shares and comments

Reach - insight into unique users

Impressions - number of times a post from page is displayed, whether the post is clicked or not

Engagement - actions on page such as post clicks, likes, shares and comments



LinkedIn page

Launched on 29th of November 2017


Number of followers: 637

Total number of impressions: 234,733

Total numbers of clicks: 4.334

Total number of social actions: 744

The Project’s LinkedIn page managed to

reach targeted audiences and groups, pri-

marily by posting updates to drive engagement and building its business presence in the com-

munity. Following launch, Interactions over the LinkedIn page continued to gradually increase

throughout Year 1 (see chart above).

Twitter page

Launched on 15th of December 2017


Number of page followers: 35

Total number of impressions: 21,517

Total number of engagement: 340

Total numbers of post retweet: 17

Total numbers of post likes: 63

Total numbers of clicks: 65

The Project’s Communications Team continued to grow the community of followers on Twitter

by communicating with them on a regular basis. Since inception, the number of CSS Twitter

followers continued to grow throughout Year 1. The Communications Team routinely

“tweeted” about topics related to CSS activities, helping to grow its network of influence on

Twitter.



GRANTS AND SUBCONTRACTS

Grants and subcontracts are an important tool for building key partnerships and networks that

were utilized by CSS in early stages of the project. Eights grants in the amount of 270,708

USD and five subcontracts in the amount of 158,437 USD were signed. The status of grants

and subcontracts is attached as Annex C.

Award of grants

Unsolicited proposals:

CSS received three unsolicited proposals and awarded grant agreements upon USAID approval

with the following organizations:

o ICT Hub for “Improving Serbia`s economy competitiveness and innovation capacity

through multi-stakeholder dialogue and participation” project, No. USAID CSS/SS-201-01.

ICT organized the “Global Innovation Index 2017 Report” Conference, held on December

18, in Belgrade, aimed at raising public awareness of innovation potentials and competitive-

ness levels in Serbian economy and business environment (as shown in GII 2017 Serbian

economy’s profile), and facilitating a public debate among key stakeholders on viable solu-

tions to increase Serbian’s economy competitiveness and innovation potential in agriculture

and food production. The total value of the contract is $7,000 to be implemented through

the end of February 2018.

o Youth Business Forum (YBF) for “First working experience for young graduates in food

industry” project, No. USAID CSS/SS-2017-02. The purpose of the grant was to promote

youth entrepreneurship in the food production and processing sector in Serbia, through de-

velopment of a comprehensive and inclusive internship model for young faculty graduates

and the organization of a Startup and Entrepreneurship Fair, held on December 13-15 in

Belgrade. The total value of the contract is $18,159 to be implemented over a seven-month

period.

o National Association for Organic Agriculture “Serbia Organica” to supports 14 Serbian

organic producers to exhibit their products under a joint brand at world’s leading organic

Fair - Biofach 2018 in Germany from February 14-17, No. USAID CSS/SS-2018-01. This

effort was jointly co-organized by the German Corporation for International Cooperation

(GIZ) and the Serbian Chamber of Commerce and Industry (PKS). The purpose of the grant

was to strengthen Serbia Organica’s capacities as a national association of organic producers

and facilitate business contacts of participating companies with foreign buyers/distributors

and allow companies to gain better insight into foreign market demand and learn about the

latest global production trends. The participation of the companies at the Fair was supported

through grant in the amount of 14,433 USD.

Sole-source solicitation grants

CSS awarded a sole source grant to Chamber of Commerce and Industry of Serbia (PKS) for

the implementation of “Increasing Export through Creating a Value Chains in Fruit and Vege-

table Processing” project, No. USAID CSS/SSS-2017-01. The purpose of the grant is to boost

PKS business services capacities i.e. conduct industry analysis (diagnostics), identify gaps and

needs of the SMEs, support the development of export-oriented value chains, and boost growth

of SME to integrate into export-oriented value chain. The implementation of the grant activities

is in line with the agreement on cooperation between the Project and PKS aimed at conducting



joint activities focused on improving economic development in the Republic of Serbia. The

total amount of the grant is 97,300 USD to be implemented throughout 2018.

Request for Proposals

On November 22, the Project published a Request for Applications (RFA)-2017-01 for estab-

lishing support hubs for food processors. The purpose of this solicitation was to support the

establishment of a hub-type business model for SMEs and start-ups operating in the food pro-

cessing sector (niche and premium products, particularly from fruits and vegetables) in order

to access domestic and international retail buyers and/or HoReCa. Seven organization have

applied through a competitive procedure, and following the evaluation process and USIAD

approval, four organizations have been awarded grants in the total value of 133,729 USD to be

allocated over a one-year period: Nova Iskra Dizajn Inkubator, Impact Hub Belgrade, Export

Import Desing Belgrade and Business Innovation Programs. By supporting companies to de-

velop new, innovative product designs and upgrade existing products, and access new markets,

it is expected that the Hubs will created a self-sustaining networking effect within the commu-

nity that will stimulate food industry entrepreneurship in general.

Annual Program Statement

Following the approval of Work Plan for year 2, USAID CSS published the Annual Program

Statement (APS) 2018, on March 14, to establish integrated and collaborative models for sup-

porting Serbia’s processing industry to increase export of fruit and vegetable products. The

purpose of the APS is to solicit expressions of interest (EOIs) and applications from eligible

organizations that present creative technical approaches and methodologies for supporting the

Project’s key long-term goals. The Project will support initiatives in the following four priority

areas: 1) F&V processing industry consolidation; 2) Best practices at the firm level for consol-

idating supply chains; 3) Trade promotion – Improving trade and export service for industry

firms; and, 4) Services Innovation – New products, practices or partnership development. The

Project intends to award the most successful bidders with contracts worth between 10,000 and

100,000 USD. The Project will evaluate applications submitted in response to this APS on a

rolling basis through the deadline for submission of applications on December 27, 2018.

To date, the APS has already generated certain interest from organizations to apply for grants

CSS received three project ideas and deliberated and approved two Expressions of Interest

(EoI) until 30 March 2018. The Grants Selection Committee (GSC) positively evaluated EoIs

submitted by the Association for Promotion of Serbian Food for the organization of the “Bel-

grade Food Show”, aimed at providing Serbian food producers with new business opportunities

with international buyers, thereby increasing the visibility of Serbian food producers and their

access to international markets; Van Drunen Farms to develop, market and sell a high-value

shelf-ready product (freeze-dried fruits and vegetables) to boost growth, train raw material sup-

pliers on food safety practices, and integrate a greater number of smaller food producers into

consolidated F&V value chains: and Serbian Chamber of Commerce and Industry (PKS) to

co-finance participation of 12 fruit and vegetables (F&V) companies at the Private Label Man-

ufacturers Association (PMLA) 2018 in Amsterdam, scheduled from May 29 – 30. All three

EoIs were approved and applicants were invited to submit full proposals for further review.

Grantees have been regularly fulfilling the contracted obligations, and therefore nine payments

were initiated in the reporting period for accomplishment of milestones as per their grant agree-

ments. Total disbursed grant funds until March 31 amounts to 47,233.06 USD.



Award of subcontracts

The Project issued three Requests for Proposals: (RFP)-2017-02, (RFP)-2017-03, and (RFP)-

2017-04, to subcontract organizations for delivering different services to support CSS in

achieving its programmatic objectives.

(RFP)-2017-02 for Market analysis for top Serbian exported fruits and vegetables in targeted

markets was issued on October 6, 2017. In response to a competitive procurement procedure,

a subcontract was awarded to Autentika Global based in Valjevo. The subcontractor is respon-

sible for providing services related to export market analysis, drafting a marketing strategy for

top Serbian exported fruits and vegetables in targeted markets, providing recommendations for

establishing an MIS and training PKS staff on market research approaches and company-re-

lated training approaches. The value of the subcontract is $25,994 to be implemented until

April 30, 2018.

Market research undertaken by the Project’s subcontractors in Y1 showed that the main gaps

in competitiveness of fruit and vegetable processing include low integration with high value

markets, unconsolidated industry and non-standardized product quality. As such, the Project

designed the APS to address these issues with the end-goal to increase sale and exports of

processed fruit and vegetables.

In consultation with USAID, it was agreed that the Project will work with companies that can

support CSS’ strategic goals: Market competitiveness of fruit and vegetable value chains in-

creased; Business support systems coordination strengthened; and Resources for enterprise

growth mobilized.

(RFP)-2017-03 for Facilitation of Export of Serbian Niche Products in Targeted International

Markets was issued on November 17, 2017. The purpose of this RFP was to solicit proposals

to support the Project by providing export facilitation services for selected Serbian niche and

premium products to targeted international markets. Project evaluated three proposals received

in response to the RFP and awarded subcontracts to Blue Zeppelin and Agrobrand. These or-

ganizations are supporting CSS efforts in increasing the performance of Serbian enterprises in

exporting to selected international markets. The total amount for these subawards are $56,865

to be implemented until the end of 2018.

The purpose of the (RFP)-2017-04 for Financial Training to Serbian Small and Medium En-

terprises and Facilitating Access to Finance was to select a subcontractor from the financial

sector to develop SME support programs with financial institutions, through financial manage-

ment capacity building aimed at Serbian SMEs and public institutions, and facilitating better

access to finance for SMEs through assessment of establishing a domestic equity fund to sup-

port SME development involved in the Project’s targeted sub-sectors. The RFP was published

on November 29, 2017 and the Project received three proposals. The Project awarded a sub-

contract to WM Equity Partners in the amount of $48,469. In response to a high level of interest

in trainings organized for SMEs in four towns throughout Serbia, WMEP proposed to organize

an additional two trainings in Kraljevo and Valjevo on April 18 and 24, respectively. The orig-

inal subcontract was modified to reflect the additional costs associated with the two trainings,

thereby raising the total amount to $55,652 USD.

Total disbursed subcontract funds until March 31 amounts to $72,095.02 USD.

Documents

ANNUAL REPORT (APRIL 20, 2017 MARCH 31, 2018)