Food production and marketing in Croatia: current issues

Abstract

Since 1995 food production and tourism have been officially designated major strategic economic activities to ensure the economic development of the newly independent Republic of Croatia. Since then, food production in Croatia has faced some serious challenges with natural resources, human resources, and technology, the major input factors of food production. Some of these have are inherited from the planned economy of the past, and some of them have arisen as consequences of war and transition processes. Croatian food production nowadays is led by mostly small sized companies (85%), with major problems of inconsistent product quantities and quality and a small ratio of recognizably branded products. Most proitable food products in Croatia are produced by companies owned by foreign investors. The foreign trade balance is set for a long term negative, as trade is based on only a few products with low added value (sugar, tuna ish). Marketing of food products in Croatia can be analysed in terms of the 4P's. Among products, there is powerful competition from foreign substitute products that are often of lower quality and price. These products are welcomed by Croatian consumers in circum stances where almost 35% of household income is spent on food. Promotional activities are at a very low level, since marketing and, especially, promotion are often perceived as unnecessary costs by food producers. In the area of distribution, distributors have signiicantly greater bargaining power than do producers. Therefore, there is a need for both macroeconomic (structural) changes in areas of ownership, production, and market organization and microeconomic changes in food producers' marketing and innovation to create competitive advantage on both local and international market.