Baltic Sea Food business model now available


The Baltic Sea region (BSR) has increasing local food production and an increasing interest from customers for their products. Local food can be defined as “Food and beverages with a local identity, distinctive origin or special qualities related to production method, tradition or raw materials”. A local food network involves relationships between food producers, distributors, possible retailers, and customers in a place, where they work together to in- crease availability of local food and increase the value for the producer and ensure sustainability. Most countries and regions in the Baltic Sea area have their own specialties in local food products, which help highlighting their identity and uniqueness. Local food businesses offering small scale both traditional and innovative use of healthy, premium quality and often handcrafted local food products, can develop attractiveness for their own region and business through different customer groups, including locals and visitors. Additionally, it creates jobs and strengt- hens the effort for keeping local farms alive, rural areas active and attractive, and helps preventing depopulation in areas struggling to create jobs for their inhabitants.

Local food producers and farmers in BSR rural areas are mainly small family businesses, who prefer to organize the sales through face-to-face contact and by phone. They’re often not able to sell their products to big wholesale companies or supermarket chains because of limited production volumes and higher price comparing with large producers. Therefore, their access to catering, food processing and retail sector is complicated. The market area of local food producers is usually their own home region. In many regions they have established local food networks to cooperate for marketing and information exchange. The analysis of current situation in BSR countries shows that existing local food distribution models are mainly focused on Business to Consumers (B2C) relations and there is lack of economically competitive Business to Business (B2B) model. Local food networks in BSR region have highlighted the need for cost-efficient distribution solutions for delivering food products from farms to local restaurants, tourism farms, culinary event’s organizers, retail chains, special shops etc. The objective of collabo- ration project „Baltic Sea Food“ is to design a sustainable and transferable business model for B2B distribution applicable for local food nets established by local food producers and providers in BSR rural areas. The model enables to establish smooth short supply chains in local and regional level offering opportunities for growth and improved business performance to SME’s acting in local food sector in rural areas. The ten participating countries are Lithuania, Latvia, Estonia, Finland, Sweden, Denmark, Norway, Germany, Russia and Poland.

The target group of this document is mainly established local food networks and distributors already selling their products business-to-consumer (B2C). The goal is to create new sales channels for business-to-business (B2B) through small-scale local-food networks, by cooperation and increasing value of their products in a shorter supply chain. The target customer groups will be able to meet the demands and expectations from their customers of local food, looking for special and premium products from local or specific regions.

For mapping the current situation in local food distribution, the survey of B2B distribution solutions and coope- ration models in local food sector was conducted in 2018 involving 189 local food networks and distributors from Baltic Sea region area. The survey report prepared by Lahti University of Applied Sciences has been used in composing this document. Additionally, nine in-depth interviews were conducted by expert team with represen- tatives of local food networks and distributors in BSR area.