Turkey has long been one of the largest food producers for Europe and the Mediterranean. Now, international agri-food companies are seeking to invest in developing the nation’s export potentials. The country has a strong position in global food trade as a result of large tracts of arable land, abundant water supplies, a 1996 Customs Union with the EU, and FTAs with another 27 countries.
With a favorable climate for the production of Mediterranean food products, Turkey is currently the world’s top producer of hazelnuts and apricots. It is the second-largest producer of cucumbers, pistachios, watermelons, figs, lentils, and chestnuts. Turkey’s hazelnut industry, which supplies 70% of the world’s production, has drawn domestic and international investors for its quality food products and unmatched market dominance.
The local hazelnut industry received a notable boost in 2014 when the Italian brand Ferrero, best known as the maker of the Nutella chocolate spread, acquired Turkish hazelnut company Oltan. Five years later, Ferrero continues to expand its Turkish hazelnut production. In 2019, the company plans to invest EUR2.19 million to support its six existing facilities in the country. Four of them are near the Black Sea coast, where most of the nation’s hazelnuts are harvested.
The investment seeks to boost Turkish hazelnut exports, which during the 2017-2018 season totaled 287,000 tons, earning producers more than USD1.78 billion. Turkish firm S.E.P. Gıda is one of several notable hazelnut producers, harvesting 5,500 tons annually, 80% of them for export.
Kivanç Çubukçu, general manager and board member of S.E.P. Gıda, said partnerships with international companies such as Kellogg’s, Ludwig Schokolade, Seagram’s, Pedigree Petfoods, Uncle Ben’s, and Benckiser have helped the company grow over the years. Çubukçu said the top importers of Turkish hazelnuts are Italy, Germany, France, and Austria. Meanwhile, processed or value-added food products, such as praline and croquant, have helped the company increase its profit margins.
“Our praline and croquant products are what chocolate makers need but often times are reluctant to produce themselves,” Çubukçu said in an interview with TBY. “This gives us a great opportunity to transfer all the knowledge that we have acquired throughout the years from our confectionery business.”
To foster continued growth in the industry, hazelnut producers like S.E.P. Gıda are investing in more efficient sorting technologies to remove shells, leaves, and rocks that come with the harvesting process. They are also investing in industrial-grade ovens to roast nuts before distribution. Yet as with many sectors in Turkey, hazelnut producers are keeping a close watch on currency fluctuations. They are implementing protective mechanisms to minimize trade loses.
“In 2019, we are positioning ourselves to limit the impact of the current economic volatility,” Çubukçu said. “We would not want to fall into the same issues we saw in 2018, when new buyers came in to take advantage of currency fluctuations.”
Overall, agri-food companies are also diversifying their markets and products to improve resilience through market swings. Apart from the EU, Turkish food exports are increasingly reaching new destinations, such as Russia, Eastern Europe, the Middle East, and the Balkans. The push into emerging markets, coupled with growing demand from domestic consumers, has helped Turkish food producers grow quickly over the last 10 years.
Moving forward, agri-food companies will continue to seek foreign investors to further expand existing agriculture staples such as citrus, olive oil, and fresh vegetables. Meanwhile, significant increases in the production of beef and chicken have placed Turkey among the top meat producers in Europe, with opportunities for growth in export markets.