The Chamber of Commerce from the Serbian capital of Belgrade hit the show floor of Vitafoods for the first time this year, bringing under its wing supplement companies Esensa, Galenika and Max Medica.
Next year the Chamber plans to attend the show with ten or more companies.
Speaking with NutraIngredients at the Geneva industry event last week, senior adviser for trade and services at the Belgrade Chamber of Commerce, Vesna Vučićević, said the aim was to “assess new markets and exchange experiences with other companies in this field”.
A new law in the country will mean in six months all companies must be chamber members, something Max Medica told us was part of a “trade push to make things happen” by increasing networking and communication between Serbian companies and developing businesses in the country.
Serbia applied for full EU membership back in December 2009 and was finally confirmed as a candidate in March 2012 after it normalised relations with Kosovo.
Continued co-operation with the international war crimes tribunal in The Hague also remains a key condition in its accession bid and, with some progress made, Serbia may be set to join the EU around 2020.
So what would EU membership mean to a Serbian SME?
Max Medica said the development could go either way.
“From a business perspective it’s the sooner the better for some companies, or the later the better from other business perspectives. You never know,” said Max Medica CEO Miloš Obradović.
While membership might increase export opportunities from Serbian firms to the bloc, it could also open the flood gates for EU companies to enter Serbia and heat up competition in the region.
Nemanja Kranjc, marketing and sales chief for Max Medica, said: “It’s a two way street, because we are open to exports but we are also open to imports.”
Indeed Dutch firm CaliVita International already leads the Serbian market for vitamins and food supplements, according to a 2015 Euromonitor International report.
However Obradović added: “But generally, long term it can only benefit us. All the economic connections can only benefit us. We are prepared for that and we hope that opens up new markets for us.”
Logical first targets would be Eastern Europe as well as Italy given its strong botanical market and major supplement consumers France, Germany and the UK.
Yet Max Medica said it was currently “very difficult” for newer players to gain access to the EU market, with distribution deals for its 26 products easier to come by in the likes of Kazakhstan, Egypt or Iran, despite being closer to the EU and products being “99% ready” for the EU through aligned regulation as part of EU membership conditions.
“The main thing is competition. Here [in the EU] markets are obviously controlled by a few dealers and entry level is difficult. The bottom line is that it’s difficult to get into any [markets],” said Obradović. “Competition is big.”
Kranjc said local EU players had a tendency to protect their own markets.
What sells in Serbia?
While the Serbian supplement market was relatively small - worth $21m (€18.74m) in 2015, up from $18.5m (€16.51m) in 2010 - use was a burgeoning health trend, said Kranjc.
“There is a significant amount of doctors in Serbia who advise people to take supplements not drugs,” he said.
“So there is this perspective, even though we are small market because we are a small country.”
Max Medica's botanical food supplement purporting to help with relaxation is its best seller in volume, with most of its products sold through pharmacies.
The most significant health positioning for supplements in Serbia is women’s health, which accounted for 24.6% of total retail value in 2015, according to Euromonitor data.
“Women [in Serbia] are traditionally more prone to take care of their health and to purchase different supplements and that’s the main reason why women’s health supplements were the most popular in 2015,” the market research firm wrote in a report last year.
This was followed by general health (13.8%), beauty (8.2%), memory (8.1%), digestive (8%) and immune health (7.2%).