Lebanese Food Company Penetrates New Markets
Innovations in business practices have given a venerated food manufacturer—and the local farms and businesses that support it—a chance to grow and compete in international markets.
Mechaalany is a leading Lebanese processor of fresh fruits and vegetables. It is one of the country’s oldest food companies, with strong brand equity and a large market share of pickled products in local markets and in ethnic markets in the U.S. and Europe.
New product line
However, Mechaalany suffers from the seasonality of its product line, operating at 67 percent capacity during the short pickling and jam season and only 30 percent capacity the rest of the year.
This situation prompted the company’s management to create a new product line to capitalize on its brand equity and unused off-season capacity.
ACDI/VOCA supported this initiative through the USAID-funded Lebanon Business Linkages Initiative (LBLI), helping Mechaalany expand its product line, link with local fruit and vegetable growers, identify export opportunities and improve business practice.
Market analysis informs innovations
For the new line, ACDI/VOCA helped Mechaalany analyze the ready-to-eat market and develop appropriate products. It advised the company on making accurate sales projections and reducing the expense of product launch.
An LBLI market study identified the need for updated labeling and packaging to meet consumer preferences, and LBLI staff linked Mechaalany with Liban Pack, a local packaging company, to create the new design. And through linkages with two multinational firms that specialize in fresh-food packaging equipment, Mechaalany was able to buy used equipment at reduced cost.
Mechaalany also identified problems in its distribution to the local market, with help from an LBLI team. This led the company to outsource to an experienced distributor that has extensive channels outside Beirut, taking the food company’s products to entirely new Lebanese markets.
In addition to developing its new product line, Mechaalany continues to strengthen its core business. It decided to offer organic pickles, and ACDI/VOCA is helping it connect with local organic farmers, rather than rely on imported products. Through close relationships with these growers, Mechaalany is able to ensure organic practices and certification, while expanding the market for fresh produce suppliers.
One of those suppliers is Massoud Massoud, a certified organic farmer in Ramlieh-Alley with more than 40 dunums (approximately 10 acres) of farmland and over 10 years’ experience in organic farming. He will supply Mechaalany with nine varieties of organic fruits and vegetables including tomatoes, cucumbers, figs, strawberries, cauliflower and hot peppers. Mechaalany also is purchasing a variety of organic fruits and vegetables from BioCoop, Lebanon’s first for organic agricultural cooperative.
Working with Mechaalany will build the capacity of these suppliers to meet the requirements of the growing and increasingly lucrative organic market.
More opportunities for growth
LBLI is helping Mechaalany expand its penetration into the global specialty food market by consulting on product preparation and sales, and marketing strategies. In June 2010, ACDI/VOCA’s LBLI advisor represented the company at the Fancy Food Show in New York to identify potential distributors and retailers. The event led to an agreement between Mechaalany and the New York-based Sahadi Fine Foods to hold in-store promotional events for Mechaalany products to evaluate their market appeal.
Thanks to the ACDI/VOCA support, Mechaalany has reported an overall sales increase of 11 percent. The stronger links created between Mechaalany, farmers, distributors, packagers, and other members of Lebanon’s food value chain, are an example of how ACDI/VOCA is strengthening local capacity and boosting economic growth in Lebanon.
LBLI works with leading firms in agribusiness and tourism to promote sustainable economic growth and poverty reduction in rural Lebanon. LBLI supports the efforts of local industry groups to develop competitive strategies, identify solutions that address constraints to growth, establish linkages, and encourage increased productivity and coordination.
Pictured at top left: Mechaalany's specialty foods ready for taste-testing at Sahadi Fine Foods in New York.