BUSINESS HEROES. A story of an ex-marketing director producing organic grits near Kyiv.

Yurii Vinnichuk, Dmytro Kazantsev, journalists of  dated 14.07.2017. 


A taste of the Soviet-era juice motivated Andrii Olefirenko to set up a company for organic production. Andrii Olefirenko decided to deal with organic product processing once he tasted apple juice at one of organic fairs. It reminded him of the juice taste in the three-liter jars given to the children in the Soviet-era kindergartens. 



"Before that (2008-2011) I used to work as a marketing director in big companies. Those had nothing to do with food products, but dealt with trucks and tyres. I worked at LAZ (Lviv Bus Factory). Having worked for the big companies, I desired to have a business of mine. Organics came to my mind, when I tasted that organic juice. Today the organic trend is picking up the pace, for almost 90% of people want to have a natural product," – the businessman tells.


Before telling us about his company, Andrii Olefirenko explained what organic products are and how the organic certificate can be obtained.

Organics starts from the field. For example, the farmer X says: “I want to deal with organics”. The motivation varies. He might have not used chemicals in the fields, or had poor sales of his products and knows that organic products are sold better and at a higher price. The organic extra charge is rather considerable. At this moment, he calls a certification authority to visit him.

The certification authority says that for your land to be assigned a status of organic, you should pass through the three years’ transitional period, within duration of which you are being checked each year. Once a year you have an announced inspection, and once a year – a non-announced one. Your soil will be sampled for analysis, and you may not use any chemicals during these three years.

There is a restriction on the land proximity to a plant, road or industrial facilities. And every year you have the inspection and pay for it.

After obtaining the certificate, the manufacturer will mark his products with an “Euro Leaf”, an official EU organic logo. In any European country, having found this “Euro Leaf”, the consumer will know that the product is organic.

In Ukraine, the European Commission accredited 15 certification authorities for certification. Two or three thereof are located in Ukraine. Other 12 authorities are in some other countries, but if you want to apply to them, you should pay all their expenses. The cost of certification depends on the area of the land, quantity of plants, etc.

Having experienced the three years of such wandering, for the yield decreases in this period, the farmer will be assigned a status of the organic one. Now all the raw materials, which have grown on this organic field, will be marked with the “Euro Leaf”. From this moment on, he will gain access to the European market.

At the same time, as processors, we also get certified by any of these certification authorities. What does this mean? The first and foremost – the production cycle should be free from any chemicals whatsoever. That is, if we produce oil, we do not apply such processes as refining and deodorization. For, those are chemical processes, and the oil subject to such processes becomes a 99.9% synthetic product. 

If we speak about flour, it is free from any additives (aerating agents). The same thing is for the grits. We refrain from any chemical processes in production.

The second requirement for production – no chemicals may be used to get rid of mice and insects. Production should be free from these chemicals.

One more obligatory criterion – we should have contracts with those suppliers only, which have obtained an organic certificate.

For example, if we purchased 100 tons of organic grains, our output will be up to 50-60 tons of organic flour. In case of higher output, the certification authorities will question the source of extra volumes.

If we take raw materials from a farmer cooperating with our organization in terms of certification of organic products, then our certification authority will agree with his authority upon each supply under the so-called transaction certificates. So, in relations between them, they confirm that a lot supplied by the farmer X to the processor Y is really organic. Very strict control.


The company Organic Original was established by Olefirenko with his partner, who dealt with non-organic grits at that time, in 2011.

The organic grit production facilities were organized by the partners in Vyshhorod district of the Kyiv region. In the same year 2011, the company obtained the certificate, since there is no need to wait for three years to deal with processing.

They began to purchase raw materials from the Ukrainian farmers, who grew organics. There appeared quite a number of them in Ukraine. 

"We just don’t know about them. Why? Because 95% of these organic, certified raw materials are safely exported to Europe. There are some hundreds of such producers in Ukraine. Though now we really cooperate not more than with ten of them, - Olefirenko says. – We got our own fields after the investor came, who had been already dealing with organics in terms of growing. It happened three years ago. Now, in terms of percentage, we take 40% of raw materials from our partners, and the rest – from other organic farmers.”

The first investments for organization of the enterprise for organic processing were several tens of thousands of dollars. The first assortment – six or seven positions of grits.

“At that time, we found a farmer, who was willing to grow an organic watermelon with us. He already had his certified organic land. We signed a contract, agreed upon the money. He grew an organic watermelon, and we took the product. This was in 2011. Then we placed our organic watermelon on the shelf of the supermarket, the first one among all the post-Soviet counties,” – Olefirenko recalled.  

From the very beginning Olefirenko’s organic grits were for sale at the healthy food stores, but eventually the partners approached the supermarkets.

“The first contacts with supermarkets were established by sweat of our brow. We had to prove to the stores that the products were really organic,” – the businessman tells.

At the moment, the company “Organic Original” (TM “Ecorod”) belongs to the two partners: Andrii Olefirenko and Oleh Zhukovskyi, the owner of the company “Ethnoprodukt”, which deals with grits and organic milk. The company sells organic sunflower oil, flour, cereal, grits, beans, honey and animal feed. 


Europeans buy organic raw materials from Ukraine with great pleasure, but refuse from the finished products.

Several years ago, Organic Original began to supply organic grits to the USA. They obtained their certificate USDA NOP and launched supplies through a distributor. However, now the exports to the USA ceased through some difficulties with the distributor. Besides, the grits were exported to Moldova, “We haven’t supplied our products to the EU yet. The Europeans are afraid of the Ukrainians. We understand. They are pleased to take our organic raw materials, then process it at their premises, pack and have some additional value, - Olefirenko says. – For many times, I saw organic products on the shelves of our elite stores coming from there, but these are our organic products. They are in no haste to take our finished products”.

"That is why we work for the domestic market. According to my estimates, now we have not more than 0.5% of organic products on the shelves in our stores from among the ordinary products. Other European countries have 10%-15%, and some may even reach 20%. The people there consuming the certified organics understand what they pay for”.

According to Olefirenko, Ukraine may become an organic product supplier for the entire Europe.

“We have good soils. As compared to the developed European countries, they are less polluted. Organics may become one of the drivers for Ukraine. But at least during next 10 years Europe will be interested in the raw materials only, because they have production facilities, they want to retain the additional value,” –the businessman says. 

The prices for the organic products in the Ukrainian stores may be twice as high as the cost of ordinary products. However, some organic items cost only by 10-15% higher than their non-organic analogues.

“20-25% of our assortment differs in price within 10-15 percent of the ordinary products. For instance, our beans, such as lentil, haricot bean, are priced almost the same as non-organic products on the shelves of the stores. And the other 75% of our assortment differs almost twice, - the businessman says. – The difference in price for some organic products in Europe is 30-50 percent. However, there are many positions priced in Europe also about twice as higher as the ordinary products”. 



For himself, Olefirenko has distinguished several types of people buying organics in Ukraine. The first type of buyers of organic products is well-to-do people, who want to eat normal and healthy food. The second one is the people, who travelled in the European countries and saw what the organic food was. One more category of the organics buyers are young families with children.


"In terms of many positions we have up to 30% profitability. It seems to me that sellers of ordinary grits have the same extra charge of 30%. The profitability used to be a little bit higher before. During the last three crisis years we have to reduce the extra charge at our own expense, - the entrepreneur says. - As an owner, I have not recovered my investments yet. Though our business is growing and developing. We increase volumes, current assets, a lot of which are “frozen” in supermarkets. Now we raise a question of capitalization of the company. It is growing. The team is expanding”.

Can one make millions by processing organics in Ukraine?

"As for me, I have not become a millionaire yet. But, speaking about capitalization of the company, we have already become millionaires. But it goes about neither a hundred, nor tens of millions yet,” - the dialogue partner admits. 



"Now Ukraine has an “organic law”; it was adopted three years ago, but it is absolutely inoperative now. As the co-founders of the organic association “Organic Ukraine”, we have been fighting for Ukraine to have a harsh, transparent law adopted, alike the European organic law. I am very much hopeful that now it is on the homestraight. The draft bill was initiated from the bottom, from producers”.

“What shall be expected from this new law? All those marking the products as organic or natural, but having no organic certificate, will be forced out from the shelves. They have to either get certified or not write it on their products. When this law begins to work, we’ll have the things the same as in Europe. Little by little, the Ukrainian organics will gain confidence”.

“Most of the organics producers say that probably we shouldn’t actually stand for any Ukrainian organic law, so that we have nothing alike at all, because once they adopt a Ukrainian organic law, they will start to extort, throw sand in the wheels. On the other hand, if not us, who will bring the law in Ukraine into compliance with the European norms? Now actually we have no such a law. As yet, the organics in Ukraine is rather a mission, not business”.


"On the one hand, it needs to be opened, because if any market segment is unregulated by the market itself, this is a place for corruption. On the other hand, I am fearful of doing it, because now Ukraine’s financial condition is not really good and our land costs lower. The world companies having a huge reserve of money can move the Ukrainian buyers aside and simply buy it up. That is why the matter should be investigated. I don’t say that I disagree, but I’m also not all for it”.