Aconcagua Partners - 2 min read
Case Study | Business Ventures
LATAM Agtech expands to Europe
Company: Chilean startup
Target: European market
2 min read
Chile is the largest exporter of fresh cherries worldwide and this is due to its high quality fruits and its counter seasonal production, supplying the largest economies in the world during winter in the Northern Hemisphere. Despite the upside of Chile's privileged geography, moving fresh cherries from the Southern Hemisphere to the north puts the fruit through a high stress load during handling and transportation. The strength of the cherry skin is extremely important for the fruit to retain its high quality during freight from south to north.
Here comes the weather with the first problem: rain weeks before harvest makes the fruit grow excessively forcing the skin to overstretch and making the cherry too weak for handling. To overcome this problem, Chilean producers cover their orchards months before harvest to ensure the rain doesn't affect the skin. But this brings another problem: the fruit misses out precious weeks of sun exposure during the most important part of its growth cycle, reducing its sugar content and making it less sweet. So, Chilean producers once again came up with a solution: retractile covers that can be closed before the rain and opened during sunny days. But the market presented yet another problem: this practice is labour intensive and therefore expensive (20+ persons and 1 whole morning to cover 1 hectare). And most of the time, labour demand is far greater than supply pushing labour cost even higher.
In 2017, our Client developed and patented an ingenious solution that allows orchard managers to open and close 1 full hectare of covers in just 20 minutes using only 1 person. This way, Chilean producers can be ahead of the game, surfing climate change at a marginal cost without compromising in fruit quality.
Despite being the largest exporter of cherries worldwide, Chile is just a portion of the market. What about reaching out to other cherry producing countries?
We took this Client under the Business Venture programme in 2019. At Aconcagua Partners, we could see our Client's competitive edge, but before going to the drawing board to come up with a market entry strategy, we took one step back and embarked on a market research from primary and secondary sources to validate whether the problem our Client solved in Chile, was also a problem in Europe.
Once we could confirm the existence of the same problem in Europe, we adopted a lean approach and used the existing patented solution as an MVP for the European market. Based on our previous market research, we focused on the early adopters from 3 key markets: Germany, Italy and Spain. After a bit of travelling and several iterations with these early adopters, we made some minor modifications to the MVP and in February 2020 we signed a distribution agreement with an Italian company leader in the development and provision of solutions for fruit production globally.
If you are a LATAM startup with a unique value proposition that wants to venture into the European market,
contact Aconcagua Partners. We are certain we can help you.
Case Study | Business Ventures