TO: Jorge Cordero, Agribusiness Director of CSU
FROM:
DATE: June 2020
RE: The model has been very successful in Costa Rica, but each country has
its own strengths and weaknesses that should be taken into
account.
____________________________________________________________
1. Who are the participants in CSU's vegetable and fruit chains? What are the
changes in the chain with the creation of Hortifruti and the Tierra Fertile program?
The participants in CSU’s vegetable and fruit chains are public markets, who sold the
vegetables to the Corporación de Supermercados Unidos supermarket chain. Middlemen
from these public markets purchased the vegetables and fruits directly from farmers.
They visited the farms in their pickup trucks and often purchased crops even before they
were harvested. However, Costa Rican consumers demanded higher quality, freshness
and variety of fruits and vegetables, and public markets were unable to satisfy these
demands. Hortifruti was created to purchase directly from farmers and offer them support
to comply with the supermarket quality requirements. The Tierra Fertile program helped
to improve transportation, production and increase product quality.
2. What are the essential elements of the Hortifruti / Tierra Fertile business model
in Costa Rica? What elements change when the program expands to Nicaragua?
The essential elements of the business model in Costa Rica were the large variety of
fruits and vegetables that farmers were able to harvest during various cycles. On the other
hand, the progress from the to Nicaragua was slow because local farmers were used to
producing only corn and beans during specific seasons of the year. Also, in Costa Rica
the business model was successful due to the shorter distances between farms and storage
facilities, and roads were much more accessible in Costa Rica than in Nicaragua. As
mentioned in the case, farmers from Costa Rica had experience in harvesting several
crops while farmers in Nicaragua embraced a single crop (corn culture).
3. How would you assess the performance of Fertile Land in Costa Rica and
Nicaragua in terms of operational efficiency and social impact?
In terms of operational efficiency and social impact, Tierra Fertil had a very good
performance in Costa Rica. They were able to reduce waste in classification, packaging,
transportation and reception from 25% to less than 5%. Also, the number of workers that
handle the fruits was reduced from 10-15 to 2-3. Diversification and quality was
improved. In Nicaragua the performance wasn’t as great. There was a high desertion rate
from agronomists. However, Tierra Fertil assisted farmers to gain access to different
credits, as well as technical support to improve quality and efficiency.
4. Should Jorge Cordero recommend the expansion of the Tierra Fertile program in
other countries in the region? Why or why not?
The expansion should be promoted, but there has to be a complete study of the conditions
in those countries in order to know how to help local farmers in order to achieve more
efficiency. It is clear that the program can be very successful, but the business model
can’t be the exact same for every country, because of the different conditions and
possible barriers. It would be important to take advantage of the different climates that
can be found in Central America.
