DIIA.BUSINESS: Resilient and unbreakable: cheesy, natural, Ukrainian — snEco treats

We continue to share stories of unbreakable Ukrainian businesses heroically working during the war and securing Ukraine's economic stability.

To support them, from the very first weeks of the full-scale invasion 300 micro and small enterprises received financial support under the international aid program EU4Business: SME competitiveness and internationalisation, funded by the EU and the Government of Germany and supported by the Ministry of Digital Transformation of Ukraine, the Ministry of Economy of Ukraine, the Office for Entrepreneurship and Export Development, the national project Diia.Business, and Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. The total grant amount is UAH 150,000. The implementing partner of the initiative is the international charitable organisation 'East Europe Foundation'.

Even before the start of the full-scale invasion, snEco crispy cheese bites had won the hearts of thousands of Ukrainians. Their hallmark was a unique property — the ability to keep cheese snacks even without refrigeration. The business had big plans for the future, but the war introduced its own corrections. The enterprise had to be moved to another part of the country, and all the money earned was donated by the management to the Ukrainian Armed Forces. Production was restored thanks to a microgrant from the EU4Business program.

The first Ukrainian eco-snack

Brothers Pylyp and Vadym Hryshyn founded 'Prime Snack' in Kharkiv. The idea of creating a healthy, tasty, and nutritious snack from cheese appeared back in 2015. The men sought a technology that would allow storing cheese for a long time without special conditions. And they succeeded.

The future eco-snacks were based on technology inspired by NASA in the 1970s for providing astronauts with healthy food: to make products weigh as little as possible, they were dehydrated — moisture removed by microwave-vacuum methods. Pylyp and Vadym needed a year and a half of research and experimentation. It was thanks to this technology that they managed to dry cheese while preserving its nutrients. So in 2016, a new product called snEco appeared in Ukraine.

The company patented its method of producing the healthy snack. Today only 'Prime Snack' can dry cheese using this technology in Ukraine. Also, the entrepreneurs were the first in the country to create snacks without adding extraneous ingredients. Thanks to this, in 2018 the enterprise received a European eco-production certificate and now has the right to call its cheese bites the first eco-snack in Ukraine.

snEco's range includes 12 different types of cheese. Up until February 24, 2022, the enterprise produced about three tonnes of products per month. The brothers had big plans for production expansion and dreamed of exports to Europe, but one day changed everything.

What to do next?

Pylyp and Vadym met russia's full-scale invasion in Kharkiv. In the very first days, it was decided to evacuate the families from the city, as military operations were already very close. There was no access to production or the office. Due to the fighting, both finished products stored at the enterprise and raw materials — several tons of high-quality cheese — were lost. The enterprise itself was also damaged, but in April 2022 the brothers managed to evacuate the surviving machinery, documents, and equipment. The family homes were almost completely destroyed.

The businessmen spent a long time choosing a region for relocating the company. Eventually they settled on Mukachevo in the Zakarpattia region. The search for suitable premises took about two months. Eight trucks transported the company's equipment and materials from Kharkiv.

The next stage was renovation — engineering work for the needs of food production continued throughout the summer.

At the very start of the war, on February 27, 2022, we transferred the UAH 500,000 we had on company balances to support the Ukrainian Armed Forces and the 'Come Back Alive' fund. By summer we were left with almost no working capital. We attracted loans and grants. Thanks to this, we were able to start up and resume production.

Continue regardless

Before the great war, the company had 35 employees who scattered across different regions after February 24, 2022. When the enterprise got a new home, Vadym and Pylyp invited employees to return to work. Three agreed to move to Mukachevo. Currently, 14 workers are employed at the enterprise, most of whom are internally displaced persons who similarly fled the war to a safer place.

In parallel, the brothers were looking for financial support to rebuild the business. At that time, on the Diia.Business portal, Pylyp saw information about a microgrant from the EU4Business programme.

We immediately understood that we had to apply, since we needed it. And the microgrant really did help us start operating. It was the first grant we ever received in our lives. When the news of the win came — it was very emotional, we were incredibly happy. Everyone who already worked with us at that time was proud that we won. And we are still proud.

The enterprise was launched in August 2022. Thanks to grant funds, raw materials were purchased — 130 kg of fresh cheese, which was later turned into 67 kg of dried cheese. The microgrant also allowed us to pay for premises rental, taxes, and employee salaries.

snEco company production and team

Raw materials, rent, and salaries are the main fixed costs we needed to cover in the first months. This helped us stay afloat. The microgrant freed up other money that was spent on new equipment. Also, thanks to the constant availability of raw materials, we managed to organize uninterrupted production work.

At that time the company managed to produce a batch of products and ship it to the 'Silpo' supermarket chain. According to the entrepreneurs, the grant funds helped avoid a major cash gap and overcome losses caused by relocation.

This kind of help motivates us to keep going despite everything and to work in our home country for the prosperity of all of Ukraine. During the microgrant program implementation, we created two additional jobs, increased our contributions to the local budget, and signed several supply contracts.

What are today's challenges?

The company currently cooperates with supermarket chains such as 'Silpo', 'Novus', 'Obzhora', 'Antoshka' stores, OKKO and WOG gas stations. The order level has grown 30% from pre-war figures, but so far the enterprise can't fully meet them due to regular power outages.

The biggest challenge for us right now is the lack of capacity. We have energy-intensive equipment, and a regular generator can't get us by. The enterprise has large requests from distributors that we can't meet because we don't have time to dry cheese in the period when there's electricity.

In December 2022, the enterprise managed to produce 1.75 tonnes of products — more than half of pre-war volumes. According to management, if production worked at full capacity, they would already exceed 2021 figures.

In the autumn we won another grant for installing solar panels. This 20 kW equipment is already on the roof of the enterprise. But there's no sun right now, so we're really waiting for spring. This will also allow us to mark our products as produced in an ecological way using renewable energy sources.

Plans for the future

The company is now actively working on exporting products to Europe. The Hryshyn brothers started this process back in Kharkiv, but now, being just 100 km from the EU border, setting up exports will be even easier. At the start of the war, the company even had several offers to relocate to Europe, but the founders decided to keep working in Ukraine.

In autumn, Pylyp and Vadym already opened a representative office in Poland and signed contracts for exports to the Czech Republic, Slovakia, and Switzerland. So now the entrepreneurs are working on the necessary production certification to start supplying.

There's only one enterprise in Zakarpattia that has the right to export food products to the EU. We can become the second in the region. Overall, only 12 enterprises in the country can export dairy products. It's a fairly closed club, hard to get into.

Before the great war, expansion of the assortment was also planned. With its unique technology, the enterprise can dry anything. The company has already experimented with meat, fruit, and vegetables. Even in Kharkiv, they thought about building a second workshop dedicated to drying meat. But launching new products requires time and significant funds, so this idea has been put on hold for now.

In 2022, the company produced over 30 million cheese balls. For 2023, the enterprise plans to reach 50 million. So we wish that this and all other dreams of the company will surely come true.

We have big plans and we know exactly where to go next. The main goal for the future is to grow, to create new types of products. To grow into a large enterprise that will work for our country. We want to make our product in Ukraine and sell it all over the world.

Pylyp Hryshyn, co-founder of "Prime Snack"

Original article – https://business.diia.gov.ua/cases/iniciativi/stijki-ta-nezlamni-sirni-naturalni-ukrainski-smakoliki-sneco