Food processing in Serbia and Montenegro

The food processing industry in Serbia and Montenegro is a vital component of the region`s economy, rich in tradition and steadily adapting to modern trends. With a history deeply rooted in agriculture, both countries possess a wealth of locally sourced ingredients that form the foundation for a diverse range of food products. From dairy and meat to fruit, vegetables, and processed grains, Serbia and Montenegro have long been recognized for their high-quality production of processed foods.

Serbia`s food processing sector is driven by its agricultural strength – the country is the largest agricultural market in the Western Balkans. Serbian meat, dairy, and fruit products have long gained recognition in European and international markets. Montenegro, while smaller in scale, has a growing food processing industry that leverages its coastal and agricultural resources to produce high-quality seafood and traditional specialties.

In Serbia and Montenegro food processing technologies, factories, and equipment have seen significant modernization in recent years, reflecting the region`s commitment to improving production efficiency and product quality. The food processing industry in both countries utilizes advanced technologies in areas such as pasteurization, fermentation, packaging, and automation, allowing for the large-scale production of products ranging from dairy and meat to beverages and snacks. Many factories are equipped with state-of-the-art machinery that ensures precision in processing, minimal waste, and adherence to international food safety standards. Furthermore, both countries are increasingly investing in sustainable practices, including energy-efficient systems and environmentally friendly packaging solutions. While some older, traditional production methods are still in use, there is a strong trend toward modernization, enabling Serbian and Montenegrin food products to meet the rising demands of both local and international markets. The future of the food processing industry in the two countries looks promising, with continued investments in technology, sustainability, and innovation poised to drive growth and enhance competitiveness.

Serbia`s food processing industry

Approximately one-third of Serbia`s total processing industry is made up of the food processing sector. Nearly 90% of the more than 20 000 food businesses that are now in operation are micro, small, or medium-sized firms. Over 120 000 people work in this industry. Grain, oilseeds, dairy, meat, fruit, vegetables, wine, and confectionary are the biggest subsectors in Serbia in terms of value. The Serbian market, which is relatively small, generates about USD 8 – 9 billion in retail revenue annually. Over 80% of the retail market is controlled by foreign companies. Only about 20% of the Serbian market is made up of domestic retail chains.

Serbia`s food processing industry is vital for food security, employment, and rural development. Its potential for inclusive and people-centered development can be enhanced through better understanding of market dynamics, technological advancements, and strengthened policy implementation. Although results are improving, there is room for improvement in mobilizing small-scale producers, as food systems play a significant role in Serbia`s economy.

The growth of exports of both primary and processed food products provides evidence of the competitiveness of Serbian production in international markets and of significant potential to further leverage the sector’s growth to create jobs and income. Produced and frozen fruit and vegetables, fruit juices, confectionary, yeast, brandy, processed fruit (jams, purees, and jellies), sweet corn, wine, cheese, mineral water, and baked goods are among Serbia´s top agricultural imports, according to the Internation Trade Administration (ITA).

On the CEFTA market Serbian slaughterhouses and meat processing facilities hold a strong position. Serbia has a long history of raising livestock and preparing meat. Fresh or smoked beef and pork, along with chicken, are the most widely consumed meat items. Products like pate, several types of dry sausage, hot dogs, and smoked beef and pork are also extensively available in all grocery chains in the Balkan region.

Serbia offers a variety of dairy products abroad, in addition to "kajmak," a creamy dairy spread that was first produced there. Among the most well-liked are white soft and hard cheeses, paprika in sour cream, and sour yoghurt. These products all come directly from Serbian cuisine, which has a century-old history. High-quality fresh and pasteurized milk is primarily utilized to meet high local consumption, but it is also readily available for export to neighboring Montenegro and Bosnia and Herzegovina. However,

Serbian export businesses started to consider expanding into new countries, particularly Russia and Turkiye, as the domestic dairy market stabilized. Goat cheese, hard cheese, sour cream spread, and "feta" cheese have all so far found buyers in the competitive global market.
Serbia requires all export-focused food processing businesses to have HACCP certification.

The Montenegrin food processing sector

The fact that primary agriculture accounts for a larger portion of the GDP than the food processing industry is one of the structural features of Montenegrin food production. The food manufacturing industry has grown steadily during the past decade. Over 6% of the workforce was employed in the agriculture sector, which also generated 10% of the GDP`s value added. Over the next years, it is anticipated that domestic consumption of wine and fruit will rise. Numerous legislations have been passed by Montenegrin authorities to encourage foreign direct investments in the nation`s economy, particularly the food industry.

The second-largest manufacturing sector in Montenegro is the food, beverage, and tobacco industry. Meat and sausage production has been steadily rising over the past few years, whereas food goods including pasteurized milk, beer, fruit juices, and non-alcoholic beverages have been declining. The food industry`s main pertinent sectors include the bakery sector, the dairy and meat sectors, and the processing and beverage manufacturing of fruit and vegetables. Over the past few years, the number of Montenegrin businesses operating in the country`s food industry has increased steadily. Montenegro`s agriculture is quite varied, with tobacco and vegetable cultivation in the country´s middle and citrus and olive groves along the shore.

The dairy industry alone accounts for the largest portion of agricultural value (about 23% of assessed value). Dairy factories process only 15% of the primary milk produced. The northern region is the center of production. The bulk of dairy capacity is dispersed over the Central region. Every year, over 17 000 tons of meat are produced domestically, making up almost 40% of the country´s total meat consumption. Approximately 20% of the over 300 agricultural-industrial businesses are involved in the production of meat.

The overall yearly value of fruit and vegetable production is expected to be around EUR 117 million, with a volume and value of about 290 000 tons per year.
The Central region of the country is the area most crucial to the production of vegetables. The industry is widely distributed, lacks appropriate specialization, produces mostly for its own consumption, and sells excess. Of the approximately 100 processing facilities, around ten play a major role and hold a substantial market share, while the remaining factories are smaller.

Montenegro`s food safety laws govern the production and distribution of food products, ensuring safe practices across all stages. The legislation covers plant and animal-based food, as well as composite food made from both. It also outlines labeling requirements for additives, enzymes, flavorings, and supplements, and hygienic guidelines. Businesses in the food sector are subject to rigorous certification and quality control procedures. The National Council for Food Safety Assessment is the primary organization for addressing food product manufacturing issues in Montenegro.