Fruit and vegetable production in Montenegro benefits from naturally favourable conditions in terms of climate, soil and water resources. Such conditions enable high quality fruit, vegetables and vines to be grown, and fruit and vegetable production and viticulture have a long tradition as well as the cultivation of a wide assortment of produce. A significant number of Montenegrin households therefore deal with horticultural and wine production, although on a small-scale. Along with the global market trends, the level of domestic consumption, the expected evolution of the distribution system in Montenegro and the planned dynamic developments in the tourist sector, these natural conditions contribute to creating basic conditions for the development of the considered sector. Market opportunities are favourable and represent an additional contributing factor towards its development. In spite of the favourable climate for production in this sector and the supportive market opportunities, the real value of Montenegrin products at sector level is quite low. We conduct a SWOT analysis of the sector aimed to find out its potential as well as the needs of the sector. Our starting hypothesis is that the potential of this sector in Montenegro is greater than current activity/production, and that suitable strategies can provide higher results in this sector. The main outcome of this paper will be our suggestions for improvement within the sector. The SWOT analysis will be completed according to the PESTEL categorisation, after which Opportunities and Threats will be grouped into three major strategic categories: “New market trends”, “Sector financing” and “Structure and functioning of the value chain”. The SWOT analysis outcomes, when regarded alongside a review of global market trends and domestic production potential, lead to strategies for the improvement of the sector.
A number of facts, primarily including high fragmentation at all levels, weak vertical integration, limited dimensions in comparison to competitors poor technological level and unbalanced quality/price ratio make the sector weak, low competitive and exposed to international competition, reducing its capacity to capture any existing market potential. Almost all opportunities are frozen by prevailing weaknesses and threat impacts are exacerbated by a largely prevailing number of weaknesses. High production unit cost appears to be a major constraint to local supply market competitiveness. This situation appears to be mainly caused by general low levels of productivity – provoked by not adequate and up-to-date cultivation practices, reduced levels of input use, utilisation of old and, therefore, less performing varieties, and also farm management shortcomings. High losses from reduced availability of post-harvest facilities and equipment add up to the problem. The improvement of the sector is not easy. In other words, there is a lot to do for the Montenegrin sector operators to increase sales: tackle imports and increase market shares in the domestic market and abroad. Based on our research, we suggest that the Montenegrin fruit and vegetable sector should primarily aim at substituting imports, increasing domestic consumption and developing exports to the region (CEFTA countries) primarily via promising market opportunities. Based on our analyses of the state of affairs of the sector, the competitiveness and the market potentials, the recommendations for improvement competitiveness are outlined.