Want to know how to run a successful organic and fair trade food project in Colombia with a real win-win outcome for the founders, small farmers, importers, consumers and the environment? Meet Fruandes, one of Colombia’s three main producers and direct traders of tropical dried fruits.
The project was started in 2002 by Hugo Ciro, CEO of Canadian firm Level Ground Trading, and Colombian agronomist Giovanni Porras Pinilla, who met while Giovanni was working for an NGO called MENCOLDES (the Mennonite Colombian Foundation for Social Development). Hugo wanted to diversify his Canadian coffee import business, and exotic dried fruit sounded like a good idea.
“Hugo traveled to Colombia to find a partner and Giovanni raised his hand,” says Javier Vasquez, who joined the team in 2005 and is currently their partner and the firm’s business manager. “They shared a vision to export products to complement the coffee, while providing new job opportunities, especially for Colombian women in rural areas, who were affected by the civil conflict and came to Bogota looking for new opportunities.”
Building a business enterprise with a strong commitment to helping solve social and environmental problems in Colombia is an ambitious undertaking, fraught with challenges, but the most significant? “Finding clients,” replies Javier. “Fruandes has been able to overcome many obstacles because the project started with a customer.” And not just any buyer, but a business partner willing to invest and take risks side by side with the management and producers.
“Business associativity is a difficult concept for Colombians to assimilate, and this is a country where an “organic culture” is still foreign,” says Javier. “We embarked on a long journey, traveling Colombia looking for producers with passion, drive, and enthusiasm.”
Fruandes has structured an associative model based on trust that enables growers to sell crops to a company committed to buying at a fair price. “Fruandes does not own land, and we are not going to buy any since part of our business model is to work with and for small growers. We rely 100% on small producers to supply the fruit,” says Javier.
Fruit suppliers to Fruandes provide certified organic banana, mango, pineapple, dragonfruit, goldenberries, cacao nibs and cane sugar from different regions of Colombia. For many entrepreneurs coordinating logistics to gather the fruit and other products from small producers in various locations in a country in the Andean highlands can be a nightmare that Giovanni and Javier manage with skill.
Over 50 percent of exports go to Canada and 25 percent to Italy. The balance is divided between other countries like Switzerland, United States, Japan, United Arab Emirates and Sweden and six percent serve the local market and Chile under their Fruandes line, previously named JustFruit. For white label clients, eager to be part of the process, Fruandes offers access to suppliers, fields and processing facilities, and has an in-house team ready to help with label design and packaging.
To help growers cope with the high cost of organic certification, Fruandes encourages them to create or join associations. The company has a Grower's Service Model that provides support in areas such as technical assistance, certification training, organizational and financial skills, and support in applying for funding when an opportunity arises.
Keeping an eye on funding opportunities has been key to the company obtaining capital. Fruandes received a USD 75,000 Colombian Government Grant in 2008 and had since been awarded further payments to help growers. It additionally runs a volunteer program, which has attracted students worldwide keen to learn how a social enterprise operates.
Currently, Fruandes works with seven associations that benefit 333 families. Its network of producers has obtained organic certification for over 137 Ha and recorded revenue of almost USD 2 million. The company invests 6 % of its revenue developing new suppliers and expects to have 1000 hectares certified organic by 2020. In 2016, Fruandes decided to move its processing plant and offices from Bogota to Ibague, closer to producers and the ports. Ibague is a smaller city with lower costs to run the business and offers the team a nice quality of life. There are 72 full-time employees. At the plant, 70 percent are female workers and primary breadwinners.
To better understand and access export markets, Fruandes enjoyed assistance from the Swiss Import Promotion Programme (SIPPO), exhibiting at Germany’s BioFach trade fair under their umbrella for three years. Now present on the ProColombia pavilion, Fruandes continues to display at BioFach every year.
Fruandes achieved B Corporation status for its social and environmental performance in 2013; a recognition that took under a year to obtain, thanks to clear communication, transparency, and high-quality products that already met the certification requirements.
It has been an exciting ride for Fruandes, but Javier admits challenges still lie ahead. “We need to grow the supplier base to produce more organic fruit and accelerate the certification process,” he says. “We also need to increase awareness of our Fruandes brand and add new clients to the white label program.”
As to what advice he would give to others interested in starting a similar enterprise, Javier advises first securing a customer and then working patiently and professionally to deliver what they expect. “Open your eyes to other opportunities but never lose focus of what the business is about – offering great products to your client, with a sense of fair trade.”