La Fageda Social Enterprise

...

- Is La Fageda a sustainable business? (Economic value creation)

In an ideal scenario, social enterprises attempt to target unfulfilled social needs with (more or less) market based approaches aiming for sustainable solutions. They do so by creating additional value (social value creation and not just economic value creation). La Fageda has successfully done so by moving resources to areas of more efficient use and creating value that has been created into revenue for so many years. La Fageda creates its products by offering employment opportunity to a group of people who is usually denied any other opportunity in the society. In an economic sense, the employees are placed in a situation of higher productivity, involving them in economic value creation. La Fageda has also internalize externalities, which are usually ignored by the market, to further increase the output of social value. La Fageda has created additional value by offering to its consumers, socially aware products for which they are ready to pay a price higher than he market value.

As La Fageda is driven by Cristobal Colón’s humanistic values, the social responsibility undertaken by La Fageda is part of its understanding of doing business. La Fageda’s business model is the core of its innovation and is considered radically innovative at the time. At the same time, profits generated by operations are reinvested into the company allowing it to offer social and environmental services.

- In your opinion, what are La Fageda’s key success factors and main threats or the next five years (2016-2021)?

La Fageda has maintained a solid success story for the past so many decades and continue to do so. All the success factors listed in the first answer were true then and pretty much continue to hold true even now for the coming years. A diversely skilled dedicated team, a concrete vision, unique and effective marketing strategies and highest quality from-the-farm products are Unique Selling Points (USPs) for LF. At La Fageda, handicapped workers are perceived not as disabled, but instead as people with different capacities and competences who need a special learning program but are not inferior to the others. Company’s managers listen to all staff members and have a personalized approach towards each of them. This is also the age of well aware consumers. Consumers around the world and in Catalonia as well are moving toward adapting healthy/organic products which come without preservatives and while doing so, they are ready to pay a premium price as well. LF’s high quality and healthy products which were always priced with a premium over its competitor products were anyway well accepted by consumers and we can hope for a further positive shift where more consumers will be willing to change preferences and prefer LF’s products. Also, La Fageda has managed to successfully adapted to newer and more sophisticated technology without cutting out jobs.

Cristóbal Colón who is already more than 67 years old and is aware that he cannot keep running the company much longer. Last year it changed from a workers’ co- operative to a non-profit foundation. A young team of executives – mostly women – has been hired. The aim is to professionalize the management and the foundation’s board and prepare for a handover. This way a solid succession plan is on the way. Changing to a non-profit foundation, La Fageda will be now eligible for numerous tax and other benefits from the government as well.

Although triumphant in Catalonia the firm does not want to commercialize its products abroad because the company’s value chain based on the close “family” relationship and mutual help between the members of society might not prove sustainable for a bigger scale.

Even after having a strong business model, La Fageda faces some bit of competition in the market in terms of revenues. Not all consumers are inclined towards paying a premium amount for apparently a better product. La Fageda will also be challenged to continue to employ better and more advanced technology while ensuring that it keeps the number of available jobs or even try to increase it if need be. In the age of start-ups, it is always possible for new social or for-profit enterprises to spring up in the same or region or elsewhere with similar business model but an entirely different vision and mission. If dairy products and jam making process are not enough to provide jobs to people in need, La Fageda may find it difficult to diversify into other product lines to justify its vision.