La Fageda Social Enterprise

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by

Aditya Srivastava

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1. Which critical factors have enabled La Fageda to grow over the past 30 years?  

As one of Europe’s leading social entrepreneurs, Cristóbal Colón has grown his Catalonian dairy business into a company that takes on multinationals while providing dignity and meaning to the lives of individuals suffering from mental illness. Colón believes that in addition to having absolute clarity and consistency over the vision of their business, an entrepreneur has to assess their own personality in order to succeed. This means being able to look objectively at their own skills, to understand that you don’t know everything, and to ask for help whenever required. There are plenty of factors which has led to La Fageda’s immense success over the past 30 years:

• The right team: La Fageda employs about 250 people and majority of them suffer from some sort of mental illness or handicap. This is very unique. La Fageda and its founder has sought commitment, the right attitude of objectivity, honesty and dedication over skills. More than an enterprise, La Fageda is a social project. It an organization where employees are provided with equal opportunities to learn and grow within the organization. Employees are trained well and compensated well. For the employees with mental illness or handicap, working at La Fageda is not a means of earning a remuneration. For them, it is a unique platform to give their lives a bigger purpose and meaning and be completely independent. They appreciate this opportunity and the gratitude is visible in the devotion they put in their work.

• Commitment to the vision: Colón was sure and confident about the business and its vision right from the beginning. There were difficult times throughout, but Colón never lost faith in the founding vision. Colón in an interview said, “What is crucial is to observe very carefully what you are doing well and badly. We did well and grew because, even when we did badly, we rectified well!”
• Unique marketing: The firm operates in a highly-competitive sector challenging market shares of Danone and Nestlé. La Fageda’s prices are substantially higher than average (La Fageda’s prices are more than a 20% higher than those of its rivals) but for the moment it is in the top-3 in terms of sales and invoicing for the area of Catalonia. This fact clearly demonstrates that consumers are not only willing to pay for the product itself, they are committed to contribute to the company’s social mission implementation. They have never indulged in aggressive marketing or price wars with competitors like Danone. They are clear about their target market which is the region of Catalonia. All their labels and marketing is in Catalan only and through this they aim to provide maximum value to the customers. They have always kept the production facility open to public visits.

• From-the-Farm products: They put enormous amounts of emphasis on quality of not just the final products but also of the raw materials, mainly milk, and its source, the cattle which are taken care within the premises. They use only natural resources throughout their value chain – natural farms and forests. Highest levels of safety standards are maintained throughout the production line.

1. Do you think La Fageda should continue to grow or is time to just consolidate the organization?  

La Fageda has proved over the years that a unique and not so conventional business model can work well if it has the right vision, the right people driving smart strategies. I believe that La Fageda should continue to grow and it is not the time yet to consolidate the organization. La Fageda is unique its concept and its operations. While it operates in the same industry as giants like Danone and in some way, competes with it as well, La Fageda has managed to develop a niche market for itself as well. LF’s From-the-Farm products are healthy, safe and are so loved by consumers that they are ready to pay a premium price for it. LF’s ‘stay local’ strategy to strongly capture the Catalonian market through its Catalan-centric market has played well among loyal consumers for whom these are local and trusted products. While proving the competitive metal and staying profitable throughout these years, La Fageda is also the hope and means of livelihood for a huge number of citizens suffering from mental illness or handicap. La Fageda project radically improved the lives of its worker-owners. People who had repeatedly tried to kill themselves stopped doing so. Those who took a monthly salary home found they were no longer a family burden. As a successful social project, La Fageda has been a boon for the development and independence of these citizens. Hence, we can say that in more than one unique ways, La Fageda has established itself in a very unique competitive advantage and in a spot where it can continue to grow in the coming years without getting into the race to “accumulate wealth”.