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Giving Real Purpose to the World’s Forgotten

Social Enterprise SpotlightRena Avramidis is a senior at the University of North Carolina at Chapel Hill.  She spent the past semester studying at ESADE Business School in Barcelona, Spain, where she became interested in how the power of business can serve as a catalyst for social and environmental change. 

I love yogurt. I eat it with fruit for breakfast, drizzle some honey on it as a snack, mix it into smoothies … I never get tired of it and it is always a staple in my fridge, no matter where I am. Hands down, it is my favorite food! That’s why when I found myself in a supermarket in Barcelona during my my first week of my study abroad experience, I decided to not only stock up, but try the local brand, La Fageda. Little did I know that I would also be supporting a sustainable and socially responsible business with a truly incredible story.

So, what’s the story?

Upon first glance, La Fageda seems like your typical “self producing” farm turned business. Located in the beautiful mountains near Olot, Catalonia, La Fageda has its own garden and farm with cows which supplies the milk for the production of their products. Sounds pretty standard for a farm, right? But what is so special about this “self producing” farm is that the factory specifically employs disabled people.

As you may know, Spain has one of the highest unemployment rates in the world. According to BBC News, Spain has the highest unemployment rate in the euro-zone, with almost one in four workers out of a job. This rate is even higher for the country’s mentally disabled citizens, with some estimates that up to 95% of disabled peoples are unemployed.

This is not the case for the citizens of Garrotxa, the name of the region where La Fageda is located. The factory employs 280 workers, about half of whom are suffering from mental disabilities. Despite suspicion for the ability of the disabled workers, La Fageda has turnover of nearly 11 million of euros and between 2009 and 2010 rose by 10% its revenue.

The History

La Fageda cooperative was started in 1982, by a team headed by psychologist Cristóbal Colón. After years in clinical psychiatry, Colón realized that the key to solving the integration problems of the mentally disabled was by giving them a sense of purpose in life.  His solution was to give these people a real job in a real company with real processes and products.  And with this in mind, La Fageda was born.   The secret to this successful venture?  According to Colón, it is the focus on putting employees first:    “La Fageda is a company that was constructed in reverse.  Its first asset was the workers, a group that needed to be employed…Subsequently the company was created.  La Fageda demonstrates that a company that starts with people, putting people before profits, can grow to be a strong organization.”

Now for the big question:  How does this work?

The “Fageda” Model succeeds for its focus on integrated industrial processes and comprehensive quality control.  Another advantage is that they source milk from their own cows on the farm, allowing for greater control over raw materials.

The company is also loyal to its values and principles, which include the following:

  • Only a real job can give people real satisfaction: a decent salary and decent work conditions

  • The organization reinvests its profit in the company and its workforce

  • The company needs a leader who is not only an effective businessman but also socially conscious

  • The working site must be a pleasant environment for all

 

Colón and factory workers.  Source:  La Fageda

Most importantly, La Fageda knows that it is employees is what makes the company one of the most successful in Spain, with sales are increasing by between 15 percent and 20 percent a year.  La Fageda believes that everyone has the ability to work -and that everyone should have the chance to do so.  The company is also involved in some care activities, like an occupational therapy service, special housing for the workers and assorted leisure activities, in order to improve employees quality of life.

While some describe the model as a ‘non-profit cooperative,’ this does does not mean that La Fageda doesn’t generate revenue.  Rather, Albert Riera, Director of Communication of this cooperative, states “ La Fageda is a not-for-profit concern, but that doesn't mean that we don't earn money, because if we didn't, we would not be sustainable and we would have to close, because we cannot support ourselves through subsidies. The difference lies in the fact that the money we make does not go straight into an owner's pocket; we reinvest it in the company itself and its workers.”  The company does not just reinvest its profits into expanding, it also provides services to its employees.

Just this year,  the cooperative was awarded the 4th Integra Prize, given by the bank BBVA, for its “excellence in its business, social labour and environmental management.”  By positioning these yogurts as a natural and wholesome quality farm product, La Fageda has been able to compete with Danone products, the undisputed dairy sector leader in Spain.

Lessons Learned

Social and ‘regular’ Entrepreneurs alike can learn a lot from this Corporate Social Responsible business model.  Riera states:  “The great majority of companies think that social responsibility is an extra expense and something they pursue because they have to. Responsibility does not mean that a company has to do more than it might be expected to do as a company, but rather that it must do what it does in a different way. A company does not have to aspire to be an NGO; it should continue making money, but in a more legitimate manner, creating value in social as well as in economic terms. When organisations understand that entrepreneurial responsibility is a way of being, not a collateral value, they lose their wariness.”

Just another example of social enterprise changing the world!!

 

Quick Stats: La Fageda

Focus: Enterprise Development, Health

Geographic Area of Impact: Spain

Model: Social Business

Number of Direct Beneficiaries: 280 (2010)

Annual Budget: US$ 14,127,000 (2010) Percentage Earned Revenue: 100%

Recognition: Social Entrepreneur of the Year, Spain, 2005

Source: Schwab Foundation for Social Entrepreneurship,  http://www.schwabfound.org/sf/SocialEntrepreneurs/Profiles/index.htm?sname=168495

 

Additional Sources:
 http://www.ieseinsight.com/doc.aspx?id=984&ar=3
 http://www.slideshare.net/studenthubs/la-fageda-2665311
 http://www.catalannewsagency.com/news/society-science/catalan-cooperative-la-fageda-awarded-its-social-integration-work