Through their business, social enterprises solve some of the social or environmental problems that they have recognized as general important and important to them personally. Some of them deal with cultural issues, some with the provision of social services and some are more oriented towards the topics of environmental protection, waste management, food, etc. More and more social enterprises in our country are turning to empowering and helping the population in the villages, small farms, young farmers and women farmers. Agriculture, as a branch of the economy with huge potential in our country, is at the same time one of the most insecure professions because farmers often cannot provide a stable purchase of their products under fair conditions. When the market dictates the price and terms of redemption, many of them do not end up receiving adequate compensation for their raw materials and products, which corresponds to the labor, time and material they have invested. Also, an additional problem is created when the raw materials do not meet some of the requirements of large buyers and when the raw material that does not find its buyer is destroyed and thrown away. This position leads more and more people to leave rural areas and their farms, and especially young people, which leads to the “shutdown” of our villages.
We wrote about what is “social in social entrepreneurship”, as well as “what is the position of social enterprises in the mainstream economy”. In this interview, we talked to an entrepreneur who, together with his family, started a social enterprise whose main goal is to keep young people in the countryside and offer them a new perspective in agriculture. We talked with Branislav Sekulic, director and founder of the social enterprise Vrtlari from Mali Idjos, about cooperation with small farmers, how to reconcile sales growth and the principles of responsible business and how far they have come in these 4 years.
Through a combination of modern technology and traditional recipes, this company produces ready-made products from fruits and vegetables, such as: tomato and broccoli juices, ajvar, jams and sweets. In just 4 years of business, they have managed to become recognizable domestically for their quality, design and commitment to small farmers. All of this eventually led their products even to the shelves of American retail chains and today they are a domestic social enterprise that exports its products to over 10 foreign markets.
CoSED: Hello! How did you come to idea to replace your job in the public sector with a private business and to start making domestic products such as jams, ajvar, juices, etc.?
Branislav: Sometimes it is not a matter of our choice, but of the situation and circumstances in which we find ourselves. I finished economics and I was educated by money from Poljubac – a family farm that grows and processes fruits and vegetables. We children have always been involved in the business on the property, but I never thought it was a job I would do. In the meantime, I changed several professions, but in the end, agriculture prevailed and everything that my parents invested in me. On the other hand, as an economist, I wanted to prove that the huge perspective of our agriculture lies in the export of quality products and not just raw materials. Only in this way agriculture make sense, in my opinion. For a while, I worked in the public sector in parallel and built a vision of my company together with my wife and family and then I started the realization. And 4 years later, Vrtlari is on store shelves in over 10 countries. We are very proud of this fact because we have proved that we have something to offer the world.
CoSED: What is the social mission of Vrtlari and what sets you apart from other enterprises that produce finished products from fruits and vegetables?
Branislav: Our mission is to motivate young people to return to the villages and use the various resources available to them, and I do not mean only agriculture ,but also other activities that will improve the lives of people in Serbia and the position of young people. This pandemic has somehow shown that there is salvation in the countryside. As soon as we started the enterprise, we tried to engage young people, so that our workers can be young people from the village, but also women older than 50 years. We have managed to gather around more than 30 farms that supply us with raw materials during the season and with which we now have a defined cooperation and relationship based primarily on partnership and mutual respect. During the year, we process in our plant over 250 tons of various fruits and vegetables that we buy from subcontractors. According to the analyzes, we have a positive impact on over 300 people in our environment, which we are really, very proud of.
Also, one part of our social mission is directly focused on small food producers. Through the association Varjača, which gathers almost 100 small producers from Vojvodina, in partnership with the city of Novi Sad and the Provincial Secretariat for Agriculture, we provide appearances for more than 40 exhibitors in the field of food production at the agricultural fair in Novi Sad. This fair is the largest agricultural event in the country and a major international festival, so it is very important for producers to present themselves there. On the other hand, it is unattainable for many due to the high price of exhibition space. We therefore cover the costs of exhibition, transport, branding and marketing and thus help them present their product to a wider audience. The hall in which small producers are presented is called Vojvodina Gastro Region and it is truly the soul of the fair and the place where the best from Vojvodina is presented. In addition, within this hall we organize an educational program – workshops, presentation of small producers, panels of experts in the field of economy and agriculture. We are also trying to be their contact with decision makers and to represent them in some way in front of those who have the power to make decisions that will improve the general state of agribusiness in our country.
A year ago, we opened and shared a shop in Novi Sad called – Majka and under the slogan Ljubi te majka. High quality products are sold here, which enable another sales and promotion channel for all small manufacturers. Thus, we have increased their visibility and brought them closer to the number of customers, both foreign and domestic. A large number of manufacturers, after plasma in our magazine, found people from abroad who probably tried their products and offered them export to foreign markets. It is a wonderful story that is now also threatened by this pandemic, but I hope that we will all recover from it together.
We are also implementing several projects in cooperation with the University of Novi Sad and the Faculty of Technology. Among other things, we organize student visits where several times a year students come to visit our plant to see in practice what food production means. We are also partners in a new scientific project run by this faculty and it is about innovations in agriculture.
CoSED: Vrtlari is one of the domestic brands and the only social enterprise whose products can be found on the shelves of large hypermarkets across America. What steps led you to such a successful placement on a foreign market? What is your recipe for success that you would share with other social entrepreneurs?
Branislav: After we set up production, branded ourselves and completed our capacities, we tried to use every possible chance for further development and education – we applied for various projects, passed a large number of trainings, etc. This is exactly how we, through USAID, had the opportunity to perform at the largest delicatessen food fair in New York. Although we had a very short deadline for preparation, ie. only 40 days for the preparation of materials, translation of packaging, registration and obtaining a license to export samples to America, we finally managed to present our products at a fair in a very high quality way. And that is exactly the quality that set us apart – products without additives, preservatives, artificial colors and flavors. Then good packaging, flexibility to adapt to customer requirements with which we have entered into negotiations and a competitive price. At the fair, we also met a man from Philadelphia who became our distributor for the entire American market. Negotiations with him were very hard and detailed in terms of the standards and requirements we needed to meet in order to find ourselves in that market. At one point we thought we would not succeed but we were persistent and after 8 months of negotiations the first container with our products was sent to America.
That was pretty unreal for us then. We now already export a whole container of products to over 400 stores across America – to delicatessen stores and premium chains where high quality food is sold. In addition to product quality, a very important added value of Gardeners is our social mission that both our customers and our distributor recognize. They decided not only to buy our product but also to support the story behind it which allows us to sell our tomato juice at a price that is higher than the average for that product in America. There is a social mission and responsible business, much more at the price than with us, both with customers and distributors. This is what, in addition to a quality product, attracted our distributor to choose us, a social enterprise from Serbia.
CoSED: Micro, small and especially social enterprises face various problems in doing business in Serbia. The current pandemic has further jeopardized private sector liquidity and jobs. What are the key problems you have faced so far and what kind of support do you consider necessary and lacking in order to achieve stable growth and development of the sector?
Branislav: The pandemic was not part of anyone’s business plan. But what the state can do now and otherwise is to encourage the export of domestic products abroad. Also, it is very important to help the liquidity of small and medium enterprises, because due to the pandemic, we lost an entire sales channel, which is horeca (hotels, restaurants and cafes). We are now trying to compensate for that sales channel by developing a direct relationship with customers by offering them free delivery of our products throughout Serbia.
The biggest challenge during these 4 years for us was to survive. Although our sales and number of employees are constantly growing, our biggest challenges are still finances and maintaining cash flow. Throughout all these years, the projects and educations of GIZ, Smart Kolektiv, USAID and the well-meaning advice of the people we met helped us a lot. I will mention some of the problems faced by small producers and one of them is large chains as a sales channel. On the one hand, they are very important for the visibility and positioning of small producers, but on the other hand, the relationship they have with small and micro producers should be more stimulating. For example, it would mean a lot if they did not charge the companies that produce domestic food and those companies that have a social mission behind them. Also, what is now creating a problem for “small” in large chains are payment deadlines that are too long and which are the same for them as for large multinational companies. There are simply many aspects of the business – from positioning, payment, etc. in which large chains behave rather cruelly without taking into account who is how much and who is doing what.
Before entering large chains, the problem for many is the sources of financing because there is no real development financing for small producers and even social enterprises. If we look at the state, it encourages the development of micro and small enterprises, but with serious collateral – which means that you have to have a guarantor or mortgage / banking security. On the other hand, the attitude of banks towards small producers is very commercial and with a very tight financing system. After a very tedious and lengthy bureaucratic procedure, we often get the answer that we do not meet the conditions for obtaining a loan, and it is, for example. much needed to maintain liquidity or for the investment we have planned. In theory, everyone says that small producers should be encouraged and supported, but in practice it looks different and the room for maneuvering a small producer is very limited. In the end, you rely on yourself, your family, your associates and the farming community that grows with you.
CoSED: From the very beginning of the pandemic, Vrtlari have been the initiators and participants in many solidarity actions. How do you support your community, fellow citizens and your customers across the country throughout this period?
Branislav: We just watched what was happening around us and we wanted to support all the medical workers, officials and vendors in Vrbas who were on the “front line”. That is how we started the Jedno srce – Jedan grad campaign with the Empata association. One city during which we distributed symbolic gifts and packages – proju, homemade juice, flowers, etc. We wanted to draw attention to what they were doing and support them.
In addition, since the epidemic began in our country, we have launched a free shipping campaign. We wanted to adapt to our customers and help them, especially the elderly. We made sure that our products reach their doors and that it costs them nothing.
CoSED: One of the beliefs that many probably have when it comes to responsible business like yours is that in the face of increased production and market expansion, accountability and fairness in business become irreconcilable with increasing profits. What is your experience on this topic?
Branislav: From the perspective of business during these 4 years, I can say that you survive in business only if you have something that motivates you more than profit. The moment profit becomes the main goal, then I guess we are no longer producers but traders. All stages of development, all the effort, all the setbacks and victories bind a person to such a company and to a completely different way of doing business and approach to work. Accordingly, the goals then change quite a lot, and so it was in our case. The specificity of social enterprises is that with the increase of production and profit, your social mission grows – its coverage, effects and intensity multiply. Profit and responsible business are not mutually exclusive here. When people hear how you work, what are your business principles that you do not deviate from, they approach you and offer a partnership, and then your business increases. An excellent example of this is the cooperation we have achieved with the organization Evo Ruka, an association of parents and friends of children with disabilities. We produce jams and ajvars for them, and through the sale of these products, they provide money for the sustainability of the organization, the day center and for their activities. Every day is a chance to do something good and we do not miss such chances.
CoSED: What does a partnership with small farmers mean for Vrtlari?
Branislav: For us, partnership with small farmers is the only possibility of survival. We want to grow together with them and we want to support these people because they are committed, responsible and have a mission to stay in the countryside and in the fields. Their production gives us the quality and traditional taste that sets us apart from the competition. The relationship we have with over 30 agricultural farms is based on cooperation. Cooperation works by providing them with certain funds as well as knowledge and protection at the beginning of the season. This means that we assign a security guard to each of them – that is the person who supervises their production so that the final raw material is safe and of good quality. After the picking season, we buy that raw material from them at fair prices that are much better than the market ones. Thus, we have reduced the risk that the market carries for them and warned of those terrible pictures we see every year, when one part of agricultural cultivation fails – raspberries, cherries, and this year tons and tons of tomatoes are being thrown away. We are trying to reach these people, to direct them to processing and cooperation in order to stabilize their production and depend as little as possible on speculative purchase prices and what is happening on the market. We develop such a relationship to find each other in challenging situations – they will wait for us when we have some financial problems and on the other hand we will find ourselves in a situation where their financial liquidity is threatened. It is mutual respect and understanding.
When I first bought plums, instructed by the experience of my associates and friends, I went to the scene to make sure of the quality of the goods. When I arrived at the property, it turned out that the man who produced the plums was a person with a disability. Many years before that, he lost his hand at work in a factory. Since then, that man and his family have been our permanent subcontractors, from whom we buy plums for jam at a price that is fair and not market-oriented. It was there that I realized what a Vrtlari’ mission is in relation to small producers.
CoSED: Last month, Vrtlari celebrated 4 years of their existence. From this current perspective, what business and social results and successes would you point out as the most important and your favorite?
Branislav: The most beautiful part of our business is the community that grew up with us and with us – our farmers, associates, customers. When we get photos of children whose faces are stained with our jam, I know I’m doing the right thing. Customers have high expectations but also great trust in us. When we first joined a large chain, we all lined up around the facility and waited to see if anyone would buy our products. And when I saw the hands of an elderly lady reaching for our tomato juice, I rejoiced as a small child, even more than when we later had greater business success. These are those small victories that are remembered for a lifetime and make us not give up even in such moments of crisis.
If you are curious to hear the stories of social entrepreneurs in Serbia, follow our blog segment “Talking with social enterprises”, and if you are interested in what products and services social enterprises in Serbia produce and provide, visit our database of social enterprises.
The Coalition for the Solidarity Economy Development has launched the first blog on social entrepreneurship in Serbia within the project “Fostering the development of social and solidarity economy” in cooperation with the Heinrich Boell Stiftung – Belgrade Representative Office.
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