Urtekram: sales concepts to order

For more than two decades, Urtekram has been a familiar name in Germany as the manufacturer principally of a wide range of body care products produced with organic raw materials. Less well known is the fact that in Denmark Urtekram is also a wholefood wholesaler for a wide-spectrum dry goods range, and itself manufactures many products. Around 450 wholefood stores and health food shops and 1500 shops belonging to various conventional food retail chains in Denmark are supplied by Urtekram. The company achieved in 2008 a growth of 30 % in the Danish market and 25 % in the export market. Sales reached a volume of around 50 Mio.  €.(Picture: Steen Resen standing in front of the body care range)

“We listen to what our partners want and provide the trade with a concept tailored to their needs,” is how Steen Resen and Peter Jessen (picture on left) explain their approach to conquering the conventional market. In their view, it is not just a question of supplying goods but of developing and implementing new concepts as well. The most recent example was a Fairtrade concept for Coop Denmark, with Coop selling Fairtrade goods obtained from Urtekram. The result is 60 Fairtrade articles now available in 175 stores. Urtekram likes to operate with brown cardboard displays that are easily assembled and taken down in the stores.

A promotion plan is devised for each store belonging to the chain. Tasting sessions are prepared, press material produced and an information service is set up with telephone numbers for store employees and consumers. Suggestions for recipes can be accessed by consumers on the internet. Training sessions are organised for a chain’s employees at various locations. “Since 1993, Coop has been committed to organics, Fairtrade and dietary foods and has done a great deal of publicity work,” says Peter Jessen in praise of the company.

In Denmark, Urtekram supplies products to 1000 supermarkets and provides a further 500 shops – so-called concept stores - with goods, services and retail concepts. This last category includes 263 Superbrugsen, 210 Daglig Brugsen, 72 Irma, 65 Kvickly and 13 Kvickly extra. Presentation is in the form of cardboard displays measuring 90 cm each unit, with between two and 30 units standing side by side, depending on the interest in organics in individual stores and the supermarket chains. 450 specialist wholefood shops, health food shops and drugstores are also supplied by Urtekram. “Only about 80 of these shops can be described as well stocked food stores with a full organic range,” explains Mr Resen (Picture: cardboard display in a Superbrugsen store in Aarhus).

Urtekram has recorded double-digit growth in turnover for years. Whilst annual turnover in 2001 was 80 million Danish Crowns, in 2007 it increased three and a half times to 273 million crowns (about 37 million Euros). In the meantime, the company has experienced a shortage of raw materials in the case of some products. “We could increase our sales if we could keep up,” confesses Steen Resen, who is responsible for exports at Urtekram. The company currently employs 165 people, of whom 140 work at Mariager about 50 km north of Aarhus in Jutland and 25 in Bjæverskov near Copenhagen. The health food company Nutana, founded in 1898 and taken over in the autumn of 2006, produces at this location vegetarian products and frozen foods that are gradually being converted to organic. 200 articles are retailed under the Nutana name in Denmark and Sweden. The Urtekram body care programme consists of around 200 articles, the dry goods range of about 1000 articles. Approximately 50 % of these toiletry products are exported. (Picture: a part of the company premises in Mariager)

Urtekram is the sole importer in the case of many well-known foreign wholefood and health food brands like Dr. Schaer (primarily gluten-free conventional bakery goods) from Italy, Green & Black’s chocolate from England, Biotta (juices) from Switzerland, Rice Dream from Holland, Provamel soya products and Ecover washing powder and cleaning materials from Belgium, Yogitee from Germany, Regioni di Asiago jam and chocolate spread from Italy. Well-known Danish brands like Woodshade, Lene Hansson and Aurion are in the stocklist too. Peter Jessen is pleased to report that Urtekram is the first organic company in Denmark to be ISO 14001 certified.

The two executives point out that their supplying both the conventional and the organic markets is not an issue. The specialist market in Denmark – with only a 10 % share of the market – is clearly too small to sustain own brands. For this reason they now concentrate on the conventional retail food trade. In contrast, in Germany they operate a different strategy – Urtekram body care products are supplied only to the specialist market, and this will not change. In order to have access to more than the specialist wholefood trade, Urtekram signed a contract at the beginning of 2008 with Neuform, making it the preferred supplier of health food stores. Thus, Urtekram has become a regular supplier to the health food wholesaler organisation RND that was founded in 2007.

The company Urtekram – it translates roughly as ‘herbs of high quality’- was founded in 1972 by Lisbeth Damsgaard and Ronny McGrail in Copenhagen. After a change of ownership, a 25 % share of the company now belongs once again to the founders, and 75 % to Gaia Green/Green Venture that is owned by eco-investor Ross Jackson. After locating to Viborg in Jutland at the end of the 1980s, the company moved into its current premises at Mariager.

(Picture on left: pleasant work stations in Urtekram’s administration)

“We are an ecological company through and through,” state Steen Resen and Peter Jessen with great pleasure. “All employees who come to work by bike are given 18 Cents per kilometre. An extensive fresh food buffet in the canteen (picture on right) is available at low cost to employees, and health insurance is heavily subsidised. Inside the ecologically constructed company building you see that a lot of wood has been used, and it creates a very agreeable and modern working atmosphere that is enhanced by plants and pictures on the walls. Heating is provided by a communal heating plant that uses straw as fuel. Everywhere in the company a waste separation system is operated. It is no wonder that Urtekram is regarded as a desirable employer, and there is a waiting list to join the firm.

Mariager is the location of the administration (1800 m²) and the wholesale warehouse with room for 2000 palettes and also of the production facility for body care products. There is another raw materials warehouse with space for 3000 palettes in Hadsund that is 10 km away. On the Hadsund site you also find the equipment for the production of puffed rice (picture on left below), a roasting and milling plant for the production of nut butter and packaging machines for dried fruits and muesli. Dried fruits and other products are stored in the 800 m² refrigerated plant.

“The health aspect of our foods has been, and still is, of utmost importance,” emphasises Mr Resen. “For example, we sell jams by Fior di Frutta that are sweetened only with concentrated apple juice and energisers that consist only of dried fruit and nuts.” Nevertheless they are trying to gain a foothold in further-processed products and to sell, for example, noodle and vegetable ready meals, and also to extend the frozen food range.

“40 % of Urtekram’s production is manufactured here,” says Mr Resen. As far as exports are concerned, Urtekram is concentrating currently on Germany and Sweden. Many products also go to the Netherlands, Norway, Great Britain, Spain and other EU countries. Exports, consisting mainly of 60-80 articles in the body care range, account for 30 % of turnover.

 
At BioFach 2009, Urtekram presented a new range of "no perfume"- babycare (picture right) with shampoo, shower gel, zinc-creme, lotion and care oil. The products are free of colourants and fragrances to obviate skin irritations, irritated eyes or allergic reactions. They are certified by  Ecocert and labelled as "Ecocert Organic Cosmetic".
 

According to the two Urtekram managers, the proportion of production packaged under brand names on behalf of supermarket chains currently accounts for less than 10% of total turnover. Of course, they want to keep this proportion low and to sell products under their own Urtekram logo. This is what makes Urtekram the most visible brand along with the state organic logo, a white Ø on a red background, in the retail trade in Denmark.

Tip:

www.urtekram.dk