Bio Company: “We are the Berliners”

Bio Company is number one in the specialist wholefood trade in Berlin. By the middle of the year, Georg Kaiser and Hubert Bopp will be operating 17 stores in the capital. A high level of recognition, a certain cult status, clever ideas, plenty of regional produce and lots of brand articles in the product range – these are the trademark features of this organic supermarket chain. Georg Kaiser can look back over ten years of Bio Company. He spoke to us about the values they have embraced, current issues and expansion plans. (Picture: Bio Company’s managing partners Georg Kaiser and Hubert Bopp are doing well – turnover has increased by 24 %)
1999: in the same year as Basic started up in Munich, Undine Paul in Berlin also had the idea of making organics more than just a niche industry. “Bio Company began in quite a simple way; we had very little money and limited know how,” says Georg Kaiser when he thinks back to those days. However, the idea of “organic, but at a good price” and the popular appeal of the company soon spread round Berlin and brought lots of customers into the first stores. The company also benefited from the organic boom in the wake of the BSE crisis. They soon occupied good sites, with the low cost of opening their stores – Ikea shelving was the order of the day – being covered out of cash flow. (Picture: Store at Kranoldplatz in Berlin-Lichterfelde)

Georg Kaiser, who took over as managing director in 2000, thinks speed was the important factor in the early years: “We had the advantage of expanding rapidly in Berlin and occupying premises in a variety of locations across the city.” The company acquired a positive reputation at a time when the capital was not yet subject to competition from the rest of Germany. “If that had not been the case, maybe the company wouldn’t exist in the form we have today,” muses Mr Kaiser. It’s a company bursting with energy: in the ten years since it was founded it has opened 14 stores in Berlin and Potsdam, and from 2008 to 2009 turnover rocketed by 24 % to approximately 45 million euros. (Picture: Georg Kaiser with some of the team in the Kreuzberg store)

In the first half of 2010, three more Bio Company stores are scheduled to open – in March in Glienicke, a second store in Wilmersdorf in April and in Köpenick in the south east of Berlin in May. They also want to establish the name and idea of Bio Company in Hamburg, although that appears to be more difficult than anticipated. The company already has two stores there but, whereas the one in the St Georg district is very successful, the Rahlstedt store is problematic and is scheduled for closure because of lack of profitability. The planned new opening in Bergedorf in the spring of 2010 has been put on ice, because the investor has withdrawn. But Mr Kaiser has said that Bio Company is continuing to search for premises in Hamburg, where their local wholesale partner is Grell. (Picture: The Bio Company concept includes a café/bistro)

With more than 40 organic supermarkets and 80 organic shops, Berlin was recently given the accolade of organic capital of Europe by the Berliner Zeitung. Meanwhile, the national chains have congregated in Berlin – Alnatura with six stores, Dennree (70 % participation) in the form of eight Viv-Bio-Frischemarkt stores, and Basic with two stores. For Kaiser, the competitors against whom Bio Company has to measure itself are Alnatura, Viv and LPG. Nevertheless, the managing partners of Bio Company, Hubert Bopp and Georg Kaiser, think there is potential for further stores in Berlin. Apart from Hamburg, however, Georg Kaiser says that they are not planning to set up in other cities, despite the fact that their website mentions Dresden and Leipzig as desirable locations. (Picture: Bio Company is family-friendly: baby and toddler clothes and a baby changing room in the store at Kranoldplatz)

What’s at the heart of Bio Company? Georg Kaiser sums up its values in a couple of sentences: “We want to bring the (local) countryside into the city, which is the concept of regionality. And our focus is on the classic specialist brands – we are the house of organic brands, which makes us different from other concepts.” Since 2007, they have supported a number of manufacturers’ brands with an aggressive communication programme. In the context of the privileged-partner-programme, Bio Company collaborates with traditional wholefood manufacturers to create, with the help of lavish campaigns and also in everyday trading, a special platform for their brands. Cooperative marketing (see our earlier report) is being continued with slightly adjusted marketing measures and, as Mr Kaiser points out, every two years campaigns concentrate on particular partners. “We have to keep demonstrating to customers what is special about our brands and who is behind them.” Mr Kaiser is also of the opinion that the trade must offer the manufacturers an appropriate forum. “If we want them to keep faith with the specialist trade, we too have to prove our interest and loyalty.” (Picture: Modern store layout: no reminders of the “Ikea charm” of the early days)

From the outset, Bio Company valued regional products from Brandenburg, although targeted projects, and the corresponding marketing and communication, were only developed little by little. Nowadays, Berliners immediately associate regionality with Bio Company. According to Kaiser, the customers are aware that the company is not using empty words but living a conviction, and they respect that. Close cooperation with regional suppliers comes at a price for the company. “We’re strong in regional marketing – no national chain can achieve that distinction,” Mr Kaiser states and adds: “We are, after all, the Berliners.” He tells people that regionality is his hobbyhorse. “I love going out into Brandenburg and trying to incentivise the farmers to attempt something new.” This is why he is delighted with the Lobetal yoghurts and dairy products from the new organic dairy of the Hoffnungstaler Werkstätten (workshops for the disabled) in Biesenthal in Brandenburg. (Picture above left: The nature conservation farm Brodowin is also a partner of Bio Company). But, as Kaiser knows from experience, to get new projects off the ground suppliers need the help of the trade and concrete promises.
(Picture on right: Store manager Axel Richter has been with Bio Company for a long time and is proud of the big selection of cheeses)

An above-average proportion of the product range of Bio Company consists of fresh foods. Mr Kaiser points out that this proportion is increasing year on year and stands currently at more than 60 %. He says this demonstrates their regional profile and their efforts to develop brands and to strengthen the position of suppliers in Brandenburg by establishing a strong link between them and the customers. Since January 2010, regional partners and their products have been introduced in monthly flyers, and they are also shown on posters in the stores. Among them are Brodowin, Werdefrucht, the Pretschen estate, the dairy Lobetaler Bio-Molkerei and the Bioland farm Zielke, that has been a Bio Company partner for over ten years. Seasonal tips and recommended products on flyers and their homepage are other ways of focusing on individual suppliers. (Picture: Clear design and space for prams)

Brand products and fresh food from the region suggest high prices but, like other companies, Bio Company goes in for lower price offers too. “Entry-level prices are a segment that we, of course, need to serve if we are to stay competitive. But we’re careful not to let price advertising dominate,” explains Kaiser. He says the 300-400 articles (Green, Bio Company) under the title “Our Favourable Prices” should sell without a great deal of advertising. He is pleased that the brand articles in particular are achieving much higher than average growth rates. “We’ll continue to put all our efforts into brand development and concentrate on these product ranges, not on price wars.”

In the next few months the company is going to re-structure its product ranges. This means me-too-products must give way to partner ranges that are in total conformity with the Bio Company brand philosophy. The result will be a should-and-can range. All store managers will have a certain amount of discretion in listing based on their experience in their particular locations. Bio Company stores (300 m² - 800 m²) stock between 4,000 and 8,000 articles. For Mr Kaiser, the ideal store size is between 500 m² and 600 m². There is no comparison between store layout today and the layout in the early years. Wide aisles, clearly arranged, half-high shelves and long service counters, lighting that showcases products – an unfussy, functional style that still has individual features and radiates modern elegance. There’s nothing that harks back to the corner shops crammed full of goods that were typical of the first Bio Company generation. (Pictures on left and right: creating a stage for brand manufacturers)