Ecoveritas: the driving force in Spain’s domestic market

The Spanish organic supermarket chain is anticipating turnover of more than 19 million euros for 2010. Whereas the market for organic food in Spain had been ticking over for years, the organic chain that was founded in 2002 and has its headquarters in Barcelona is one of the few companies that can now be credited with growing the market. The twentieth Veritas store was opened in February 2010. 45,000 families shop regularly in the organic chain’s stores. The conventional trade, including the market leader El Cortes Inglès and Carrefour, whose organic offer has been marginal and overpriced for years, obviously sees no reason to respond. The per-capita spend on organic food in Spain is just a tenth of the figure for Germany. (Picture: The latest Veritas store in Barcelona)“We’ll end this year with an increase in turnover of more than 2 million euros,” Eliàs Silvio de Gispert, the co-owner and managing director of Ecoveritas, is pleased to report. This is an increase of more than 15 % and, adjusted to take account of the new store, it is still a rise of 5 %. “Everybody is moaning about the economic crisis – we’re not,” adds Ignacio Pons, the firm’s head of marketing. (Picture on left: Silvio Eliàs de Gispert, the CEO of Ecoveritas)

Whereas in 2010 they were able to find only one new location for a store, in 2009 four new stores were added to the organic supermarket chain. As a result of the economic crisis, an above-average number of premises became available, and they were able to lease some of them at a reasonable rent. The next new opening is planned for March 2011. “We can see scope for another ten stores in Barcelona,” says Gispert. The store they are planning to open will be in the shopping centre Las Arenas, and it will become the second of their stores to be located in a shopping centre. The smallest Veritas shop, in the Senillosa Passage, has 140 m² of retail space, and the biggest store (650 m²) is in Barcelona’s Mandri Street. This store is currently the biggest organic supermarket in Spain. Six of the twenty stores are not in Barcelona itself but in the surrounding areas (Granollers, Sant Cugat, Castelldefels, Manresa, Sitges and Llicà d’Amunt).

The average spend at Veritas stores is increasing and has reached 15 euros. The number of goods in its product range is similarly rising continuously. “We’re listing 30 - 40 new products every month and de-listing 15 – 20,” says Pons. Thus the total number of articles is 4,500, of which a good 400 – about a tenth – are own brand items. “We want to keep on reducing the very high prices that the end consumer has to pay for organics and make them affordable for everybody,” is how the managing director describes his mission. And he explains that over the last few years they have in fact lowered the premium on many products from 100 % to about 40 %. (Picture on right: Light green product group signs in the dry goods range)

The company Ecoveritas – the stores and their own brand are called Veritas – collaborates directly with manufacturers in order to circumvent the middlemen (importers and wholesalers) who make goods more expensive. This approach means that prices can be gradually reduced. Ecoveritas enters into agreements, mostly for five years, with more than 300 manufacturers, and this gives the company the security needed for forward planning. Of course, this is a huge contribution to the development of processing in Spain, and Gispert is proud of what they have achieved: “Our efforts over the last eight years have resulted in the proportion of Spanish products rising from about 20 % to between 60 % and 70 %.” Many products that were not produced in Spain at all are now available, for example vegetarian bolognaise (with soya), a range of organic baby food and ice-cream from Catalonia. (Picture: Own brand products like these chocolate almonds carry the name Veritas on the packaging)

In 2003, the launch of the company was financed with the capital of four families.The very difficult development phase – for six years they made no profit but had to keep on investing – is now over, and the CEO says that for the last two years they have been operating at a profit. Now Ecoveritas employs around 160 people, and this number will rise, because they intend to expand their business regularly though in moderation. They will consider other towns in two years at the earliest after the market in the Barcelona region, with its approximately 3 million inhabitants, has been fully opened up. Franchising might then play a bigger role. The one and so far the only franchised store was opened by a former employee who wanted to establish a business 60 km to the north of Barcelona. Ecoveritas is pleased with this venture. (Picture on right: Marketing manager Ignacio Pons and an employee)

Marketing strategy – with a company magazine and a flyer with offers every three to four weeks - plays a crucial role in developing the market. The 36-page monthly magazine has a print run of 8,000 and is found on a stand in front of the organic supermarkets for shoppers to take home free of charge. It is financed through advertising and deals with issues relating to health, the environment and products. “We were especially successful in May of this year when we had a supplement in the Catalonian daily La Vanguardia (120,000 copies),” Ignacio Pons explains enthusiastically. He says that after this initiative they had a significant number of new customers and recorded an increase in turnover. In his view, the campaign was expensive but it was nevertheless worthwhile, and they are intending to repeat it in the coming year. They also place an advert in La Vanguardia three times a year. A regular TV programme, that is received in the whole of Catalonia, broadcasts a two-minute feature during the week with the title “Real Food”. With a 20 second spot, Veritas uses the programme to attract customers. Veritas’s internet site is also put to good use, and it registers 15,000 visits a month. Interested customers (13,000) receive an email twice a month giving details of current offers and background information. (Picture above: New products being introduced to customers)

About now, the company is celebrating its eighth birthday with special offers. 10,000 eight-page offer flyers give an overview of 100 products that are each shown as a little picture.

The new store that was opened in February 2010 is located in the Carrer del Mestre Nicolau in the Gracia district and is only a minute’s walk from Macià Square on the elegant Diagonal Avenue. Pons explains that the organic supermarket has done well from the start, which is probably down to the fact that the store has a fresh meat counter. 5,000 brochures were distributed in what is a very affluent neighbourhood. The store has 250 m² of retail space and sells 4,500 products. At the front are the fresh foods. Immediately to the right of the entrance you find bread and bakery goods, and then comes the meat counter. On the opposite side is the fruit and vegetable department. Towards the back of the store are the shelves stocked with dry goods. A system of light-green vertical signs (see picture) guides you to the various product groups. On the walls are large-format signs with background information such as the company mission statement. The fittings and furnishing are colourful and practical and not too high quality. The building that houses the Veritas store on the ground floor is very conspicuous: from the top to the bottom of the glass façade you see stylish horizontal sun blinds in all the colours of the rainbow (picture above on right).

A short time ago, a fresh fish counter (picture above) was added in two of the bigger stores (picture above on left). “We found a fisherman from nearby Palamos who supplies us regularly with the fish he catches,” says Ignacio Pons. He explains that what they sell is always changing, so not everything is available all the time, but it is wonderfully fresh. His catch often includes crayfish, shrimps and tuna.

At Veritas, they are especially proud of their huge variety of bread and bakery products (picture on right). They are baked fresh every day in the company’s own bakery and delivered to the stores. For some time, 22 schools that provide meals for over 5,000 school children have been regularly supplied with organic bakery products by Veritas.

The opening times of Veritas stores are customer-friendly: 9.15 – 21.15. One of the stores in the middle of the tourist zone in the centre of Barcelona (Via Laietana) is also open on Sundays. The store in Castelldefels, 15 km to the south-west of downtown Barcelona, is even open 361 days a year.
Tip:
www.ecoveritas.es