In the Bogota Savannagh, home to some of Colombia’s largest flower exporters, Ultraroma has rapidly built its herb volumes on five farms in close proximity. The business began as a small-scale add-on to one of the company’s flower farms, but initial feedback was so good the commercial decision to separate the two, and establish dedicated herb farms, soon became a no-brainer.
Now, Ultraroma, which is part of a bigger group that also handles both flowers and fruit, exports 40-50 tonnes of herbs a month and sends two or three consignments a week to the UK by air (around 3-4t) and recognises the role played by the market in its rapid development. “The UK market has taught us how to do business,” says Antognoli. “The [Colombian] domestic market is 20 years behind the UK in terms of herb consumption and working in partnership with English Country Herbs, we have learnt a lot from them and their feedback and advice has been invaluable.”
The company produces a wide range of herbs in greenhouses and open-field. Mint and rosemary perform better outside in the region, while oregano, chives and tarragon are among the products that respond to being under cover. The climate speeds up the production process, compared with many regions of the world. “It rains hard and then the sun comes down hard, and the herbs respond well to that. Mint, for example, has a four-week growing cycle in the summer months. We do place plastic covers on the plants at night at some times of the year, to protect from hail.”
The greenhouse structures used at the company’s farms are lower hung, hiding them from view, and giving benefits to the production process. “They are more expensive,” says Antognoli, who brought the idea back from a trip to California, “but they are more environment-friendly and easy-to-control. For products such as tarragon, which likes higher temperatures, they are much better. The tarragon production process has been reduced from nine to four weeks, as a result.”
Ultraroma’s portfolio also incorporates chervil, rocket and basil. Colombia’s basil crop is largely sent to the US, as the Genovese variety preferred by the UK market is in limited production, says Antognoli, who explains that productivity and management issues have made it difficult to justify to date. “It is difficult to predict demand for some products, but our job is to fit in with customer demand,” he says. “If the retailers want it, we want to have it available, but we have to be sure because trials are very expensive.”
While the company manages its five main farms, from which 100 per cent of its UK-bound product emanates, it has also forged close links and in some cases joint ventures with a sizeable network of small growers. “The growers own the land, but we have the technology, the know-how and the will to invest. This provides around 20 per cent of our total volume for export and an opportunity for more growers to get involved in a potentially profitable business. It also makes sense for us - growing 100 per cent of your own product in a volatile market is not good business.”
All post-harvest grading and packing is carried out centrally though, at Ultraroma’s facility, within 15 minutes drive of Bogota’s international airport. “Post-harvest is just as important as production,” says Antognoli. “The reception area at our facility is one of the most important parts of the entire chain - if we pick up any issues at that point we can short-circuit problems further down the line, as well as immediately notifying the sourcing department.” Regular contact with EurepGAP certification body Integra ensures that the necessary controls are in place throughout, and Antognoli’s management team are constantly looking at ways to improve the flow of product through from field to container.
“We encourage our graders to compete by putting them in teams of two, and selecting two employees of the month each month. They are measured by a series of criteria and there are incentives both to receive financial rewards and advance within the company. Everyone takes a food management course before they begin their employment here, licensed by the ministry of health. And the overtime we are able to offer here gives our employees the opportunity to take home a very good salary by Colombian standards.
“It is gratifying to see what is developing here and the jobs we have created,” says Antognoli. “This is of course a poor country and we are very aware of our responsibility to the people of Colombia. Our group employs [members of] 2,700 families and on average through the year, the herb business employs 100.”
Many companies have crossed interests in the Colombian fresh produce industry, but whether they deal in fruit, flowers or herbs, there is always a primary focus. “It is definitely an advantage to have a multi-product business to offer to your overseas clients,” he says. “In Europe, there is a preference to work with just one supplier and that is why we look to build strong relationships and grow with our partners. The Colombian export industry is relatively new, and to do things well in Colombia, you need to be here and also to invest. Eventually, I believe customers will recognise who the most important players are and the industry here will consolidate and stabilise.
Even as its Colombian volume increases and the number of families directly employed by Ultraroma expands with it, Antognoli is also exploring opportunities to add herbs and other products from further afield, countries such as Peru, the Dominican Republic and Mexico, to its range. “We are continuously looking for new areas where we are able to add real value. There are so many small things to take care of to ensure that product arrives in good condition.”
ECH counts Tesco and leading foodservice providers among its UK customer base. Ultraroma is working towards EurepGAP, and expects to gain certification early in 2006. Antognoli says: “The UK is our biggest market in Europe and obviously we have to have EurepGAP. The most complicated thing is to change the mentality; to convince people that they need to do things differently. But once you have done that, the rest falls into place.” The company’s employees attend regular seminars to educate them in, amongst other things, the reasons behind the reduction in pesticide usage and the safe and proper use of the minimal inputs that remain.
“It is very difficult to do this job unless you understand why you are doing it. We spend a lot of time telling people where the product they are working with is going and impress upon them that the product is representing Colombia around the world, focusing on making our employees proud of what they are doing. The fact that they feel they are doing something for their country helps quality control and staff retention,” he says.
Biological controls, including the use of calendula (pic on page 18) to attract insects to the end of each row of herbs, adds to the environmental focus. “The aim is not to be organic,” says Antognoli, “but to reduce chemicals to a minimum, ensuring that residues will never be a problem. With ECH, we carry out residual testing on a regular basis and we are very aware of the range for the UK. We have trialed an organic area, but it rains a lot here and it proved quite difficult and impractical to take it any further.” The farms’ irrigation systems are not highly technological, he adds, but a dedicated chemicals manager and the carrying out of regular water and soil analysis ensure that good agricultural practices are achieving the desired results.
Adding value is crucial to the profitability of a product that relies totally on airfreight, and has therefore been subject to spiralling distribution costs in the recent past. Ultraroma has ensured itself the freight capacity by buying forward, but needs to maintain its performance levels to retain its space. “Shipping costs are very expensive, but we can compete by adding value,” says Antognoli, who was due at the Martinair offices for a meeting after FPJ’s visit. His herbs are all airfreighted to the UK, and Martinair provides the only direct route in, to Stansted Airport in Essex. “The fuel surcharge has increased from 20 cents in 2004 to 45c. You cannot pass that cost onto the end customer - it has to be managed in our margins.” In the last two years, he says, margins have been cut by two per cent. “We have reinvented our processes to reduce costs. These things force you to be more efficient and that is what we will continue to focus on, although I would prefer to be more efficient and make more money.”
CASTRO PLOTS TO EXPAND HERB POTENTIAL
Diego Castro, manager of Cultivos Montana, which has its own representative office - Colombitana - in London, has been producing herbs in the Madrid area of the Bogota suburbs for two and a half years. It has one 2.5 hectare farm, with a post-harvest facility on-site and an array of clients which includes wholesale markets in the UK.
“We undertook market research before we began exporting,” says Castro, “and decided that we did not want to target the US like so many other Colombian exporters, but to look at another part of the world. To open an office in London, which we did in August 2004, was a very big decision, and to date it has been a good experience. We have two guys in the UK because we wanted to target a market other than the US and felt that the best way to gain the necessary experience and understanding was to be on the ground.
“We want to build strong relationships by being there with our clients in person, and not just by sending them our product - UK customers are much more loyal than their US counterparts and long-term relationships are therefore more possible,” he says.
“We expect it to take time to open the market fully, but we are learning the different trends and most importantly, focusing hard on the place we want to go to. We have a lot of competition of course, but we are doing everything we can to differentiate our products and identify the shortcomings of our competitors.”
Castro adds: “In terms of direct business, the UK is our primary market, but we do have some product going into North America and a lot of our product is exported through other channels. The UK is very competitive, but we are relishing the challenge. EurepGAP certification, for instance, is quite hard work for a new production business here, but it is worth the effort. It is one thing to have the business, but we know we need this to guarantee our ability to supply the market going forward.”
Certification is useless without a good product, of course, and Castro is confident that his herbs are a match for the competition. “We have a range of good products, including sage, chives, mint, tarragon, thyme, rosemary - the only one we grow in open-field - and oregano,” he adds, “but we want more and there is always space to improve. We have concentrated on optimising the performance of each block on the farm, so that availability runs like clockwork, with no gaps.
“The first six months of the business were spent learning what we were doing, another 18 months down the line and we can really see what we have achieved and how much we have improved. We have space to expand our production area and we aim to do so. We have an opportunity to grow Colombian products and bring foreign money into the country and that is very important. Two years ago we had just four full-time employees, now we have 23 and we like to think we can go on creating opportunities for the people of Colombia.”
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