business model
Verstegen Spices & Sauces B.V. As a family-based company, Verstegen Spices & Sauces focuses on long-term business continuity. They direct many of their investments towards quality and sustainability, in order to remain competitive in the market of the future, including ever more aware and demanding customers. This explains why they attach so much importance to transparent, ethical and sustainable production chains. In 2011 the company initiated a new project for white pepper production in Bangka, Indonesia. In 2018 Verstegen added an agro-forestry project, based on trust, knowledge exchange and experience with a supplier located in Indonesia. Indonesian pilot project Indonesia is a great location for white pepper production and this is the place where Verstegen has been getting most of its white pepper supply from. To increase efficiency and social as well as ecological sustainability, a subsidized project was started in 2011, to establish a more fruitful and respectful relationship with the local farmers. A smaller agroforestry project started in 2018 with suppliers and ReNature, and is still under development. Agroforestry of white pepper turns out to be a sustainable, fair and efficient production method, which is also more profitable than traditional mono-culture. An existing plantation from a supplier was turned into an agro-forestry experimenting site, as well as an educational project for the surroundings farmers. By investing in geo-information, Verstegen and the supplier can keep on monitoring the project and making sure that the pilot crop would be as sustainable and efficient as possible. The geoinformation data are shared through mobile apps and training events with the surrounding local farmers. The quality of soil, air, water and harvests Initiative: Verstegen Spices and Sauces, Supplier and ReNature, 2011/2018 Type of organization: limited liability company Landscape focus: Indonesian agriculture Scale: Indonesian rainforest
are also monitored, which is a great asset in quality control and accountability. Safe business model Verstegen used the financial support of (inter)national governmental subsidies such as GIZ, DHI and RVO, among other funds, to establish a new 50/50 contract with a supplier on the pilot project site. The investments risks and profits are equally shared between Verstegen and the Indonesian supplier company. The collaborating farmers in the Verstegen agro-forestry project become direct suppliers of the Dutch company, which ensures them a higher and safer income. Lessons learned Multinational food production chains with sustainability, traceability and ethical values as well as financial viability are possible. They can be a good investment for a family business such as Verstegen, focusing on long-term competitiveness and quality. As a kickstart, subsidies are often necessary for a large project, such as the 2011 pepper production project. Smaller projects, such as the agroforestry project of 2018, can be started by the company and its suppliers, without subsidy. Value loops: In a clever loop of consumer desires, ethical and sustainable ambitions of the company, shared risks and costs with a supplier, and a safe pilot environment for over 2.000 pepper farmers, Verstegen Spices managed to develop a production chain that brings quality pepper
Contact: Gilmee Davids Financing model: subsidies and private investors
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