Baru Fresh: flourishing in times of crisis

14 May, 2020

The following is an automatic translation of an article originally published in Spanish on Fortune on May 14, 2020. The full article can be found here

While in Latin America all the alarms sound regarding the economic consequences that the region will face as a result of the COVID-19 pandemic, in the highlands of Panama, the cradle of agriculture and livestock, and a benchmark for ecotourism in that country, a company of organic crops moves against the current and becomes in a few months the main delivery of fruits and vegetables in Panama.

In recent weeks, on social networks in Panama, local figures of different habits have begun to appear with tables full of fruits and vegetables, of all possible shapes and colors, as if he had just harvested that banquet in the garden of his house. But the reality is that this trend is not another temporary trend of influencers bored by the quarantine, but the latest link in a phenomenon that an organic farming company started 2 years ago in the highlands of that country. That company is Baru Fresh.

We have always heard that eating well and quality food is expensive, but when the Swiss holding company Bacalia started Baru Fresh, the goal was as ambitious as it was disruptive: Deliver high-quality food, 100% organic, hydroponic, leaving behind pesticides, excessive consumption of water and excessive exploitation of resources, to be marketed en masse, reaching the final consumer with competitive prices compared to traditional crop products.

“Growing in hydroponics and in a controlled environment allows us to dispense with the aggressive pesticides used in traditional agriculture. It also allows us to better schedule production and deliveries, thus reducing the difficulty in agro-logistics,” says Yolanda Díaz, General Manager and main driver of innovation at Baru Fresh.

At the end of 2019, Baru Fresh launched its e-commerce with delivery in the Panamanian capital, a space that hoped to slowly educate people about the importance of eating healthy and provide the opportunity to purchase these products in the comfort of their home.

“We have allies among local producers who have demonstrated high quality standards, but the process is 100% controlled by us. It ranges from production, management of the processing plant, quality control, internal logistics and direct distribution to the client”, says Díaz.

 

But COVID-19 arrived and everything changed.

The quarantine in Panama precipitated everything in a few weeks. Baru Fresh went from 200 monthly orders in February to 2,000 the following month. Online servers crashed and delivery had to stop. It was official: the company was a success.

Its executives moved fast. In a couple of days they strengthened the servers, strengthened their distribution chain and increased the office staff. In less than 72 hours, Baru Fresh was back on the streets and the rest is history: today they are the largest fruit and vegetable delivery company in the country, surpassing powerful retail chains and local cooperatives, they went from an offer of 15 to more than 100 organic and hydroponic products, and recently expanded their operations to Chiriquí, the second most populated region in Panama.

The President of Bacalia Group, the Italian businessman Giuseppe Cicatelli commented that “The COVID19 contingency has accelerated digital processes that had been growing slowly. Once the restrictive measures are gradually lifted, it will be clear that online commerce is an unstoppable trend. The way we relate to products and services has changed, and there is no turning back from that.”

“The great complexity of distributing food online is the handling of perishable products. A vertically integrated company from production to sale to the final consumer, under the concept “from the Garden to the Table”, has an insurmountable advantage over companies that only distribute, in terms of price, quality control, quantity and time. of delivery, which are the main keys to the consumer experience”, adds Cicatelli.

Perhaps one of the most remarkable elements of the positive Baru Fresh experience, beyond being the story of a successful business, has to do with the paradigm shift that they installed in this Central American country. In general, products of this quality would be designed to travel to the US, Europe or Asia, but it was decided to offer the local population a healthy, high-quality and accessible product across the board, as a way of suggesting that eating well It is not only exclusive to the elites, but a right that families must access to improve their quality of life and food education.