` Gaea CEO's Top Priority: 'Keep Serving Our Clients Every Day'

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Gaea CEO's Top Priority: 'Keep Serving Our Clients Every Day'

Jul. 29, 2015
By Lisa Radinovsky

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Last week, Aris Kefalo­gian­nis, the CEO of Gaea, spoke with Olive Oil Times about his company’s suc­cess in meet­ing the chal­lenges of the Greek eco­nomic cri­sis, the urgent need for reform in Greece, some pil­lars of the country’s eco­nomic growth, and Gaea’s con­cern for the envi­ron­ment and for the peo­ple behind the company’s award-win­ning prod­ucts.

We need to change our soci­ety, our econ­omy, the way we oper­ate.- Aris Kefalo­gian­nis

Gaea prod­ucts are exported to 26 coun­tries, includ­ing the USA, Ger­many, the UK, Rus­sia, and Nor­way. Along with what Gaea’s new video iden­ti­fies as the most awarded Greek extra vir­gin olive oils in the world, which account for 50 per­cent of its sales, the com­pany pro­duces olives and other authen­tic Greek prod­ucts. Pro­duc­tion and exports have con­tin­ued with­out inter­rup­tion dur­ing the finan­cial cri­sis, even after banks were closed and cap­i­tal con­trols imposed, with Gaea intro­duc­ing a new olive oil and olive pack line in the United States on July 13.

Kefalo­gian­nis says Gaea is not delay­ing any­thing dur­ing the cri­sis: The tar­get is to keep serv­ing our clients every day; this is the most impor­tant thing. We know as long as we man­age to do that we will be healthy and alive as a com­pany. Our empha­sis in cri­sis man­age­ment is to con­tinue oper­at­ing and load­ing our orders.” They have achieved this, with higher sales this July than any other year. It has been a strug­gle, given the need for advance cash pay­ments, with a pre­vi­ously approved credit line not yet acti­vated even after banks reopened. Gaea man­aged to pay for­eign sup­pli­ers and main­tain sup­plies by open­ing a bank account out­side Greece.

Kefalo­gian­nis men­tions that both Greek import com­pa­nies and the export com­pa­nies that rely on imported mate­ri­als face tremen­dous prob­lems” now, with hun­dreds if not thou­sands of loaded con­tain­ers wait­ing in ports dur­ing the cur­rent bank­ing cri­sis and eco­nomic reces­sion. Even so, Kefalo­gian­nis points out, many are relieved that Greece has avoided the worst: an uncon­trolled bank­ruptcy of the Greek state. No one could fore­cast accu­rately what that would mean.”

Kefalo­gian­nis cred­its Gaea’s cur­rent suc­cess largely to the cre­ation last March of Gaea North Amer­ica, a wholly owned sub­sidiary of the Greek com­pany, which is headed by David Neu­man, the for­mer CEO of Lucini Italia, and based in Hol­ly­wood, Florida. With Gaea prod­ucts read­ily avail­able in the U.S. thanks to a very good dis­tri­b­u­tion net­work in the North­east, espe­cially in the New York metro area and with the North­east and Mid-Atlantic divi­sions of Whole Foods, Amer­i­can imports have made a strong con­tri­bu­tion to Gaea’s recent high sales vol­ume.
See more: What an Olive Oil Brand Needs to Make it Big’ in the U.S.
How­ever, if the sit­u­a­tion is to improve in Greece more gen­er­ally, Kefalo­gian­nis is adamant about one thing: If I have to say one word I’ll say: reforms. We need to change totally our soci­ety, our econ­omy, the way we oper­ate, the way the Greek state has been set up, all the bad prac­tices, the pro­tected pro­fes­sions.” He argues that such reforms will ensure a future for Greece even if we go back to the drachma,” a rever­sion he is strongly against, being in favor of the euro although he admits a deval­ued drachma could the­o­ret­i­cally help a com­pany like his, which is depen­dent on exports for 82 per­cent of its busi­ness.

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Whether Greece stays with the euro or returns to the drachma, Kefalo­gian­nis cau­tions, with­out reform, struc­tural prob­lems would bring the same deficits and prob­lems, drag­ging things down­wards.” He also argues that aus­ter­ity with­out reforms is a dead end.” What is most impor­tant to him is not which gov­ern­ment is in charge, but that reforms are insti­tuted, because he expects reform to ben­e­fit all sec­tors of soci­ety and help reverse the brain drain that has plagued Greece for years. Reforms will cre­ate con­di­tions for these tal­ented peo­ple to come back. A lot of tal­ented peo­ple have moved abroad and become extremely suc­cess­ful when they are part of an orga­nized soci­ety.” He views their abil­ity to thrive under dif­fer­ent con­di­tions as proof that reforms are needed and will help.

After reforms are insti­tuted, Kefalo­gian­nis sug­gests that three pil­lars” could be cen­tral to an eco­nomic recov­ery: 1) the Greek diet, 2) tourism, includ­ing culi­nary tourism, and 3) ship­ping. Gaea’s video points out, No mat­ter how far you look into Greek his­tory, you will see that olive oil dom­i­nates our diet. It is the basis of the Mediter­ranean diet, and all sci­en­tists attest to its ben­e­fits.” Fea­tur­ing tra­di­tional Greek prod­ucts, Gaea has been help­ing to intro­duce the tra­di­tional diet of Greece to the world, both as part of Mediter­ranean cui­sine and in terms of its unique healthy fea­tures.

A closer link between tourism and the food indus­try could ben­e­fit both indus­tries. Kefalo­gian­nis main­tains that while culi­nary tourism is in its infancy in Greece,” there’s tremen­dous poten­tial. There is no more pow­er­ful tool of intro­duc­ing our diet and our prod­ucts to the world than by bring­ing peo­ple here, espe­cially dur­ing har­vests. It cre­ates a last­ing impres­sion. The field trip is the most effec­tive mar­ket­ing and sell­ing tool.”

While Kefalo­gian­nis rec­og­nizes the impor­tance of mar­ket­ing, Gaea has also demon­strated an impres­sive con­cern for both human beings and the envi­ron­ment. The Exportlead­ers web­site indi­cates that the com­pany pro­duced the first car­bon neu­tral olive oil and olives in the world. Kefalo­gian­nis explained to Olive Oil Times that Gaea accom­plished this by mea­sur­ing car­bon diox­ide emis­sions dur­ing the life cycle of olive oil, all the way from the field to the super­mar­ket shelf. They found that for every kilo­gram of con­ven­tional olive oil Gaea sold, 4.08 kilo­grams of car­bon diox­ide were emit­ted, and just 1.87 kilo­grams of car­bon diox­ide for organic olive oil. This is far bet­ter than toma­toes, for exam­ple, at 35 kilo­grams of car­bon diox­ide per kilo­gram, or beef at 70 kilo­grams of car­bon diox­ide.

Gaea wanted to cal­cu­late its car­bon foot­print because the com­pany pays a fee to the Swiss foun­da­tion mycli­mate for every kilo­gram of car­bon diox­ide released into the atmos­phere. That fee is rein­vested in renew­able energy resources in devel­op­ing coun­tries through­out the world. Once they learned what caused most of the car­bon emis­sions, they could work on reduc­ing emis­sions, as every­one can. Sur­pris­ingly, it was not glass bot­tle pro­duc­tion or even trans­porta­tion to var­i­ous parts of the world that caused 70 per­cent of the car­bon foot­print of con­ven­tion­ally pro­duced olive oil, but the small amount of fer­til­iz­ers and pes­ti­cides used by olive farm­ers. That explains why organic olive oil pro­duc­tion leads to a much lower level of car­bon diox­ide emis­sion.

Along with con­cern about the envi­ron­ment, Gaea demon­strates respect for peo­ple. Kefalo­gian­nis explains that his com­pany sup­ports employ­ees who seek an edu­ca­tion, hav­ing financed two mas­ters’ degrees (one in the U.S.). We encour­age peo­ple to develop their skills and grow in the com­pany. Many employ­ees started very low in Gaea and are now work­ing in man­age­ment.”

Gaea’s atten­tion to people’s needs extends well beyond its 52 Greek employ­ees. Kefalo­gian­nis says Gaea was the first olive oil com­pany in Greece to do con­trac­tual farm­ing with the same peo­ple year after year — both indi­vid­ual farm­ers and coop­er­a­tives. Now Gaea has an inno­v­a­tive long-term exclu­siv­ity arrange­ment with the agri­cul­tural coop­er­a­tive in Kritsa, Crete: Gaea buys all they pro­duce and gives them back 50 per­cent of the added value cre­ated — con­sid­er­ably more than pro­duc­ers gen­er­ally get. Kefalo­gian­nis believes in reward­ing farm­ers for out­stand­ing qual­ity” in order to attain the con­sis­tently high qual­ity prod­ucts Gaea is look­ing for.

In Sitia, Crete, he explains, Gaea is reward­ing farm­ers in a dif­fer­ent way, by try­ing to help save the deeply indebted Union of Agri­cul­tural Coop­er­a­tives from bank­ruptcy, in coop­er­a­tion with the Bank of Piraeus, the union’s biggest cred­i­tor. By Jan­u­ary 2016 at the lat­est, a new com­pany that is a joint ven­ture of Gaea and the union will begin oper­at­ing, using the brand name Sitia Olive Roots SA.” Gaea and the union will man­age the com­pany, with Gaea pay­ing for use of the union’s mod­ern facil­i­ties and famous, award-win­ning PDO brand name. Eleotech­nia reports that the planned 20-year coop­er­a­tion between Gaea and the Union of Sitia will res­cue the bank­rupt union, ben­e­fit the farm­ers with con­trac­tual farm­ing, and pre­serve the famous Sitia name in the inter­na­tional olive oil mar­ket­place, while Gaea’s man­age­ment and mar­ket­ing skills help the union earn enough to pay off its debts.


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