Home Latest Organic News Martin Eras (Barnhouse) “The organic market is changing rapidly. We need to...

Martin Eras (Barnhouse) “The organic market is changing rapidly. We need to be part of it”

02/06/2021

Barnhouse founders, Neil Reen and Sina Nagl, were first movers with regards to the organic development in the 1970s. They were driven by supporting organic farming in the first place. Since they were not farmers and loved granola, they decided to produce the first organic granola in their small apartment in Munich and invented thereby “Krunchy”. They distributed it by bicycle to the 4-5 organic shops existing in Munich at the time.

After 40 years of successfully developing Barnhouse, in November 2019, they retired and decided to sell the company to Stefan and Sebastian Hipp, organic entrepeneurs and farmers. The brothers, well-known for organic baby food, are continuing the journey of this familiar pioneer company. Now, with Martin Eras leadership, a CEO with experience in leading mid-cap companies from very different sectors and business models, Barnhouse is currently working on a coherent approach to deal with the current challenges such as organic specialized distribution that, in words of Mr. Eras “has made the sector grew over the past 40 years and put it where is now all over Europe”, and the changes coming from new field-players like retailers and discounters, digitalization and new distribution models.

Barnhouse it’s been a worldwide pioneer – the history of the company begins in 1979 with the first organic crunchy muesli. What’s the key to your success?

Over the past 40 years the founders developed the business up to the scale where it’s now. And the growth of Barnhouse has been really in accordance with the growth of the German and European organic movement and market. In Germany we have approximately 70% of the organic crunchy muesli market share in the specialized market, and we have distribution close to 100% in the organic shop world. In Germany when you enjoy organic crunchy the chance that it is produced by us it’s pretty high. Our crunchy DNA spread out pretty wide.

“The Barnhouse founders were driven by supporting organic farming in the first place. Since they were not farmers and loved granola, they decided to produce the first organic granola in their small apartment in Munich”

Our motto is ‘always quality first’ – we never ever had an approach ‘volume first’ – it’s been always quality. Very pure recipes, no tricks of food technology, top notch ingredients. This mix led to a high quality level that we were and are always committed to. And the taste, of course – our crunchiness, a very specific crunch factor!

How has Barnhouse adapted to the growth, the sector changes & challenges, without losing its essence?

I think we didn’t change a thing. It was and is always quality first! Our Krunchy Honey has the same recipe as in the Munich apartment back. Quality dictates recipes and production processes – not vice versa, as it is often practised to make production cheap.

Covid-19 made the past year extremely challenging for Barnhouse due to very high demand. Covid-19 is a health crisis that pushes organic development. Although we already have three shifts a day from Monday to Friday, we had to add additional weekend shifts. The growth in Germany was very strong, but even other countries in Europe were not falling far short.

Covid-19 was also a personal challenge for me, since I was new to the company and new to the organic industry. But we have experts at Barnhouse who have an in depth understanding of the organic business and its drivers. Everybody supports me with regards to the specialities of the organic world and I am still learning from the people at the company.

What is the ‘Barnhouse oat’?

We have a group of 88 regional organic farmers that grow all the oat and spelt wheat that we process in our Barnhouse products. We know them by name, I have conversations with them, we have team meetings with them, we discuss things. It’s not a group of people delivering products to us: we work together to further develop and promote organic farming. They’re very committed to us and we are very committed to them. And this is a very emotional and convincing concept for the endconsumer: to understand not only that the product is organic but to know the region and the farmers the grain comes from. Now we are extending this regional approach to Krunchy sorts, that are exclusively produced for Spain & Italy. Even people in Spain and Italy appreciate our regional farming concept in Bavaria.

On the packaging, you will see the names and faces of our farmers. It’s very meaningful for us to have the source of ingredients around our company, and we are very happy to work with our farmers. All the oat fields are less than 100 kilometres around our factory, the very majority even less than 50 kilometers.

“Make the fields wild again” – What can you tell us about the wild-herb project?

We are facing problems with conventional farming developments that are pushing our soils to their limits. Missing biodiversity, monocultures are endangering our fields and soils with regards to desertification. It’s an issue if we do not tackle it. We are trying to re-cultivate the arable land, and motivate farmers to increase biodiversity and to revitalize humus. It’s so important to help the ground to get recovery time. Because even organic farming sometimes forgets that. The farming structure needs to take care of the arable land and the biodiversity. We want to encourage organic farming to go a step further.

This goes along with the philosophy of the HiPP Group as well

Absolutely. They are very committed to that. They come up with first approaches to true costing and really improve the carbon footprint. We are a small company and the good thing is that we can learn from them. We are not part of the HiPP Group, but of course we have a very close relationship.

Why did you choose to went fully Palm-Oil-Free on all your Krunchy product range?

It’s an interesting development. All our recipes were processed with palm oil in the early days. We had a very good organic sourcing project in South America, not Indonesia, without any deforestation since many years and high social standards. But at the end of the day the endconsumer decided the verdict: palm oil is not acceptable, no matter what. We were not getting through to the customer with our reasonable palm oil approach. Especially endconsumers in Spain were holding back sales due to our palm oil content and so we decided a hard stop on palm oil and switched over to sunflower oil without loosing quality and taste. This was challenging!

“Quality dictates recipes and production processes”

What about packaging?

We can’t stop thinking about that. How can we improve packaging? Our plastic foil is very thin and its easily recycable. We need a packaging that really keeps our products fresh and crunchy, and that is the basic, not neglectable requirement. We are constantly checking new developments with providers, but so far, the formula we are using is the best choice with regards to sustainability and crunchiness of the product.

What do you think about the specialized shops – major retailers’ cleavage?

The organic shops, the specialized market, are our home base. That’s were we come from and the organic shops supported and helped us to become the company that we are. There’s no doubt about that. The question is what’s next.

In Germany the business is changing. The typical organic shops from the early days with one owner are shifting towards shops within organic chains. We also have to see what are the further steps regarding the Covid-19 pandemic. People are now looking to a one-stop shopping opportunity. We’ll see now how this further develops. The specialist shops need to develop strategies to get people into their stores. Consumer frequency is key. They have to come up with new concepts. Concepts that will attract to the end consumer. That’s vital.

“We want to encourage organic farming to go a step further”

How do you see the evolution of the Spanish Organic Market?

We are very happy with our evolution. Spain is very important for us. It’s a very interesting market, with a strong specialized organic shop base. Our development is promising. Our best sellers in Spain are SUN ‘Oat’ and ‘Apple Cinnamon’.

You are part of OPTA, the Organic Processing & Trade Association. What’s your compromise with the European Organic Sector?

As I said: Our commitment is clear. The historic and current impetus of Barnhouse is organic farming. Our conventional food and farming system is showing its limits. We need a strong and powerful organic supply chain with regards to processers and traders. And I think we need that to create future. The current system is at the end of its lifecycle. Look at the Covid-19 crisis. OPTA is very effective in the way they want to transform the European food and farming system, and in the way they want to be part of political developments. We all know it’s a complex process and a lot of interests are present at the EU level, but additional support for the organic sector is needed.