Mahler & Co. AG

Interview with Stefan Jost, CEO Mahler & Co. AG

Mahler & Co. AG is a young company that has been selling sustainable, flavourful and authentic organic products online since 2011. As a result of its longstanding relationships with producers it supplies its customers directly, without using distributors. However, the history of Mahler & Co. AG goes back to the 1960s. Despite the boom in industrial agriculture, Mäni Mahler and his family – nicknamed “the green crackpots from the Eichberg” –maintained their commitment to exclusively organic principles. With head, heart and hand and a great deal of patience and hard work they made their organic business an ecological and economic success. In 1995 Mäni and Margrit Mahler and their son Markus founded the company Eichberg Bio AG and built it up as a food wholesaling business. This company was merged and sold off in 2007. The present company Mahler & Co. AG, one of the major players in the online organic trade, was founded in 2011. We talked to Stefan Jost, managing director of Mahler & Co. AG:

Mr. Jost, you have been on board for a long time – 20 years, in fact. What can you tell us about the early days?
In 1998 – 20 years ago – I joined Eichberg AG. At that time we were one of the distributors of fresh produce who delivered mainly to organic shops. But Coop was also buying our products then, before it started importing goods itself. I started out in the fresh food department; in particular, I was responsible for building up the “white line” of milk and fresh dairy products. Then in 2001 we started working with Vanadis, the distribution centre in Seon was built and synergies were utilised. This was followed in 2007 by the merger of Eichberg AG with Vanadis and Via Verde, creating the present Bio Partner Schweiz AG, which is still active as an organic wholesaler.

Why are the Mahler family not still Shareholders?
Eichberg AG was a co-founder of the new company and a partner in the merger. The new company was established on the basis of equal representation – nobody had a majority stake. But the differing philosophies of the merged firms led to repeated disagreements and obstructions. So in 2009 Mäni and Markus Mahler decided to sell their stakes and quit the newly founded company. Markus Mahler had been active in corporate development since 2007, first as a coach and subsequently as CEO of the Brack company; he had been involved in every aspect of online trading and helped develop it. And so the idea of combining organic products and online selling was born. In 2010/2011 this idea became reality. We started from scratch again, looked for donors and shareholders and in the summer of 2011 we founded the company Mahler & Co. AG. We started with a small range of dry goods, with the intention of adding more products as we went along. After two or three years we had built up the right customer base for this.

What has changed since then?
The organic market has grown, the demand for organic products is also continuing to grow, and the supply has changed too. Organic products are now available via almost all channels. Twenty years ago organic ranges were just getting off the ground; only a few products were available in organic quality. You could surprise consumers by offering an additional organically grown product. That has changed radically since Coop and Migros also started selling organic products and emphasising innovation. For us the major challenge is keeping up with that – or finding a niche that sets us apart from the big distributors.

So you supply specialist shops, businesses and private individuals rather than big distributors?
The big distributors structure their margins differently from the specialist shops. And the listing fees should not be underestimated. It is true that it is easier to list a product if it is a niche item, but that is not our aim. The opportunities for us arise from offering products to smaller shops on an exclusive basis and using our background to keep as close to the producer as possible. As a result of the network that we have built up in recent years we know many of our producers personally; this enables customers to have confidence in us and our products.

Are the products ones that are supplied exclusively to Mahler & Co.? Such as mountain figs from Turkey?
In the case of the figs we support a special project that we have been involved with for a long time. The project helps the growers of mountain figs. As the name suggests, these figs grow in the mountainous regions and not as figs usually do in the valleys. We also support the Weja Agricultural Development (WAD) project that was set up by Patrick Deegbe and his wife Christiane in 2000. We were among the first customers, when we were still Eichberg Bio AG. We still maintain the link just as in the early days. Our exotic organic dried fruits are produced by this project. It is through such projects and the personal contact with these producers that we stand out from the big distributors.

Why choose Mahler & Co. And not one of the many other online organic suppliers?
Transparency, trust and customer service are important in the online organic trade. In technical terms, setting up a webshop is now very easy. But in online trading the customer’s trust in the supplier is absolutely crucial. Customers often pay up front and therefore have to trust that the goods that are delivered will be top quality. This means that a friendly image, information on the products and their background stories, regional aspects and personal contact are very important. Many of our customers come from the cantons of Aargau, Zürich and Lucerne, so there is a certain closeness to our producers there. For fresh products this is particularly likely to be a deciding factor. Another important point for existing customers is customer service. Right from the start people have been able to rate our online shop using an independent tool. This enables customers to express an opinion and give a verdict free of any influence by us. Online customers and over-the-counter ones see the same criteria as important: friendliness, the quality of the products, freshness. For online customers, fast delivery is another key issue. KTIPP GAVE YOU ONE OF THE BEST RATINGS FOR YOUR ORGANIC BOX. Yes, we got the best rating for freshness. The breadth of the range was also rated. Because we have a strong regional emphasis, our range of fresh products is not quite as broad as that of suppliers who use international producers. The closeness to the producer is important to us, which is why we focus on it.

The organic box is available in different versions: vegetables, fruit, meat, cheese. In season you also offer an organic advent calendar and a menu box.
We started the subscription service in 2013 and decided right at the start to offer a menu box. Initially we offered the menu box throughout the year; we were the first company in Switzerland to do this. It soon became apparent that offering three recipes in two different sizes each week is a huge amount of work for a small company such as Mahler & Co. Despite extensive and very positive media coverage, mentions on the radio and reports in consumer broadcasts, we did not achieve the sales figures we needed. Our organic boxes of organic fruit, organic vegetables and fresh and dried organic meat are available on subscription in various sizes. Customers can also take out a trial subscription without obligation and with no minimum term. We still offer the menu box during the Christmas season.

You have a broad product range but there is no special mention of vegan products in your online shop. Aren’t there any?
Large parts of the range, such as dried fruit and nuts, are automatically vegan. But we also sell animal products such as meat, eggs and cheese. People who adopt a vegan diet and like this philosophy of life actually have their own entirely vegan shops. Because we also sell animal foods, our products are less suitable for this particular customer group. But organic and vegan is restricting. The range is smaller and many conventional products such as cheese and meat alternatives contain additives, which is something that we cannot credibly support. We sell veggie products that are also becoming increasingly popular with non-vegetarians. These customers are doing without meat more often for the sake of the environment and that is something that we want to support. We started to address the organic issue seven years ago. These days, though, it is not just about being organic but more generally about the environment and sustainability. Corinne Mahler, who is responsible for sales and marketing at Mahler & Co., recently completed a course leading to the Swiss Federal Proficiency Certificate in Environmental Consulting and is bringing her knowledge to bear in areas including environmentally friendly packaging and shipping.

What does that involve?
Plastic packaging is a big issue. It seems inappropriate to sell organic products and then wrap them in plastic. Many of our customers comment on this and we are working on a suitable solution. Plastic provides protection and an alternative product must do the same. Organic plastic does already exist, but most of it is made from maize starch that may come from genetically modified maize grown under intensive conditions. There is a system of environmental impact points for packaging. The organic plastic is degradable, but it cannot usually be disposed of in household compost. Even organic plastics do not decompose easily. Organic plastic is ostensibly a better option than ordinary plastic, but I doubt whether it is a long-term solution. Paper could be an option as an alternative packaging, but even wood is a resource that is becoming increasingly scarce. In addition, paper does not act as a barrier in the same way and is not gas-tight enough to provide products with adequate protection. For our own brand we are currently looking at pouches that are based on cellulose rather than starch and can be made from materials such as wood waste or sugarcane fibre.

What are the advantages of organic certification for Mahler & Co.?
Our products are all organically certified, usually not just to minimum standards. The founders of Mahler & Co. were and are organic pioneers and we are proud of that. Much of our range meets higher organic requirements than those of Bio Suisse, Demeter or Naturland. From 2019 we shall also be labelling more than 60 of our own-brand products with Bio Suisse’s Knospe bud. Familiarity with the bud symbol is widespread among our customers and they trust it. We hope that working with Bio Suisse will get our products noticed and increase our reach; we also look forward to joint communication on some issues. The whole organic inspection process is conducted via bio.inspecta. In addition to the annual organic audit we have contact with the certification body throughout the year on technical issues. For example, even as an organic supplier it is still possible to find pesticide residues present in raw goods in small quantities. The staff of bio.inspecta were able to help us in a specific case of residues of this sort and by working with the producer in Italy and the local certification body it was possible to prove that the contamination was the result of drift from an adjacent conventional field. The problem was addressed by planting the organic crop – in this case organic tomatoes – further away from the conventional field, so that the distance between the two was increased from five metres to ten.

Is there anything else you would like to say?
We humans must think a lot more about future generations. We need to rethink our lifestyle and adjust it now – not just in connection with diet and organic food but also more generally in areas such as transport, housing and consumption. Major changes must be made so that we no longer need a fictive two or more planets for our lifestyle. But as individuals we can start now by taking many small steps in the realm of our everyday consumption.