Write a Business memorandum ( Memo). The Memo is going to be a solution for the company

S K E 1 1 9

M A Y 2 0 0 9

����������� �������� �������������� ��� ���� �� � �� ����� �������� ������� ��������� ������������������������������������ ������������ ����� ������������������� � ������� � !��������"���������� ������������� ������������ ���� �� ���������� ����� � ������� ���������������������!����������� �������� ������������ ������ ������� ���� �#��� ��� � ���!��#���$�%&&'��� �����(��������������������)�������������� ��������������������� ����� �*+&&,�'++-&++.����*./0,�0+1-02&&� �������� ���� 3���� � �� �� ����� 4����� 5�� ���� ���� ���� ����� � ��" ���� #�� ����� �� 6 � &%/.1�� ��� #�� ��� ����788444��"������ ��������� ��� ����� ��� ����� ��" ������ � ��!� "�� ������������ ������� � � �� ������ � � �!������ ����� � � �� ������������� ��� ��� �������� � � � !� ����� ��� "!� � !� ��� ��� � ����� ���� ����� ��� �� ��������!� #�� ������� #�� ��� �����4����� 4�������������������� ���������"� ���� ��� ������!��#����� ����� � ����������������" ������ ��������������������4����������"!� �9� ���� ������� ��������� ���: ����5�� �������� ���� ����� ��9�� ��9�� ����� ��������3 � �����������; ���������� ���3 � ��������������� �����3 � ������������� � ��<��� 3 � �������������=����� ���� ��3 � ���������� ����>������ ] �

ALFRED VERNIS LAURA LAMOLLA DANIEL ARENAS

?�������� �� ����@� ���AB�����C���������C����D�� ���������� ����������������������� ������ ������������� � ���������� �����������E����������������������� �������������� ��B���

��F����6� ����������������������*&%8%G8%&&+,�

La Fageda When Cristóbal Colón, La Fageda’s founder and president, received Spain’s 2005 Social Entrepreneur award from the Schwab Foundation for Social Entrepreneurship, many corporate journals and magazines suddenly became interested in the organization. However, this was neither his first nor his last award during his 25 years at the helm of La Fageda, a dairy cooperative business that produced yogurts and puddings and employed most of the mentally challenged people in La Garrotxa County.1 This award specifically rewarded Colón and La Fageda for the organization’s long-term work on social and labor integration for people with developmental disabilities. Cristóbal Colón could also pride himself for managing to position yogurts produced in a small town removed from Barcelona’s influential reach on the same supermarket shelves as Danone products, the industry’s leading manufacturer. La Fageda had secured retail recognition by manufacturing a top-quality yogurt that consumers viewed as a homemade, natural farm product. Colón knew that La Fageda was praised because, though being a social and labor integrating business for mentally challenged individuals, it had held its own ground upon competing with dairy industry market leaders. Yet, in late 2007, Colón’s overriding concern was how to keep La Fageda yogurts in distribution circuits. On one hand, large food multinationals had ever-increasing leverage with distributors; on the other hand, some leading distributors were prioritizing their own brands. Colón wondered if La Fageda could maintain its competitive positioning while upholding its foundational spirit.

1���:����� ����� �������� ����� ��� ���������� ���#�� �*'2��� ������������� � �,��(����%+G-�)����-�� ����� �!����������� ���� � ���21�&&&�*%&&.,������ !��� �� �������� ����������� ����!��H ����9������ ��!������������ !�� ��#��"��� ������������ ��� ���� #��4� #���� ����� �����!������� �� #����� ������������� ��������������� ������ ����������� ������� �������� ��� � ����� � � ��� �� � (see Exhibit 2).

Distributed by The Case Centre North America Rest of the world www.thecasecentre.org t +1 781 239 5884 t +44 (0)1234 750903 All rights reserved e [email protected] e [email protected] centre

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

2

La Fageda’s Dairy Operations La Fageda was a nonprofit organization that had managed, since its inception in 1982, to employ over 100 mentally challenged local people at Mas els Canals, a 37-acre farm located at the heart of the Volcano Region Natural Forest in Fageda d’en Jordà, a beech forest considered extraordinary for its flat, low-altitude location and breathtaking beauty. La Fageda had started producing and distributing yogurts almost fortuitously, although its founder had been committed to proving that it was feasible to conduct economically viable business ventures with handicapped employees. Back then, in the early 1980s, this notion was highly innovative, as individuals with intellectual disabilities were only considered apt for routine jobs with little value added in highly protected environments, that is, they could not work for regular companies. This led Cristóbal Colón to look for projects that would be therapeutic for the mentally challenged and, at the same time, address a specific market need in order to become sustainable. As a result of this search, he first ventured into gardening and forest upkeeping, later moving on to dairy farming and, eventually, to the manufacture of diary products. He recalled

having the opportunity to garden Olot’s squares and parks afforded us public visibility. It not only contributed to promoting similar services for other city halls and agencies, but also to boosting mentally challenged people’s visibility and normalcy. We proved that the town fools can also provide a service to our community.

In 1984, La Fageda purchased a farm that had previously housed a cattle-breeding operation. Two years after its acquisition, La Fageda had the establishment approved for dairy farming. Colón believed this productive operation had enabled people with intellectual disabilities to work outdoors with live animals, an experience that greatly enhanced the emotional rewards of their job. As Colón put it, “With our forest maintenance, gardening and cattle operations, La Fageda’s project was complete, for we were able to sell the cows’ milk and, later, to manufacture dairy by-products.” However, in 1992, as a result of Spain’s agrarian policy (PAC) negotiations with the European Union, a dramatic dairy production cutback was enforced on Spanish farms to avoid surpluses and ensure sales. Thus, Spain’s dairy sector was and continued to be subject to tight production restraints. La Fageda was assigned a 700,000-kilogram yearly milk production allotment that implied a 30% reduction in its current production and sales levels. To respond to this new scenario, La Fageda turned to yogurt production in order to fully exploit its milk production capacity, maintaining its headcount and, at the same time, increasing its products’ added value. This new business venture substantially fueled La Fageda’s growth, and dairy product manufacturing became its core operation (see business unit distribution in Exhibit 1), with sales in excess of € 8 million in 2007. By 2007, La Fageda operated a 500-head cattle ranch (with 125 full-grown cows) to produce 2 million liters of milk a year, with on-site fodder production. It also produced approximately 2.5 million yogurts and puddings a month at its dairy plant, also located at its Mas els Canals farm, provided gardening services to most nearby cities,2 and ran a local plant and tree nursery that serviced landscaping and forestry clients throughout Spain.

2 ���� I�� �#� �#������� ��J��������� ������������ �� ������ ��F������� ������������� ���� ������ ������� � �����5���� ���� 4������������ ����+&K����������#�� �����"� �#���� � #�������*��������"���G,�

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

La Fageda

3

In addition, to accomplish its mission, La Fageda also worked to promote social integration for the mentally challenged. It ran supervised housing accommodations for 40 people with intellectual disabilities either without families or whose families could not take care of them, an occupational therapy center for highly challenged individuals), and several leisure activities for the entire mentally challenged population and their families, including tours, vacations, etc. Spain’s Milking and Dairy Sectors The European dairy industry featured strong protectionist policies. Traditionally, developed nations produced large volumes of milk, and their surpluses were sold in international markets with subsidies that distorted market prices. In 1984, the EU enforced a restraining policy based on milk production and trade quotas with a view to lifting this measure by 2015, when it planned to deregulate the sector. When Spain joined the EU, milk quotas were also imposed on its dairy industry, which, as a result of its new European competition, embarked on a sector turnaround featuring consolidation and alliances between Spanish companies and large European holdings. Thus, by the mid-2000s, Spain’s dairy industry was highly concentrated into a few companies and was also concentrated on a regional basis: four autonomous communities produced half the overall milk and dairy product sales, with Catalonia (where La Garrotxa was located) ranking third (12.7% of net sales).3 However, due to PAC milk policy enforcement, by 2007 Spain faced a milk deficit and was negotiating a milk quota increase until the sector became deregulated. Spain’s overall dairy product output was distributed as follows: yogurts, 40%, puddings, roughly 23%, and milk shakes, around 13.5%.4 As for yogurt, in 2007 the Spanish market accounted for € 2 billion, while per capita consumption stood at 24 kilograms a year, well above the EU-15’s per capita average of 20 kilograms a year.5 Including dairy by-products, overall per capita consumption reached 39 kilograms a year in Spain. The dairy product industry was highly concentrated, with a large share of French capital. Danone, the sector’s leading group, produced over 375,000 tons of yogurt and 50 tons of pudding per year, holding a 50% yogurt market share. There was intense competition among a few companies that managed to produce 50,000 to 375,000 tons. La Fageda produced 30,000 tons a year and, though its production output was nowhere near Danone, it ranked among Spain’s largest manufacturers. Spain’s Five Leading Dairy Companies

Company Yogurt (tons) Company Dairy products (tons) Danone 375 Danone 70 Senoble Ibérica (distributed by Mercadona) 89 Senoble Ibérica 21 Lactalis 65 Lactalis (Nestle before) 20 Láctea Antequerana 60 Dhul España/Lactalis 19 Corp. Alim. Peñasanta (Central Lechera Ast.) 52 Clesa 14

Source: Based on data from “Sector lechero español y francés similitudes y diferencias” report prepared by CNIEL-Unifrance, and data provided by La Fageda.

3 Source: Department of Agriculture, Livestock, and Fisheries, Generalitat de Catalunya.

4 Source: Federación Nacional de Industrias Lacteas, 2006. View complete report at: http://www.fenil.org/Sector/ComercioExterior.asp. 5 Source: CNIEL-Unifrance

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

4

As a result of increased volume demand and a larger share of higher-priced products, the local yogurt segment had grown steadily at an annual rate of 5% over recent years. In fact, the product range was quite broad, with a substantial rise in sales of skimmed, enriched and functional yogurts as well as pasteurized milk. Yet, it had been puddings that had invigorated the market: both their penetration and mean purchase had grown, giving them an edge over yogurts.6 Among yogurts, the so-called “functional” type had become significantly appealing (Source: MAPA).

Nonetheless, the introduction in the 1990s of retailers’ brands, also known as “private labels,” had changed the sector. These distributors’ brands (in Catalonia, Carrefour and Mercadona were the leading distributors, followed somewhat distantly by Caprabo and Bon Preu) for regular varieties (natural, flavored and fruit yogurts) drove sustained selling price reductions in these categories and forced industry leaders to innovate and market new products (enriched, functional, plant-based, flavored, exotic fruit and ethnic yogurts) to maintain their margins. New product launchings and the denominations they were given triggered harsh battles among industry players. Thus, from 1999 to 2002, multinationals led by Danone and Nestlé engaged in what the Spanish press dubbed the “yogurt battle” to prevent, on historical, economic and health-related grounds, a manufacturer called Pascual from using the term yogurt to refer to its dairy puddings – produced with the traditional yogurt-making method but later pasteurized to withstand non-refrigerated storage for up to three months.

In 2007, Switzerland’s Nestle group, quite ubiquitous in the market until then, though always second to Danone, decided to forgo yogurt production and sold its division to the French group Lactalis. In Catalonia, Danone led the yogurt market, with a 51% share, followed by private labels (35%), with the remaining 14% shared by several brands. In turn, the pudding market was dominated by private labels (45%), followed by Danone (35%) and other brands (20%).7 In addition to great concentration on the manufacturing side, distribution was also highly concentrated, with 90% of sales made through large distributors (supermarkets and hypermarkets), conditioning sector dynamics and industry strategies. Indeed, both market concentration and maturity put significant pressure on leading companies to invest heavily on R&D to bring new products to the market or to rethink their pricing for more mature categories. � ����#�������#���������������4���� ���������� ���"!���� ���� �"� �������������������� ������� ��� ������� ���� ������� #� ���������� ��������� ����� L� �������� ��� ���� �"� � ����� ��� �������� �����#������� ��� ������M���������� ���������������� ���������� !�N�����!����������� �!���� In this highly concentrated environment, and unable to maintain their profitability as a result of their dependence on economies of scale, small and medium-sized companies had been forced to shut down. Yet, there were also many local farms with limited, wholesome production that had focused primarily on natural, organic and alternative yogurts (made with goat and sheep milk) as well as traditional puddings, such as curd, sour cream, etc. to respond to trends indicating an increasing number of consumers preferred this type of product. In the dairy industry, usually the larger the transformation, the greater the margin.

.�Source: DBK.������������� ��������� !������������ �O���� ��������� � !����� ��� �������� ���� �����*444��"����,� 7 Source: Department of Agriculture, Livestock, and Fisheries, Generalitat de Catalunya, 2007.

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

La Fageda

5

These small producers were also starting to merge and partner to consolidate their market share. Such was the case of Agrofresc, the product of a merger between Torre d’en Roca (yogurts and dairy products) and El Canadell (cheese and sour cream). In any case, these small firms were often unable to access large-scale distribution through supermarkets and hypermarkets and distributed their products largely through alternative channels, such as local shops, fairs, handicraft markets, etc. Only a few had managed to outgrow local distribution. For instance, Agrofresc sold its products through the Nostrum prepared meals franchises.8 Additionally, in recent years, hypermarkets began to market organic yogurts to respond to an increasing demand that, although it had started off at very low levels, grew at a 20% to 30% annual rate, as reported by CRIC (Consumption Research Center). Even private labels were also launching “organic” products, including yogurts sold at lower prices than their counterparts from independent firms. Cheese was the dairy product that offered producers greater margins. In Spain, only 2.6% of the overall cow milk production went to cheese manufacture, as opposed to the far greater 32% used for cheese production in the rest of Europe.9 Spanish cheese consumption, at 7.3 kilograms per person per year, also lagged behind when compared to that of other European countries, although it had risen from an average of 3.4 kilograms in 1984. According to the local Dairy Industry Federation, annual per capita cheese consumption in Spain was expected to reach 10 kilograms in the future (the leading European cheese consumer was France, with 17 kilograms per person per year). However, trends in health concerns seemed to prevent any major increase. As opposed to the yogurt industry, in the cheese sector a large number of small, scattered producers coexisted with some large manufacturers, configuring a sector that was mostly viewed as fragmented (450 companies and cooperatives). In general, MAPA’s Food Consumption and Distribution Study documented that Spanish consumers were still basing their shopping preferences on proximity and product quality. Quality differentiated products (for example, guarantee of origin) were gaining significance and shelf space at retailing level, with smaller formats and prepared meals that responded to smaller-sized households and less time for cooking. There was also greater concern for health and aesthetic issues, a development that drove functional and low-fat product sales. At the same time, private label products were increasingly viewed as reliable, especially for milk, dairy and canned products. La Fageda’s Yogurts Yogurts and prices Despite the fact that La Fageda’s product range was not as broad as its leading competitors’, its positioning as a natural farm yogurt had a great appeal for consumers who appreciated non- industrial yogurts made with top-quality ingredients, as reported by several market research surveys consulted by the firm. In fact, except for La Fageda’s yogurts, virtually all yogurts sold at supermarkets and hypermarkets were industrially manufactured and sales were dominated by leading brands. La Fageda’s product line included bifidus, skimmed, natural or sweetened and flavored yogurts, as well as puddings, vanilla flan and chocolate cream. Yogurts were sold in packs

8 Nostrum owned 45 stores -27 in Barcelona and the rest in the major cities in Barcelona’s suburbs, with a few in more rural areas.

9 Source: Ministry of Agriculture, Fisheries and Food, MAPA.

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

6

of four 125-gram units, like other brands. Each unit was packaged in a plastic container, with its lid portraying the image of a cow and a blue-and-white tablecloth (see Exhibit 3). This packaging was meant to reinforce consumers’ perception of a natural, farm-made product. On its website, La Fageda explicitly conveyed that its products differed from other brand products because of their farm origin – as opposed to the other products’ industrial manufacturing. La Fageda raised its own cows, nurturing them and ensuring their living conditions, while other manufacturers, like Danone, purchased their milk from many independent dairy farms. In addition to its imagery, the text on yogurt containers was written in both of Catalonia’s official languages (Catalan and Spanish), for La Fageda sold all its products in Catalonia. Its use of the local language reinforced the feeling of proximity. Its positioning had enabled La Fageda to price its products above both market leader and distributor brands (10% to 35% more). In fact, as shown in Exhibit 4, La Fageda’s yogurt more than doubled the price of private label products. The question was whether consumers would be willing to pay that premium price at a time of economic recession. J�����6�����"� ���������#������������� �����������������"!��� ; ��4��!�����"������� ������� �

��������4���� ���� ��� ����� ������ #�� ���� ���� ������� �������������������H���#�� ���� ��� #��4� � ��#�� ��� � ����� ���� ��� ����� ��"� ��!�� "��� 4�� ���� ��� �������� "!� �� � ��� � ������� ���������� #������� �������� �������

Distribution and communications La Fageda dairy products were sold at supermarkets and hypermarkets, as well as by grocery stores, restaurants, coffee shops, and some hospitals and catering services. When La Fageda first started to produce and market yogurts in the early 1990s, there was no centralized purchasing for all points of sale at larger retailers, a development that unfolded in the mid-2000s. Major distribution became dominant in dairy product sales (for example, Spain’s Mercadona supermarkets developed their own private label with products by Senoble, a French company), leading to lower prices based on their purchasing leverage and centralized decision making with regard to all their vendors. ��������������#������� �������������� ������� ���������������������� � ��������� ��������������������� ��� ������������� � �� �!����������� � � H ��� � �� ���� ��� ����� ������ �� #� :��� ��� �����;"� � �� ; � ���� ��� ������ ��� ���!� ���� � �4 � 4���� ��� ��� �� ��� �������� � � ���� !�#���� �������� 4����� ��N��� ������"���� �������� ����������� � ���� �����!�4�� ���� �������� ��������������� #�!�#�������� ��� ��� �������#��������������������"���� ������� �4���� ��� -����- �������� ��� ������ �� #������������� �� ��� ����� H ��� � �� ���� ��#�"��� #� ��� ����� ��� �� !� ������ ������ ��� ���� � ��� "!� ���� ���� %&&&��� 5�4� ����"�� ���4��� ����4���� ��������������� ��� ���� �!��� ���� ���������� � �� ������������ "�� ��4���� � �4 �������#������!�#������ ������� #��4����� � �4 ������������� � �� �������� ���� � ��� ���� �� ��� �!��� ��� �� (����#� �� ������������ 4�� �� ����# �O�� ������ "�� �� ��� ������ ���������/&� P���� #� � � ��� ��#���Q�� ������� �������!�� ���� !�#����� 4���� ��� �� �� ������� ���� �� ���� �� ; ������"�� ������������ ����������� !�� ������ ���� �� � ���������������������� ����� � ��7������#���� ��� �J���R�� �����:��������� ������������� �

/&�(����#� ������"����/+.��� ������������H �����

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

La Fageda

7

9 ����� � �������:����������� ������)�� ��!��� �����������"�� ��� ��� ����������� ������� ��������� �4�������4������������ ���� �����!�#������ �������������� ������ ��� ���������- ������� �����!����������������������������������"�� �� #������� ���������N���������"�������

� In addition, La Fageda served 1,200 points of sales with only two people devoted to that task in the organization. Recently, the cooperative had tried to focus on delivering sound service to its points of sale in order to minimize errors. Its strategy hinged on two elements: flawless order taking and outsourcing yogurt distribution through seven logistics firms (though it served hospitals with its own delivery vehicles). In a recent study commissioned by La Fageda to determine its image, positioning and key values associated with its brand, consumer perceptions indicated that the brand exceeded its 15-product range. In other words, La Fageda´s brand was far greater than its specific product offerings. 11 Yet, La Fageda did not invest much in product and brand communications, for its budget was quite tight. Until then, the brand had been mostly known for its farm project –guided tours for families and schools, farming operation reenactments at shopping malls, and Colón’s public relations efforts. These activities required less resources than more conventional communication mechanisms used by industry leaders and focused on the project, not on the products. It should be noted that La Fageda had never used the fact that it hired people with disabilities as a sales argument. According to La Fageda’s chief communications officer, Albert Riera, the people who visited the farm (30,000 in 2005) were La Fageda’s true promoters. At Mas els Canals, there was a “Visitors’ Center” (a simple tent with a stand to provide information on the La Garrotxa Volcanic Natural Park) where people could buy farm products and fashion accessories produced by the Occupational Therapy Center. Proceeds from these sales were used for leisure activities at this Center. Consumers viewed La Fageda products as “a product you try once and, then, you look for again and again; it drives repetition and loyalty.” Consumers used words like “healthy”, “wholesome”, “expensive”, “excellent”, “local”, “poorly distributed”, “natural” and “top quality” when referring to La Fageda’s products.12 Riera explained that La Fageda’s key communication challenge was

never to betray its true nature. It is hard to be consistent and to remain humble when the media are focusing on you and you are on the news. It is tricky to convey the reality of our target beneficiaries without upsetting our internal stakeholders as a result of what we tell or show or how we go about doing it. On the contrary, we want them to be proud of what is being said about La Fageda.�

Organizational and Financial Issues Production La Fageda had already reached its maximum production capacity (30,000 tons of yogurt a year). To increase its capacity, it would have to invest heavily in the expansion of its current plant to neighboring lots or in the purchase of a new manufacturing plant. It was highly unlikely that a new plant could be built at the increasingly protected Natural Park, so it would have to be located at a

11 Source: La Fageda, June 2006.

12 Source: La Fageda, June 2006.

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

8

nearby industrial area. Its current cattle and fodder operations were no longer enough to produce the milk volume required for its yogurt production, so La Fageda had had to find a local milk supplier that would provide the same quality milk it produced at its own farm. This supplier was a neighboring farmer who produced milk with the same traditional, grazing scheme as La Fageda, but outside the Natural Park’s boundaries. Furthermore, milk prices had climbed as a result of recent increases in worldwide crop prices. It was yet to be determined whether this was a short or long-term phenomenon, but, in 2007, milk prices had risen by 40%. Certainly, being a producer itself, these increases affected La Fageda less than private label manufacturers, but they still had a definite impact. Finally, existing machinery and facilities at La Fageda were not suitable for efficient yogurt production, which required more advanced technology. However, La Fageda had planned to produce yogurts with plant-based, goat or sheep milk, using its current technology and machinery and complementing its present product assortment to strengthen its brand and market share. Human resources management and socially-oriented funding In 2007, La Fageda’s headcount averaged 210 employees, 125 of whom belonged to La Garrotxa’s mentally challenged and disabled population. These individuals were employed by La Fageda’s four existing business units –its nursery, gardening and cattle operations, and its dairy plant. In order to qualify for a job at La Fageda, they were required to have a disability certificate issued by the Institut Català de la Salut (Catalan Institute of Health, henceforth ICS) and to demonstrate that their specific disability did not prevent them from performing the tasks required by the cooperative’s operations. When necessary, individuals were assisted by the Occupational Therapy Service (see Exhibit 5 & 6). Yet, La Fageda did not constrain the incorporation of mentally challenged individuals to its production needs. In principle, anyone in the region with an intellectual disability (530 people across the county in 2005) who wished to work at La Fageda and complied with the above-mentioned requirements could join in. So far, though, since the firm had expanded its production activities and had grown steadily, it had never experienced an excess headcount. La Fageda employed 22% of the entire mentally challenged population of the local county. In 2006, a total of 1,814 handicapped people (with all kinds of disabilities) lived in La Garrotxa, while the entire handicapped population in Catalonia totaled 377,527. ������ J���S�� ��� ��#������ 5��� � F��������� ���������� ��������� ����� ��� ���L(������������ ���� �!��� ��4��� �� �4�������������9����� ���� �����������" �������� ��������� ������������N�"���� Human resources management at La Fageda was not an easy task: employees’ differing intellectual disability levels demanded different kinds of protection and job assignments that influenced overall productivity. La Fageda’s human resources area sought to ensure that employee entry processes were highly customized, taking into account each individual’s disability for job assignments and part-time work schedules. In some cases, employees started working three hours a day and later moved on to a full-time schedule. Thus, establishing shifts to increase production with this population seemed rather unfeasible. Sometimes, job offers did not satisfy newcomers, and temporary assignments were designed to retain employees while they waited for the position they wanted. “We are not going to lie: working with mentally-challenged people is not that easy. However, despite the difficulties, it is really rewarding,” said Jordà.

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

La Fageda

9

Another significant feature at La Fageda was its job rotation policy based on therapeutic prescriptions. When employees were found to be overwhelmed by their jobs or requested a job switch, they were transferred to other activities. In general, the unit that registered the highest turnover was yogurt production, because it was more monotonous and indoors. Business units also engaged in regular rotation practices. A key role inside the organization was the one played by monitors, for they were in charge of both social assistance tasks and the supervision of the work of the various business units. They needed a twofold skill set: they had to be knowledgeable in dairy farming, and they had to know how to lead, advise and successfully manage periodical conflict situations. At times, it had been hard for La Fageda to recruit and retain candidates for this role, especially at its yogurt production plant. La Fageda’s transition into a growing number of more complex and competitive production operations had called for stronger and more professional top and middle management teams. Two years before, the organization had hired an executive director, Josep Corbinos, a financial director, Jaume Coquard, a commercial director, Carles Serra and a communications director, Albert Riera. It had also recently recruited a professional to head its human resources department. Cristóbal Colón had left his executive director position to become La Fageda’s chairman. "����F��������� ��������� 4�� ���� N�� ��� �����#������������ "�� ������ ����������"!�L�������!-#�� #���������������4���M� � ��!"��!�������� � �������������������� ��!� ����5����������������������� �O���������������������� ��#����������� ������ ��4������ ��� �������4�� �� ��� ���������������4����� !������������������7� L�����#����4���� �� �����" ���������������������� ������ ����� ���� ��� ������4��� ������4��� ����������� ��������� �������� ��������� �#��� ������� ����!������4�� ����!������������� Colón, who had a background in psychology, liked to point out that at La Fageda “there was a different atmosphere. We take care of our people, because human capital is our most significant asset. And the people who work here feel that there is no greed in our organization. We believe we don’t just make yogurts here; we are here to help a group of people to live a better life.” Recently, La Fageda had surveyed the social and assistance needs of local handicapped people, and no significant changes were expected. La Fageda viewed itself as a company with a strong social focus. As Colón put it, “we have always tried not to confuse our means with our ends…” As a social enterprise, La Fageda provided several free social services through a foundation, the Private Foundation for La Garrotxa Assistance Services (Fundación Privada de Servicios Asistenciales de La Garrotxa, henceforth FPSAG). This foundation’s endowment came from yearly agreements with ICS and from several mutual funds and was used to cover support personnel and organization maintenance expenses. In turn, the cooperative itself received its funding from several sources, operating subsidies and capital grants awarded to any company employing people with disabilities (see Exhibit 7, 8 & 9):

i. One-time grant awarded for offering a steady job to a mentally challenged individual. This grant could be as high as € 12,000 for each job offered. For instance, in 2006, La Fageda received € 568,071 for job creation grants, partially recorded in its 2006 balance sheet.

ii. Subsidy of half the regular minimum wage ( € 7,182 a year in 2005). Overall, this subsidy accounted for € 454,606 fully recorded in 2006.

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

10

iii. 100% of employers’ contribution to handicapped workers’ social security. In 2006, La Fageda received a total sum of € 207,536, fully recorded in 2006.

Leadership and Growth La Fageda’s evolution had been closely tied to its founder’s track record, experience and leadership. Colón, a talkative man who used to make jokes about his name (Cristopher Columbus, in English), had been born in a small town in Aragón. When he was 13 years old, his father died, and he went to work for his uncle, a tailor in Zaragoza. Before he was drafted for the military service at age 21, Colón already ran his own tailor shop in Zaragoza. In the army, he worked as tailor, but he was drawn to psychology. He grew so passionate about it that he never returned to his former craft and started to study psychology in Barcelona instead. He also began to work at psychiatric hospitals, practicing occupational therapy with patients. Colón felt occupational therapy practices would be greatly enhanced if patients were involved in real, meaningful jobs. Following his views, he embarked on his first business venture: a fine wood furniture workshop manned by mentally challenged workers. Faced with increased sector industrialization, he abandoned this venture and later founded La Fageda. He stated, “La Fageda is the result of my life project: a personal project –(making my work more meaningful) added to a professional project –(making other people’s work more meaningful).” Over the years, Colón had managed to instill in La Fageda a set of values centered on self-respect and derived from human dignity, efficiency, profitability and product quality. He tried to emphasize and convey the company’s consistent values in every aspect of La Fageda’s operations (natural, crafted, wholesome products, top quality…). These notions translated into a highly positive global image for La Fageda, reflecting its founder’s focus on coherence. Moving forward, La Fageda’s own research matched the studies by MAPA’s Food Consumption and Distribution Study Findings had clearly presented fresh cheese, sour cream and curd production as a viable possibility. La Fageda could try to launch a new product or assortment, since these products had more added value than yogurts. However, Colón wondered, was it really necessary? La Fageda was already growing and it could not produce more yogurt, while its social assistance program was quite successful. Nonetheless, Colón knew that, if he wanted La Fageda to remain a leading “company with a soul,” it had to continue boosting and enhancing handicapped employees’ abilities and working conditions while upholding the company’s accomplished sustainability in such a competitive environment. Indeed, he often talked about a “non-growth” model, only to realize that, in order to preserve its competitive standing, La Fageda needed to grow. Colón’s greatest concern was not how to expand La Fageda’s business, but, primarily, how to do it without jeopardizing its true mission. 9 ������ ��#��������"� ���� �"��������L4��4� �#��4�� ��#�����#���� �����������N��������� � � �� (�� ������ ���� ����� #�� �� 4�� ���� 4���� #� � � �� !� ������� ���N������ �4� ���������� �������� ����� ��� ��T�"���4��������!���� �"��� ����� ���������"��� ������������ ����� ������#�����������7� ���� �� ������� � � #��� ����� ������������ �� !-��� � #������� ��4���4����� ���������N�������� � ��������������%&&+�!����� ������ ���4������������������������������� �������4 ��� �������� ����� ��� ���� ����)����������������#������������������� ���������� � € �//�&&0�10'���

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

La Fageda

11

���������� ��� �#��� ������ ����3 �����%&&0� � Business units Share of Overall 2006 Sales Dairy products 86% Cattle operations 1% Gardening 7% Nursery 2% Transportation and Cafeteria 2% La Fageda Tours 2% Source: La Fageda, 2007 ���������� ���:���������H ���� ���������:�������������� ������

�������� � �����#� #�������� �#��� ���4���� ��������� �P�#������

�

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

12

Exhibit 4 Yogurt Prices for La Fageda, Danone and Other Brands Line

Product

La Fageda in €1

(2005-2008)

Danone in €1

(2005-2008)

Product Price Range in €1

(2005-2008) Bifidus Natural bio yogurt 1.65 2.15 1.49 1.59 0.99-1.89

Skimmed natural yogurt 1.45 1.71 1.19 1.19 Skimmed Skimmed, lemon flavored yogurt 1.47 1.71 1.19 1.19

0.50-2.59 0.49-2.36

Natural yogurts 1.27 1.48 0.93 1.09 Natural/ Sweetened Sweetened natural yogurts 1.27 1.48 0.93 1.09

0.48-1.64 0.58-2.50

Strawberry flavored yogurt 1.27 1.33 0.93 1.05 Lemon flavored yogurt 1.27 1.48 0.93 1.05

Flavored

Banana flavored yogurt 1.27 1.48 0.93 1.05

0.88-1.75 0.62-2.02

Flan Vanilla 1.45 1.57 1.15 1.15 0.58-1.49 0.65-1.84 Pudding Chocolate 1.99 2.22 1.652 1.65 Vanilla 1.99 2.22 1.652 1.65

0.24-1.99 0.80-4.48

Source: First column -Caprabo Supermarket, 2005; Second column -Consum Supermarket, 2008. (1) These prices are for four-unit packs. (2) Each unit of yogurt contains 130 grams. � ����������������� � ����� �������� ����� ��!�"��� ���� �������������� ���� �!�� ���� ����

Ordinary firm Ordinary firm Special Employment Center

Regular employee Handicapped employee Handicapped employee

Gross annual salary 22,500 € 22,500 € 22,500 €

Social security costs (33%) 7,425 € 7,425 € 7,425 €

Annual bonuses (1) (2) 0 € 6,683 € 7,425 €

Business cost 29,925 € 23,243 € 22,500 €

Hiring grants 0 € 6,000 € 12,000 €

Social Welfare Dept. grants (3) 0 € 0 € 4,200 €

Total cost (year 1) 29,925 € 17,243 € 6,300 €

Difference percentages 100% 58% 21%

Total cost (subsequent years) 29,925 € 23,243 € 18,300 €

Difference percentages 100% 78% 61%

(1) 90% for men over 45 years of age; 100% for women; (2) 100% at Special Employment Centers; (3) 50% Minimum wage.

����79 ���������������������������*������ ���� �!�� ���� ���,���� ������������ �!�������������� ������02K����� ��� �������� ��� ������7������4��������� � Exhibit 6 La Fageda’s Human Resources

Category Average Headcount

Management 3 Supervisors 4 Workers 18 Monitors 5 Assisted personnel 79 Other 2 Total Headcount 111

Source: La Fageda’s 2006 Annual Report.

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

La Fageda

13

���������� ��� �#��� ��9 ������������ ����%&&1�U�%&&0�*� ������,� 2003 2004 2005 2006 2007 2008 Notes

Revenues Net revenues 5,207,420 5,740,633 6,050,773 7,264,050 9.525.317 9.387.137 Increase in finished and unfinished products

93,647 178,614 177,897 150,562 83.853 9.218

Other revenues 475,948 668,614 876,566 826,637 949.757 1.035.078 Note 1 Expenses Decrease in finished and unfinished products

144,239 142,559 126,387 260,517

Supplies 2,509,692 3,134,569 3,658,466 4,125,267 6.537.073 5.463.526 Personnel expenses 1,392,949 1,623726 1,524,615 1,661,832 1.967.371 2.279.293 Amortizations 393,272 319,913 279,629 269,952 330.266 397.925 Inventory allowance variations 32,466 18,880 36,460 14,467 -29.095 -32.545 Other expenses 1,091,014 1,272,728 1,643,000 1,975,811 1,832,897 2.593.599 Note 2 Gross Operating Income 213,383 75,486 -163,321 -66,596 -137.775 303.697 Interests and consolidated revenues 98 567 38,440 32,753 38.209 41.693 Financial expenses and consolidated expenses

83,376 63,992 56,498 62,222 81.252 73.541

Financial Results -83278 -63,425 -18,058 -29,204 -43,043 -31.758 Operating Income 130,105 12,061 -181,377 -95,710 -180.818 -335.455 Earnings from inventory and portfolio sales 600 19,350 9,052 16.179 Grants passed through to fiscal year income

164,756 156,829 160,238 159,967 271.684

Extraordinary revenues 5,388 147,801 169,616 226,459 56.091 33.331 Revenues and earnings from other fiscal years

413 32,000 2,151

Losses from inventory and control portfolio -28,050 -37,861 -7,299 -49,215 Extraordinary expenses -5,885 -118,586 -18,098 -48,003 -50.587 Expenses and losses from other fiscal years

-2,308 - -300 -1,380 -7.719

Extraordinary income 134,914 148,183 355,507 299,030 410.109 354.634 Note 3 EARNINGS BEFORE TAXES 265,019 160,243 174,128 203,320 243.255 324.194 Corporate tax 14,165 2,801 13,417 8,555 22.695 17.865 FISCAL YEAR INCOME 250,854 157,443 160,711 194,765 220.560 306.329 Allowance for education, training and promotion fund

26,502 16,024 17,413 20,332 14.321 32.419 Note 4

FISCAL YEAR SURPLUS 224,352 141,418 143,298 174,433 206.239 273.909 Note 1: Including grants received from the public administration for hiring people with disabilities (see Exhibit 8). Note 2: see Exhibit 9. Note 3: See Exhibit 10 Note 4: La Fageda’s Bylaws established that a share of income be set aside to build a fund for partners training and education.

� � � ���������� H�����F� � ����� �%&&0�*� ������,�

Agency/Organization Concept Other Revenues

Catalan Institute of Social Assistance (ICASS)

Salaries and Social Complement 501,965

Social Security Subsidy to Annual Quota paid by employer 227,527

Other public agencies grants Employees Training and Health; R&D grants;… 185,265

FUNDACIÓ LA CAIXA Grant for incorporating disabled people in the organization 35,000

Total 949,757

������7���� �#�����%&&+� � � � � �

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U

14

� � � � � ���������� H��������� ����� �%&&0�*� ������,� Outsourcing to other gardening companies 21,269.07

Outsourcing to other milk companies 843.2

Merchandising outsourcing 40,647.73

Milk product distribution outsourcing(*) 774,445.00

Outsourcing to pork companies 16,938.00

Cow growing outsourcing 106,365.60

Outsourcing to other cattle companies 53,016.00

Outsourced administrative and management services (*) 753,575.14

Outsourced canteen services 65,796.93

Total 1,832,.896,67 ����7�*V,���� �#�������� ������� � ������������������� ��� ������7���� �#�����%&&+� � � � ����������� ��������� ��!�9 ������ �%&&0�*� ������,� Grants from Public Agencies Grants for rural development and territorial balance 74.245 €

Private Agencies/foundations Grants Grants for new machines and factory improvement 146.168 €

Other foundations grants Other Grants for supporting disabled employees 189.696 €

Total 410.109 € ������7���� �#�����%&&+� � � Exhibit 11 La Fageda’s Selected Financial Data

Revenues Sales Income

2003 5,948,270 5,220,528 250,854

2004 6,893,057 5,766,000 157,448

2005 7,860,659 6,050,773 143,298

2006 9,103,353 7,809,610 174,433

2007 11,023,424 9,609,170 206,239

������7���� �#�����%&&+��

U sa

ge p

er m

itt ed

o nl

y w

ith in

th es

e pa

ra m

et er

s ot

he rw

is e

co nt

ac t i

nf o@

th ec

as ec

en tr

e. or

g T

au gh

t b y

P ro

fe ss

or J

ac qu

el in

e K

er st

ne r,

fr om

1 2-

N ov

-2 01

5 to

1 7-

D ec

-2 01

5. O

rd er

r ef

F 26

09 91

. P

ur ch

as ed

b y

N ai

f A lo

ta ib

i f or

u se

o n

th e

E S

L 09

7 an

d B

U S

1 01

c lu

st er

, a t B

un ke

r H

ill C

om m

un ity

C ol

le ge

.

E du

ca tio

na l m

at er

ia l s

up pl

ie d

by T

he C

as e

C en

tr e

C op

yr ig

ht e

nc od

ed A

76 H

M -J

U J9

K -P

JM N

9I O

rd er

r ef

er en

ce F

26 09

91 C

ou rs

eP ac

k co

de C

-6 68

-1 63

30 4-

S T

U