Franz Kraus: “The country people of Mallorca are the real gardeners behind the hotel industry”

Interview with Franz Kraus, manager of Sa Fàbrica de Gelats and Fet a Sóller

Franz Kraus came to Sóller in the 90s. He opened “Sa Fàbrica de Gelats” with two employees and two years later he created “Fet a Sóller” which currently employs between 70 and 150, both directly and indirectly.

Franz studied in the United States and Germany, and after finishing his degree he worked as the manager of a multinational food company. He then moved to Sóller in order to work as a project consultant for a German company. Sometime later, he left the job to create the food factories. In this interview, Franz talks to us about his early days, projects, and why Fet a Sóller has become an unprecedented success as a company that emphasises the best of Mallorca’s countryside.

– Franz, what is it about Sóller… Why did you leave your native Germany?

– I had quite a lot of success in the food industry in Germany when I took the decision to move to Mallorca. I was always clear about the fact that I would have my own business one day. I came to Mallorca because I had met my wife and we made the decision to settle here. I also consider myself to be Latino, so I feel more at ease in the south of Europe than in the north. I have been here for 26 years, I really like the way of life here.

– What were the early days like in Sóller in the business world right in the middle of Serra de la Tramuntana?

– We had to tread very carefully. From the moment I arrived, I assessed the potential of Sóller, the riches that nature provides and what we could do. At the start, I spent 7 years working as a consultant for the agri-food industry in Europe. In 1994 I created Sa Fabrica de Gelats and in 1996 I set up Fet a Sóller. I began by myself, but now I have partners because the business is now too large to manage alone.

– Why did you start in the ice cream sector? Is it a passion or a business?

– I began in Mallorca for two reasons. Firstly, because I found a niche in the ice cream sector and secondly, because, in addition to being an economist, I am also an ice cream maker. Everything I know about ice creams I learned in my native Germany, because I worked there as an ice cream maker when I was studying.

– How did Fet a Sóller come about?

– Fet a Sóller is a marketer of Sóller’s regional products, but all over Europe. It originated as a concept for creating food products, not only ice cream, because ice cream, just like wine, is a product that is not essential, but which has its niche in the market. The ice cream is Majorca has always been a disaster and that is why I began to work with the two brands, and of course that forced me to leave my job as a consultant. We currently have 70 people that work with us and who are on our pay roll. We also have agreements with several companies -cooperatives- in Sóller, El Consell, and occupational workshops. In short, I would say that in total we have 150 people working for the company.

– How did your relationship begin with Bufete Buades?

– It was a coincidence. Juan Buades participated in a debate at the Economic Circle in Majorca. We met one another there and he told me that he was surprised to meet Germans that did not fit the normal stereotypical vision people have on the island.

– What do you attribute the success of your company to?

– No new company, apart from those that have a unique idea for the world, like Google, can reach a target alone. I think that, in order for a company to have success, the important thing is perseverance, knowledge and humility when you reach a goal. The creators are not the only ones that have success, so too do employees and lots of other people. It is like football; you need a solid team to progress. On the other hand, I think that the potential that Sóller had in this case, somewhat forgotten during Spain’s dark era, and also due to a lack of new paths, made me set my aim on involving everyone in the project. The knowledge was already there but it lacked a driving force to get things going. At the beginning I had to convince people to believe me, but I have demonstrated it especially because I trustworthy, and in society it is extremely important that people keep their word. I think that any business person has to create employment and over the last few years, we have created 50 jobs in a town like Sóller. Nobody from Mallorca works here, only locals, because in Sóller we are the “aliens” of Mallorca: we have to pay a toll tunnel, the most expensive in the world and that is like a border. Unfortunately, none of the parties that have governed have been able to free us of that border. Now it seems that the current government of Francia Armengol is going to free us, giving us free access to the rest of Mallorca, thus providing us with a normal way of moving around so that we can grow and hire employees from the rest of Majorca.

– What advantage does your company have in relation to other multinationals and what is it like to compete with them?

– In our case, we are a group of food companies. I have a personal philosophy: food is a product that helps you to survive in life, it is not a product to fill your stomach. Multinationals want to fill stomachs and their pockets. I mean, food is the first medicine that we take each day. We are educating our clientele so that they always bear this in mind and remember that food is the first medicine that we supply our body with, and that anything we eat has to help our body to function, it is very straightforward. An example of this can be found in the marmalades that are produced and sold in supermarkets: they contain citric acid preservatives, pure chemicals, while we take the more complicated route because we use natural ingredients such as strong lemon juice. The other difference is that multinationals have more financial power, but at Fet a Sóller we have the support of suppliers because they view us as the saviours of their economy. In our case, we plan in the long term, over years, so that farmers have time to plan with the fixed income they will receive from their harvest. Before the harvest, farmers know the volume that will be purchased and the amount that they can earn. The price that we pay is higher than in the countryside of Valencia, for example. We do that because we have an underlying policy, which is to try and recover and defend the Mallorcan countryside so that it can have an added value for tourism, because if it doesn’t work there is no tourism. The country people of Mallorca are the real gardeners behind the hotel industry, our idea is to be more productive, we can also make a living within tourism while having quality. The word quality is very versatile, everyone talks about it, but what really is it? Our quality is about having a product that is suitable for the body, and not full of chemicals, that is quality. If we meet the expectations of consumers thanks to the taste, then we have perfect quality. Quality is poor for example, when you consume processed foods, that is poor quality because its only purpose is to fill your stomach and then illnesses emerge. Almost 95% of lemon ice creams from multinational companies have never come into contact with a lemon, they are just created with citric acid. At our company it is forbidden to use citric acid, when we sell lemon ice cream, it is flavoured only with real lemon.

– What advice would you give to someone that wants to embark on a business venture in Majorca? How do you create a formula for success?

– I have no right to sit and hand out advice, but if someone asks me, I would say that the first thing you need is humility. Secondly, before you open your mouth and say “in my country things are done in such a way”, you have to look at things first here, and assess the different way of doing things in Mallorca. When that person has got to know and taken a closer look at society, that is when they really learn. Ghettos are not good, we know that life in Mallorca is difficult but you have to make an effort to get to know it, and then only after doing that, I would advise investing. Mallorca is not the third world; we are in Europe.

– Currently, having a client is a treasure, what is the key to keeping them?

– A client is always an asset but the key question is who has access to the client. Companies have to work on the same level as their clients. You have to be honest, and tell the truth because if you tell lies the client will end up finding out. We now use the internet to work on international exportation. 50% of our direct sales are with our clients, I mean, everyone that thinks it is possible to work with platforms such as Amazon is wrong. In those cases, you don’t have access to the end customer, because Amazon manages everything and you always live with the fear of losing everything. It is essential for any business to have direct access to buyers, know when a client is happy or not, and what to do in each of those scenarios. Another thing that is important for any company is research and constant renewal in order to keep evolving.

– In a company with such an extensive trajectory, there must have been good and bad moments, what can you tell us about them?

– 99% of business people, especially at the start of the first 10 years, have to calculate that their idea will not work. They need to have a plan B or C in order to change the strategy when things are going badly. The key is knowing if you are going to survive or not. Survival is success. For many people money is success, but this is gratification. You may earn more than others but really, success is about surviving and being able to grow in markets where almost everything exists. Internet is something new that has been around for about 15 years, however for me it is like a pencil: it is not for selling, it is a path, a means, a tool, however the ideas and creations of markets have to be made by humans.

– Mr Kraus, what are your challenges for the future beginning with 2016?

– We have a plan for the next five years, each year we add one to the future plan. It is continuous, our goal for this year is to build the headquarters of our company. We invest money in order to have a decent infrastructure to use a base for business in the future, located in a town in Sóller with a freed tunnel that is no longer a border. Fet a Sóller is a Sóller-based company because our employees live here, but we are a Mallorcan company in an international market. 50% of sales come from the European Union and 50% come from the Balearic Islands. Our goal is to grow with quality, to create foods that are good for the body, for people that really want to enjoy a Mediterranean diet.

– Is it profitable to invest in Sóller?

– Sóller, along with Palma, is the most historic and prettiest town on the island. This is thanks to the people of Sóller and their spirit, for the last 150 years, they have gradually created fortunes and invested them into making their town beautiful. What other town has a train, such a highly concentrated level of modern architecture, as well as people that are slightly crazy, different, international and liberal? That is the way people in Sóller are. However, at the same time it is difficult to live behind the mountains with a different climate and have the intellectual ability to speak different languages such as Mallorquín here, and Spanish…those are things that you cannot fake. Anyone that wants to invest here has to think about the way they are going to do so, namely, in a neo-capitalistic way or in line with social capitalism, thinking with their heart. In my case, I do everything with heart, I don’t understand success without heart. That is the greatest source of joy. I recommend that people who want to invest in Sóller do so humbly and tread carefully. Above all, they should learn the language, which is the same as what northern countries request of newly arrived immigrants. You have to learn the language here. I speak the language, even if I make some errors, but I am getting better every single day. You have to show an interest in the language, be able to communicate, because if you only speak English or German then you miss out on the cultural riches of the people here and will never be fully acknowledged by the people of Mallorca.