17 May Feeding through the generations
Ari Fenger, CEO, 1912, runs a holding company with a great pedigree when it comes to feeding the nation and, in this interview, he tells us what his group is doing to meet the challenges of our time.
This year, 1912 can reflect on 110 years of serving Iceland’s economy and your many stakeholders. You have been in the position yourself for 14 years now and have a firm understanding of the market. What have been the main strategy and leadership lessons that you’ve learned amidst these challenging times?
The most important thing is to have great employees and transparent leadership, sharing your outlook, the challenges and strengths, and keeping everyone informed on the strategic plans for the future. That has been the key, both during the 2008 crisis and again now, through the pandemic. In order to lead the teams through challenging times, keeping everyone informed, has really been important.
The strength of our company is through our three pillars: our subsidiaries Nathan & Olsen, Ekran and Emmessis. Nathan & Olsen services the retail market, Ekran the food service market, and then we produce ice cream under our own brand Emmessis. In terms of food service, you can imagine with the pandemic: the tourists were not showing up and the hotels and restaurants were hit by the crisis, but at the same time, all the Icelanders were staying in the country, so the retail market picked up. Prior to the pandemic, it was the opposite: we had a boom in tourism and that’s where the growth was coming from and the retail was more flat. That’s really the strength of our company, and it’s important for employees to hear that we will get through these challenges. Our strategy has been to minimize the risk and not have all our eggs in the same basket.
We are going through unprecedented times: first the pandemic and now we are faced with war. Our main challenges are price increases, logistics, and the fact that everything is getting delayed. The last six to seven months have really been drastic in terms of price increases.
What is your outlook for the medium term for 1912 and its subsidiary companies?
My outlook as of today—and like everyone in the world, I’m learning day by day now—is that, despite everything, I’m positive that I can deliver goods to Icelandic consumers. We are working with strong partners. We are a little bit different from others as we are sourcing a lot from the US, which is helping us at the moment. In Europe, we have partners in multiple countries. That’s one of the strengths that we have as a company. In terms being able to deliver brands to Icelandic consumers, I’m quite confident that we will be able to do that for the foreseeable future.
As a holding company, how do you align the business models of acquisitions to your own strategy and values?
Within the group we run one culture, we have the same values for all our three subsidiaries, which are passion, reliability, teamwork and initiative. But my motto has been that we’re part of the same family, we are all under the 1912 umbrella. Up to our acquisition of the ice cream factory, Emmessis, we were always merging businesses into either Nathan & Olsen or Ekran which made it easier to align the cultures. With Emmessis we were adding the third pillar to the group, and it was more challenging to align the culture of a 60 year old company to our culture, but it’s been an exciting journey and a quite successful business for us.
You are chairman of the Chamber of Commerce and a board member of the Icelandic-American Chamber. Is it important for Iceland to continue to strengthen this important trade relationship with the US?
Absolutely. The US has always been important. We have a strong history with the US. Now, with everything that’s going on in Europe, it is essential for us to have strong ties with the US, and the imports from there can make up for other shortfalls. It just boils down to risk assessment all the time.
As you mentioned, I sit on the board of the Icelandic-American Chamber of Commerce. We normally have an event every month. During the pandemic we weren’t able to do that, but now things are picking up again. Usually, we go every year with a delegation of Icelandic business people to visit the US, a delegation is led by some of our government ministers. There we have visited American companies, banks and universities and have discussed the economic outlook for the US and Iceland. It has helped strengthen our long-standing ties. It has also given Icelandic companies an opportunity to meet new companies and potential partners. We have visited different cities every year: New York, Washington, San Francisco, among others. These trips have been very successful.
1912 also focuses on providing technological solutions to its subsidiaries, could you share with us how you do this?
The subsidiaries, Nathan & Olsen and Ekran, focus on sales and marketing. 1912 is our operational company, where we provide services to our subsidiaries such as finance, quality control, IT, HR, purchasing, distribution and operating a warehouse and a service desk. Most employees of the group are 1912 employees. Even though we have three different pillars, we try to get the synergies and economy of scale through 1912.
You provided human resources as well. Is it difficult to find qualified workforce in Iceland with such a small population?
It can be. The major challenge in Iceland currently, and probably all over the world, is that people have been quite isolated for the last two years. Now people are seeing a brighter future ahead, and a lot of people are thinking about changing roles. But that also opens up opportunities. There is another hurdle that is coming: we are expecting a surge in tourism in Iceland this summer and there will be a shortage of workers in the coming months.
Iceland is a small economy, and we are quite heavily dependent on foreign workers. A lot of the workforce that we had prior to Covid went to their homeland because of the pandemic. Now, it is going to be a challenge to get people back and train them again. That’s one challenge or task for the coming months.
Do you feel Iceland’s economy today is a strong and stable bet for investors? What are some of the core strengths that emerge in Iceland?
Yes. I would say that we should be of interest to foreign investors. The Icelandic economy is an open, high-income economy that combines a free market with a welfare state, something referred to as the Nordic Model.
The main factors of the country’s success as a society can be attributed to factors such as skilled workforce, strong institutional framework, high degree of economic freedom, great preference for equality and peace as well as low level of corruption. Iceland has remained at the top of WEF’s gender equality index since 2009. It has also held its place as the most peaceful country in the world since 2008. Despite Iceland’s small size, it punches above its weight in competitiveness, having ranked 21st out of 63 countries in IMD World Competitiveness Ranking in 2021.
How are you working to make 1912 and its subsidiaries the most environmentally friendly possible? What ESG activities are you engaging on?
We have taken many steps to become more environmentally friendly. We have been working on reducing and recycling waste and we are changing to electric cars to reduce emissions. Good examples of the steps we have taken is from our ice cream company Emmessis. We had been selling ice cream in plastic containers for 58 years and we changed it to paper packaging two years ago. That was one of the first things we did when we took over; we were the first ones to do that in the market and got very positive feedback from our consumers.
In terms of activities regarding the social factor of ESG, we have promoted gender equality, we have a gender equal management team, and were one of the first companies in Iceland to get a equal pay certification. We are also an ISO 9001 certified company, and we emphasize the health and safety of our employees.
Would you like to add a final message to the readers of Newsweek on partnering with Icelandic talent? What values would you like to see attached to Iceland’s brand on the international stage?
The value that I would like to see attached to Iceland´s brand now and in the future is to continue being a beautiful and desired destination by travelers, known for being a safe and peaceful country.
Iceland should continue being known for being on the forefront of combatting the climate changes with our green energy. The goal is to achieve carbon neutrality and full energy conversion no later than 2040, which will make Iceland the first state to be independent of fossil fuels. As stated earlier, the economy is strong and we have a highly skilled workforce so we welcome foreign companies and investors to the country. If you haven’t visited Iceland yet, you have a lot to see.