Azul Lavanda, (dba)The Lavender Project, was incorporated as a Mexican rural production and limited liability corporation on February 20 of 2008. It is organized and operates as a cooperative, in which its members have equal representation and participation in the organization’s strategy and operational decisions.
The rural enterprise was established with 15 founding members, all of them small-scale agricultural producers or neighbors of the community of La Colorada, in the municipality of Dolores Hidalgo in central Mexico. Each of the founding partners contributed Mex. Ps. $10,000 pesos, OR approximately US $1,000, to the initial equity capital of the rural cooperative.
The idea of switching traditional subsistence agriculture to more value added crops was initially presented in 2005 to the small-scale farmers of La Colorada by representatives of St. Anthony’s Alliance, a 501-c-3 NGO based in Albuquerque, New Mexico which since that time it has been the driving force behind this rural enterprise in central Mexico.
The community of La Colorada is located in the central part of Mexico, outside of Dolores Hidalgo in the state of Guanajuato. In 2005, St. Anthony’s Alliance, (SAA) Board of Directors visited the community for the first time, trying to assess the ways in which they could help the small community of 900 people. This area is one of the large tracts of lands called ejidos, which were given to the people after the Mexican Revolution. Most of the people are considered of moderate poverty, by earning a salary of less than $10 a day. Majority of the men have left for the states, leaving only women, children and elderly people behind to maintain and develop the agriculture.
Transformation is the word that comes to mind and essential for the survival of this community. They needed a new way to support themselves, a new direction while preserving the culture of Mexican rural life. In the spring of 2006, St. Anthony’s Alliance established an agreement with 8 farmers. One of the irrigation pumps used to irrigate crops had been unusable for for several years. SAA funded $15,000 to buy a new pump, in turn that each of the 8 farmers would plant a hectar (about 2.2 acres) of lavender as well as soy and also an acre of soybeans to the local cuisine of the school program. A few weeks after the well was up an running again the farmers began planting their corn, beans, alfalfa, soybeans and lavender.
Why a Lavender Project?
Lavender is a very resilient plant that grows well in climates similar to La Colorada. It is a plant that has a longer life span, needs little water, a lot of sun, no fertilizer and has many bi-products.
Although several possible agricultural products could have been used as substitutes or complements to thetraditional corn and bean crops, the choice of lavender was favored because of several unique characteristics of the plant itself and its potential markets. Lavender is a crop that is very resilient, less susceptible to plant diseases, and very suitable to the type of soil, climate and altitude where the community of La Colorada is located.
There is also a growing market in Mexico for aromatherapy products, such as those derived from Lavender and presently there are no significant domestic producers of lavender in the country. In addition, near La Colorada is the city of San Miguel de Allende, a well-known tourist center and colonial town with hotels, boutiques and a community of foreign nationals, a natural target market for lavender-based products.
By the time the group of farmers who formed The Lavender Project had planted and tended one hectare of lavender plants and were ready to harvest the first lavender crop in the fall of 2007, another group of village women, already trained in the basics of soap preparation, were ready to make the lavender-oil based soaps, hand lotions, and other aromatic-therapeutic products and to sell them in the target markets of the nearby San Miguel the state of Guanajuato and soon, all of Mexico.
The Lavender Project Cooperative and its operational units
Our project was initially funded by Stephen Tryon of Overstock.com. He generously donated a “seed” grant. In February 2006, Teresa Balcomb, a member of the Governing Council of SAA, attended the 2nd Annual Southwest Conference of the Lavender in Fredericksburg, Texas. There Teresa, “Tes” met Teresa, Al and Peggy Armstrong of Valley View Lavender Farm in Buhl, Idaho. They offered to host an intern farmer of La Colorada and teach the cultivation of lavender. with the help of Aucencio Domenzain Martinez, native of La Colorada was granted a temporary visa for the summer to work and learn all aspects of lavender.
Aucencio, being a real self-starter, returned from Idaho totally energized. Having very little informal training in business and computers, he wrote a manual in Spanish about “Growing Lavender and some of its uses.” SAA published it’s manual in booklet form. He didn’t stop there. Armed with a brochure and a sense of entrepreneur, he requested for assistance for starting a small business to the Business Incubator Program of the Technical University of Guanajuato North (UTNG). His request was granted and began working under a business plan with the guidance of the Director Andres Casillas Barajas and his staff. At this time a legal entity of Mexico was formed, Azul Lavanda SPR of R.L.
In August 2007, UTNG established Azul Lavanda, The Lavender Project, as one of the exemplary projects of the University. Azul Lavanda was given technical support to start their business, logo design, technology support, legal aspects, help locating local markets for products and suppliers. To date Azul Lavanda has confirmed it’s “constitution” of work and all statutes outlining how members interact and distribute the benefits of the new company. The UTNG continues to provide support but not as a funding organization. Other local support was granted when Aucencio asked the President of Dolores Hidalgo for financial support. The Presidency granted a remarkable 70/30 to Azul Lavanda. SAA paid the 30%. This funding gave Azul Lavanda the opportunity to buy a new drip irrigation system, a warehouse for the harvest, as well as space for the reproduction of plants and a distillation system to extract the valuable oil of lavender.
In 2008 the incorporation of the social enterprise into a rural business entity made it possible for the farmers and the community people, who had been working for the lavender project, formally to organize under the umbrella of a rural cooperative, with the direction and guidance of its managing council. The cooperative’s partner-members and the community people who have been actively participating in this rural enterprise are in three distinctive but interconnected operational units:
The activities of this unit, performed by seven farmers who are also partners in the co-op, involve the planting, harvesting, distilling and drying processes of lavender plants. They work on the land and also at the distilling and drying areas adjacent to the lavender fields, where they prepare the supply of lavender oil or fresh branches for soap production and branch- bundles making unit of the cooperative. The farmers in this group are also responsible for tending to the lavender seedlings, replanting, and ensuring that the supply of branches and lavender flowers is ready when the other units need them.
Soap manufacturing.This segment represents the core of the business and it is the one closest to the market and its customers. Seven village women, one of them acting as a supervisor, belong to this unit, the various tasks of making the lavender soaps and related products take place.
Seamstress unit. A group of seven women, one of them in the role of a supervisor, perform the tasks of cutting, assembling and sewing textile material for the production of pillows, sachets, tote bags and aprons, some of which are embroidered with the purple blossoms and green stems. Some of the products sewn in this unit, such as the sachets, small bags and neck pillows, are filled with bits of the dried lavender flowers and thus prepared for their sale in deluxe hotels or specialty boutiques.
The Lavender Project: A Social Enterprise Model
The case of The Lavender Project cooperative presents a business model of a typical social enterprise. Its multiple objectives seek both economic benefits for its business partners as well as social benefits for its cooperative constituents, employees and for the community-at-large, where the enterprise is located. This rural cooperative processes agricultural products into value-added finished goods to generate more income for its participating farmers, improve human capital, satisfy market needs of its target customers, create new jobs through expanded operations and, in general, to benefit the community, with spillover/ or ripple effects created by the new business venture.
While the profit motive the cooperative seeks through its manufacturing and sales activities is essential and justifiable for its existence, it also coexists with another, more altruistic and socially charged objectives: To override employment opportunities to members of the village who would have fewer or no job alternatives in the conditions and circumstances of their lives in those communities. Creating opportunities for people who live in traditionally poor and isolated rural towns include: learning a new trade, making a new product, selling their products at market fairs and networking with consumers of their products in cities and towns distant from their villages.
Examples of the social services The Lavender Project provides Include: funding for the transportation of ill people from the community to city hospitals or clinics, partial or full coverage of prescribed medications not covered by the government-sponsored health insurance system, free meals (as deemed necessary or requested) for the poorest and most indigent neighbors in the community.