In the heart of Latvia, a small yet innovative company is revolutionizing how people perceive and consume one of the most nutrient-rich vegetables in the world: kale. Kale Latvia Organic, founded by Edgars Kravalis and Laura Atelsone in 2019, has rapidly grown from a passionate kitchen experiment into a full-fledged production facility offering a diverse range of kale-based products. Despite facing significant financial challenges, the company’s relentless dedication to quality and innovation caught the attention of smeGo, which provided the crucial support needed for Kale Latvia Organic to thrive. This case study explores the journey of Kale Latvia Organic, from its humble beginnings to its promising future, highlighting the transformative impact of its partnership with smeGo.
Quick Facts:
Financing type: Loan backed by European Investment Fund guarantee.
Amount: €250 000
Country: Latvia
Client: Kale Latvia Organic
The Company
Kale Latvia Organic is a pioneering food production company based in Garciema, Latvia. The company operates under the brand name “Kale”. It focuses exclusively on producing a wide range of food products from kale, often called the king of vegetables due to its high concentration of valuable vitamins. Kale Latvia Organic prides itself on its innovative approach to food production, offering over a dozen different products, including kale chips, pesto, kimchi, and kale powder.
“Our story started in the kitchen of a house in the city center and with superhuman enthusiasm,” shares co-founder Edgars Kravalis. “At first, we planted and grew kale ourselves in our fields in Madona County. Even now, we can say that we grow it ourselves, but it is done cooperatively with organic farms.”
The Problem
Despite its innovative approach and high-quality products, Kale Latvia Organic faced significant challenges in securing the necessary funding to continue its growth and expand its production capabilities. Traditional banks were hesitant to provide financing due to the company’s short operational history and the revenue interruption caused by the construction of its new production facility.
“In Latvia, it is a challenge to get bank funding,” explains Kravalis. “We have invested 1.5+ million EUR in our new production facility, have taken a pause on the production side to improve our facilities, and thus revenue had dropped, which is logical. But banks need steady cash flow, and they are too narrow-minded. They still somehow say we need you to have two years of steady cash flow. Basically, they say, ‘Show us that you don’t need money, and we will give it to you’.”
This funding gap threatened to stall the company’s progress just as it was poised to scale its operations and enter new markets.
The Solution
The breakthrough came when Kale Latvia Organic connected with smeGo Through smeGo’s innovation and digitization program, and with the backing of the European Investment Fund, the company secured a 250,000-euro investment loan. This funding was crucial in enabling Kale Latvia Organic to purchase essential equipment, restart production, and hire new employees.
“Meeting several times with the company’s representatives, we searched for and found a type of financing suitable for the specific business and development goals, as well as advised on filling out the documents in order to receive the necessary guarantees from the European Investment Bank,” says Agris Indričevs, head of the Latvian branch of smeGo. “We are pleased to support a modern production plant with great export potential of manufactured products, and we hope for even faster development in the future.”
The Future
With the support of smeGo, Kale Latvia Organic is well-positioned for substantial growth, particularly in the international market. The company is actively working on expanding its export operations, with plans to sell nearly all of its products abroad. This strategic focus on exports is expected to significantly boost their revenue and market presence globally.
“We are creating a market, a trend, and a new vector. It is a challenge that takes courage and time,” Kravalis notes. “We continue to experiment, and some of that will definitely translate into new products and come to market. I will not be afraid to say that we are the only ones in the world who offer this vegetable in such a wide variety and have created the world’s best and most valuable alternative to potato chips.”
Kale Latvia Organic is not just about producing healthy snacks but about changing eating habits and promoting healthier alternatives. One of their biggest challenges is convincing consumers to switch from traditional, unhealthy snacks to their nutritious and delicious kale-based products.
“Biggest challenges? Changing people’s habits that quick and easy snacks like crisps in the shop are unhealthy and oily. We provide the world’s best alternative to the crisps industry,” says Kravalis. “We want to change young people’s minds and influence the negative trend of overweight in primary school children.”
The company plans to continue its innovative approach, experimenting with new products and expanding its reach. The financial support and partnership with smeGo have been instrumental in setting the stage for this next growth phase.
“Quick and easy communication, always there to help and explain all details of the application and funding process,” reflects Kravalis on his experience with smeGo. “It’s one of the best alternatives to bank financing, and besides loans, smeGo offers factoring options, which is great for us and all manufacturing/wholesale companies out there.”
In conclusion, Kale Latvia Organic’s partnership with smeGo has been pivotal in overcoming financial hurdles, allowing the company to innovate and expand its unique product offerings. As they continue to grow, Kale Latvia Organic remains committed to changing eating habits and promoting healthier snack alternatives globally.
