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Innovation based on tradition made us one of Iceland’s strongest companies

Interview with Steinþór Skúlason, CEO of Sláturfélag Suðurland

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European Business: Sláturfélag Suðurlands began as a cooperative of Icelandic farmers in 1907 and is still organized as such. How did a cooperative founded over a century ago manage to be named one of the country’s strongest companies in 2018?

Steinþór Skúlason: I have a favourite quote from none other than Charles Darwin, who wrote in 1809: "It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change." The same applies to the world of business. The graveyards are full of leading companies that did not adapt and as a result, vanished into the mist of history.

So the key to the success of Sláturfélag Suðurlands, commonly known by its abbreviation SS in Iceland, is its adaptability. We are a brand-oriented company with leading positions in many categories. Innovation based on tradition has been very successful for us, and our strong emphasis on quality has always paid off.

Steinþór Skúlason
"The graveyards are full of leading companies that did not adapt and as a result, vanished into the mist of history." Steinþór Skúlason

European Business: Iceland is a small nation, but it exports thousands of tons of meat every year in spite of significant logistical obstacles. What makes Icelandic meat so popular in other parts of the world, and which are your most popular export products?

Steinþór Skúlason: Consumers all over the world are becoming more conscious of the quality of the food they eat and the conditions in which animals are raised for meat production. Iceland can never compete on price, but we can compete on quality and sustainability. Lamb is the main meat we export, and it is a unique product from a breed of sheep that has been living in isolation in Iceland for 1,100 years. The lambs roam free in the mountainous regions of our island during the summer months, when they feed on the mountains’ grass and herbs. Their meat has a special flavor and is exceptionally tender. They are raised on family farms – thus, their meat is produced without the cons of large-scale industry farming. All electricity and heat in Iceland is sustainable, free from pollution, and generated by hydroelectric and geothermal power plants.

Steinþór Skúlason
"Iceland can never compete on price, but we can compete on quality and sustainability." Steinþór Skúlason

European Business: Iceland only has a population of less than 360,000 and is thus a very small market. Does that make exporting an incontestable necessity for a company that needs to grow?

Steinþór Skúlason: Many companies in Iceland only sell their products locally, but at this point in time, we at Sláturfélag Suðurlands aim to generate 10 to 15% of our turnover from exports. We see this as an opportunity to increase growth in the future because environmental issues and a shortage of water will make agriculture difficult in many parts of the world in the next decades.

European Business: Besides running Iceland’s largest abattoir and processing and exporting meat, Sláturfélag Suðurlands also serves as Iceland’s importer for a large number of international brands, such as Mars, Pedigree and Barilla. What made you decide to become Iceland’s importer for these brands, and how significant are the supplychain and importing obstacles in Iceland?

Steinþór Skúlason: These leading international brands are a very strong addition to our portfolio and create sustainable competitive advantages in logistics, sales, marketing and production since we use products from these companies - except, of course, the pet food - in the production of our own products. The volumes we import are large, and this creates a very cost-efficient supply chain. Importing obstacles in Iceland have become minimal, except for meat, whose importation into Iceland is restricted by duties to support local agriculture.

Interview: Julian Miller | Pictures: Sláturfélag Suðurland