“We are glad that Lithuanian companies understand the importance of introducing technological eco-innovations, as they not only help businesses to increase their competitive advantage both in domestic and foreign markets, but also to reduce the negative impact of their economic activity on the environment,” says Diana Martinavičienė, Head of the Business Promotion Division of the Innovation Agency.
According to her, the “Eco Innovation LT+” measure enables domestic companies to introduce innovations that promote eco-friendly production and contribute to the creation of a cleaner environment – a business that receives funding can modernise technological processes, replace equipment and technologies with more environmentally friendly and less polluting ones, use less polluting raw materials instead of harmful ones in the production process, and develop waste recycling.
“It is important that modern equipment contributes to mitigating climate change by reducing the use of raw materials, using less or no harmful raw materials, saving electricity and making products more recyclable,” says the expert of the Innovation Agency.
Continuous investment in modern equipment
According to Elmantas Pocevičius, Head of Švenčionių vaistažolės, the investment has been used to purchase a new fumigation unit, a granulator, a shredder and a packaging machine.
“For the sake of clarity, herbal tea is produced from a plant that is naturally collected in nature and then dried. Everything that lived on it, i.e. beetles, worms and their eggs, remains; therefore, the whole raw material has to be processed using a special technology so that the tea does not ‘come to life’ later and that the remaining beetle eggs do not hatch. The fumigation equipment we have purchased enables us to work with environmentally friendly raw materials and to remove all living creatures using CO2 gas, which is completely harmless. Meanwhile, the granulator and shredder are needed to compress the raw material so that it can be packaged more easily and quickly, while the packaging machine allows us to avoid any plastic in the production process,” shares Mr Pocevičius.
According to him, Švenčionių vaistažolės is constantly investing in innovations, trying to mechanise manual work as much as possible, but according to the head of the company, there are no prospects that machines will replace the people working in the factory in the near future. According to him, although technology is improving very rapidly, there are certain jobs that machines cannot do to a high standard. For example, it is the workers themselves – not the laboratory tests – who warn of poor quality herbs or other ingredients.
From an idea to a team of 120 people
When asked what is the secret of the success of one of the oldest herb processing factories in the Baltic states, Mr Pocevičius says that there is no single formula – first of all, Lithuanians are very fond of herbal products, and secondly, the company is constantly striving to adapt to the needs of the market, balancing between upholding tradition and introducing innovation.
“We try to combine science and tradition in our operations. It is also important to us that the product is natural, effective and, last but not least, tasty,” says the head of Švenčionių vaistažolės. Back in 1883, one man, pharmacist Naumas Taraseiskis, had the idea of setting up a small company for buying and processing of herbs, and thus started a company that has grown to a team of 120 people and a product range of more than 500 products. It is therefore likely that if you open a cupboard in any home, you will find products made in the Švenčionių vaistažolės factory, as this is where most of Lithuania’s teas are made, and 30 per cent of the company’s products are exported to foreign markets – not only European countries, but also the United States, Japan, South Korea and the Middle East region.
“In the US, our teas are popular as gifts – even though a simple tea bag doesn’t appeal to Americans, who already have a lot of products to choose from, they really like our tea collections. In the Middle East, people only drink black tea, so our herbal products go to pharmacies and are considered as medicine by the people in those countries. In Europe, we are interesting to those who need a good, interesting, niche product, because our neighbour Poland is a cheap mass producer, so it is difficult to compete in this region,” shares the head of the company.
Making herbal tea is a long and complex process
In total, the company produces around 300 tonnes of products, or 4 million different tea bags, per year. Since it is not possible to collect so many raw materials in Lithuania, a large part of the herbs is bought from other countries, such as Ukraine and Egypt. According to Mr Pocevičius, although it may seem otherwise, the production of herbal tea is a long and complex process.
“Before Covid, we used to organise a number of tours of our factory and to this day, whenever possible, we try to invite our customers and show them how our tea is made. The main observation we get almost every time is that nobody expected tea production to be so complicated. Basically, to make tea, you just pick the herb outside, dry it and pour hot water over it, but when it comes to industrial production, the whole process is much longer and more complicated. We test the quality of tea alone three times: first, when the raw material arrives at the factory, then when it is cleaned, cut, sifted, mixed, formulated and the so-called ingredient is obtained, and lastly, the final product has to undergo quality control,” shares the head of Švenčionių vaistažolės.
Future plans include new markets and a wider range of products
Speaking about the challenges faced, Mr Pocevičius says that the business is currently experiencing a decline in exports, with particularly lower sales in European countries: “At the end of 2022, we saw a drop in exports in European countries, and since the end of 2023, we have observed a slight drop in purchases in Lithuania. We are waiting for this stagnation to end and for things to get back on track and are actively looking for other solutions. For example, the possibility to export to other markets.”
The Švenčionių vaistažolės team is also working hard to offer the market a wider range of products to meet its needs and to increase its competitiveness on foreign markets. According to the head of the company, this is one of their main goals.
“We want to become not only a producer of herbal teas, but also a producer of herbal products – we are investing a lot of time and finances in the production of new products, expanding our assortment so that we can offer functional food, food supplements, herbal capsules, liquid products, even gummies and flour to customers,” says Mr Pocevičius.
Eco-innovation will also remain important for the company in the future and will continue to be invested in, with a focus on saving and replacing raw materials and lowering energy consumption.
The “Eco Innovation LT+” measure has been implemented under the Programme for the EU Funds’ Investments 2014–2020.
