Iranian Saffron Spices Up German Food Business

EghtesadOnline: Once cultivated by Persian kings and believed to have healing powers, saffron is now fuelling the growth of a small German business that imports tons of the spice from Iran to make fine food products for sale in Europe and beyond.

News ID: ۷۶۹۹۴۳

02 October 2016

“We try to capture the soul of saffron and the magic it contains,” Reuters quoted Michael Sabet, an Iranian-German business executive who quit his banking job six years ago to found Miasa GmbH, which is now doubling its revenues every year.

Sabet is one of many German business leaders who see great business opportunities opening up in Iran after the end of sanctions related to its nuclear program.

“Germany has always had a good relationship with Iran and I think it will continue to expand,” Sabet said. “I hope the end of sanctions will allow exports to rise and have a positive effect on the import business as well.”

Miasa delivers large quantities of high quality saffron to industrial users, but also produces 20 products ranging from saffron-infused sea salt, honey, rice and even coffee that are sold via the company’s website or at luxury stores like Berlin’s famous Kaufhaus des Westens, or KaDeWe.

Sabet says the business is growing fast given increasing demand for specialty “fine foods”, the rise of gourmet cooking shows and the increasing popularity of Middle Eastern cooking.

“Sweden is one of the biggest consumers of saffron because the spice plays a key role in Christmas baked goods,” he said.

“In the Persian Gulf states, more consumers are also looking for packaged products such as saffron rice.”

Initially, Sabet tried to grow saffron—which comes from the flower of the crocus plant—in Germany’s Black Forest, but soon realized the yield per plant was far too low to produce the quantities needed for industrial-scale sales.

“It takes about 100 plants to produce one gram of saffron,” he said. “So you can imagine how big the fields have to be to produce one kilo.”

Bumper Output

Iran produces close to 93% of the world’s saffron. About 400 tons of saffron are estimated to be produced in the current Iranian year (March 2016-17) from 90,000 hectares of land under saffron cultivation across the country to register a 15% increase compared with last year, according to Iran’s National Saffron Council.

“Some 300 tons of saffron can be exported. The US has recently resumed its purchases from Iran after 15 years. Americans consume 50 to 60 tons of saffron annually and the country is expected to become our biggest export destination in the near future,” Ali Hosseini, a member of the council, says.

According to the Islamic Republic of Iran Customs Administration, 54 tons of saffron worth 2,428 billion rials ($68.22 million at market exchange rates) were exported in the five months of the current Iranian year.

The figures show a 5.8% rise in weight and about 11.3% increase in value compared with last year’s corresponding period. The UAE, Spain and China were the main customers of Iranian saffron in the period.

More than 350 tons of saffron were produced in Iran over the last fiscal year, registering a 25% increase year-on-year.

The idea for Miasa was born when Sabet’s Iranian father and German mother brought back a can of saffron from a trip to Iran, reports Financial Tribune.

“I was just fascinated,” said Sabet, who was born in Germany. “So I decided to jump into a new adventure.”

His father has since died, but Sabet has developed a whole new appreciation for Iranian culture through his work, including yearly visits for the saffron harvest.

“This has opened up whole new horizons for me. I’m getting back into the language and learning so much,” he said.

Gabriel Due in Tehran

The German entrepreneur’s remarks comes ahead of a two-day visit by German Economy Minister Sigmar Gabriel who is scheduled to arrive in Tehran today with a planeful of executives keen to rebuild trade ties.

Gabriel said he expects some agreements to be signed during the visit but gave no details, adding that he is also going to discuss Syria with Iranian officials.

The German minister was one of the first high-ranking foreign officials to visit Iran after the country and world powers clinched the nuclear deal in July to revive economic ties damaged by years of western sanctions imposed on Iran.

Gabriel canceled a scheduled trip to Iran to attend a meeting of Iran-Germany Economic Commission for the first time in 15 years early May, citing poor health.

A conference hosting hundreds of Iranian and German business figures was held in Tehran on May 3 in lieu of the joint commission, which has yet to be held.

German industry is keen to rebuild longstanding business ties with Iran, but trade has been slow to resume due to uncertainty and financial sanctions that remain in place even after the completion of the nuclear accord.

$10b Trade Target

Managing Director of Iran-Germany Chamber of Industry and Commerce Rene Harum says trade between the two countries is expected to reach €5 billion in 2017 and €10 billion in the coming years.

Speaking at the first meeting of the joint chamber in Tehran on Wednesday, Harum said bilateral trade stood at €2.5 billion in 2015, IRNA reported.

He said Germany is willing to become Iran’s top trading partner, replacing China whose trade with Iran topped $22 billion in the last Iranian year (March 2015-16).

According to the Islamic Republic of Iran Customs Administration, trade between Iran and Germany stood at $2.13 billion in the last Iranian year, down 25% over the previous year.

IRICA’s latest stats show bilateral trade is already witnessing a rebound.

Iran exported 10,400 tons of non-oil goods worth $87 million to Germany in the first four months of the current Iranian year, registering a 1.4% increase compared with last year’s corresponding period. Pistachios, carpet, caviar, saffron and dates were among the main exports.

More than 419,000 tons of goods valued at $671.3 million were imported from the European country during the same period, indicating an 18% rise year-on-year. Imports mainly included industrial machinery, grain, pharmaceuticals and steel products.