It’s been just over a year since I returned from my Churchill Fellowship trip to South America to study community food enterprises and how they can be scaled up for public benefit. I spent a very happy few weeks talking to enterprises in the UK before visiting counterparts in Peru and Bolivia.
It was a huge privilege to travel and to meet entrepreneurs, producers, and finance and support providers in all three countries. I came away with a set of recommendations which are summarised in this blog and in a report, Hungry for More.
So, what has happened since?
I presented my findings to UK funders, support providers and social entrepreneurs at the RSA in November 2019, and on a Food Power webinar with Churchill Fellow Simon Shaw from Sustain in March 2020.
I also met with a dozen organisations and individuals exploring investing in the food space, including Triodos Investment Management – who aim to accelerate the transition to more sustainable agricultural systems and consumption patterns.
Recommendation #2 in my report was to increase the number of programmes which help product-based social enterprises access mainstream retail and corporate markets. Social Investment Scotland’s retail academy with Asda is a great example of this, and I connected key players Social Enterprise UK and UnLtd to this programme so that they can consider partnering or replicating the approach.
Back at work at Big Society Capital, we have taken action in two ways:
1) We are Buying Social as much as possible, such as buying our office supplies from social enterprises and using social catering providers and venues for our events. The recently improved SEUK directory is a great help with this. During the covid-19 crisis we are revisiting the best way to continue supporting the sector.
2) We have recently backed the Good Food Fund, a new £1.8m accelerator and venture Fund backing ambitious food and drink challenger brands ready to help tackle childhood obesity, in partnership with Guy’s and St Thomas’ Charity. We’re excited to be working with healthier challenger brands to deliver market-led solutions to one of the biggest health challenges facing the nation. I hope to see this work build on recommendations #7 and #8 in my report: support tailored to different impact models, and flexible and tailored financial products for the sector.
7-12th October is Social Enterprise UK’s #BuySocial week– a time when we should all be increasing our awareness of the brilliant social enterprises out there, and buying more from them when we can. In the food space this is particularly true, and a push to buy our food more socially could have a huge impact.
In May I travelled to Bolivia and Peru through a Churchill Fellowship, to explore how community-owned food businesses can be successfully scaled up for public benefit.
The full report can be found here
Some of the our most pressing problems today relate to food production and consumption. In the UK, half of adults are overweight and obese, healthy food is three times more expensive than unhealthy food, about of a third of the food we produce goes to waste, and current food production us unstainable and causing climate change.
Community food enterprises are organisations that are run by communities for their benefit and are primarily involved in at least one part of growing, harvesting, processing, distributing, selling and serving food. They may also be involved in the sustainable disposal of waste food. Those involved are likely to be committed to local food as a way of ensuring quality and sustainability in the food chain.
On my fellowship I interviewed 10 community food enterprises in the UK and 20 in Bolivia and Peru, as well as 8 finance and support providers in the UK and 11 in Bolivia and Peru. I explored the people behind these enterprises, the communities they serve and the challenges they face in growth.
I found exciting examples of enterprises tackling food problems in the UK. For example, Sutton community farm produces better food whilst improving community cohesion, HISBEsupermarket improves access to ethical and sustainably sourced food, Snact produces healthier affordable snacks from fruit that would have gone to waste, and Our Kitchen provides nutritious and affordable ready meals to low income households.
But such enterprises tend to be small and only 2% turn over more than £1 million, which limits their social impact and financial viability.
I discovered similar barriers to scale across all the enterprises I spoke to in the UK and in South America: access to markets, leadership and governance, access to patient capital and support, the challenge of retaining a community focus and access to land.
In Bolivia and Peru found several examples of community food enterprises which are successfully growing without losing their community focus, and which combine good leadership, the right finance and support, and an absolute dedication to quality and to finding the right buyers.
Having studied the secrets of their growth I concluded that the following top three actions are needed to improve and grow community food enterprises in the UK:
1) The Buy Social movement should be sufficiently resourced to emulate the Fairtrade movement, connect the ecosystem better and get social enterprise products into supermarkets and companies.
2) A program of support should be set up to help community food enterprises have better leverage over food buyers, especially supermarkets – or to help them partner with them to develop better food products. Programmes such as Social Investment Scotland’s retail academy with Asda should be replicated.
3) Supermarkets should be showing the way, building on the Ethical Consumer ranking of the ethical and environmental record of 22 supermarkets. Best in class supermarkets like HISBE should be replicated across the country. The Cooperative supermarket should “go social” again and source only fair trade organic and local food as well as promoting the Buy Social campaign.
The full report can be found here
I will be presenting my findings at the RSA (the Steps at Rawthmells cafe), at 2pm on Tuesday 12th November. If you are interested in attending please email Heywoodjoanna@gmail.com
Today is my last day in Bolivia and a good time to recap on the flurry of meetings and visits I’ve had since the last blog. I have now met or visited a total of 20 enterprises, 12 finance/support providers, 7 farms, and 2 processing plants!
Scale is good, depth is better?
I have seen yet more examples of how community businesses can scale in the last few days of this exploratory trip, in the shape of co-operatives and producer-owned businesses selling cocoa, dairy products and quinoa. All are achieving sales of between $1m and $7m, and supporting between 39 and 1300 farming families. There is a ton of learning about how these organisations are growing, which I will pull out in my report!
But I’m also hearing about depth of impact…
In the successful, scaling community food businesses I have come across, the focus is usually on growth, accessing buyers and increased productivity for the producer so that their incomes go up. There is rarely much focus on social impact beyond this. I’m hearing that most impact investors are also focused on monitoring the businesses’ balance sheets rather than asking many questions on social impact – such as whether women are more empowered, children are going to school, families have running water, etc.
In his book, “Meaningful Work: A Quest to Do Great Business, Find Your Calling, and Feed Your Soul”, renowned chocolate maker Shawn Askinosie challenges the “grow or die” mentality of modern business. We all feel incredible pressure to make our businesses as large as humanly possible, which has a tendency to separate us from the people we’re striving to serve. The secret, Shawn insists, is in maintaining the humanness of business by making sure that we never extend ourselves beyond the ability to cultivate meaningful relationships with the people we do business with. (Chapter 5, “Don’t Scale, Reverse Scale”)
The three graces: leadership, ecosystem of support and market
I met with three more finance/support providers (Agriterra, Christian Aid and Oxfam) and learnt about a variety of approaches to support community-led agri food businesses. In smaller community businesses (associations of producers in particular), three reasons for failure were highlighted:
1) Poor or weak leadership/lack of focus/priorities
2) Lack of focus on market and quality
3) Over-reliance on funders or NGOs
When a community business combines good leadership, the right finance and support, and an absolute dedication to quality and to finding the right buyers, it can have a huge impact and withstand the test of time.
Food heritage movement
Finally, I met/looked at a series of actors who are part of a growing food heritage movement in Bolivia – who believe gastronomy is not the end but the means to enhance, stimulate and promote a country’s food sector as a source of identity and national pride, and as a tool for economic development.
MIGA connects the elements of the supply chain, promotes gasto tourism, and helps stimulate healthy and sustainable food based on regional cooking. In particular, I was struck by the importance of encouraging low-income people in urban areas to consume local and healthy ingredients. In Bolivia, good food is still cheap. In the UK this is no longer the case unfortunately.
Manq’a is part of the new wave of Bolivian gourmet restaurants, run as a social enterprise programme that aims to train new chefs to work with Bolivian and sustainability sourced products. They have nine schools in disadvantaged areas of the city where so far 3500 young people have been trained as chefs and entrepreneurs. I met several inspiring young people with big dreams for the future!
Roasters Boutique sells transparently sourced coffee for national consumption, proving that Bolivia’s best beans needn’t be exported and training the general public to understand and appreciate where their coffee comes from.
Sabor Clandestino is a collective offering haute cuisine menus served in secret locations in the disadvantaged neighborhoods of La Paz, as a way of reflecting reality through food and bringing people from different backgrounds together. Proceeds support the distribution of free, good quality food in disadvantaged areas.
Last but not least, I met Bolivia’s vice-minister of tourism and culture who is busy promoting all these wonderful trends and hoping to bring more people to discover the rich culture, landscapes and food Bolivia has to offer!
Next week I will turn my attention back to the UK and hope to extract key learnings, ideas and recommendations from this fabulous and enriching experience!
The Peruvian Amazon is a beautiful and mysterious place. It has one of the most diverse faunas on the planet, and an endless variety of cacaos that have already become a great social tool. Cocoa crops have largely replaced coca crops in certain regions of Peru. Coca is traditionally a sacred plant and its leaves are a natural remedy to altitude sickness as well as a natural stimulant. Mountains of coca leaves tower in the Andean markets of Peru and are offered for sale but in the past decades, coca has also been used for the production of cocaine in the western world. In recent years, Peruvian and US programs have been focused on providing viable alternatives so that farmers are incentivised away from coca production.
Within this context, the Alto Huallaga cocoa cooperative stands out as a model of good practice. It has received a relatively low government subsidies-mainly in the form of a warehouse and processing plant – but apart from that it is very much a sales-driven and commercially sound operation. It has an exciting vision, undeniably strong social impact and presents a true example of sustainable food production.
Leadership and growth
The cooperative has been operating since 2009 and in 2017 it sold over $5 million-worth of cocoa to customers in Italy, Switzerland Austria and France. It buys high-quality, certified fair trade and organic cocoa from 440 farmers in the region. The cooperative operates with a democratic structure through an elected assembly to which the management team reports on a monthly basis.
There are 60 paid members of staff who work together and are very innovation-focused, from a team of six field technicians who visit 50 farms each per month to provide technical support and teach the latest cocoa farming methods, though to a taste profile and chocolate team who are developing the cooperative’s own chocolate brand for national and (in due course) international consumption.
The vision of the cooperative is to continue increase sales by bringing in new members, increase productivity (farmers are constantly testing new approaches, such as planting cocoa trees closer together and using better varieties), and to start selling higher value products such as cocoa butter, liquor and chocolate. In fact their chocolate has been selected as one of the top five Peruvian chocolates to be judged at this year’ international awards in Paris!
Social impact in practice for low income communities
The Alto Huallaga cooperative aims to improve the living conditions of its members, by providing them with guaranteed sales at a better price than on the open market, technical assistance to improve their farming, low interest loans and emergency grants for their healthcare needs. The cooperative receives a fair-trade premium of 200 USD per tonne of cocoa sold. This is used to pay for certifications, to offer advanced training, to improve the cooperative’s infrastructure and to collect the cocoa directly from the farm gate, saving the farmers high transport costs.
Finally, a bonus per kilo sold is paid out directly to the farmers at the end of each year. Producers are not tied to the cooperative and have the power to choose what they do with their cocoa, including selling it on the open market if they so wish (though to remain a member they must sell a minimum of 500kg per hectare to the cooperative). However most choose to produce the best quality cocoa possible and to sell to the cooperative, as it pays consistently more than the open market.
Though the benefits to producers are largely economical, there are also numerous social aspects to the cooperative, such as competitions, social gatherings and collaborations between farmers. Finally the ecological benefits of the cooperative are undeniable- all farms are organic and free of harmful fertilisers and pesticides, and the cooperative runs long-term reforestation programmes in conjunction with an NGO and one of its buyers.
Lessons for the UK?
1) Scale is possible in community food businesses – This case study shows that community enterprises can scale. The co-op has a simple business model despite the complex social structure behind it, demonstrates good leadership and has empowered and self motivated staff. It provides multiple benefits for its producers, who are starting to live more comfortable and contented lives in what used to be an area dominated by illicit crops and violence.
2) The “cocoa effect” – The cooperative is a shining example of food production that is healthier for people and planet. It brings people together and builds skills to enable vulnerable groups who were once on the edge of criminal activity, to become self sufficient – and indeed to start winning international prizes for their products! Can this “cocoa effect” be applied to working with vulnerable groups or people at risk of being drawn into crime in the UK, or to improve the prospects of today’s youth through creative ventures that engage their talents, potential, and passion?
3) The role of UK cooperatives – In developing countries the role of organic, fair trade cooperatives can be particularly strong because they are empowering and opening markets to small producers and enabling sustainable food production. When I return I will dig into UK co-ops and draw up some comparisons.
Next week I will be popping back to Lima briefly for some last meetings then heading to Bolivia to explore more community business models-namely around the promotion of locally sourced ingredients. I will continue thinking about UK issues which can be solved through social food businesses, such as loneliness, food poverty and unsustainable food production.
The social enterprise scene in Peru has started to take off in the last 5 years. There are some 250 self-declared social businesses but if you include co-operatives and associations in the agri-space (who have often been around for 30+ years), this goes up by several thousand. I’m told that food is the most promising sector for social enterprise in Peru – gastronomy and agroindustry in particular. Other observed trends include a more stable economy in the last 10 years, the emergence of Peruvian cocoa and chocolate on the international scene, and an explosion in the national and international consumption of foods grown in Peru such as quinoa, chia and avocados.
With regards to “impact models”, I am mostly coming across businesses supporting vulnerable people through their supply chains – but also some who work with vulnerable employees, and a handful who have a positive social impact through the use of their profits. Here is a round up from my encounters to date, and a few early stage lessons for the UK!
Promoting Peru is a start-up market connector for agri produce, dedicated to finding markets for the producers that don’t have access to the traditional export channels and ensuring that these producers benefit directly from fair prices. They have been finding smaller organisations hard to do business with (slow turnaround of orders and obscure leadership structures) but are committed to building their capacity and to helping them find the right buyers abroad.
Shattell is an award winning artisan chocolate maker. Many of the farmers who Shattell work with used to grow coca trees before cacao, and since coca is illegal, growing it put the farmers in a lot of risk. Shattell’s mission is to help those farmers get a good enough income from their cacao growing, so that they don’t feel the need to go back to growing coca. They pay 50-100% more than commercial buyers for the finest beans, pushing them towards premium quality and new markets.
Cacaotal is a bean to bar chocolate shop and tasting school. Again, whilst not branding herself as a social enterprise, founder Amanda Jo helps cocoa farmers (who are increasingly seeking to make their own, tree-to-bar chocolate) with free advice on quality and marketing.
Yaqua is a bottled water company which re-invests 100% of its profits into clean water projects in the most vulnerable and remote areas of Peru. Apart from co-operatives and associations, dedicated structures for social enterprises don’t exist in Peru as they do in the UK, and Yaqua has dealt with this by running its own water projects and by having 99.9% of shares owned by a foundation, to ensure profits are given away.
Support and finance providers
Nesst is an international non profit which supports the creation and growth of sustainable social enterprises.To be supported by Nesst, there has to be social impact management for vulnerable groups, fair prices, secure contracts, training and good governance/a voice for vulnerable people in the business. Nesst offers two main support mechanisms: an incubation programme offering capacity development and tailored finance (using philanthropic capital) and a $20m investment fund. Nesst is one of the only providers of early stage tailored finance (most social enterprise start-ups are self funded).
Shared Interest is a finance provider to community businesses, offering short and long term financing. They used to only invest in the agricultural and craft sectors, and only into associations and cooperatives.They have broadened their impact definitions quite recently and now independently assess a business against the 10 fair trade principles of the world trade organisation https://wfto.com/fair-trade/10-principles-fair-trade
Lessons for the UK?
1) In Peru, even food businesses that do not describe themselves as social enterprises are often working with vulnerable groups in their supply chains, and find themselves playing a capacity building and knowledge transfer role, as they depend on these groups for their own product development. This a win-win relationship and there is no sense that these groups are “beneficiaries”. Could the UK learn something from this?
2) The social enterprise sector remains young in Peru (with only some 250 self declared social enterprises), and whilst there are now many providers of capital for the agri-sector and co-operatives, Nesst is one of the only providers of early stage tailored finance. Should the UK, with its 90,000 social enterprises, export its experience or franchise its models to other places?
Next week I will take a deep dive into a cocoa co-operative in the Huanuco region of the Peruvian jungle. I will stay with them for five days and explore the co-op’s leadership, how it has grown and what its social impact means in practice for low income communities. I will continue to think about UK issues which can be solved through social food businesses, such as loneliness, food poverty and unsustainable food production.