Scaling community food businesses – blog #2

How can UK Community food businesses learn from counterparts in South America, many of which have scaled successfully, in terms of good practice, how they are organised and how they address inequality and improve social cohesion?

I’d like us to think about the last coffee you had or the last lettuce you bought. Maybe your coffee was certified fair trade how about that poor lettuce, who knows where that came from, who grew it and how much they got paid? In this age of sophisticated palates we still know so little about the origin and social impact of the food we eat.

Last summer I visited Sutton Community farm, where I could not only buy a lettuce knowing where it had been grown sustainably and ethically, but also knowing I was supporting a community businesses to improve community cohesion, bring people together, increase their skills and create jobs in the UK food sector.

In the UK there are many great businesses like Sutton Community Farm, but what we are seeing is that very few ever grow – with 84% of social enterprises in the UK turning over less than £1 million. That means that their impact is limited despite the high potential for good that they might have.

In South America there are examples of community businesses that have grown, with a high number of food cooperatives in sectors such as coffee and cocoa, but there are also other interesting models such as share distribution schemes for producers, which make South America an interesting place for exploration.

In the next few months I will be speaking to several UK community businesses to ensure that I understand the challenges that they face in some detail.

So far three challenges have surfaced – one is around leadership and entrepreneurship and how community business leaders are not often businesspeople; the second is around access to the right support – even though there is quite a lot of funding available in the UK for community businesses this is not necessarily what they are lacking; the third is scale – is it a contradiction for community businesses to scale and does it mean that they will then lose their community focus per se?

I will then talk to infrastructure and finance providers in South America such as Shared Interest and Oxfam, and research relevant businesses such as chocolate business Choba Choba explored in a previous blog, which is giving an increased number of shares to its producers as the business grows.

If you know community food businesses in the UK or South America who might be interested in this research please do let me know!

Scaling UK community-owned food businesses – South American blog #1

In this blog series we explore what the UK can learn from community owned food businesses in South America which have scaled successfully whilst having a positive impact in their community. The first under the spotlight is chocolate brand Choba Choba, the first Swiss chocolate brand co-owned and co-managed by its cocoa farmers.

1) Farmers as entrepreneurs- A community business works best when it manages to harness both social good and business acumen. Choba Choba entrepreneurs Eric and Christoph teamed up with 36 organic cacao farmers from the Alto Huayabamba Valley of Peru who have a direct stake in the company and benefit from its success. Choba Choba farmers define the price of their cacao (Bottom-up pricing), benefit from the profits as shareholders of Choba Choba and are represented on the board of the company.

2) Scale – maintaining accountability Despite the exponential growth of the global cocoa industry, farmers usually benefit the least. Most cacao farmers receive less than 6% of the retail price of a chocolate bar and struggle to survive. Since 2016, Choba Choba farmers have seen a 20% increase in their total yearly income, as well as increasing their ownership of the business from 7% to 17%.

3) Talent- upskilling in partnership Cocoa producers are struggling due to unfair prices, but also because cocoa trees are delicate and difficult to grow. Enemies of cocoa trees come in different shapes and sizes, two being disease and pests which cause yearly losses of 30% to 40% of the total global cocoa production. Choba Choba has formed a research partnership with a University to conserve and re-produce ancient and indigenous cocoa species that grow in the wild, and to develop organic methods to fight pests affecting cocoa trees in the region.

So what can UK community businesses learn from Choba Choba? Give your community members (who may also be your suppliers) a direct stake in the company so that they benefit from its success and growth. Treat community members as entrepreneurs, sharing equity, governance and decision making as well as the benefits the company generates. Treat community members as team mates and tackle your biggest challenges together by upskilling in partnership with experts.

Choba Choba is an inspiring community business that looks set to start a chocolate revolution! So let’s get chomping.

References: https://www.chobachoba.com http://www.bbc.com/capital/story/20180926-could-we-be-facing-a-chocapocalypse?ocid=ww.social.link.facebook

Scaling UK community-owned food businesses – lessons from South America?

Community-owned food businesses in the UK are a force for good: they tackle inequality and food poverty and improve community cohesion by bringing people from all walks of life together to learn new skills and access jobs, and by producing food sustainably and locally.   But very few grow and scale (84% of UK social enterprises turn over less than £1m) and this limits their social impact as well as their financial viability. The biggest challenges identified during my recent conversations with such businesses are   1) Entrepreneurship – community entrepreneurs/leaders aspire to social good but they are not natural business people 2) Scale – if these businesses scale, they lose their accountability to communities and sense of ownership by a geographic community 3) Talent – community work forces, volunteers and members don’t have the time and skills to grow a venture successfully.   I have worked with several community owned food businesses in South America which have scaled successfully, had great positive impact and addressed these three challenges without losing their community focus. Can the UK learn from them?   I shall explore this question over the next few weeks by focusing on 7 community-owned food businesses in South America, all of which have managed to scale and yet have retained their community focus, and offer lessons for the UK. More soon… Meanwhile use this interactive map to discover which community food businesses are near you !

Tip #6 Use all the tools at your disposal

For charities and social enterprises seeking to grow and scale, fundraising is not the only solution. It is important to make sure your organisation is in good shape, aware of its strengths and weaknesses and able to tackle the latter full-on. There are numerous good tools and tool kits which can help guide you through your organisational development. For example, these resources help navigate the fundamentals for non profits, and help you navigate change & opportunity. In particular, check out this Financial Self-Assessment Worksheet to know your Strengths and Weaknesses, or use this worksheet to help articulate components of your business model. Whatever you do, don’t forget to plan for success, but for a rainy day too. As my Dad would say (but apparently he stole it from Denis Waitley – “Expect the best, plan for the worst, and prepare to be surprised.”

Tip #5 Is your fundraising diversified enough?

Happy New Year to all! In 2017 I advised a number of charities on their fundraising strategies, and one of the most common problems I came across was “putting your eggs in one basket” i.e over-relying on one or two sources of income. When thinking about diversifying your income streams, think about the fundraising mix (grants from individuals, trusts and foundations, corporates, regular giving and events) but also think about non-philanthropic income, for example by developing and testing commercial opportunities. At the moment trading income makes up only 11% of voluntary sector income, but this is bound to change as pressures on the fundraising environment increases. Check out more on this blog by Tom Barratt, director and founder of Frodas – an independent consultancy that works with charities to grow their earned income and become more financially sustainable: https://www.institute-of-fundraising.org.uk/blog/why-arent-we-trading-more/