Amid the natural beauty of Cartagena's Caribbean coast there exists an alarming level of wealth disparity in Colombia's most notable tourist destination - with an estimated 33 percent of the population living in poverty.
Despite the city's thriving hospitality and tourism industry, local residents are unable to tap into this growing industry because they do not have the market relationships to approach high-end restaurants, five star hotels or supermarkets. Furthermore, they lack the necessary skills and business expertise to meet the rigorous market standards of these establishments. Therefore, most are forced to live as subsistence farmers or fishermen, requiring a stable cash product to enable them to meet the basic needs of their family.
The city's hospitality industry is growing at an impressive rate and having reliable supply chains is a critical requirement for the success of this touristic city. In spite of that, a majority of the industry procures their products, including seafood and fresh produce, from Bogotá (located over 600 miles away), as local infrastructure for sourcing, refrigeration, and transportation is usually inadequate. The local smallholder farmers and fishermen have been unable to meet the quality and quantity standards of these establishments.
CGEP launched its first social enterprise in Cartagena tailored towards the city's growing tourism industry with the aim of bringing local farmers and fishermen out of poverty.
This enterprise operates on a for-profit basis – buying, consolidating, and selling agriculture products, seafood, and processed goods from smallholder farmers and fishermen to five star hotels, local supermarkets chains, and catering companies.
As a first step, prior to creating the enterprise, CGEP carried out studies to identify the demand requirements for several products and services. CGEP sought cooperation from various hotels, restaurants, and supermarkets, analyzing their purchasing history of products, their specifications for each product category, their order placement schedule, their quality standards, and their anticipated growth requirements for each product line.
Next, CGEP studied the "supply side" to identify the current state of production for each identified product and service with respect to demand. When gaps between supply and demand were discovered, CGEP saw this as an opportunity to help the city's underserved population.
After thorough market analysis, CGEP asked for an initial commitment from the various establishments to procure from selected suppliers that they felt could be trained to meet their specifications. CGEP worked with local NGO groups to identify suppliers that were most ready to receive capacity building, that were open to change, and those that embraced the rigor and discipline needed to be a viable commercial provider.
To prevent supply shortages, CGEP's production plan supplies the hotels, restaurants, and supermarkets with a limited volume per week in order to maintain a more consistent supply. The hotels agreed to procure 20% of all goods and services over a 3-year period. The hotels have since asked to scale the number of products they source locally.
A state-of-the-art warehouse was established to provide distribution, storage, processing, and logistics in order to reduce costs, and broaden market opportunities. By helping these smallholder farmers and fishermen improve their productivity and ensuring they receive a fair price for their products, CGEP is empowering them to work themselves out of poverty.
CGEP’s enterprise has provided training, business resources, and technologies to farmers and fishermen to help improve their yields and productivity, consolidate their harvest, and reduce the number of value chain intermediaries, substantially increasing their income. As of September 2015, the enterprise has generated over $1.5 million in beneficiary income for nearly 400 farmers.