There are an estimated 500 million smallholder farmers in the world living in poverty, operating at levels of productivity that are significantly below their potential, and unable to directly access formal, high value markets for their produce.
Multinational corporations and large local food retailers are generally unwilling to extend their procurement systems and supply chains to deal directly with numerous smallholder farmers due to the associated risks and operational complexity, unreliability, and inconsistent, substandard produce. Moreover, local entrepreneurs are unwilling to create businesses to support and aggregate the produce of smallholder farmers due to their scale-driven nature and relatively long payback on their investment (typically greater than three years).
In the meantime, rapidly increasing global demand for food is leading to increased levels of food security and high levels of inflation.
The introduction of impact entrepreneurs that bridge the current gap between the massive latent potential of hundreds of millions of smallholder farmers and the ever growing global demand for food is perhaps one of the world’s greatest development challenges.
Our supply chain enterprises bring real economic value to supply chains through efficiently consolidating and rapidly developing fragmented producer bases and linking them to quality buyers.
We accomplish this by understanding the demand and specifications required of buying partners and forming alliances with them usually in the form of a buying commitment once the demand is identified.
Based on these commitments and specifications, we create the enterprise necessary to identify the potential supplier base, provide training and inputs, and work directly with the producers to improve their quality and yield. The enterprise provides working capital, quality control, aggregation, and consolidates efficient logistics solutions including the development of collection hubs and centralized, dry and cold storage warehouses, as well as transportation of goods. Through this integration, the enterprises we form provide scalable, reliable supply chains for high value buyers.
By working directly with producers to ensure the quality and yield of their produce is improved over time, we develop loyal, mutually beneficial, and long-term relationships with our beneficiaries.
Our for-profit supply chain enterprises bridge the gap between the producers and market buyers and eliminate the multiple tiers of intermediaries which traditionally reduce income to farmers and drive up prices to buyers. The resulting enterprises allow us to increase farmer income, reduce poverty at the farm level and deliver commercial returns to high value retail buyers such as five star hotels, regional supermarket chains, and leading international food and beverage companies. And as a market driven, for-profit solution (with profits recycled), these become sustainable enterprises.
We provide a business opportunity for corporations, supermarkets, restaurants, and other buyers, who, through our supply chain enterprises, are able to reliably source quality produce from local smallholder farmers.
Promoting sustainable supply chains through “Impact Investing” aims to provide a framework through which social investors can play a critical role in poverty alleviation and create greater impact. We offer an investment opportunity in enterprises on a case by case basis for social investors. Additionally, donors can provide grants for farmer training or for use as enterprise capital. All such forms of participation will help to scale the number of producers we are able to include, magnifying these businesses’ social impact.