Five business interventions to achieve social impact, financial sustainability and scale
Improving food and nutrition security through better availability, accessibility, and utilization of food and food products is another complex challenge. It involves a sector where key activities – such as the production, distribution and consumption of food and the identification of food markets – are largely in the hands of private enterprises. Interventions by the private sector in the food value chain can increase the income of the actors in the chain by involving the Base of the Pyramid (BoP) as consumer, producer or entrepreneur. It can increase the availability of food products, make food products more affordable, or increase the quality of food in the BoP.
In collaboration with the Global Alliance for Improved Nutrition (GAIN) and supported by the Dutch Ministry of Foreign Affairs, we have identified five different business interventions for BoP ventures in a new publication. These interventions achieve social impact, financial sustainability and, potentially, scale:
- Interventions focusing on smallholders to improve quality and volume of production. For example, DADTCO, a social enterprise, develops mobile small-scale cassava processing units in Nigeria allowing first processing close to farms.
- Commercial buyers to assure access to a supply of produce that meets specific volume.
- Interventions focusing on BoP intermediaries between (smallholder) producers and consumers. For example, Hariyali Kisaan Bazaar is a rural retailer selling agri-inputs and consumer goods through its chain of centres, which also serve as a common platform for providers of financial services or health services.
- Adaptation of existing products, services, processes to serve BoP consumers.
- Innovative strategies that seek to create new markets at the BoP, through the introduction of new (specialized) products. For example Danone has ventured with Grameen in Bangladesh to create a business Grameen Danone Food Ltd that produces an ultra low cost fortified yoghurt for small children distributed by entrepreneurial Bangladeshi ladies.
The five business interventions are an entry point for companies and other stakeholders to develop products and services to improve access to food and better nutrition with and for the BoP. They are based on extensive study and analysis of existing projects and venture worldwide.
Deliberately choosing one of these strategies, implementing a suitable governance structure and leveraging existing elements in specific models not only enables companies to become more effective in the food value chain, but also to interact and partner with the BoP.
By broadening our understanding of the options available for private sector engagement in providing better access to food and improved nutrition, this report provides key challenges and lessons to scale BoP ventures to be used by the private sector and its partners, be they NGOs or public authorities. Especially in the 2SCALE (Towards Strategic Clusters in Agribusiness through Learning in Entrepreneurship) programme, the BoP Innovation Center will use these insights to develop market based innovation trajectories.
You can download the report here.