The business of sanitation: a microcosm of Inclusive Business challenges
I tend to use sanitation business as an example when I want to explain how tough inclusive business is at the BoP. All the normal challenges are magnified in sanitation: lack of product awareness, difference between what consumers ‘want’ and ‘need’, fragmented complex logistics and the need to delineate roles of public, non-profit and private sector, subsidy and profit.
The contributions we have this month on the theme of sanitation are certainly relevant to all of us in inclusive business, not just the ‘sanipreneurs’. But they are sharing more than problems and challenges. There is excitement in sanitation. I can’t point to a profitable model at scale, but our contributors explore current directions to get there.
We partnered with the Toilet Board Coalition, an unusual multi-stakeholder collaboration. And partnership is one of the current directions that emerges strongly, reflected in blogs by TBC’s Alex Knezovich and our Editor’s Choice review of how the Toilet Board Coalition has picked up the excellent analysis of sanitation models in 2014, to turn these into actions in 2015. Partnership between ‘giggling bureaucrats’ and sanipreneurs is also discussed by Chris Oestereich, reflecting on how the dawning realisation of the SDGs ambition is catalysing serious talk.
In her overview blog on current trends, Cheryl Hicks, CEO of TBC, focuses on three buzzing directions
- The circular economy, converting human waste into an asset and revenue stream
- Digital business models for payment of sanitation services
- Affordable housing incorporating sanitation.
Realising value from human waste is a theme touched on by many of our contributors and an area of apparent progress. Sanergy share their latest progress in selling organic fertiliser and using waste to create insect-based animal feed. Wessex Social Ventures describe how their model is made sustainable by working with micro-enterprises and the community to build EcoSan toilets and sell the waste as natural fertilizer. The Human Urine Bank in India pays farmers for their waste to process and sell on for agricultural use.
If you don’t know the options for turning human waste into valuable products - and if you would like to - there is a clear overview in half of this month’s Editor’s Choice (half, because my choice is 2 sister reports this month). Hystra’s 2014 report on the Next Generation of Sanitation Solutions pointed out that waste treatment, is a huge technical headache for sanitation solutions. Options for pit management in rural latrines, and for bio-chemicals that process waste inside the toilet itself, were reviewed, with clear summaries of five options for recycling waste – composted fertiliser, urine-based fertiliser, energy bio-pellets, gas, and breeding into insects for animal feed.
At the time, Hystra estimated that the potential revenue streams from waste by-products was relatively low (a $0.60 to $12 profit per household per year) so could not cover the costs of waste collection operation such as home mobile toilets (requiring $110 operational costs per household per year). But it is clear from our contributors this month that continuing technical innovation and market exploration on this theme is central to current directions.
I have learnt a huge amount from working with toilet entrepreneurs – not just about design of toilets – but about business model adaptation and ingenuity in testing markets, creating new revenue streams, and building coalitions. If you work in sanitation, good luck and share your insights with us. If sanitation is not your business, all there reason to enjoy this mini-series, because of what it can teach the rest of us on the pitfalls and strategies of inclusive business.