Tangible impact in BoP markets through 2SCALE

Developing food products for Base of the Pyramid markets requires an innovative approach, an entrepreneurial mindset and – in most cases – partnerships between local enterprises and international organizations and businesses.

The innovative approach is required because many crops are being grown but do not reach the market either because there is no surplus to sell or because the supply chain is not organized properly and products cannot reach the market or the products are not geared for BoP consumers.

The BoP Innovation Center has a good track record in developing go-to-market strategies for food products targeted at BoP consumers. Part of the experience was gained through over 20 pilots that are being implemented with African businesses that have partnered with the 2SCALE programme.

A number of market pilots are extremely successful and all agri- and food businesses that want to expand in Africa should be curious about the factors that have resulted in successful market introductions and a good market uptake. We would like to share three successful business cases and briefly discuss what has defined the successes so far.

The market introduction of Supermom’s by GUTS Agro

GUTS Agro has launched a product never made before in Ethiopia – an affordable, highly nutritious corn-soya blend for young children and expectant and nursing mothers, called Supermom’s. Supermom’s is made from maize and soybeans, is fortified with over 20 vitamins and minerals, and contains essential fats, carbohydrates and proteins. The new product is targeted at low-income households and has quite an innovative distribution model - called Likie, meaning ‘my fit’ - that was designed with support of 2SCALE and is better suited to effectively reach low-income consumers, while maintaining the affordability of the product. The Likie distribution model shortens the supply chain and will improve the traceability of the product, since Supermom’s is hawked door-to-door by young women on tricycles, bringing the products directly from the factory to the consumer.
This eliminates mark-ups by middlemen, reduces costs for the consumer, and substantially reduces the risk of deterioration in transit. It also increases nutrition awareness among poor women, because the sales ladies are trained to offer nutrition education. Since the launch in July, more than 3000 Super Mom sachets (600 Kgs) have been sold with positive feedback from customers on its acceptance, especially by children. Presently over 20 women small entrepreneurs are engaged in the micro-franchise distribution business. GUTS’ goal is to increase sales 10% each year, capturing a 10% market share of the supplementary foods market in the country. Over 20.000 farmers will have access to sustainable output market for their maize and soybean production through the partnership.

Soya beans for Goussi – transformation of a by-product to an attractive proposition

What has the nutritional value of 66 eggs, but costs the same as just four eggs? Answer: a kilogram of soybean Goussi. Goussi is a popular West African dish, traditionally made from squash seeds. To promote Goussi made from soybean, 2SCALE is partnering with the Coopérative de Transformation d’Approvisionnement et d’Écoulement de Soja (CTAE) in Benin. Soybean Goussi tastes almost
identical to traditional Goussi but is more nutritious (42% protein), more profitable and far less labor-intensive to produce. The 2SCALE partnership secures access to soya goussi for low income consumers; a nutritious and affordable food product. However, to make the product attractive it had to be transformed into a product that addresses the aspiration of the consumers. A new value proposition was developed and the new product needed attractive branding and promotion through a flyer and radio commercials. So far, 14,000 consumers have been reached and feedback is positive.

AACE Foods develop new brands for low income consumers

In partnership with the 2SCALE programme the Nigerian company AACE Foods – a local SME that produces herbs and spices – develops new products for low income consumers. Recently, AACE Foods started producing convenience foods, primarily corn-soy flour that functions as an affordable and nutritious breakfast meal.

AACE Foods sources the raw materials for these products from smallholder farmers that are involved in 2SCALE across Nigeria. With these products, the company has an interesting proposition to low-income consumers, but AACE Foods needs a clear marketing strategy on how to reach these BoP consumers.

With the 2SCALE partners AACE Foods developed and improved a value proposition that serves as a blueprint for future marketing efforts. This improved value proposition will focus on a better defined target group, the creation of a new packaging design as well as uniform product branding. In addition, more effective distribution channels to BoP consumers will be developed. The implementation will be done with a team of local marketing experts.

Lessons learned from the 2SCALE BoP pilots

Development of new products for local markets requires innovations throughout the supply chain: better organized smallholders, improved techniques, better connection to food businesses and last but not least improved value propositions for BoP consumers and appropriate distribution models. Food products should be affordable but still look attractive and provide value. It is not different from any other market: the perceived trade-off between price and value is extremely important.

The entire value chain can be further developed in partnership with corporate businesses from the western hemisphere. They can provide the inputs, fertilizers and more efficient and effective agri technologies, as well as education for farmers. With the African food enterprises new products can be developed after having retrieved market insights through appropriate market sensing technologies.

In addition, the new products should be accessible requiring innovative distribution models such as the Likie model in Ethiopia. Often we have seen business innovations and value chain optimization in which sales and distribution models for local markets have not been sufficiently addressed. We believe that the local agri and food sector can scale up and have more social impact if local and regional consumers are being reached. Not only will there be more job opportunities but also local and regional food security will improve.

Finally, there is a need for promotion and campaigns to reach the potential consumers. This is a business activity that can easily be forgotten. Since only few BoP consumers own television sets or have access to electricity, innovative advertising and promotion models are needed. Within the 2SCALE programme community advertising is being used through networks of sales ladies. In other BoP marketing go-to-market strategies we successfully cooperate with Mobile Movies to organize a network of mobile promotion experts that combine community engagement approaches with promotional activities. In these models the sales people are not only promoting and selling, they are also bringing back information on the consumers and their purchasing behavior.

The main lesson we have learned is that real impact in terms of job creation and food security can best be reached by including every link in the value chain: from small holders to food processors AND from food processors to local and regional consumers.

This blog is a part of the October 2015 series on inclusive business portfolio impact and learnings. For more opinion, analysis and studies click here.