Paris, 8th March. In typical (i.e. gloomy) Parisian weather, a group of people gathered at Danone’s headquarters to share a bit of enthusiasm and optimism – and best practices, too. Over a dozen people from Danone, danone.communities, the Danone Ecosystem Fund and Hystra (an organisation that works with social businesses to design and implement strategies and innovative business approaches) came to hear about Living Goods, a social business that operates in Uganda to provide people with the products they need and lack. As Thierry Delepoulle, Growth2 Director at Danone, explained in his introduction, this meeting was part of a benchmark currently being conducted by Danone Ecosystem and Hystra on inspiring social businesses and initiatives outside. Living Goods was chosen
because it is about providing health, which is at the heart of our mission, and also because they developed an incredible IT solution to monitor their business.
With this meeting, the goal for the teams at Danone and its funds was to “formalise what (they) already knew about micro-distribution” and find inspiration on how to “develop an inclusive model” that is effective business-wise as well as with the social aspects.
Filling the distribution gap for indispensable products
After a short film about the Danone Ecosystem Fund (which you can watch here), Chris Murphy, Director of Marketing & Development at Living Goods, rose to speak about the spirit and mission of Living Goods:
Like Danone, we do not see the people at the bottom of the pyramid as victims, but as value conscious consumers and resilient entrepreneurs.
He explained that, while there are already many products that can save or change lives, Africa experiences a gap in the market at distribution level, which keeps these products from getting to the poorest or most remote populations. When Living Goods was created in 2007, it took inspiration from the cosmetics company Avon to build its business model: Avon started in rural America in the 1880s, where the conditions (poor access to quality goods for the villages and few opportunities for women to earn money) were strikingly similar to the context in emerging countries today. And it developed a direct-to-consumer micro-distribution system that enabled it to become a thriving $10 billion business in over 100 countries. Living Goods thus adapted the system to Ugandan villages. As explained in a film shown by Chris and his colleague Molly Christiansen, in charge of partnership & research, the social business relies on a network of women who go from door to door, teaching people how they can improve their health and wealth while selling life-changing products at affordable prices. Their product range includes nutrition products (such as fortified complementary foods for children), health products (such as medicines and oral contraceptives), consumer goods (such as soap or hygienic pads) and pro-poor innovations (such as clean cookstoves and solar lamps).
By empowering over 1,000 micro-entrepreneurs, Living Goods has already supported 105,049 pregnancies, treated 388,465 children for deadly diseases, sold over 25,000 clean-burning cookstoves, and improved the lives of countless consumers throughout East Africa.
Chris listed the four key goals and benefits of this system: helping to save lives by focusing on easily preventable and treatable diseases (malaria and diarrhoea), empowering micro-entrepreneurs to earn a living by making a difference, increasing access to innovations (both in terms of availability and affordability), and achieving financial sustainability.
Women empowerment and innovative technology
Molly gave further details about the model: every woman in the network is actually a micro-entrepreneur and operates with a franchise. They are all community members, often housewives, who earn a supplemental income with their Living Goods activity. They are trained on the various aspects of running a small business and are given branded materials (clothes, bags, product catalogues, signs for their home) to improve their visibility and credibility. They also receive health training, so that they are able to diagnose the most frequent diseases, treat some of them and, with conditions they cannot handle, refer the patients to treatment facilities. But one of the most interesting innovations implemented by Living Goods actually lies with technology: thanks to the enormous penetration of mobile phones in East Africa, Living Goods is able to use mobile technology to monitor and motivate their sales agents and market more effectively to their customers. For instance, when a Living Goods agent diagnoses someone with malaria, or learns that a woman is pregnant, she texts a simple code to a cloud-based platform, which can thus monitor whom the agents are treating, and for what. With the data collected, the server then sends automated text messages to the clients: treatment reminders, education for pregnant mothers, behaviour change communications to high-risk households, and so on. Living Goods is also using the system to broadcast product promotions, announce new product introductions, build brand equity, and drive word-of-mouth marketing.
Good ideas are better shared
All through the presentation by Chris and Molly, questions came from all directions – and they were extremely relevant. Everyone attending had expertise in social business, and this gave rise to some very interesting discussions on how to engage the women entrepreneurs, how to chose the products and source them locally, how to handle a large portfolio of products, etc. Molly and Chris shared the challenges they are facing, notably in terms of technology: bugs are still occurring, and local habits (multiple SIM cards, shared mobile phones, etc.) make it hard to ensure that a personalised message is received and read by the right person. They see a huge opportunity in the development of mobile phone technology in Africa and are planning to integrate mobile money, training tools, and direct response marketing into their mobile platform. In 2013, Living Goods also plans to increase its Uganda network by 60%, launch the business in Kenya, continue to drive product innovation and, finally, scale up their impact by influencing leading NGOs and companies, and convincing them to adapt their model. Molly says that Living Goods wants to be copied:
The scale of the problems is huge. We are not going to solve these problems at the scale they persist on our own. We aim to share what we have learned with others to help replicate our methods and model throughout the developing world.
They have thus started to build partnerships with other organisations, and they communicate on their model to inspire others. The future of Living Goods lies in ensuring its own sustainability and efficiency, and helping others replicate the model. We can be sure that some of the people who were in the room that afternoon will pick up on their ideas!
If you wish to learn more about Living Goods, you can visit their website, follow them on Twitter, like them on Facebook, or read their latest news including features in The New York Times, The Economist, BusinessWeek, and more.
(Photo from: http://jonathankalan.photoshelter.com by Jonathan Kalan)