Around Johannesburg, in South Africa, hundreds of thousands of people live in townships: under apartheid, these areas were reserved for non-white populations, and they are still poor and under-equipped. Unemployment rates peak at 58%, and as there are no jobs inside the townships, those who are in employment have a 5-hour commute to work every day. Danone South Africa is present in the townships with a very popular product: Mayo, an affordable large-format yogurt. People have found an original way to consume Mayo: they put it in the freezer and eat it as a healthy ice cream. But while Mayo is highly popular in the townships, it is not always easy to find in the small shops that buy it directly from wholesalers.
This dual issue – the high unemployment rate and the lack of a reliable distribution system for Mayo – was the inspiration for the Ecosystem Fund’s new project: “Entrepreneurship for the townships”, developed by Danone South Africa in partnership with Ukuthemba, a private township brand activator specialist that is socially engaged and leverages entrepreneurship in the townships, and HeartLines, a not-for-profit organisation working on changing behaviours in the townships and communities.The programme has just been approved by the Fund’s Social Innovation Committee, and is now in its funding phase. Here is how it will be implemented.
Mamas and hawkers
The first phase of the project will involve creating a network of entrepreneurs who will become small-scale distributors for Mayo, but also for other products from other brands – this is to ensure they do not depend solely on Danone South Africa and on sales of Mayo, which is much more in demand during the summer than during the rest of the year.
A typical “Bulk Breaker” would be a woman who lives in the township, is respected in her community, owns a garage where she can store products, has a basic level of education and heads a family. She will generally have an informal job. Thanks to the project, these “Mamas” will enter the formal economy by becoming the intermediary between Danone South Africa and the townships’ small shops, taking care of orders and distribution. Each mama will formally employ two people, usually family members, to deliver the products to the shops.
To achieve this, Danone South Africa, with the support of the Ecosystem Fund and in partnership with Ukuthemba, will create a training school for these mamas and their employees. The school will provide them with key information about selling and all the knowledge required to become an entrepreneur (accounting, management, etc.). The local Nonprofit partner, HeartLines, will develop a tailored programme to help them operate as effectively as possible within their tough daily living environment.
The project will start with 100 micro-entrepreneurs, which means it will create more than 330 formal jobs.
The second step of the project will be to enter the world of the informal economy. In the townships, there are a lot of “hawkers”: street vendors, who work around the street markets or at traffic lights. They are often poor migrants alone in Johannesburg and live a very precarious life.
The project aims to empower these hawkers by putting them in contact with one of the Mamas and providing them with training. The idea is to help them develop their sales skills, become more visible (with appropriate equipment and a uniform), increase their income and save up money, but also to support them in Johannesburg’s rough environment. Being in contact with a Mama, who is acknowledged in her community, will help them integrate in the townships. Moreover, HeartLines will also work with them on how to operate safely in the township streets. The goal is to empower 1,500 hawkers.
For Danone South Africa, the project will create a reliable distribution system for Mayo; the expected business benefit is a 25% sales increase within three years.
With “Entrepreneurship for the townships”, the Danone Ecosystem Fund and its partners will actively build a distribution network while empowering women and informal workers. We wish them all the best!
Photos © Danone Ecosystem Fund