DISPATCHES FROM FOOD VISION 2016

‘Demand-creation’ business model key to sustainability

 

How to create a new high-value, sustainable business model for African ingredients? By focusing on demand-creation first, production second and engagement with communities, says the founder of baobab start-up Aduna. 

FoodNavigator caught up with Andrew Hunt, the founder of Aduna, a start-up which is taking a little known fruit from the baobab tree and forging a new model for doing business in Africa.

The hope is by introducing new formats every year the ingredient remains in the spotlight of the media, the retailer and the consumers.

“Imagine a new product adoption lifecycle,” he explained.  “Our overall strategy is to take Aduna from early adopters on the left side (superfood powders) to early majority (bars and teas) to majority (more mainstream formats in our NPD pipeline). The long-term nature of our strategy is the key here.”

Hunt goes on to explain how the success of the baobab fruit relies on an intricate ecosystem of producers and distributors in the Ghanaian region that all contribute to its long-term sustainability.

“Baobab is the first such ingredient we are working on – a product without a significant history of either consumption or value-creation in the region.”

Hunt referred to an ‘aid based’ model that he believed was outdated. Within this model, huge investments are made by donors into time-bound ‘projects’ whereby thousands of women are trained to grow ‘cash crops,’ with little thought as to how the products will be marketed.

He believed the international development community had an obsession with production and supply and a blind spot for demand.

“As such, when the projects expire, nothing is left but redundant equipment and discouraged producers. These producers are left with little choice but to uproot the crops and return to their subsistence lifestyles, perpetuating a downward spiral of aid-dependency.”

Community integration

The food industry has been increasingly eyeing African countries as potential ingredient producers, with many multinational companies adopting a business model that integrates small-scale farmers into their supply chains.

In 2016, flavour firm Firmenich and water management firm Veolia joined Mars and Danone in an investment fund that boosts the security and sustainability of their supply chains while improving the livelihood of smallholder farmers.

The Livelihoods Fund for Family Farming (Livelihoods 3F) was first launched in 2014 with an initial investment from Danone and Mars. It has now been announced €120 million will be ploughed into projects in Africa, Asia and Latin America in 2016, helping 200,000 farms convert to sustainable agricultural practices.

With Aduna, Hunt has employed a multiple ingredient strategy. Along with baobab and moringa – a nutrient dense leaf derived from the Moringa tree, the business is set up for long-term success that does not depend on the fortunes of either product.

“Once this ‘proof of concept’ has been successfully delivered it can be replicated and further scaled up – in other parts of Africa where baobab is abundant, and with other ingredients Aduna’s pipeline, including moringa,” he said.

African connection

Africa has the greatest potential for growth in food consumption over the next 25 years, according to a report, as the continent’s young demographic and lower-than-average calorie consumption provides huge export potential.

In 2014, Euromonitor International estimated that the Middle East and Africa’s turnover of agricultural produce totalled €442m ($482.7m), while the region’s ingredients market was estimated at €59m ($64.5m).

“More than 25% of the world’s botanical species originate from Africa, but less than 1% of what we see goes into the global health food industry,” said Hunt.

“The primary reason for this is a chronic lack of investment in clinical research in order to understand the properties and benefits of many of these species and bringing them to the awareness of the global markets, even local ones.”

Food Vision Asia 2016

Didn't make it to Food Vision in Cannes? Food Vision Asia will be taking place in Singapore from 27 - 29 April 2016 - book your place here.

 

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