liberation cic evaluation
Download
Skip this Video
Download Presentation
Liberation CIC Evaluation

Loading in 2 Seconds...

play fullscreen
1 / 30

Liberation CIC Evaluation - PowerPoint PPT Presentation


  • 88 Views
  • Uploaded on

Liberation CIC Evaluation. Dr Bob Doherty Head of the Business School Liverpool Hope University. Overview. Research process Competitive Context & Challenge Impact on UK Market Impact on Producers Impact of INPC Governance Lessons Learnt. Governance of Liberation CIC. Background.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Liberation CIC Evaluation ' - axel-meyers


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
liberation cic evaluation

Liberation CIC Evaluation

Dr Bob Doherty

Head of the Business School

Liverpool Hope University

overview
Overview

Research process

Competitive Context & Challenge

Impact on UK Market

Impact on Producers

Impact of INPC

Governance

Lessons Learnt

background
Background

Set-up in May 2007 to develop market access for small-holder nut farmers

42% shares owned by 12 producer coops from 3 continents called INPC

Investment provided by Comic Relief and Hunter Foundation

Southern Africa share of global groundnut market had declined from 77% in 1970s to <4% by 2005

research process
Research Process
  • 20 interviews
    • Range of 20 informants from supermarkets to producer representatives
    • 4 group discussions

Review of secondary documents

    • Internal meeting minutes and annual reports
  • Market reports
  • Academic sources
competitive context
Competitive Context
  • UK Nut market the supermarket own-label figure is a significant 73% of total nut market share (Mintel 2009b)
  • Major brands struggling
  • Some nut traders cross subsidising price of FT nuts
  • Launched at a time of economic recession and devaluation of £
slide7

Forces against

Anti-competitive activity from major players

Highly competitive market

Severe price cutting

Economic recession

Lots of competitive activity and NPD in nuts since launch of Liberation

Devaluation of the £

Volatile commodity prices

Weak position of nut farmers

Liberations competitive position

Educating supermarket buyers

Improvements in quality

Positioned as the FT nut specialist

Stakeholder coalition

Liberations FT nut supply

Producer representatives in key meetings with retailers (strong integrated supply chain)

INPC working together to prevent larger players securing FT nuts

Working with Sainsbury’s to add value in country of origin

Restraining Forces

slide8

Impact on UK Market (20)

Established strong business (19)

Performance

Improvement (18)

Strengthened producer

Market position (13)

High quality

reputation (12)

Sainsbury\'s relationship (16)

Positioning of branded products (14)

Listings in top 4

supermarkets (16)

Good media

coverage(4)

Direct role with

UK retailers (12)

Changed supermarket practice (7)

INPC leaders

international

Reputation (10)

World leader in FT own-label nuts- one stop shop (9)

strong liberation business
Strong Liberation Business?
  • Number 1, fair trade nut company T/O =£3.5m2009/2010
  • Product listings in four of the five largest supermarkets in the UK.
  • Informant G comments

“Supermarkets know we are the one-stop shop for FT nuts”! (Interview, informant G)

  • One of Liberation’s key customers informant L,

“To gain listings in all the leading supermarket retailers against some very powerful competitors should not be underestimated and what’s more they have managed to hold onto these contracts despite a very competitive annual tendering process” (interview, informant L, 2010)

strong liberation business1
Strong Liberation Business
  • According to informant R Liberations products compete because
    • “Liberation have got the balance just right in the modern business environment, they are a competitive supplier from both an excellent quality and cost perspective. Plus they benefit the growers which for our supermarket is crucial. There passion for farmers comes through very strongly. Don’t forget this market is very competitive” (interview informant R, 2010)
impact on uk market
Impact on UK Market

Executive of Liberation comments;

“You are always starting off on the back foot with buyers due to Liberation’s higher prices. However, doing meetings with supermarket buyers as a team with Dyborn Chibonga or Tomy Matthews just works incredibly well. I remember one meeting with one supermarket when Tomy came along to talk to the buyer about the difference that Liberation makes to his farming community in Kerala, India, the buyers eyes did really light-up!, Normally this buyer is just interested in profit but this was something different, this joint representation gives Liberation a lot of weight in the market” (interview, informant P)

strong liberation business2
Strong Liberation Business

Very good supermarket store distribution including Tesco Express

Very good press coverage reaching 30 m consumers (appendix 3)

Established a number of business supply chains

slide13

The Liberation Business

Dried Apricots/Pakistan

Dried Mango/Burkina Fasso

Other Dried Fruits

Raisins/Sultanas

South Africa/Chile

Mozambique/peanuts & cashews

Malawi/Peanuts-Macadamia

Nicaragua/peanuts

Brazil/Bolivia & Peru- Brazil Nuts

India/Cashews

Twin

Trading

Fullwell Mill

Traidcraft

= Liberation

managed

relationship

Liberation

(takes ownership and pays

import and logistics fees to TT)

Liberation

(Buys fruit

delivered to warehouse in UK

= Relation with customer managed by others

Fairtrade BULK SALES

Comercio Alternativo

Traidcraft

Altromercato., EEX, The Roast Co, etc

Simmonds

UK Warehouse

NL Warehouse

Vebero

Blanch & Ship

UK Snacks

(process Harry’s Nuts

and store

Lib nuts for WR

TAZ

(pack & ship O/L)

Trigon

(Pack & ship Lib lines) &

Sell O/L to Morrisons

Duerrs

(UK

Peanut Butter)

Swartberg

(EU Peanut Butter)

Eddie

Stobart (O/L)

Fradley

(O/L)

Profresh

(Xmas O/L)

Pindar

HH

Co-op Suisse

Be Fair DEK

Fair Mary (Finnish)

Pakka (Swiss)

Ethiquable (France)

Tesco

JS

Waitrose

(Lib&HH),

Peros ,

Simply D

FTO

Gepa

Ethiquable

Oxfam Belgium

EZA

Traidcraft

(margin

share)

Oxfam

(Liberation

lines)

Morrisons

(O/L)

Key

Supplier Raw Material

Warehouse

Processor

Warehouse/consolidator/distributor

Customer

slide14

Areas for Improvement (20)

Commercial

Management (14)

Staff team balance (11)

Focus mainly on social (12)

Marketing over spend (14)

Poor balance

sales vs social(8)

Business plan

untested assumptions (5)

poor focus on sales (14)

Staged release

of investment (3)

No distribution(5)

Poor margins (4)

Too many changes(8)

slide15

Impact on Producers (20)

Adding value

At origin (15)

Sense of Pride (8)

Development of Producer

communities (13)

Quality improvement (14)

Joint representation (7)

Growth in FT

Producer groups

(5)

quality

of life (6)

Guardian

shelter(5)

Seeing nuts in final packaging (4)

Development in Sub-Saharan Africa(7)

Sainsbury\'s Partnership (10)

Women’s

empowerment (6)

New producer

Groups to FT (3)

producer impact
Producer Impact
  • FT premium total =$251,000 up to end of 2009
  • Community projects have brought improvements in the quality of life and well being for 440,000 people
  • Transformative change in adding value in Sub-Saharan Africa, with revival of Malawi nut industry
  • No one else bringing FT nuts from Sub-Saharan Africa
producer impact1
Producer Impact

NASFAM in 2008/2009 exported 576 tonnes of groundnuts generating income $527 and $58k FT premium= 10,709 farmers

RTU ‘Plumpy nut’ relationship with Sainsbury\'s

Catalyst in raising £1.75m of further funds for producer partnership programmes

producer impact2
Producer Impact
  • 6 informants also identified the impact of Liberation in enhancing the role of women in their producer communities. Informant B explains;
  • “Fair trade has been a real plus for women as the price is even and stable. This really does encourage women to get involved in groundnut farming because the price is even and constant. Remember women are the stabilisers in the community. Our FT certified group is 2,000 farmers strong and now 40% of them are women, ten years ago the percentage was only 15-20% women in the group maximum. The MASFA Board has 5 women and 7 men giving a total of 12 members, while the Premium Committee also has 12 members 3 of which are women and 9 are men” (interview, informant B)
slide19

Impact of INPC (20)

Unique producer partnership(13)

Advocacy work (10)

Strengthened producer

Market position (13)

Retailers

(10)

Kerala AGM assembly(9)

FLO (7)

Impressive governance (4)

Cashew exchange (6)

Influencing

FLO

(6)

Growing international reputation(10)

Sourcing board

(5)

Across 3 continents, 3 languages (11)

impact of the inpc

“There is no question that Liberation and INPC is working. It is a key instrument to gain greater value for producers in the value chain. The ownership is substantially tangible”! (interview, informant C)

Impact of the INPC
  • Unique producer partnership
  • Remko Komjin (formerly of Cordaid in the Netherlands) commented;

“ I have never seen democracy in action with producers quite like in Kerala”(source :Liberation Annual Report 2008/2009)

slide21

Governance (20)

Conflicts of interest (12)

Sense of participation (14)

Legal Form CIC (10)

Fiduciary

responsibility(8)

Solidarity (8)

Problem solving (8)

Untested (4)

Not appropriate for farmer ownership(6)

governance
Governance

More financial experience on board in early stages

Hunter Foundation taking a seat on the board

Investment being released in tranches

community interest companies
Community Interest Companies

Pros

Specific for social enterprise

Asset lock protects social mission

Company can appreciate like any ordinary company

Brand and credibility

Easy to set-up

Cons

Can’t sell shares to public

INPC collective ownership makes it complicated to borrow money against the capital asset

slide24

Lessons Learnt (20)

Commercial focus

weak in 2007/2008(16)

Governance (15)

Ownership(9)

Conflicts of

interest (12)

Fiduciary

responsibility (8)

Imbalance of objectives(11)

Legal

structure (9)

Access

to capital (3)

Money paid upfront (3)

No listings and high marketing

spend (12)

lessons learnt
Lessons learnt
  • Producer expectations to be managed more effectively
  • Dual aspect of FT marketing
  • Focus more on low cost marketing options such as using activist groups
  • Hunter Foundation seat on board
  • Important work of TWIN
  • Comic Relief in future perhaps provide grant in tranches against key performance indicators
conclusions
Conclusions
  • Findings support focus on own-label
  • Created whole new FT category
  • Delivered the right quality nuts and the right price for some very demanding customers
  • Work of TWIN and NASFAM in Malawi is truly transformative
  • INPC has strengthened the position of nut producers and influenced practice and policy
conclusions1
Conclusions
  • At the outset need to get the balance of objectives right
  • Catalytic effect to gain more funding
  • (See table 9 in report for summary)
recommendations
Recommendations
  • Agreement at the outset to be clear about conflicts of interest
  • Get the balance right
  • Build stronger links with fair trade activists
  • Continue to build the partnership with Sainsbury’s
recommendations1
Recommendations
  • Further development of Latin American relationships
  • Further business to be developed with local South African market and via developing links with new producer groups who add to the variety of nuts on offer
  • Further work on climate change projects
recommendations2
Recommendations

Test assumptions in business plan

Also use the Liberation story with other business opportunities with larger players

Investigate how collective ownership can be used to raise capital

Further education of supermarkets in the nut cycle

ad