Texting for Cheaper Marketplace Food with SokoText

An international group of graduate-social entrepreneurs from the London School of Economics (LSE) is pioneering a way to reduce food prices in Kenya using mobile phones.

Answering a call to action to address global food insecurity by the Hult Prize (hultprize.org), the team members looked at how they could make food cheaper for urban slum dwellers.

The Hult Prize, funded by Swedish educational entrepreneur and billionaire, Bertil Hult, is a start-up accelerator for budding young social entrepreneurs emerging from the world’s universities. The winner receives US $1 million and mentorship to make their idea become real.

SokoText (sokotext.com) (soko means market in Swahili) uses SMS (short message service) messages from mobile phones to empower vegetable sellers and kiosk owners in slums when it comes to bargaining the price for wholesale fresh produce. SokoText makes it possible for them to benefit from bulk prices by pooling their orders together every day. Usually vendors lack the funds to buy in bulk and have to make numerous time-consuming trips to the centre of Nairobi to buy stock.

SokoText reduces the price of fresh produce by 20 per cent for kiosk owners by buying the produce earlier in the supply chain. SokoText then delivers the food to a wholesale outlet at the entrance to the slum.

This approach makes available a wider range of produce and reduces the price. And best of all, it will knock down prices for the poorest people and enable them to buy more food and better quality food.

The team behind SokoText come from a variety of countries – Colombia, Canada, Kenya, Britain and Germany.

Hatched at the LSE, the enterprise prototyped its service in Mathare Valley, Nairobi, Kenya for four weeks during the summer of 2013 with 27 users and began the second phase of testing in November 2013, working with a local NGO, Community Transformers (https://www.facebook.com/pages/Community-Transformers-kenya/119937408165671).

According to SokoText, slum dwellers spend on average 60 per cent of their daily budget on food.

Mobile phones can be transformative since they are now a common communications tool, even in slums.

On the SokoText website, respected blogger and commentator on technology in Africa, Erik Hersman (http://whiteafrican.com/about/), calls it “a fantastic low-tech approach that could really scale for decreasing the inefficiencies in urban slum markets.”

SokoText’s 21-year-old co-founder and chief executive, Suraj Gudka, explained the genesis of the project to news and technology in Africa website, 140Friday.com.

“From our research, the Mama Mboga (small-scale vegetable retailers) spend between 150 and 200 Kenyan shillings (US $1.70 and US $2.3) daily, about 25 per cent of her revenue, to buy her stock, and since they do not buy in bulk they [she] get their goods at a higher price.”

Getting the market traders to cooperate is very difficult, Gudka found, because competition is fierce and trust is low. SokoText sees itself as a solution to this situation. By encouraging bulk buying by way of the SMS text service, there is no need to build trust between the traders before the produce is purchased.

“To use our service, the interested retailers would be required to send us an SMS every evening detailing what they need,” said Gudka, “and then we will source the produce and they come pick it up from us the next morning. In this way they do not have to incur the additional costs of transporting their goods and it also saves them time.”

SokoText is being incubated at the Nailab (nailab.co.ke) in Nairobi, a startup accelerator that offers a three to 12 month entrepreneurship program, with a focus on growing innovative technology-driven ideas.

SokoText’s summer pilot test confirmed taking the orders can work but found getting the product to the market in time was difficult.

The next step will be to set up a presence in the Mathare slum.

“We will be selling about seven to 10 different kinds of produce, and from our calculations, according to our projections for how much the Mama Mbogas buy every day, we hope to get  40-50 customers within three months,” Gudka said.

By David South, Development Challenges, South-South Solutions

Published: December 2013

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Rainforest Gum Gets Global Market

Mexico is home to the second largest rainforest in the Americas after the Amazon jungle. But the country’s forests face serious threats from logging, cattle ranching and agriculture. As much as 80 percent of Mexico’s original forests have already been lost.

A group of Mexican farmers is now using sophisticated product marketing to preserve their income, and the 1.3 million hectares of rainforest as well. They are called chicleros and they harvest the gum needed to make natural chewing gum, a once-booming industry laid waste by the arrival of synthetic chewing gum in the 1950s. Their story is an excellent example of how a declining industry can turn things around with a smart plan and sophisticated marketing.

A collection of 56 cooperatives comprising 2,000 chicleros – called Consorcio Chiclero – is now making, marketing and selling its own brand of chewing gum: Chicza (http://www.chicza.com/index.php). The chicleros are supporting a community of 10,000 people across the three states of Yucatán, Campeche and Quintana Roo.

Gum has been chewed in Mexico to clean teeth as far back as the ancient Mayan people in the second century AD.

The gum harvesting business was dying out and young people, put off by the low pay, were leaving for jobs elsewhere. The adminstrators of the chiclero co-operative created Chicza Rainforest Gum brand to save the industry. They made a deal with Britain’s Waitrose supermarket chain, which specializes in fair trade products, and the gum is being launched in 100 stores.

The brightly coloured packages of chewing gum are now being sold as organic and a way to preserve the forest. Frustrated by the decades of decline and attendant poverty and community decay, the chicleros decided to take matters into their own hands. Five years ago they decided to avoid the middlemen who would buy their raw gum products, and instead manufacture and market the chewing gum themselves. And it is paying off: by adding value to the raw product, each farmer’s income has grown six times higher than he would earn as a mere provider of raw material.

The gum comes in three flavours: wild mint, heirloom lime and spearmint. Future flavours will blend tropical fruits, herbs and spices.

The Consorcio Chiclero coordinates the production, the logistics, the trade and the finances for the manufacture of gum from the chicozapote tree (Manilkara zapota).

Certified organic, the Chicza gum is completely natural and free of synthetic ingredients and also biodegrades when it is discarded – a boon to city governments who hate the mess and cost of traditional gum left on sidewalks.

The farmers work in the rainforest at the southern end of Mexico’s Yucatan peninsula (http://en.wikipedia.org/wiki/Yucat%C3%A1n_Peninsula), bordering Guatemala and Belize. It is a place with one of the most bio diverse ecosystems in the world, and an environment the farmers are in harmony with. The chicle gum (http://en.wikipedia.org/wiki/Chicle) is harvested from chicozapote trees – some living for more than 300 years – by hacking z-shaped cuts into the bark of the 100 foot trees. The harmless cuts zig zag down the tree and a bucket is placed at the bottom to collect the dripping sap.

Once collected, the sap is boiled, dried and made into a sticky paste, which is then kneaded and shaped into bricks called marquetas. Each marqueta is carefully marked by its maker. Since the sustainable management of their rainforests is certified by FSC (Forest Stewardship Council) (http://www.fsc.org/), these marks contain relevant information that tells the name of the chiclero who harvested it, and the exact location of the harvested tree in the rainforest. Few products offer such perfect traceability.

“I started following my dad around the rainforest when I was 10 and working when I was 12,” farmer Porfirio Banos told The Guardian newspaper. “I am a chiclero to my core.”

Working in a remote area of rainforest jungle with just spider monkeys for company, the chicleros are paid by the amount of chicle harvested

“We don’t kill the trees like farmers do when they clear land to grow corn or graze cattle,” says Roberto Aguilar, 60. “We leave a wound, it’s true, but eight years after it is healed and producing chicle again.”

The chicleros face two main risks while doing the job: falling from the trees if their rope gives out; and being bitten by poisonous snakes.

Chicle was once the basis of all commercial chewing gum. Beginning in New York 141 years ago, it was the only source for chewing gum until the 1950s, when synthetic substitutes destroyed the industry.

It was the economic desperation of a Mexican general, Antonio Lopez de Santa Anna, living in exile in the United States in 1869, that gave birth to gum-chewing as a global practice. Working with a local inventor, Thomas Adams, he tried to use the chicle to make a rubber substitute. But when this failed, Adams added sugar and flavouring, making chewing gum.

Apart from being a great chew, the natural gum’s unique selling point is saving money: local governments tight for cash are looking for other ways to deal with the menace of chewing gum on pavements. A small fortune is spent every year trying to keep streets clean of gum. The British alone spend over UK £150 million every year trying to clean their streets of chewing gum.

And despite the global recession, the chicleros are optimistic they can do well: during the Great Depression of the 1930s, chewing gum was an affordable treat and sold well.

By David South, Development Challenges, South-South Solutions

Published: April 2009

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Connoisseur Chocolate from the South Gets a Higher Price

Like coffee beans, cocoa beans are grown around the world and are a major commodity, highly prized in wealthy countries. West Africa accounts for 70 percent of the world’s output, with the rest grown either in Indonesia and Brazil (20 percent), or on a smaller scale in countries across the South, from Belize to Madagascar.

Global sales of cocoa beans have grown by an average of 3.7 percent a year since 2001, and the World Cocoa Foundation estimates 40-50 million people depend on cocoa for their livelihood.

But harvesting cocoa comes at a price to the farmers and those who work on the farms. It is estimated that 284,000 children in West Africa work under abusive conditions to harvest the beans. Cocoa farmers usually only benefit from the price of cocoa in the harvest season between October and February. In Ghana, the second largest producer of beans, child slavery allegations have plagued the cocoa plantations, along with too-low prices paid to farmers. Fluctuating global market prices constantly put small-scale farmers at risk of losing everything they have worked for.

But consumers are developing ever-more sophisticated tastes for chocolate, paying more attention to the quality and origin of the beans. Savvy cocoa producers are using this greater awareness to increase prices for farmers and improve conditions for those who work on the farms.

Maturing consumers’ palates are now picking chocolate and other food products from the South in much the same way as connoisseurs pick wines. In the United Kingdom alone, sales of Fairtrade-branded goods (www.fairtrade.org.uk)- a scheme that offers guaranteed prices and better trading conditions to farmers – have reached £560 million (US$1.1 billion) a year. A survey of consumers in six countries found awareness of fairly traded chocolate was highest in the UK, with 43 percent of people having tried it (http://www.barry-callebaut.com).

British consumers willing to pay more for ethical products are at the forefront of a global surge in fair trade. Hans Vriens, chief innovation officer with Belgian chocolate makers Barry Callebaut, told The Independent newspaper: “Nowadays, chocolate consumption is coming to resemble the way we enjoy wine: we sample and compare different tastes.”

The world’s appetite for chocolate is voracious: For example by 2007, volume sales of chocolate confectionery increased from 1998 by 30 percent in Eastern Europe, and by 40 percent in the Asia Pacific region. Europeans devour 35 percent of the world’s cocoa.

In order to be classed as Fair Trade, a producer must meet a strict set of criteria governing how people and the environment are treated. The Fair Trade scheme pays farmers a higher price for cocoa beans, calculated on the basis of world market prices, plus fair trade premiums. The Fair Trade premium for standard quality cocoa is US$150 per tonne. The minimum price for Fair Trade standard quality cocoa, including the premium, is US$1,750 per tonne. Fair Trade ensures a minimum price of 80 US cents a pound under long-term contracts, with access to credit, and prohibits abusive child labour and forced labour.

At the Chuao Plantation in Venezuela, the local Chuao Empresa Campesina cooperative, representing 100 farmers, is reaping the benefits of developing an exclusive relationship with an Italian chocolate company. Chocolatier Alessio Tessieri was willing to pay a lot more for the beans if high standards were maintained. His sister Cecilia was struck by the aroma of the rare Criollo bean grown by the farmers: it is the least productive in terms of output, but prized for its flavour.

“We found an aroma that was greatly reminiscent of ripe red fruit and plum preserves, with an extremely delicate aftertaste,” she said. “A highly complex and sophisticated aroma lacking any trace of acidity.”

Located in Parque Nacional Henri Pittier, a road and sea trip from the capital Caracas, the town of Chuao, population 1,500, has ideal growing conditions because of its high humidity. In the village, the women take care of the drying process. Throughout the town the cocoa beans lay out in the open on verandas. In the warehouses the enormous “masorche” – the fruit of the cocoa trees, looking like big red melons – are split in half and the pulp is removed, revealing the super-sweet white-coated beans inside.

Alessio struck a good deal with the farmers in recognition of the exclusivity of the beans. He pays US$4 per kilogram against the US$1.30 per kilo paid by the local merchants. He also took on the farmers’ debts with the merchants. But most importantly, he ensured that one of his agronomists would stay behind and supervise the plantation and increase its production, from the current level of 120-130 kilos per hectare to a projected 250-300 kilos.

The Toledo Hills Cacao Cooperative in Belize, South America has developed a relationship with one of the UK’s pioneers in fair trade chocolate, Green & Blacks. The Mayan Indians who farm the cocoa live a traditional life more or less as they have done for centuries. They also live in one of the poorest areas of Belize. The profits made are ploughed back into buying machetes, or rubber boots to protect against snake bites. The cocoa harvest helps supplement their traditional way of life.

Green & Blacks has been buying organic cocoa from the farmers’ co-operative since 1994 and paying a guaranteed price above the world cocoa price. In 2003, they extended their activities with the cocoa farmers and started the Belize Programme to provide even more support. With an investment of £225,000 (US$443,350) over three years, the investment was used to help improve management and farming practices, rehabilitate hurricane-damaged crops, plant more cocoa trees, and train farmers in better growing methods. Green & Blacks continues to provide technical advice and support to the farmers. The business relationship with Green & Blacks has been so successful that other farmers in Belize are now interested in cocoa farming.

The pattern is being repeated elsewhere in Latin America. In San Martin, Peru, rice farmers have moved into cocoa to reap the rewards of the higher prices. Alvis Valles Sajami and Alberto Inou Amasifuen are both graduates of the Peru Farmer Field School. Sajami uses a plant nursery as an extra source of income by selling cocoa plants to other farmers. “I already have 4,000 plants, he said. “This (the nursery) will be so important to increase my cocoa area. I can sell planting material to other farmers in order to have a new source of income for my family.”

Amasifuen has already increased his own cocoa production from two hectares to five, and has also established a nursery to produce cocoa and timber tree seedlings to sell to area farmers.

“We have an increase in demand for cocoa plants in San Martín,” he said. “We expect to provide seedlings not only to our farm, but also to other farmers in expanding their production area.”

By David South, Development Challenges, South-South Solutions

Published: June 2008

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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