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Let’s watch some ‘telly’
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Cambridge Global Consulting Project – Sierra Leone
Tim Fright
As MBA students, we were tasked with advising an Irish NGO on their sanitation marketing project, which had entailed raising public awareness of the need for better sanitation in rural villages in Eastern Sierra Leone. The follow-on steps that they had taken included working with local consumers to design relatively cheap concrete latrines which local masons would produce. Throughout this process, the NGO had taken into account the local context, and worked with local partners in order to lay the foundations for a sustainable market for sanitation products, and thus better sanitation in Eastern Sierra Leone as a whole.
Working in Sierra Leone for two and a half weeks helped us as business students realise how much we take infrastructure, access to credit, and electricity (in particular) for granted. Working with local Sierra Leoneans however, showed us that entrepreneurial flair was possible in the face of such constraints. Local masons were travelling long distances to show consumers different types of rural latrine. Local radio stations were playing jingles and holding radio phone-in discussions on the role of sanitation in the village. Local sanitation representatives were sharing new ideas with us in order to increase market awareness, sales and thus overall levels of sanitation.
The key to sustainability for this “market-making” exercise will be whether local people can step up and take control of the marketing and distribution functions that have been heavily subsidised so far. Given what we saw while we were out there, and the people that we spoke with, we believe that they can.
Investing in Food Processing – New Consumption Trends, Changing Tastes
Priya Shah
The food processing industry in Africa is an exciting and fast-growing space. Africa has historically been known for a wealth of fertile regions where fresh produce is grown, harvested and distributed both for local consumption and exports. Now, this sector is being closely watched by private equity funds keen to maximise investment opportunities across the continent. The African market has recently seen a trend where companies are moving away from solely producing raw consumables and increasingly investing in value-add processing units and branded food products.
When food products are sold to wholesalers, supermarket chains and organic food retailers, the highest margins are captured from adding flavours, food colouring, packaging and branded labels (comprising the second half of the value chain). For example, fruit juices, pastes, syrups, purees and concentrates are more expensive than raw fruits and vegetables. Ice cream, yoghurt and cheese are priced higher than milk; and the same is true for biscuits, pasta and bread when compared with raw grain and flour. This trend has subsequently repositioned food processing as a manufacturing and Fast Moving Consumer Goods (FCMG) sector rather than an agricultural sector.
In recent years, this shift has been fuelled by three key changes in the African market: the growth of supermarkets chains; changing consumer incomes and tastes; and the emergence of consolidated firms such as food conglomerates. Supermarket chains such as Shoprite, Carrefour and Pick n’ Pay are increasingly popular across Africa, expanding aggressively across urban centres on the continent. The ability to stock food products in cold storage and provide multiple varieties of domestic and international brands allows for an easy and convenient experience when buying household food items. Nevertheless, in many African countries, open markets, local vendors and butchers are still the main source of grocery shopping for the average consumer. Furthermore, a change in consumer tastes and incomes has increased aggregate demand for processed goods, as higher disposable incomes allow for a greater ability to spend on packaged, branded products which are generally of a higher quality. Lastly, the move towards consolidation has allowed for much smaller players to be acquired by large food conglomerates such as Tiger Brands, Remgro Limited and Foodcorp. These food conglomerates have reliable distribution networks (a key advantage in Africa) and can provide consistently higher quality food products as they are vertically integrated. They also offer higher margins by achieving economies of scale, and are better positioned to compete with international brands such as Nestle and Coca Cola.
One of the key success stories in the food processing sector is Fan Milk International (FMI), a manufacturer and distributor of frozen dairy products and juice company in Ghana, which was acquired by Abraaj Capital and Danone in 2013. With a strong brand heritage and a well-developed cold chain distribution network across West Africa, Fan Milk attracted international attention and is now well-poised to become a market leader in high-quality dairy products and logistics in the food processing sector. Another key example in Southern Africa is Zambeef, the publicly listed Zambian beef company which has established production in poultry (Zamchick) and edible oils (Zamanita) along with many other food divisions. The company has taken advantage of its vertically integrated model and operates fast-food chains and a trucking company, including a fleet of refrigerated trucks. By controlling the supply chain, Zambeef has reduced its exposure to logistics challenges for perishable foods and allowed for direct access to end-consumers.
In summary, the food processing sector will be a vital component of the FMCG industry in Africa in the next decade. There are larger opportunities for these companies to grow in the private sector as compared with the public sector, both by capitalising on changing market dynamics and by catering to changing consumer tastes, as trends point towards new and innovative food products.
Priya Shah ([email protected], MBA 2013/14, CABN Committee)
Priya is from Mumbai, India and has worked as an equity analyst at Bloomberg; a Programme Manager at Asia House; and a development consultant in India. She holds a B.A. in Modern European History from Brown University and is currently pursuing an MBA at Judge Business School. She has a keen interest in social enterprise and impact investment, and will be spending her summer working with Acumen’s Impact Team in India.
Uniquely well placed to make a difference
How the Cambridge Development Initiative is rethinking volunteering and tapping into the potential of Cambridge as a force for good in international development
By Patrick Hoffmann
In a speech titled Universities and the Poorest Billion, our current Vice-Chancellor argued that universities like Cambridge are ‘uniquely well placed to make a difference’ in international development. While quoting the principal is only slightly more socially acceptable at university than it is at high school, this is actually nothing less than a forceful repudiation of the comfortable picture of Cambridge as a closeted ‘ivory tower’. It is a belief that is fundamental to the vision behind founding the Cambridge Development Initiative.
So what can Cambridge ‘uniquely’ provide to development and what does that have to do with an initiative that is not just ‘yet another volunteering project’ , as some might sigh in exasperation?
As the Vice-Chancellor put it, universities are ‘the last great integrators of knowledge’, places where all disciplines come together – places exceptionally suited to provide holistic solutions to complex problems, as the Cambridge Development Initiative is seeking to do. Just as importantly, strong partnerships with companies, NGOs and government are vital to a university like Cambridge, making it a natural ‘broker’. The Cambridge Africa Business Network is itself a prime example of realising Cambridge’s potential as a platform.
But one thing was strangely absent from the vision that the Vice-Chancellor presented – the students. His image of the university as a force for good is all about the academics, everyone from the Junior Research Fellow upwards. However, this is just as true for the 12,000 undergraduates and 6,000 postgraduates, people with skill sets of exceptional breadth and depth. When else can the Shakespearean actor, the banker and the aeronautical engineer really join forces to make a difference before they all go down their separate careers paths? Aside from the odd encounter at Alumni events, or in an eclectic London bar, these people may never even meet again, let alone combine their skills for integrated, creative programmes which could foster the sustainable development of entire communities.
In conclusion, then, universities are an ideal platform for this kind of work but we contend that students are uniquely suited to taking the lead – and that they can do so through a new kind of volunteering.
Currently, that potential lies untapped.
Even though volunteering is the main way for students to get involved in international development, most volunteering projects in Cambridge are in fact very conventional and much like the projects you might find anywhere else. A typical project might involve flying over to an African country, for £700 a ticket, and teaching English or building a well.
To do student volunteering differently, we want to take an integrated approach: We are designing projects in Entrepreneurship, Health, Engineering and Education, all of which focus on five slums in the city of Dar es Salaam in Tanzania. That way, we are establishing a platform for students from all backgrounds and disciplines to support Tanzanians themselves in lifting communities at the bottom of the pyramid out of poverty. It is an open platform that invites new ideas and allows different skills and abilities to converge for greater impact.
More than that, we want to test how much student volunteers can contribute to implementing innovative and sophisticated development solutions: our Entrepreneurship project, for instance, is an incubator for Tanzanian university students. It provides the students with hands-on support for founding businesses that provide products or services in the slums. Bridging what is known as the ‘Pioneer Gap’ of early-stage development, it will build these social enterprises to scale. A diversity of experiences, skills and creative insights from our students will be invaluable. There is a role to play for the social anthropologist, just as there is for the experienced MBA student.
Nothing quite like this has ever been done by a student-run initiative: it is a far way off from building a well. We hope this approach will have a greater impact on communities in Dar es Salaam. And as for our volunteers, we hope they will realise that they are not shut off in an ‘ivory tower’, but part of a community that is ‘uniquely well-placed to make a difference’.
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