A packaging & distribution system for BoP communities to reduce the cost of life's essentials, eliminate packaging waste & build community.
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Explain your project idea (2,000 characters)
LATAM's BoP spends 27.5% of their income to feed their families-IDB2015. This is due to the BoP having low & volatile incomes, forcing them to buy in small portions (increasing cost on a per unit basis), from family owned neighbourhood stores (FONS)–expensive due to poor distribution & excessive middlemen. The high costs of this consumption, not only entrenches families in poverty, but also has excessive packaging that often leaks into the environment.
Algramo has been refining a bottom of the pyramid (BoP) business model that empowers FONS, so they can sell life's essentials to marginalized low-income families for about 30% less, while virtually eliminating packaging waste. We do this with vending machines/reusable packaging & a simple exchange system of trading an empty container for a new container filled with product. Algramo's distribution now reaches 1,700+ stores & over 270k customers. We now have a LATAM FMCG co-branding their products with Algramo. We are in early discussions with values aligned FMCG with global distribution who are interested in helping Algramo launch its distribution system into global markets.
If funded, we will export Algramo to 1–3 coastal cities & seed our awareness with likely the world's 1st vehicle that distributes food & cleaning products at local farmers markets (ferias), into reusable containers.
In Chile, over 80% of all households (>% for lower incomes), buy products in ferias, on a weekly basis. With 1 customized vehicle to dispense our products in ferias, per city, we can potentially reach ~1,400 people/day/7 days a week=>500k contacts per year. This mobile, feria, distribution system offers an effective way to promote awareness about responsible consumerism, recycling & ocean plastic. The economic savings & connivence will solidify our customer base. We see this trans-Chilean expansion as a critical step in validating our distribution system and business model to enable global expansion with a FMCG.
Who are the beneficiaries? (1,000 characters)
Algramo's social mission is to reduce the cost of life's essentials for BoP families, with a sustainable distribution system. Chile has 9.7 million BoP people. In Santiago, our network of 1,700 FONS reaches ~272k people. The 1,700 FONS+68k families we serve = main beneficiaries. Our FONS are owned by >70% women, we are proud to benefit women entrepreneurs. We are optimizing our technology+business model in Chile, so we can soon expand internationally.
We benefit our customers, FONS, by selling them quality healthy products & providing them with free technology like our vending machines. Our reusable packaging & short supply chain save BoP families ~30% on life's essentials. Our reusable packaging virtually eliminates packaging waste, potentially averting ~2kg of plastic waste/family/month. This equals 136 metric tons(Mt)/month, @4,000kgCO2/Mt (aprox CO2 savings of not producing new plastic) we can avert 544,000Mt of CO2/month in just Santiago=huge CO2 emissions reduction for humanity.
How is your idea unique? (1,000 characters)
Algramo's main strength is the strong social licence & support from our network of 1,700 stores. Algramo/its founder have won dozens of prestigious international awards for their socio-enviro benefits, including: Ashoka & TED Fellows, World Economic Global Shaper Designation, Expo 2020 Dubai Global Innovators, Ellen MacArthur Foundation & United Nations awards.
A key distinction we have is our human centred business model customized to supporting the FONS that serve BoP families. With this we create major economic savings (~30%), while providing major environmental benefits. All of this helps enrich the social fabric of highly marginalized communities and enables us to address market failures that result in excessive prices for the most impoverished families, with a distribution systems that virtually eliminates the flood of packaging waste that typically inundates emerging economies. This has attracted FMCG brands to partner with Algramo to help us spread our innovation and impact.
Idea Proposal Stage (choose one)
Full Scale Roll Out: I have already tested and scaled this idea significantly with the intended user base.
Tell us more about your organization/company (1 sentence and website URL)
We erode a market failure that inflates the cost of life's essentials for low-income families, we do this with a distribution and packaging system that virtually eliminates packaging waste-we aim to partner with global brands to export our technology, packaging and distribution into global markets so we can amplify the impact we create.
Our website: https://www.algramo.com
Organization Filing Status
Yes, we are a registered social enterprise.
In 3-4 sentences, tell us the inspiration or story that encouraged you to start this project.
Algramo's Founder had moved out of his upper income family home into a low-income area to live with his friends while completing his economics degree. They bought food like millions of LATAM families, daily, in small amounts from local family owned stores. He realized he was paying ~30% more for this food, due to buying in small portions & the food having excessive middlemen and packaging-he termed this the "poverty tax". Algramo exists to be a market-based solution to reduce the poverty tax.
Please explain how your selected topic areas are influenced, in the local context of your project (1,000 characters).
PROSPERITY-we help 1,700 stores, 70%+ women led, be more competitive so they can better serve their marginalized customers. Lower prices mean families can increase disposable incomes & not be forced to spend 27.5% of incomes just to eat.
This leads to PEACE-If families are stuck in poverty traps, poverty fosters crime & violence-which are too common. Also, BoP neighbourhoods often lack any significant place to gather–for people to connect. Algramo helps build the social fabric of marginalized communities via FONS.
PLANET-our innovative packaging & distribution system using reusable containers, reaches 1,700 FONS, it has potential to avert 136 tons of packaging waste/month! To our knowledge, no other company has this scale/impact with reusable packaging. This has attracted a regional FMCG to co-brand products with Algramo-global FMCG also interested in Algramo. We support local smallholder bean farmers. By lowering cost of beans we allow vegetarian food to replace low quality meat.
Who will work alongside your organization in the project idea? (1,000 characters)
We have worked with Jpal (http://povertyactionlab.org) in the past. If funded we would try & have them assess impact.
We want to work with TriCiclos (http://www.triciclos.net/en/) to develop our vending machine technology & leverage their expertise in circular economy engineering.
We will work with Talking Stickers (also in BB Challenge) by connecting them to FONS in areas with high densities of Haitians so they can promote their app.
Now working with Deloitte (D2i Fellowship) = US $600k+ in pro bono consulting to help us scale & optimize supply chain & business plan.
LATAM based FMCG who will be selling cobranded products in Q3 2018-soon FMCG will be public. Also, we recently spoke with global FMCGs interested in working with Algramo to support our efforts to expand our impact beyond Chile.
We are also interested in working with other social enterprises who share our values and are keen to be change makers and help make the world a better place. If this is you, please contact us.
Please share some of the top strengths identified in the community which your project will serve (500 characters)
Chileans are proud to support Chilean innovation. Algramo has had 350+ media features: Forbes, Fast Company, CNN, most Chilean TV stations/newspapers, Ashoka, Nestle & UNEP. This fosters support & eases entering into new markets by the 'the people' embracing us.
We have had discussions with global FMCGs who are keen to work with us, as they see Algramo as a made in global south solution, to critical challenges facing the global south-we created this with a scalable BoP centred business plan.
2013-18-Santiago, reach 2,000 stores
2019-20-Start expansion beyond Chile
How many months are required for the project idea? (500 characters)
This depends on funding. Depending on potential award allocation, 9 months to 2.5 years. Approximately: 100k would be 9 months; 200k 1.5 years; 500k 2.5 years.
Did you submit this idea to our 2017 BridgeBuilder Challenge? (Y/N)