Project Overview

Connecting international retailers with producers in developing countries to supply goods to international markets can positively impact the livelihoods of rural communities. However, small scale producers often lack the skills, capital and business expertise to deal with the high demands of export markets. International retailers, for their part, often struggle to reliably source from the developing world despite growing demand for high quality products with ethical credentials.

For four years Shell Foundation has been working to unlock markets for developing country producers by exploring business models that have a commercial appeal to retailers. To prove that value chains which both alleviate poverty and deliver commercial returns to retailers can exist, Shell Foundation has co-founded three distinct “ethical agent” models. These social businesses can unlock markets by providing market knowledge, risk capital and training to developing world producers, while helping retailers access new products and better manage their supply chains.

• The Better Trading Company links retailers with small agricultural producers selling niche products such as Rooibos tea, chillis, and tea tree oil. Its spin-off, The Better Flower Company, focuses on new products in the cut flowers sector and sells to UK retailers, benefitting growers and harvesters from struggling rural communities.
• CottonConnect works with international retailers and all players in the cotton supply chain – from farm to finished article – to make the world’s cotton supply more sustainable.
• The Bright Futures programme on Haygrove Heaven farm in South Africa creates opportunities for local farm workers from disadvantaged communities to run their own raspberry businesses.

These ethical agents have already improved the livelihoods of thousands of producers in rural communities in Africa and India, and now supply clients such as Waitrose, Tesco, The Body Shop and the McIlhenny Company (maker of Tabasco Sauce). They have already created more than 550 jobs and increased 2850 incomes, while attracting increasing retailer interest. CottonConnect, which was created in 2009 out of a unique partnership with C&A and Textile Exchange (a US-based NGO), enables farmers to convert to sustainable cotton production. As a result their first customer C&A increased sales of certified organic cotton product from 2.5 million pieces in 2007 to more than 20 million in 2010, improving the lives of over 13,000 farmers .

These businesses operate in multiple countries, but the success to date is not enough to realise the potential benefits to hundreds of millions of producers and huge numbers of international retailers and brands. As Alison Rodwell, Shell Foundation Business Director says:

“We’re looking to transform retail supply chains – taking goods from the fields to retailers’ shelves – so that they positively contribute to poverty alleviation and the environment. This generates real commercial returns for retailers and brands, which will eventually lead to wider industry replication…we’re trying to accelerate this process. We want to others to look at these ethical agent models and decide to adopt the models themselves.”

The ‘ethical agent’ model is proven and it works. Now, Shell Foundation and Forum for the Future are working to create replicable models to scale up the reach and impact of ‘ethical agents’ in retail markets. We’re seeking partners – innovative, entrepreneurial organisations or individuals– who are keen to consider how to apply these models in new contexts.

We’ll be conducting a series of interviews and events to ask what makes the existing ethical agents successful – and how these ingredients for success can be transferred elsewhere. As part of this process we want to learn more about what it takes for pioneering practice to truly transform a sector. We want to develop a deeper understanding of how best to intervene in agricultural supply chains to create a more sustainable future.

For more information, or to suggest a potential partner, please contact Louise Armstrong. Or if you know of any similar initiatives that we could learn from, please let us know.

For more information on all three businesses, please refer to the ‘Fresh Progress’ report on the Shell Foundation website.