What does a poverty alleviation charity like Oxfam and a global food corporate like Unilever have in common? They are both serious about smallholder farmers. More than 2 billion people depend on small farms for their livelihoods; the majority of them struggle with poverty and vulnerability. At the same time, these small farms represent an under-utilised source of food to meet a growing global demand. With investment in skills, knowledge, networks, and technology, small farms could hugely improve their productivity and environmental sustainability.
The idea of working together on smallholder supply chains was born when two senior managers from Oxfam and Unilever attended a learning journey in Honduras as part of the Sustainable Food Lab. In 2010, their collaboration was formalised as a joint project called “Sunrise”, and Azerbaijan was selected as the first country in which they would attempt to build a sustainable supply chain.
The Sunrise team formed a plan to source onion powder from marginalised farmers for use as an ingredient in Knorr brand soups and stocks. Implementation of this plan proved far more challenging than both Oxfam and Unilever had expected. Menka Sanghvi and Mia Eisenstadt from Reos Partners have researched the work done and produced a case study sharing key lessons from this ambitious undertaking.
The case study looks at the challenges of setting up a new supply chain with smallholders, and also looks at the process of collaboration between two large international organisations with different cultures and priorities. With the benefit of independence and hindsight, the authors highlight both strengths and weaknesses in the work done. The high level of transparency found in this case study speaks to the commitment of both organisations to learning from this experience.
Many of the core insights relate to the innovation process. Sunrise has been an unprecedented collaboration that from the outset benefited from high visibility and a sense of optimism. CEOs from both organisations made bold public announcements about Sunrise’s potential impact. All this helped fuel the energy, enthusiasm, and appetite for risk needed for innovation. Expectations were set to reach tens of thousands of smallholders within five years. However, this same enthusiasm may also have contributed to an underestimation of the challenges, costs, and time frames involved in setting up and scaling a supply chain.
Although Oxfam already had a field office in Azerbaijan (this being one of the criteria for choosing the location), working with farmers to produce the new variety of onions that was needed and with an intermediary that was new to dehydrated onions proved more technically challenging and time consuming than the team had bargained for. In addition, asking farmers to grow an onion variety that has no existing local market put them in a high-risk position, a move that more marginalised farmers could not afford to make. The sense of vulnerability had to be overcome not just by putting in place legal contracts but also by building understanding and trust, which again took more time than had been planned for.
In the face of such setbacks, the case study refers to a “fear of failure” found within the local delivery team, which made them hesitate to openly discuss new information emerging on the ground. Innovation requires willingness for trial and error and an agile decision-making process that keeps up pace with the reality of an unfamiliar and changing situation.
The case study also highlights the importance of how success is framed and evaluated. In Sunrise—just as in many similar projects—a great deal of importance was given to the number of smallholder farmers directly engaged. While the project did not scale as intended in terms of the headcount, a wide range of positive shifts occurred across the whole system in Azerbaijan. During the project groups were formed to encourage women’s participation in new supply chains; relationships were brokered between farmers, government service providers, buyers, and investors; and new skills, knowledge, and technology were introduced to improve both business and agricultural practices. The Sunrise project thus created positive ripples that were not originally anticipated and are still currently in motion.
Looking forwards, Oxfam and Unilever remain active in supporting smallholder livelihoods. Oxfam is taking a systems-level approach, helping smallholders (particularly women and marginalised producers) to create linkages with multiple markets. Unilever continues to pilot initiatives to include more smallholders in its supply network, working towards its goal to engage at least 500,000 smallholders.
The full case study can be downloaded here
Unilever’s Sustainability Living Plan can be found here