The AAK Kolo Nafaso programme – Securing an alternative shea supply chain
AAK, a Swedish company providing vegetable oils and fats for various industries for more than 140 years, has been a dominant player processing shea since the 1950s. In 2009 in Burkina Faso, AAK started a project to work directly with West African women with small farm holdings, to improve their productivity as well as pay them fair prices. This project evolved into an alternative supply chain. The shea nuts through this programme – called Kolo Nafaso – were traceable to the women’s group level in West Africa. Kept segregated, the shea was not blended with AAK’s conventional shea supply, such that clients could lay claim to having sustainable and traceable sourced shea, when using Kolo Nafaso shea in their products. This was becoming increasingly important, as focus on sustainability grew among end-consumers, employees, as well as investors. The Kolo Nafaso programme expanded to Ghana, as AAK realized the potential of this alternative supply source, especially in 2018 when there had been a global shortage of shea. The issue was how to significantly grow this alternative sourcing programme, and how to realize its value
The case highlights an innovative approach to alleviate poverty at scale, and provides an interesting example of how the double bottom-line – social impact and profits – can be achieved by a careful balancing of the two motivations. The case also illustrates the need to, as well as how to, manage the differences in perspective across functions, within the organization, to activate the full potential of the program.
The case can be used with undergraduate, MBA, EMBA and executive audiences. With undergraduate or inexperienced MBA audiences, the discussion of managing the programme across different functions is not possible and needs to be a part of the wrap-up. With executives, EMBAs and experienced MBAs, this topic leads to a good discussion. The case can fit in a module/session on sustainability, purpose, poverty alleviation, or social responsibility, in an executive programme with a general management focus, where social issues are included or purpose/sustainability, as a source of differentiation, is a topic of interest. It also fits in to a specialized programme on sustainability. In EMBA, MBA or undergraduate courses, this case can be a part of a strategy, supply chain or marketing course that wishes to highlight sustainability or to discuss purpose as an important source of differentiation. The case can also be a part of a CSR or sustainability strategy course, or one focused on business models for targeting the world’s poor for impact and profit. It is in the latter context that it fits within my own teaching portfolio in degree programmes.