Kolo Nafaso from a researcher’s perspective – highlights from Amitava Chattopadhyay
It’s been a long-standing interest of mine to understand how businesses can be a force for good. That desire stemmed from a conversation with a former classmate, a pioneer in social innovation, who cogently argued that there simply wasn’t enough money in the form of charitable giving to alleviate poverty on a global scale. Thus, the best way forward was for business to invest behind social innovation, also referred to as sustainability.
Kolo Nafaso – a new way of doing business in shea.
I was invited to give a talk at the executive committee meeting of AAK held in Singapore, in early 2018. In my conversations with senior sourcing representatives of AAK, I learned about the Kolo Nafaso programme and wanted to understand more deeply what AAK was doing in terms of creating a sustainable supply chain, working directly with the women from small-holder families in rural West Africa, who collected the shea kernels, the first link in the shea supply chain. My goal for learning more was threefold. First, there was my personal curiosity, the Kolo Nafaso programme seemed to be an interesting and meaningful initiative, that could impact poverty alleviation at scale. Second, I teach a class on strategies for social impact and profit, and this seemed to be an interesting example of just that, and I wanted to write a case study that I could use in my course. The third was that innovations like Kolo Nafaso pose challenges, since they require the balancing of two motivations: profit and social impact. They also require managing the differences in perspective across functions, within the organization. This hasn’t been studied in the management literature, and I saw an opportunity to contribute to the discussion of how to manage the balance by learning from the experience of AAK.
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
Transforming a Supply Chain Into a Social Enterprise
For conventional, profit-seeking companies, moving into social impact carries huge contradictions. An ad hoc, small-scale initiative is an inexpensive way to do a bit of good and receive a nice warm glow in the process. But any attempt to achieve more serious impact through scaling the initiative will likely trigger awkward discussions about how much that warm glow is worth to the firm. Thus, the ceiling remains low on social impact unless it can be justified in “win-win” terms. Needless to say, this is no easy feat.
My recently published case study about Swedish oils and fats producer AAK’s “Kolo Nafaso” programme in West Africa describes how one company redefined “win-win” by creating a sustainable and scalable shea butter supply chain. In so doing, , creating ripple effects with strongly positive implications for the firm’s most important stakeholder relationships and future activities in the region.
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