Translations

LAS TACUERAS and SDGs: Microfranchise programme for women at the bottom of the pyramid

7. Community involvement

Community development

Sector Food-processing

Year 2018

Country Paraguay

Transmitter

Context

Las Tacuaras began its activities in the poultry field in the decade of the 1970s, with the rearing of broiler chickens, then almost immediately (1974) turned to industrial egg production. Up to 1997 the company was managed by its founder, Antonio Koo, until it became a limited liability company and the managerial role was passed on to his children, whom he asked to support education. For the founder, education is a way the company can help reduce poverty in the country and he is convinced that this is the best way of improving opportunities for the people. Since then, there has been no end to changes in the company. There are increasing demands every day from the production, the market and from consumers and a constant challenge to rethink the business from the point of view of sustainability.

In the middle of the second half of 2015, the Nutrihuevos Microfranchise was launched. This initiative is a way of generating shared value. In this sense, the Nutrihuevos Microfranchises improve the quality of life of families in the community, focussing on women who are in charge of the home. The programme is being implemented in nine cities in Paraguay: Caacupé, San Lorenzo, Chaco, Luque, Mariano Roque Alonso, Villa Elisa, Lambaré, Villeta and Asunción.

According to the Permanent Household Survey (General Directorate of Statistics, Surveys and Census, 2017), the population of Paraguay considered to be in a situation of poverty represents 26.40% of the total inhabitants of the country, which means that around 1,809,000 people live in homes where the basic per capita income is lower than the cost of basic living expenses. The Nutrihuevos Microfranchise initiative empowers women and provides them with essential economic stability to help their families’ progress. At the same time, the venture generates income for the family home that facilitates and extends the reach of the Las Tacuaras Company, thereby contributing to the SDG 1, related to ending poverty.

Objectives

General objectives: To do business and help end poverty.

Specific objectives:

As the company is seeking to fight poverty, establishing platforms that can enable more people to generate their own income.
To apply the shared value strategy with a focus on redefining productivity in the value chain. The aim is that people at the bottom of the pyramid can access decent employment, forming part of the company section linked to sales and distribution.
To build business models that generate economic value for the organisation but also make a contribution to society.

APPROACH

The model involves 7 steps:

Identifying opportunities to create value by analysing the company’s process chain. Focussing on the critical process which in this case is external sales. Through microfranchises it is possible to reach unattended markets.

Building the case, the microfranchise Nutrihuevos business model, with the support of students working on theses at the Faculty of Engineering of the National University of Asunción.

Measuring the results. Indicators were established such as the number of eggs sold, new markets reached, the number of women involved, and the amount of employment sources created.

Generating commitment from the senior management. The directors of Las Tacuaras are the principal promotors of this business model.

Adapting the organisation to the new business model. The women buy eggs at a differentiated price, a new sales point has been established in the town of Villeta to make purchasing easier, time and personnel are devoted to running the microfranchises.

Seeking a strategic partner to design and implement the model. This is the Fundación Paraguaya (Paraguayan Foundation), an expert in the field.

Implementing the model. Franchise holders have to commit to maintaining a quality standard previously established by the franchise. Some of the appropriate behaviours required by Las Tacuaras S.A. include taking care of product presentation and dealing with customers in a professional manner. At the beginning of the project, each franchise holder receives an identity card that gives them representation at Nutrihuevos sales points. The card has the identification number and name of the person, which are also registered on the Company system. When new products are needed for sales, the participant goes to any Nutrihuevos sales point with their card, and can make a purchase at wholesale prices. Their purchase is registered on the system so the project can be monitored. If it is the first purchase, the total can be bought on credit. The Fundación Paraguaya pays the company the money corresponding to the first sale and the participant then pays the amount of the credit directly to the Foundation. Sales are by the dozen and every two weeks the CSR department of the company provides a sales report.

CONTRIBUTION TO COMPANY PERFORMANCE

Number of microfranchises 153 (2015) / 166 (2016) / 125 (2017)
Dozens of eggs sold 196,030 (2015) / 478,222 (2016) / 508,993 (2017)
Sales by microfranchises as a percentage of total sales 1.07% (2015)/ 2.2% (2016)/ 2.3% (2017)

Benefits

Microfranchises that became wholesale clients (purchases greater than 500 dozen eggs) from the beginning of the programme in February 2015 to August 2018 : 12
People who are still in poverty (from a total of 77 people surveyed in 2018) : 6
Microfranchises active up to today : 77

In its third year of implementation, the Nutrihuevos Microfranchise programme is significantly outperforming expectations and the objective for which it was created, that is, to boost self-employment though retail sales.