Impact Report
We work with corporations and leading NGOs to support and transform global food systems, often by building cross-sector partnerships.
Globally, food systems are under stress. Agriculture accounts for as much as 17% of the world’s greenhouse gas emissions, marine resources are being depleted rapidly, and malnutrition remains the main cause of death and disease in the world. Many smallholder farmers, the backbone of agrarian economies and the source of most of the food supply in South Asia and sub-Saharan Africa, continue to live on income of less than $5.50 per day. Building environmentally and economically sustainable food systems is a critical and complex undertaking that the disruption of Covid-19 has only further complicated.
We aim to catalyze a transformation in the world’s food systems—making them more inclusive, sustainable, and nutritious—by working with corporations to embed sustainable practices at the core of their business strategies. We are also partnering with conservation leaders to make supply chains more environmentally sustainable, traceable, and transparent. And in Africa, we are shaping a new paradigm of agricultural development that anchors on farmer-allied intermediaries.
Food chains are complex. Each step, from planting to the consumer’s plate, comes with its own financial incentives and pressures. Agriculture that is inclusive and sustainable, and that produces nutritious food, can offer important economic opportunities to farmers, intermediaries, packaged food companies, and retailers. But moving in this direction will require far greater coordination among the public, private, and social sectors. Here are four examples of our recent work on food systems.
The depletion of marine resources is one of today’s greatest environmental challenges. For several years, we have worked with The Nature Conservancy (TNC) on an innovative approach to supporting sustainable fishing practices and combating overfishing and illegal fishing: the launch of Pacific Island Tuna Provisions (PITP), a canned tuna company operating with industry-leading environmental, labor, and traceability practices. Created in partnership with the Republic of the Marshall Islands and with initial funding from TNC, PITP aims to prove the business case for a more sustainable and commercially viable tuna supply chain that retailers and consumers can trust and other companies can emulate—and in doing so, create lasting, systemic change.
Building healthy and sustainable fisheries and improving the socioeconomic return for the Pacific Island nations that supply the majority of the world’s tuna require aligning multiple interests around the globe. In PITP’s model, the Pacific Island countries have direct ownership of the fish, from dock to retail, fishers receive a sustainability premium for their catch, and retailers gain supply chain traceability and visibility.
In 2020, leveraging our analytical capabilities, experience with rapid prototyping, and test-and-learn capabilities, we helped establish the commercial case for PITP’s model. At the time, PITP found itself with a bit of a chicken-and-egg problem. Stakeholders—including Pacific Island country partners, supply chain partners, and retailers—wanted to understand the details before committing, but many of those details would change depending on the nature and scale of their commitment.
As part of our work, we helped design a long-term contract and potential pricing model that would deliver value to retailers and allow PITP to operate with a lean structure, providing transparency and stability in what has traditionally been a highly unpredictable commodity market. We also analyzed and modeled PITP’s costs and financial forecasts—evaluating each decision that could be made in fishing practices, monitoring, and enforcement, and in fish handling and processing, to understand the impact on a variety of sustainability factors as well as cost implications—to ensure it could provide more sustainable tuna at a reasonable cost.
Because of Bain’s support, PITP expects to have secured full funding, a robust and operational supply chain, and a contract with a retailer by the end of 2021. As it becomes profitable, PITP will repay TNC the initial financing, and after that invest a portion of its profits in climate resilience in the Marshall Islands and other Pacific Island fishing nations.
In September 2020, after years of research and client work on the topic, we published a report titled How Farmer-Allied Intermediaries Can Transform Africa’s Food Systems. In it, we describe the linchpin role played by farmer-allied intermediaries—aggregators, processors, and vertically integrated brands that strategically source from smallholder farmers in a way that enhances their capacity and livelihoods—in unlocking Africa’s food production and economic potential, increasing employment, alleviating rural poverty, and providing affordable, nutritious foods for a growing population.
Even before Covid-19, African food systems were under pressure from growing urbanization, youth unemployment, and, perhaps most crucially, the climate crisis. During the pandemic, disruption of markets, supply chains, and operations has severely affected many agricultural intermediaries in ways that could have a significant long-term impact on food security and livelihoods.
This is how enterprises that ally with smallholder farmers are key to unlocking Africa’s food production and economic potential. How farmer-allied intermediaries can act as the linchpin firms for building more resilient food systems in Africa.
One group helping farmer-allied intermediaries weather these challenges is the public-private partnership Dairy Nourishes Africa (DNA), established in 2019 by the world’s leading commercial dairy companies. Working together precompetitively through the Global Dairy Platform (GDP), these companies provide sector expertise, on-the-ground resources, and catalytic funding to the dairy industry in East Africa to help it become more resilient, inclusive, and environmentally sustainable over the next 10 to 15 years. Bain, along with GDP and Land O’Lakes Venture37, has been a key collaborator in the design and implementation of this unique partnership and program.
Since Covid-19, dairy has become an even more important source of nutrition and livelihoods. For consumers, especially vulnerable populations, dairy is often the sole source of nutrients like calcium and vitamins A, B12, and D, as well as the essential fatty acids needed to build healthy immune systems. For smallholder farmers, farmer-allied dairy processors provide daily, year-round income, which is critical during a period of economic upheaval.
DNA’s recent results show the value that comes from supporting farmer-allied dairy processors and their farmer suppliers. In a six-month pilot that began shortly after the first wave of Covid-19 hit Africa, DNA supported a dairy processor in northern Tanzania. Tourism and institutional markets were collapsing, and the processor found itself with just two months’ cash on hand. We helped stabilize the business and accelerate its growth with a Covid response and recovery plan that included adapting its products to suit the local consumer and developing an innovative distribution model. Loans were also restructured to reduce interest costs. These actions resulted in approximately 35% year-over-year revenue growth and protected all livelihoods associated with the business, both on- and off-farm.
Based on that success, we took this playbook and, partnering with government and industry bodies, trained 65 other processors on how to tackle the challenges of Covid-19 and stabilize their businesses. Farmers working with the processors in the DNA pilot experienced a 30% increase in annual income and higher productivity as a result of better inputs, including feed, and farmer training. This support for farmers also generated positive environmental outcomes, as improved productivity resulting from better inputs and practices reduces the emission intensity of milk production. Overall, we anticipate that this pilot program alone will boost the livelihoods of more than 50,000 people currently living on less than $5 per day. We are continuing work to prepare additional high-potential, farmer-allied processors to become regional and national dairy champions in the coming years.
In addition to our work with DNA, we have joined forces with a number of our enduring pro bono clients—including TechnoServe, Partners in Food Solutions, Root Capital, and Land O’Lakes Venture37—and the United States African Development Foundation (USADF) to establish the Coalition for Farmer-Allied Intermediaries (CFAI). The coalition’s mission is to catalyze a movement centered on farmer-allied intermediaries and to help scale many more profitable, competitive African food companies.
In August 2020, with $500,000 provided by Cargill and USADF, CFAI took its first step, launching the Resiliency Grant Pilot program to support 10 farmer-allied food processors in Kenya and Ghana. These grants have helped buy needed personal protective equipment, minimize layoffs, keep wages stable, and ensure farmers are paid in full. They have helped these processors resume important farmer supports, including training and financing. CFAI partners have helped intermediaries build crucial capabilities in financial management, quality assurance, product development and marketing, and sales and distribution, enabling them to not only maintain business continuity but in some cases return to growth by adapting their products and operations to a new market reality. Visa Foundation is funding an expansion of the Resiliency Grant Program and inclusive business development in 2021.
Olam International, a global agribusiness company with nearly $27 billion in annual revenue, has long been a leader in sustainability and farmer support. While there’s a lot of discussion of supply chain transparency in agriculture, it’s actually quite hard to build. In 2018, Olam launched AtSource, a sustainability insights platform on which we collaborated. AtSource makes it possible for business-to-business customers to trace where their products come from and discloses the environmental and social impact of those supply chains.
On the platform, customers can view the journey from source to factory for more than 20 ingredients and over 60 supply chains. Each can be evaluated on up to 360 different metrics, such as supplier gender, pricing, and emissions. For approximately 220 of those metrics, users can drill all the way down to specific farmer groups. It’s possible, for example, for a customer to calculate the environmental footprint of a particular crop by volume, origin, and destination.
In addition to helping customers screen for risks and meet their social and environmental targets, AtSource identifies concrete opportunities to improve that performance. Olam aims to have 100% of its physical (nontraded) products on the platform by 2025. And the company’s efforts have already had a big impact on its supply chains, including helping farmers become more prosperous, reducing fertilizer and input usage, and minimizing carbon footprint. Covid-19 has increased the focus on sustainability, and Olam and the industry are responding with new ways to use data to make a difference.
We work with food and beverage companies, too, in an effort to shape consumer behaviors in ways that support healthier and more sustainable lifestyles. Upfield, for example, is the largest plant-based food company in the world. A maker of plant spreads, plant butter, plant creams, and plant cheese, Upfield has created innovative product extensions that deliver tasty and nutritious foods with less environmental impact than dairy equivalents and that have found a receptive audience across a wide spectrum of consumers, from vegans to budget-conscious families. This focus has been a key engine of growth for the company.
