Honey Care’s CEO discusses balancing benefit and profit in a social enterprise, sustainably monetising a model and selling it abroad
Honey Care was one of the earliest pioneers of a rural cooperative model – an initiative that was begun long before terms like social enterprise, acumen fund or impact investing even existed.
It has encouraged honey production as a secondary source of income for hundreds of low-income farmers in Kenya, won numerous awards and even found a place on the curriculums in business schools; but after a decade of good deeds, the time came for its founders to review the books. Africa farming families are producing this great honey, but most of the population doesn’t have access to any of the pure honey.
“The founders had to look very realistically at the economic structure – and that’s where I joined,” says Madison Ayer, CEO since 2010. “I brought a background in management and strategy – allowing me to reassess it from the perspective of economic sustainability.”
Acquainted with Honey Care from life in Kenya, it was Ayer’s role to apply a “private-sector mentality or business management approach.”
From his perspective, he notes that, “Honey Care is a cool story about bees and honey and economic opportunity for really disadvantaged families, and the world loves honey, so what better way than to put business principles to work to target the extreme subsistence of rural African families?Related article KICC named as Africa’s top business travel destination
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“This was what initially intrigued me, and then this opportunity came up because it needed a refresh. The social story had gained a lot of momentum and was very powerful, but as for the underlying economic fundamentals, there wasn’t a model that was sustainable yet.”
Originally sourcing honey only from Kenya, Honey Care has recently diversified its supply chain to included South Sudan, which Ayer notes “used to be the second largest producer on the continent, before the markets to the north dried up during the war and production dropped.”
In the wake of these events, Honey Care has been quick to seize upon the potential in Sudan — a market that has in many ways re-iterated the same challenges faced in Kenya in terms of first establishing a support and distribution network and then enjoining producers to supply it.
“So now we’ve gone back in there and it’s great because Sudan has these rich, equatorial forests, and the honey that comes out of there is just remarkable,” Ayer enthuses.
“But since there hasn’t really been a market, people aren’t producing — and of the little honey that came to us last year, we rejected 95% of it for not meeting the basic quality standards.”
Such challenges very much mirror the issues Honey Care first set out to counter as a social enterprise in Kenya as it worked to first educate and then facilitate producers in the sale of their honey.
“But we now have a full team and three regional offices in South Sudan and a deep training programme in the communities to make sure that all equipment and activities, from beekeeping through to transport, meet international standards,” Ayer continues.
In this shift from domestic to overseas markets, the need for ISO 22000 in food management safety, HACCP and fair-trade certification, becomes critical.
“In areas with more traditional beekeeping there is less emphasis on managing individual hives and more on training for proper harvesting technique and proper storage – things as simple as using food-grade plastic buckets as opposed to rusty tin pales,” Ayer explains.
“If a beekeeper has a bunch of honey in the forest and they think there is a market for it then they’ll use whatever containers they have lying around to get it out.”
At a community level, Honey Care provides harvesting tools and goes in with machinery to facilitate the mechanical separation of the honey – often overturning practices of boiling the honey, which separates the wax but degrades the honey’s composition, taste and texture.
Now Honey Care’s South Sudan supply chain increasingly resembles one of its well-distributed range of sources across Kenya, where it covers five of the seven provinces from the coast to the Rift Valley.
Straddling profit and a non-profit, Honey Care’s operations are typically run for profit, except as Ayer explains “when we extend into new or remote areas there are international grant providers that will fund that, because that kind of activity is not commercially viable.
“So the philanthropic capital will be the start-up, and only once we get the production of honey in that area up and past a certain threshold does it become commercially viable.”
At the point of purchase from the producer, a calculation is similarly made to determine the price Honey Care will pay for the honey product based on a range of factors including the resources that the company itself had to put towards the management of the hives, the harvest and the transport.
“How much equipment we give them will depend on the cost of transport between them and Nairobi or them and Juba, because we collect it in western and central equatorial Sudan, aggregate it in Juba, and shift truckloads down through Uganda and into Kenya,” explains Ayer.
The last three years have now been developing the diversification of the production, allowing the supply chain to weather any localised droughts and guarantee both a consistency of supply in all seasons and variety: from the rich, forest honeys of equatorial South Sudan and Kakamega forest to Acacia honey from Kenya’s semi-arid forest.
“We have reached that point, which is why we are now looking at international markets as well,” Ayer nods. “We have all the local and regional standards, and now it is more a question of consumer tastes than technical standards: it’s about finding the international markets where these honeys will resonate with what the market, and with what the consumer likes.”
“Dubai makes so much sense because of the culture around honey: the tastes of people in the UAE are a bit more refined for honey, and that makes it a very intriguing market for us.”
While Dubai, the UAE and even the GCC represent relatively modest populations to address, the market scale fits the model of Honey Care, which cannot scale up at the same speed a purely commercial operation might.
“Even that is a huge market for 100% natural product that’s hand managed across the supply chain. It’s different from building a factory and mass-producing a processed food. Of course we want the larger markets, but we’re not going to reach a hundred million in two years,” outlines Ayer.
“We have some challenges in terms of positioning in the Dubai market: first of all, a lot of people don’t realise that Africa produces any honey, and secondly, there could be a quality stigma for African products, although Kenya has also some premium connotations in coffee and tea, and in terms of the natural and exotic — and that is reflected in our identity as a honey.”
And while Honey Care’s African honey is not expected to rival the top Yemeni honeys, which are highly specialised and in low supply, Ayer is still hoping to position it at the upper end of the market by emphasising the integrity and proven origin of the company’s product.
He contrasts this with the bulk of commercial honey, which is so heavily processed that, according to a 2013 US university study, 80% of the product on the market had no traceable pollen.
“Commercial honey could be diluted with sugar syrup or many other things, it could mean that it’s overly processed, over-filtered or it could mean that it’s boiled, which means that you lose all the natural stuff that actually makes it honey — it might only taste like honey,” Ayer explains.
Nature to nuture
Within Kenya, Honey Care’s latest endeavour to increase its market and spread the reach of its social campaign has been to develop a model for selling sachets of its honey in the slums.
“Africa farming families are producing this great honey, but most of the population doesn’t have access to any of the pure honey. Consumers in slums, the low-income mass-market, the base of the pyramid — however you refer to this massive market — are typically totally exploited,” notes Ayer.
“But honey could be one of the few things with any nutrition that a kid could buy in a kiosk for five shillings — anything else is a candy, a biscuit or a lollypop — and then there’s also this built-in connotation that honey is natural, it’s wholesome, it’s pure, and mothers know that too.”
And for Kenya’s kids, who may only be eating ugali (a staple local dish made from corn maize) alongside the sweets, quality honey actually has the potential to fill in some nutritional gaps.
Building a brand
A subsequent challenge for this model was to set up a distribution network where the economics of the ensure supply chain would be justified at a product price point of five shillings, but Honey Care conducted tests and confirmed that the massive market would float the product.
The other key markets for Honey Care are the mainstream retailers in Kenya, with Nakumatt, Uchumi, independent supermarkets and the smaller class-B supermarkets selling the bulk of the produce in 100g jars, as well as the 5g sachets and 25g packs of sachets for families.
“It’s a challenge, but that’s what I’m in it for. Long-term the profitability, economic viability and social mission go hand-in-hand, while the traceability in the supply chain — all the way back to the hand-produced honey on the farm in the African forest — is what will drive the brand,” Ayer concludes.
“In Dubai, we haven’t yet chosen our channel: we’re looking at restaurants, hotels and even selling privately, so not even necessarily under the Honey Care brand, but potentially under an existing brand as their new exotic, hand-crafted honey — but whichever the case we’ll be building the brand based on the same consistency and traceability of the product.”
Africa farming families are producing this great honey, but most of the population doesn’t have access to any of the pure honey.