The Better Trading Company Summary

The Better Trading Company (TBTC) is a social enterprise that nurtures horticultural and agricultural entrepreneurs in southern and east Africa and brokers supply contracts with leading retailers and international markets.

Flowers2.jpgIn 2005 Shell Foundation partnered with Marks & Spencer (M&S) to see if new supply chains to major retailers could simultaneously improve the lives of developing world producers and deliver a commercial return.

The pilot generated significant results, with M&S becoming the first major retailer to sell products from Fairtrade cotton – improving the lives of 1500 farmers – and over one million bouquets of harvested flowers in M&S stores creating 100 jobs in poor communities in South Africa.

Despite these results, we discovered that the only way to scale this type of approach would be to create an independent entity, or supply chain connector, to bridge the gap between major retailers and developing world producers. This entity would help source innovative products for multiple retailers, gain their commitment to stock them and build capacity of producers to meet the product and sustainability requirements that retailers demand.

Business Model

In 2007, Shell Foundation co-created TBTC to meet this need and partner with the retailers and import agents to identify their product requirements.

Using their local and agricultural knowledge they then identified suitable sourcing areas and producers: both small-scale and commercial. For small-scale farmers they provided extensive agricultural training – from planting to harvesting and access to high quality inputs – and built their capacity to develop farming as a business, rather than subsistence farming.

TBTC provided a guaranteed market at a price agreed upfront to the producers with complete transparency in costings and on how the margin is shared – making it possible for farmers to receive a steady, stable and secure income.

This both improved farmer livelihoods and allowed them to plan how to more effectively manage their farm. They helped to identify simple actions like opening bank accounts to ensure women’s earnings were safe. TBTC also provided value addition services like drying and packshed facilities to ensure the right quality for export.
 

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