A Wholesale Boost for Tenderos: Why SABMiller Latin America is investing $17M in small retailers
I am a strong believer in the power of enterprise. Small and micro entrepreneurs in Latin America – as is the case around the world – are drivers of inclusive growth and local jobs. They lift people out of poverty and create new empowerment opportunities for women. They meet the needs of local consumers, as well as larger companies like ours.
For our business in Latin America, small retailers play a central role in our success. We work with 780,000 customers: small retailers who operate very small stores or kiosks, selling our products amongst a wide range of other goods. Of these retailers, close to 50 percent live in poverty and 60 percent have women as heads of households.
To thrive, these businesses need a broad environment of support – from rule of law and good governance to access to finance and reliable infrastructure. In Latin America, one of the missing elements for entrepreneurship to unleash its potential is the lack of entrepreneurial support networks beyond the family circle and the nonexistence of venture capital.
As a company, we can also play our part. Because of the nature of our business, we are able to use our networks – both physical through our value chains and intellectual through partners and employees – to help them.
We have been actively involved in supporting entrepreneurs across our global footprint, including through programmes such as ‘Oportunidades Bavaria’ in Colombia, and ‘Progresando Juntos’ in Peru and El Salvador.
One thing that we have learned is that creating dynamic, resilient growth in small businesses requires more than simply offering start-up grants or seed funding. Instead, we take an “ecosystem” approach to supporting entrepreneurship, building supporting networks which provide capacity building, mentoring and access to funds and markets.
Last week, at the World Economic Forum event in Lima, Peru, I was delighted to launch our latest initiative – 4e,Camino al Progreso – to improve the lives of 40,000 shop owners, or tenderos, across Latin America.
SABMiller Latin America will invest US$17 million over four years in the program that has been designed in collaboration with the Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB). It will be launched in the six core markets for SABMiller in the region, and will target around 10 percent of tenderos. These tenderos supply to some 1.7 million surrounding homes, with an estimated population of more than 7 million people. Small stores are often run by individuals and families, the majority of whom are women who are close to the poverty line and have the potential to become a more effective income generator, thereby helping thousands of families to escape poverty within just one generation.
Tiendas often also play an important role within their communities and the program aims to leverage this, encouraging them to take a lead in local projects which accelerate social inclusion and strengthen community engagement. The 4e program will focus on the development of the capabilities of the tenderos to improve their business, the quality of their and their families’ lives, and to enhance their leadership skills, enabling them to take on responsibilities in their communities.
I believe that human development and growth in prosperity are our strongest interest here and we want to help ensure that the Latin American region fulfils it abundant potential. If societies thrive, business also thrives. The 4e program will serve as a model of poverty alleviation and social and financial inclusion and will also act as an instrument for broader social change, particularly when one considers the leadership potential of the retailers we will reach out to and their ability to make a difference in their communities.
The 4e program will be structured in four phases, designed to address different areas of development:
Phase I: Responsible Tendero (Secure the Business): provide the tendero with the basic capabilities to ensure the existence of the business, improve his income and provide the basic elements for the quality of life of his family.
Phase II: Sustainable Tendero (Help my Family): Further advance the tendero’s development, enabling him to contribute to the improvement of his family and begin to make a positive impact on the community.
Phase III: Excellent Tendero (Growth with Excellence): develop the tendero with excellence and growth so as to diversify products and services and to attain positive acknowledgement in the community.
Phase IV: Leader Tendero (Contribute to the Community): develop the tendero as a community leader and convert the tienda into a meeting place for neighbourhood development
Every year SABMiller commits millions of dollars to supporting entrepreneurship projects in many of its markets, last year spending a total of $4.7 million. Through its projects, the company aims to create the support networks that micro and small enterprises need to survive and thrive. This ranges from start-up grants and access to microfinance, to mentoring and training.
SABMiller is bringing all of these initiatives together under the umbrella of the SABMiller Entrepreneurship Platform, which seeks to highlight best practice, share success and demonstrate the business case for supporting small businesses in our communities and value chains. The platform will also focus on SABMiller’s progressive ecosystem approach toward entrepreneurship and the impact it has around the world.
As part of this, SABMiller is supporting the Enterprise Zone here on Business Fights Poverty. This will bring together insights, case stories and other resources from SABMiller and members of the Business Fights Poverty community.
This article was originally published on Business Fights Poverty and has been cross-posted here with permission.
Karl Lippert is the president, SABMiller Latin America.