NB Health Care

Friday
December 4
2015

Ron Bills

How a Change in Perspective Helped Ignite Cookstove Sales

Envirofit details lessons learned about customers in emerging markets

 

When we began Envirofit in 2007, producing an affordable, clean cookstove that customers were willing to pay for was thought to be impossible. Now, eight years later, we’ve reached our one-millionth customer and we want to share how we were able to achieve this in hopes that other social enterprises can overcome the barriers to entry that have kept people in the developing world underserved and living in energy inequality.

Worldwide, 3.5 billion people cook over an open fire. Cooking this way is both incredibly inefficient – requiring up to one-third of a family’s income for fuel or 374 hours every year collecting firewood – and also deadly. The smoke and other pollutants emitted by open fires, called Household Air Pollution, contribute to 4.3 million deaths per year – more than HIV, malaria and tuberculosis combined.

The goal of helping people cook cleaner has been around for years; however, before the current sustainable, market-based approach was established, clean cookstoves were primarily delivered via government-run giveaway programs that distributed low-quality stoves, which were designed without input from end users. Many of these programs were never fully adopted due to the poor design and quality standards, and not aligning with the needs of beneficiaries. Approaching development as a social enterprise means changing the way businesses think, changing the way products are delivered and changing the way people living in developing countries are regarded – not as beneficiaries but as customers with dreams, desires and aspirations.

 

CHANGING PERSPECTIVES

One of the first things we learned as a social enterprise pioneering a new market was the importance of customer-centered design. The B-1200 (pictured) was the first stove we produced. It had a simple design that featured a ceramic chamber, utilitarian handles and a cast iron pot support. With affordability as the main focus, how the product looked was a secondary concern. The stove was more than three times more efficient than an open flame, but still failed to really resonate with our customers. To find out why, we conducted hundreds of focus groups and learned that customers wanted more than simply a stove – they wanted a modern appliance they were proud to have in their kitchen. Their ideal product would also help them keep their kitchen clean, be portable so they could cook indoors or out, depending on the weather, and be durable so it didn’t require frequent replacing or rebuilding.

By meeting face-to-face with our customers we were able to build the G-3300, a stove appliance with built-in handles, a long-lasting metal combustion chamber and an aesthetic design. In the two years following the launch of the G-3300 wood cookstove, sales outpaced the former B-1200 model by 330 percent. This shift in perspective – viewing our market as customers to be served rather than beneficiaries – and the subsequent work it enabled us to do is one of the five key lessons featured in our recently published report, “Cooking in One Million Kitchens: Lessons Learned in Scaling a Clean Cookstove Business.”

We’ve been able to successfully partner with microfinance lenders, such as Grameen Koota in India, because our customers understand the value of our stoves and show a strong willingness to pay – a traditional barrier to entry at the base of the pyramid. In India, where we’ve had terrific success with this model, microfinance institutions are also willing to lend because when a family buys an Envirofit stove they are also getting the means to pay back the loan, thanks to how much they save on fuel costs. With a 60 percent average reduction in fuel use, our stoves have even helped people make money while they’re repaying their loan.

Serving rural customers also posed a challenge due to the difficulty of reaching them where they live. Few if any social enterprises had been able to sustainably achieve scale with last-mile sales and delivery of clean-energy products to remote and rural areas. Part of the reason was that cultural differences between urban and rural cultures meant our salespeople weren’t always able to demonstrate the value of an improved cookstove in a way our rural customers found meaningful.

To overcome this hurdle we began by recruiting and training a team of local women to act as last-mile entrepreneurs from the rural markets we were trying to reach. This was the first time that many of these women had ventured into entrepreneurship and they spoke to us about the socio-cultural and structural challenges they faced. As women are the primary users of household energy, we felt that they would be the best choice for demonstrating the value of clean cookstoves, so we implemented the Women’s Empowerment Program (WEP) to help them overcome these socio-cultural and structural challenges. Women who completed the WEP went on to sell three times as many stoves as those who didn’t, and their customers are more likely to continue using their clean cookstoves after purchase.

 

REACHING 5 MILLION CUSTOMERS

Customer-centered design, creative financing and innovative distribution were three of the tools necessary to reach 1 million cookstoves sold. One million stoves sold means we’ve improved 5 million livelihoods, prevented the release of 17 million tons of CO2, saved consumers $138 million in fuel costs and saved wood collectors 18 million working weeks. But it is just a start, as our new goal is to improve 25 million livelihoods by selling 5 million cookstoves by 2020. Reaching this goal will require us to use everything we’ve learned while continuously improving our products and distribution.

The clean cookstove sector is reaching more people than ever – the UN led Global Alliance for Clean Cookstoves hopes to reach 100 million people in the next five years. Meanwhile, the number of people cooking with solid fuel is expected to grow as the populations of sub-Saharan Africa and Southeast Asia expand along with their economies. By sharing what it has taken to scale a social enterprise from start-up to global, we hope that these future generations will be better served by business and that energy equality will be attainable for everyone.

 

Ron Bills is the CEO and chairman of the board of Envirofit.

Photos courtesy of Envirofit

 

Categories
Health Care
Tags
Base of the Pyramid, business development, consumer products, entrepreneurship, health care, microfinance, social enterprise, Women