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Southern Drink Challenges Corporate Dominance

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

Across the global South, its thirsty people have long been a target market for Northern drinks companies. The ubiquity of the American soft drink Coca Cola, or even its rival Pepsi Cola, is testimony to that. Even the most remote village on the impoverished island of Haiti can offer an ice-cold Coke.

But the marketing power of these companies has a down side: it has pushed aside local drink brands based on traditional formulations. But in some countries, local brands are fighting back.

In India, the Cow Protection Department of the Rashtriya Swayamsevak (called RSS) based in Hardwar (www.hardwar.com), one of the four holy cities on the River Ganges, has produced a soft drink made from recycled cow urine. They call it ‘gau jal’ (Sanskrit for ‘cow water’) and it is set for a launch at the end of 2009.

The urine is highly processed to make the drink. “Don’t worry, it won’t smell like urine and will be tasty too,” Om Prakash told the Daily Mail. “Its unique selling point will be that it’s going to be very healthy. It won’t be like carbonated drinks and will be devoid of any toxins.”

The price will be less than American brands such as Coca Cola.

“We’re going to give them good competition as our drink is good for mankind,” he continued. “We may also think of exporting it.”

The drink contains not only cow urine but a blend of medicinal and ayurvedic herbs. Ayurveda is the 5,000-year-old ancient Indian health system.

The RSS was founded in 1925 and claims to have eight million members.

Cows are sacred to India’s Hindu population and killing them is illegal in many parts of India.Finding ways to make a living from cows’ waste products is common. Cow dung (manure) is already used as a fertilizer in villages. It is claimed the new soda pop will help with cancer, obesity and liver disease.

Another drink that has been consumed for its health-giving properties is Mongolian mare’s (female horse) milk. Studies by female scientists from Mongolia, South Korea and China for UNDP in the late 1990s found the milk was packed with vitamins and minerals and effective in treating liver diseases, cancer, intestine inflammations and tuberculosis.

Mongolians have used mare’s milk for centuries in their traditional diet. The drink, called airag in Mongolian, is consumed especially during traditional holidays.

There are eight times as many horses in Mongolia as the human population, which numbers 2.7 million, so the potential for this drink is enormous. The Food and Biotechnology Institute of the Mongolian University of Science and Technology (www.must.edu.mn/beta_new/) in association with the Swiss International Development Agency (www.sdc.admin.ch), has been developing technology to process mare’s milk, and make value-added products with it to create rural jobs. Under the project, eight kinds of beauty products have been manufactured so far using mare’s milk.

Published: July 2009

Resources

Just Food is a web portal packed with the latest news on the global food industry and packed with events and special briefings to fill entrepreneurs in on the difficult issues and constantly shifting market demands. Website: www.just-food.com

Brandchannel: The world’s only online exchange about branding, packed with resources, debates and contacts to help businesses intelligently build their brand. Website: www.brandchannel.com

Small businesses looking to develop their brand can find plenty of free advice and resources here. Website: www.brandingstrategyinsider.com

Growing Inclusive Markets, a new web portal from UNDP packed with case studies, heat maps and strategies on how to use markets to help the poor. Website: www.growinginclusivemarkets.org

Asia-Pacific Traditional Medicine and Herbal Technology Network: an excellent first stop for any entrepreneur, where they can find out standards and regulations and connect with education and training opportunities. Website: www.apctt-tm.net

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.

Southern Innovator’s online archive portal was launched in New York City, U.S.A. (home to the UN’s headquarters) in 2011 (southerninnovator.org).
Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

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Woman Restaurant Entrepreneur Embraces Brand-Driven Growth

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The journey of Zhang Lan is the tale of an entrepreneur who exemplifies the story of globalization. She has gone from working many part-time jobs while studying overseas, to becoming one of China’s most successful food entrepreneurs.

Starting with a very small and humble restaurant specializing in spicy food from China’s Sichuan province, Zhang has cannily used branding innovation to grow her business and build her reputation in the food trade. Today the company she started, South Beauty Group (southbeauty.com), has 71 restaurants, most in major cities such as Beijing and Shanghai.

A series of bold moves focused on raising the profile of her restaurants and the South Beauty Group has paid off: the group was singled out by the China Hotel Association as one of the top 10 Chinese restaurant brands. By riding the country’s breakneck growth and urbanization, her restaurant group has enjoyed double-digit growth in recent years in revenue and profits.

Zhang’s mission is to revitalize the Chinese restaurant scene by introducing a more upscale and consistent dining experience.

China’s restaurant industry is booming and represents a significant opportunity: it is said it will have revenue of 3.7 trillion yuan (US $590 billion) by 2015 (China Daily).

“Most people in China don’t know how to present food. I am happy that I have given some importance to the appearance of food,” Zhang told the China Daily newspaper.

“I strike a balance between popular and high-end brands in my daily life. This also works for South Beauty Group, which aims to attract customers to a modern place to enjoy high-grade and popular Chinese cuisine.”

Her business mission is to take the group outside of China and become a global brand.

“Buoyed by the booming domestic high-end catering market, South Beauty Group is looking to be a major luxury brand in the global catering industry. It is not an easy task considering that there are different cultures and eating habits. But my past experience has taught me that opportunities often come along with challenges,” she told China Daily.

Zhang’s business story started in a journey to Canada to pursue further education. To make ends meet, at one time she took on six part-time jobs, including washing dishes and food preparation.

Anybody who has gone to another country to work and better their life knows how hard this can be: “During that period, I was so tired by the end of the day that I had to lift my legs onto the bed with my hands,” Zhang said.

But working hard in restaurants and beauty shops earned her US $20,000 in savings within two years.

She returned to Beijing in the early 1990s, a time when the country was undergoing significant market reforms. She opened a small restaurant in Beijing in 1991 serving Sichuan cuisine. Dining out was still a new experience in a country that had spent decades under austere communism. She made her restaurant different by emphasizing cleanliness and unique flavours for the food. She even used the design of the restaurant to set it apart: she gathered bamboo from Sichuan and used it to transform the restaurant into a little bamboo house.

This attention to detail paid off. By 2000, Zhang had been successful enough to give her the confidence to open her first South Beauty Restaurant in Beijing’s China World Trade Center, a high-end office building in the Central Business District. It proved to be a great way to boost her business’s profile.

“It was a bold decision, as rents were high, but I knew the returns would also be high,” she said.

By 2006, she was successful enough to make another brave move: open a luxury restaurant called the Lan Club, in Beijing. Having learned about the importance of distinguishing herself in the ever-growing restaurant marketplace in China, she invited world-famous designer Philippe Starck (http://www.starck.com/en/) to design the restaurant.

For Zhang, there was a bigger strategy at work: “I was not disheartened when some people said that I threw money away like dirt and 12 million yuan (US $1.92 million) was too much for a design draft. But I got great publicity and brand recognition with this design, far more than what is received by most companies which spend millions of yuan on television advertisements. Not everyone in China can boast of a Starck design in their restaurant.”

In 2007, the company also started cooking meals for airlines flying between China and France, the Netherlands and South Korea. In 2008, it won the bid to be food and beverage provider for the 2008 Beijing Olympics and was named official caterer to the 2010 Shanghai World Expo.

“These international events have given us great confidence in planning overseas expansion,” Zhang said.

The hallmarks of the dining experience at a South Beauty Restaurant include dramatic food presentation, upscale décor, a pleasant dining atmosphere and critically, waiting staff who are informed about the dishes they are serving.

Dramatic food preparation includes cooking food at the table for the diners and serving stir-fried shrimp on a plate with a goldfish bowl filled with live fish.

“I want to change the cheap price and bad atmosphere tag that most Westerners have about Chinese food,” Zhang told China Daily.

She has attracted investors to take a stake in the business and become the second richest female entrepreneur in China, according to the 2011 China Restaurant Rich List.

While the international economic crisis is still damaging growth in the United States and Europe, Zhang still plans to go global. She is looking to initially expand into Asia before moving into Europe and North America.

“Our mission is to promote authentic Chinese cuisine across the world. With (the) Chinese economy growing steadily and its cultural influence gaining, it will not be long before we see some big global Chinese catering companies, much like McDonald’s,” Zhang concluded. And it looks like South Beauty Group wants to lead the way.

Published: November 2012

Resources 

1) Restaurant Branding: A website dedicated to discussing restaurant branding and how to do it. Website:http://www.restaurantbranding.com/

2) How to Start a Restaurant: Tips from the Entrepreneur.com website. Website:http://www.entrepreneur.com/article/73384

3) Top tips on opening a restaurant from successful celebrity chef Gordon Ramsay. Website:http://www.channel4.com/programmes/ramsays-kitchen-nightmares/articles/gordon-ramsays-top-tips-for-starting-a-restaurant

4) Tips on how to handle the start-up costs of staring a restaurant. Website:http://www.inc.com/articles/201111/business-start-up-costs-restaurant.html

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator. 

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

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Indonesian Food Company Helps Itself by Making Farmers More Efficient

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The current global economic crisis is taking place at the same time as a global food crisis. Food inflation took off at the beginning of 2011. This is having a devastating affect on countries dependent on food imports and experiencing decreasing domestic production capabilities. The least developed countries (LDCs) saw food imports rise from US $9 billion in 2002, to US $23 billion by 2008 (UNCTAD), prompting Supachai Panitchpakdi, secretary general of UNCTAD, to say “the import dependence has become quite devastating.”

Garuda Food (www.garudafood.com), one of Indonesia’s leading snack food and drink manufacturers, has been boosting its own productivity by investing in improving the productivity of domestic small-scale farmers. This led to a doubling of crop purchases from peanut farmers between 2007 and 2009. By stabilising the market for peanuts and better guaranteeing income, it has attracted more people into becoming peanut farmers in the region.

This is crucial for the future of feeding the planet: we need more farmers.

Indonesia is the world’s fourth most populous country, with a population of over 238 million, spread out over a network of islands. Peanut farmers in West Nusa Tenggara (http://en.wikipedia.org/wiki/West_Nusa_Tenggara) (one of Indonesia’s poorest places) are a key part of the region’s wealth. Peanuts are the area’s third largest crop after rice, maize and soybeans, and the region supplies six percent of the country’s peanut production and 10 percent of Garuda Food’s needs.

Garuda Food says investing in farmers has raised its own productivity by a third. Turning past practices on its head, this large agri-food company is supporting small-scale farmers and helping them to boost their productivity and incomes. Conventional wisdom had been to view small-scale farmers as an inefficient hold-over from the past – the quicker they were driven out of business, the better.

The Indonesian peanut farmers were using traditional farming methods and local seeds. Knowledge of more sustainable farming methods and land management techniques was poor. The farmers were also beholden to the whims of local buyers and fluctuating market prices.

Then Garuda Food stepped in. The company’s field staff offer the farmers training, and through its subsidiary PT Bumi Mekar Tani, it spreads knowledge about new agricultural practices and provides the farmers with quality seeds and farming equipment.

The company buys crops directly from the farmers, rather than from middlemen, increasing the amount the farmer makes. A premium is also paid if the farmer achieves better quality for their crop.

“We receive substantial supply from peanut farmers in NTB (West Nusa Tenggara) and we hope the arrangement will continue,” Garuda Food’s managing director Hartono Atmadja told the Enchanting Lombok website.

Garuda Food’s initiative, with support from the World Bank’s International Finance Corporation and AusAID, through the Australia Indonesia Partnership, has raised the productivity for 8,000 small-scale farmers by 30 percent: an income boost for the farmers of 3.9 million Indonesian rupiah (US $456) per hectare annually.

Peanut farmer H. Sajidin told the IFC (International Finance Corporation): “My farm’s productivity doubled, my income improved significantly, and I can sleep peacefully at night knowing that Garuda Food will buy my crops at agreed prices.”

Raj Patel, author of Stuffed and Starved: Markets, Power and the Hidden Battle for the World Food System (http://stuffedandstarved.org/drupal/frontpage), has grappled with the conundrum of how to feed a rapidly growing planet. He finds the world is not lacking in food, but distributes its bounty very poorly and wastefully, leaving a planet where some people are literally ‘stuffed’ with too much food (the well-documented global obesity crisis) and others left to starve.

He finds the solution is often local.

“It turns out that if you’re keen to make the world’s poorest people better off, it’s smarter to invest in their farms and workplaces than to send them packing to the cities,” Patel wrote recently in Foreign Policy. “In its 2008 World Development Report, the World Bank found that, indeed, investment in peasants was among the most efficient and effective ways of raising people out of poverty and hunger.”

Patel uses the example of the southern African nation of Malawi, where “according to one estimate, the marginal cost of importing a ton of food-aid maize is $400, versus $200 a ton to import it commercially, and only $50 to source it domestically using fertilizers.”

Published: May 2011

Resources

1) Emprapa: The Brazilian Agricultural Research Corporation’s mission is to provide feasible solutions for the sustainable development of Brazilian agribusiness through knowledge and technology generation and transfer. Website: http://www.embrapa.br/english

2) Divine Chocolate: The highly successful global chocolate brand from the Kuapa Kokoo farmers’ cooperative in Ghana, West Africa. Website: http://www.divinechocolateshop.com

3) Olam: The highly successful global food product supplier brand which got its start in Nigeria, West Africa. Website: http://www.olamonline.com

4) Insects as food: Tapping the world’s vast insect population offers many ways to supplement world food sources. Website: http://ssc.undp.org/other/e-news/newsletters/april-2008/

5) Cooperhaf: The Brazilian farmers’ cooperative Cooperhaf: Cooperativa de Habitacao dos Agricultores Familiares, has put together what it calls a “social technology”, combining housing and farm diversification to support family farmers. Website: http://www.cooperhaf.org.br

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator. 

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022

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Kenyan Products a Global Success Story

By David SouthDevelopment Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

The East African nation of Kenya has become synonymous with high-quality agricultural products, and offers lessons for other countries across the South. The country has been able to combine innovation in new technologies (it is a pioneer in mobile phone applications like m-banking), with quality control for its products like the Coffee Kenya Brand logo (http://www.coffeeboardkenya.org) and ease of access to information on Kenyan products and resources via the internet – crucial to drumming up international business – like the SME Toolkit Kenya (http://kenya.smetoolkit.org/kenya/en) .

There are several advantages to improving standards and productivity in agricultural products in Africa. The first is regional: greater productivity and efficiency will help in reducing malnutrition and food crises that have plagued the continent for decades. Secondly, it also allows Africa to export food to other countries with fast-growing economies and boost the continent’s wealth.

The dramatic changes taking place in African countries – especially rapid urbanization that has made the continent home to 25 of the world’s fastest growing cities (International Institute for Environment and Development) – means there is an urgent need to increase food production and stabilize rural economies to support farming.

Kenya is considered home to one of the continent’s most successful agricultural production zones, with multiple agricultural products and brands developing a solid global reputation for quality.

The country benefits from the fertile Great Rift Valley (http://en.wikipedia.org/wiki/Great_Rift_Valley) , where the country’s biggest crops – tea and coffee – are grown.

Agriculture is a key part of Kenya’s economy: 75 percent of the working population is employed in the sector. Farming sits behind tourism as the country’s second biggest contributor – 20 percent – to the gross domestic product (GDP).

Kenya has had a great deal of success with fruits, vegetables and flowers (Kenyan flowers are a mainstay of many European supermarkets). Kenya has been able to achieve this by using well the 10 percent of the country’s land that is suitable for farming.

Around Mount Kenya (http://en.wikipedia.org/wiki/Mount_Kenya) , the cool and wet climate is perfect for farming tea, coffee, flowers, vegetables, corn and sisal. Other products that have been successfully grown include sugar cane, pineapple, cashew nuts, cotton, and livestock-related products – dairy goods, meat, hides and skins.

Kenya’s main export markets are the United Kingdom, the Netherlands, Pakistan and the United States. This agricultural export success has had a knock-on effect of reinforcing a global reputation as one of Africa’s best countries for business.

In the tea market, James Finlay and Williamson have a strong reputation and sell to major supermarkets in the UK.

Another successful tea company is Kenya Tea Packers Limited (Ketepa) (http://www.ketepa.com) . A Kenyan-owned company, it enhances the standard of living of the small scale tea growers of Kenya who are the bulk of its shareholders.

Kenya is one of the world’s top 20 coffee producers and has a good reputation for its Arabica beans. Kenya produces 2 million bags of coffee a year and the coffee industry employs 6 million people (www.coffeeboardkenya.org) .

When it comes to exporting flowers (http://www.kenyan-flowers.com) , Kenya is a global powerhouse: 38 percent of the world’s exported flowers are grown there. The majority – 97 percent – are sent to the European Union. Its popular flowers include chrysanthemums, roses and carnations. This time-sensitive crop benefits from the air links of its capital, Nairobi.

Kenya even has a successful brand of beer, Tusker Lager (http://www.tuskerlager.co.uk) . It is a leading export and is proudly African, with its elephant logo and motto “My beer, my country.” It has a large market in the United Kingdom.

Published: June 2010

Resources

  • Small businesses looking to develop their brand can find plenty of free advice and resources here. Website: www.brandingstrategyinsider.com
  • Brandchannel: The world’s only online exchange about branding, packed with resources, debates and contacts to help businesses intelligently build their brand. Website: www.brandchannel.com
  • Just Food is a web portal packed with the latest news on the global food industry and packed with events and special briefings to fill entrepreneurs in on the difficult issues and constantly shifting market demands. Website: www.just-food.com
  • World Vegetable Center: The World Vegetable Center is the world’s leading international non-profit research and development institute committed to alleviating poverty and malnutrition in developing countries through vegetable research and development. Website: www.avrdc.org
  • Marketing African Leafy Vegetables: Challenges and Opportunities in the Kenyan Context By Kennedy M. Shiundu and Ruth. K. Oniang. Website: http://www.ajfand.net/Issue15/PDFs/8%20Shiundu-IPGR2_8.pdf
  • Olam: A global food supply company in ‘agri-products’ that got its start in Nigeria – shows how a Southern brand can grow and go global, and overcome the difficulties of cross-border trade. Website: www.olamonline.com
  • Dutch Design in Development will help Southern entrepreneurs and small enterprises to develop their brand and design identity and production processes by using experienced Dutch designers. Website: www.ddid.nl/english/index.html

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP’s South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South’s innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator. 

Creative Commons License

This work is licensed under a
Creative Commons Attribution-Noncommercial-No Derivative Works 3.0 License.

ORCID iD: https://orcid.org/0000-0001-5311-1052.

© David South Consulting 2022