A week in Lima visiting the NESsT team and NESsT Enterprises was more than enough to convince me that there is an impact economy in the making in Peru. Why an impact economy?
Sustainable Fishery Trade (SFT)
Let's start by our visit to Sustainable Fishery Trade (SFT). An enterprise in the NESsT incubation portfolio since 2017, SFT works with 200 artisanal fishers along the coast of Peru and Chile. This enterprise has trained these small producers to fish sustainably and has connected them directly with high-end restaurants in Lima and Santiago, many of which are 100% committed to sourcing only sustainable seafood. SFT buys the product from the producers at a fair price, bypassing the middleman that does nothing of the kind, which in the past led to overfishing and persistent poverty.
Pen clams (nacras) purchased from SFT.
After visiting the plant where the enterprise processes the seafood before delivery to the restaurants, Isabel, NESsT Peru Director and I, went with the management team, Simone, Beto and Omar (their colleague Priscilla is in the UK participating in the Leaders in Innovation Fellowship), to have lunch at one of its clients. They had just finished purchasing pen clams (nacras) from SFT that morning, which we thoroughly enjoyed. The restaurant was full, and the chef came out to tell us that they adjust their menus each day based on the seafood that is available.
Is this easy to do? The answer of course is no. It requires an enormous amount of hard work and resilience on the part of the entire value chain. When el Niño came to Peru, leading to a total disruption of ocean patterns; or street protests arose in Chile, resulting in a curfew and eventual early closing of restaurants, this impact chain broke, hurting the fishermen first and foremost, followed by the restaurants, and of course SFT. Is it worth doing? The answer is a resounding YES! SFT has increased the livelihood of the fishers and their families by 30%. It has helped to foster a restaurant sector dedicated to sustainable fishing practices. It is educating a new consumer that appreciates this impact.
What is NESsT's role? To invest in SFT, help it to expand its model, reach more restaurants, and diversify to frozen products as a way to increase exports and move from 200 fishermen to hundreds more in the next three years.
NESsT and Greenbox team.
Greenbox
Next is a visit to Greenbox. This enterprise was recently approved to receive a low interest patient loan from the NESsT Fund. It works with farmers and employees in its plant, mostly single mothers, in the Tarma valley, a very repressed area of the country. The company supports the farmers to produce banana, goldenberry and pineapple, which are then dehydrated using different techniques and cut to different sizes in its plant before exporting to chocolate companies in Germany. Christian and Johannes impress my colleague and NESsT Portfolio Manager, Javier, and I, by their commitment to build a company in an area where no one else has dared to invest, and to support women, a target group that they believe needs to be recognized and paid justly for their work.
Is this easy to do? The answer is no. A few months ago, right when NESsT was going to approve the Greenbox loan, the company suffered a frost that ruined its goldenberry crop. Rather than walk away, the Greenbox team increased their production and sales of dehydrated pineapple demonstrating that they were still in a financial situation to take the loan from NESsT. They have also worked hard to position themselves as a reliable and differentiated company that produces a high quality product in a very poor region of the country. Is it worth doing? The answer is a magnifying YES! Greenbox plans to triple the number of suppliers and employees to more than 500 in the next five years.
Does NESsT have a role to play? Through our Business Assistance Facility, we will assist Greenbox to increase its B2B sales overseas and also its retail sales both domestically and abroad, so that it can further establish its brand, and increase customers dedicated to healthy snack products.
Forge
NESsT’s Co-CEO Nicole Etchart and Forge team.
A late afternoon visit to Forge. NESsT has been working with this enterprise in due diligence to develop a new IT curriculum for at-risk youth and to train and place them in jobs in either Digital Sales or as Web Developers. The enterprise has trained 68 at-risk youth in four months, of which 34 are already placed. These are young people, ages 18-24, who were neither in education or employment (NEET or in Spanish NiNis) and had few hopes of having a well-paid and challenging job in such a short amount of time. Kaira came to the visit. An impressive 18 year old, who before the training was not able to afford any kind of education or training, now has a full time position with a company working in Digital Sales. She is saving to go to school in marketing. Kaira shares that she recommends this journey to her peers. She says, "I learned to be patient, to work in a team, to listen to others. Soft skills that are necessary for establishing any career."
Has this been easy for Forge? The answer is no. With its extensive experience of training more than 3,000 young people each year, entering the IT sector was new for the enterprise. They realized that the young people needed a lot more mentoring and support than that of other technical areas. As a result, the cost per student was higher. Was it worthwhile? Most definitely. María José, the director, told us that the experience has made them realize the need to move into more digital training overall. Computer literacy is very low among vulnerable youth in Peru. Most do not have access to the Internet, nor experience in how to use it to improve their skills, search for a job or prepare a CV. 70% of the attrition rate in their courses is due to young people needing to work to survive; 24% to domestic violence and over 50% of their current trainees are Venezuelan refugees, many of them homeless. So Forge cannot afford the process to be slow.
How can NESsT support Forge in this next stage? By helping the enterprise to develop its digital training courses in order to reach and employ a lot more young people; to establish a long-term clientele among corporate employers as part of their Dignity, Equity, Inclusion (DEI) strategy; and to develop a business model that helps them to generate revenues from the sales to these clients.
Innovate Peru Summit, representatives from InkaMoss, Suritex and Pixed speak to audience.
Innovate Summit: InkaMoss, Suritex and Pixed
These three social impact stories were further reinforced at the Innovate Summit that took place last Thursday, where I had the privilege of presenting on social entrepreneurship and impact investing. Following my talk, we listened to three social enterprises present their work; two of them already in our portfolio as of five and three years respectively-- InkaMoss and Suritex; and Pixed currently in our due diligence process. We heard Marco from InkaMoss, Gregor from Suritex and Stephany from Pixed, share with the audience their strong conviction that focusing on social impact is not something parallel to their business, but actually at the center of it. Providing a high quality product or service while investing in vulnerable people and paying them a decent wage, is what makes these companies succeed. As their sales grow, so does their impact.
After the presentation, Isabel and I had a chance to stop to chat with the Cynthia, CEO of Epanacombi, an enterprise currently in due diligence, that trains people with disabilities in the production of empanadas, sold in gas station stores throughout the country as well as through their catering business. As we ate our delicious empanadas, sharing with Cynthia and her sister Naty, we discussed their new strategy to help restaurants become inclusive and begin hiring people with disabilities.
Pieta’s clothing store, featuring trendy hoodies and shops.
The next day, walking through Lacomar, a popular mall in Lima, I had a chance to buy the trendy t-shirts made by inmates that are trained and employed by Pieta, also in our portfolio as of two years and led by Thomas and Xiomara. The inmates receive a dignified wage for their work and are able to support their families while still incarcerated. They feel proud of what they do and happy to see how popular their products are in the market.
In one short week, eight impact companies, an integrated impact value chain that is giving vulnerable people a chance to build their futures, and Peruvians overall a chance to participate responsibly. Alliances with Wiese Foundation, BID, JP Morgan Foundation, Innovate Peru, Kunan, Helvetas, Cofide, and Aporta, all important actors as they engage with NESsT to invest and support over US$1.5 million in the past few years in building this value chain. On Monday, the last day of my visit, we had lunch with the management team of the Wiese Foundation, Gonzalo and Ingrid, an important holding company and family office that made the intentional decision to ally with NESsT to support social entrepreneurship in the country. Their commitment provides a role model for others in Peru and the region overall.
NESsT’s Team in Peru.
No doubt there is an incipient impact economy in Peru-- one that did not exist even five years ago. It’s the result of a group of impact-driven, passionate and resilient entrepreneurs, supported by group of visionary, walk-the-talk institutions. It’s a new paradigm that upholds people first, and that believes in a kinder, more sustainable marketplace. We need to celebrate it. We need to embrace it. But more importantly, we need to work together to continue to grow and scale it.