Honey Care Africa is an innovative, rapidly expanding Kenyan social enterprise established expressly to increase the income of rural farmers. To date, Honey Care has doubled the income of several thousand small scale farmers through its "Money for Honey" program, which trains them in commercial beekeeping and then buys their honey at a guaranteed price. Honey Care then packages and sells the highest quality African honey.
The overall objective of the company is to produce and market high quality honey that will successfully compete on the world market with honey products from elsewhere. To achieve this objective the company has opted to work with the rural community groups in an out-grower model whereby it has introduced modern beekeeping methods using the Langstroth hives. In this approach, the company closely monitors the production process to ensure quality of honey produced by the contracted out- growers.
Innovation
Honey Care was launched in 1999 by a group of Kenyan businessmen seeking to capitalize on opportunities in the country's underdeveloped beekeeping industry. Besides its manufacturing activities, the firm provides free training in bee-keeping and buys produce from farmers at mutually acceptable and guaranteed prices. It operates a small-scale financing program, where the cost of equipment such as hives and protective suits, is covered by honey sales.
Honey Care is a small-scale enterprise, with revenues of about $110,000 (about Sh8.5 million) a year. It has helped some 2,500 Kenyan farmers get involved in beekeeping, with earnings of between $200-250 (Sh15,600 and Sh19,500) per year.
Honey Care works with small scale rural producers and beekeepers by empowering them to engage beekeeping as a supplementary source of income. The company undertakes development of the honey supply chain by strengthening the upstream segments through mobilization and sensitization of groups, beekeeping training, links the farmers to credit providers, supplies beekeeping equipment and other associated inputs, provides extension services to beekeepers at our cost, offers guaranteed markets for any honey produced through farm gate payments and downstream by marketing the honey purchased as a value added end product.
To date, Honey Care has supplied over 19,000 modern Langstroth hives to close to 3,500 rural households in Kenya. This has led to higher production of good quality honey as well as enabled more women to take up beekeeping using this gender sensitive technology. Honey Care also services a large number of individuals, hobbyists, horticultural farms, and agricultural institutions who are engaged in private beekeeping initiatives.
Honey Care's activities are operationalized through its innovative and now internationally recognized business model-the 'tripartite model'. This model is based on partnerships with the development sector and communities through mutually beneficial linkages. The model has cultivated win-win-win relationships amongst communities, the development and the private sector. The development partners subsidize the social costs involved upstream as well as co-financing the hardware inputs required, increases social capacities of producer groups while the private sector complements through bringing in commercial and financial discipline to create tangible socio-economic impacts. The community then implements the day-to-day running of the initiatives and maintains accrued revolving funds.
Honey Care's Tripartite model has seen public - private partnerships develop over the years. Some of Honey Care's partners today include the Kenya Government's Ministries of Livestock and Fisheries and Trade and Industry, IFC World Bank, the European Commission, DFID, UNDP, DANIDA, Swiss Development Cooperation, Swisscontact, SNV Netherlands, Aga Khan Foundation, Africa Now, German Agro Action, World Vision, Action Aid, various foreign embassies and consulates in Kenya as well as agricultural colleges and international and national institutions of learning.
Honey Care is also receiving support from the IFC World Bank under an innovative financing scheme for social enterprises through a mix of grants, patient capital and possible equity investment options to ensure that the socio- economic and environmental value generation is fortified. Other sources of financing for the business are through short term borrowing and overdraft facilities.
Impact
Today, Honey Care has the largest domestic market share of its honey products in Kenya as well as being a contracted packet for other brands earning it modest revenues through sales. Honey Care Africa was named the top small-to medium-sized business in Africa on 20 October 2005. This is the first time in the history of the Africa SMME Awards (Small Medium and Micro-Enterprise) that a non-South African company has been named the winner of the competition. SMME's from all over Africa competed in the Africa SMME awards and it is significant that a social enterprise ultimately emerged as winner.
The tripartitie model has successfully re-defined the role of the private sector in development in the South and appreciation of the private sector by communities unlike the traditionally (and suspect) monopolistic private sector approaches of the past. As most of the beneficiaries of Honey Care's initiatives can hardly afford to finance start up costs, partnerships with donor institutions and microfinance institutions have enabled these needy communities to get access to credit and seed capital to begin beekeeping. This agro based financing mechanisms enables them to pay off their loans while cushioned against the risks of 'force majeure' that may affect production. To date, the loan repayments against leases and contributions to revolving funds have been encouraging.
Honey Care Africa also won a UN prize for sustainable development and poverty reduction; chosen among 420 companies in equatorial countries for the $30,000 (Sh2.3 million) cash award, honoring poverty-reduction initiatives. They have helped double the incomes of some of Kenya's poorest farmers, according to the World Bank. The bank's International Finance Corporation (IFC) provides support to Honey Care.
Honey Care Africa signed a distributorship agreement with Premier Food Industries Limited (PFIL), one of East Africa's largest food product manufacturers to distribute Honey Care's products across East Africa. This decision was prompted by the recognition within Honey Care that it did not have the resources to distribute its honey products to the various supermarkets and outlets and collect the payments on its own. The decision to select Premier Foods as the distributor was based on the lower distributor fee (15%) they offered to charge Honey Care. This was because they were impressed by the social component of Honey Care's work. Premier Foods' strong market position (they have over 65 listed processed food products on the market and their products are sold across East Africa), as well as the option of buying jars and other packing materials jointly at the discounted prices Premier Foods enjoyed, was also another reason for deciding to work with them. Further, the opportunity for joint product development like Honey Garlic Barbecue Sauce, Honey and Mustard Sauces - something they had expressed an interest in and have the Food Technicians on their staff to begin product development trials - was another reason to select them as Honey Care's distributors
Inspiration
"Our strict ethical business practices and farmer friendly management approach have ensured that our projects and partnerships are viable and successful. Our hives can now be found in most parts of the country - an emphatic testimony of the success of our efforts. The fact that our previously established projects and partnerships continue to go from strength to strength is an unequivocal indication of the long-term sustainability of our endeavors."
The World Inquiry editorial team edited this profile from the original submission of the interviewer or other source. The views expressed do not necessarily represent Case Western Reserve University, the Weatherhead School of Management or the Center for Business as an Agent of World Benefit. More >>
