Fortifying the Peruvian value chain

By Cecilia Zevallos, Economic Impact and Entrepreneurship Manager, SABMiller plc

Fortifying the Peruvian value chain

Retired teacher Dora Pinto Salazar runs a restaurant in Peru. She is an enterprising woman with boundless optimism, culinary flair and a natural charm with people. Her restaurant is popular and well located, but with the help of entrepreneurship support, she was able to help improve her business further.

SABMiller plc’s subsidiary in Peru, Backus, has established a program, Progresando Juntos Clientes, to improve micro and small businesses within the companies’ value chain, particularly the small groceries, restaurants and bars that sell Backus products to the final consumer.

Backus’ view is that it can only be successful if it operates in healthy communities – economically and socially. Progresando Juntos Clientes maintains Backus’s local goals of leadership and organization and supports SABMiller’s global priorities for enterprise development and benefitting the community. In addition, the programme aligns with the Peruvian government’s ‘inclusivity’ agenda.

SABMiller believes that aligning entrepreneurship support with core business priorities enables scale and stimulates further investment from both industry and donors based on a strong business case.

Supporting micro-businesses has a strategic function for Backus. A network of robust small businesses creates a market for its products as well as improving employment, empowering poor workers and strengthening communities. Through investing to create shared value in the supply chain, Backus generates client loyalty at the same time as improving economic sustainability.

Progresando Juntos Clientes works by offering training sessions operated by socially-committed partners and printed materials to owners of micro and small businesses. Practical management advice, ranging from the formalisation and registration of business to financial inclusion and marketing strategies improves competitiveness. Cash payments are discouraged to improve the safety of both client and dispatchers and improve traceability.

Dora joined the programme and learnt marketing, accountancy and customer service skills, opening up new opportunities for growth.

She has improved the restaurant’s infrastructure, created a corporate identity, established better branding, measured customer satisfaction and developed a formal marketing strategy that includes promotions and advertisements. Creating a cash flow system that separates her personal expenses from the business’s and improving stock control has dramatically enhanced her financial management.

“The course and consultancy I received have helped,” says Dora. “I can see the results of what I have learned in practice and my customers seem really pleased with the changes.”

Since the program began in 2010, over 2,000 micro and small clients have been trained though the training sessions. They have received 16 hours of free training in business management issues, banking, taxation, and responsible business among others. Printed materials have been supplied to a further 10,000 clients.

Working with so many clients enabled Backus to see another avenue for support and growth.

Many customers were accessing business capital through very high-interest loans from poor lenders. In forging alliances with two financial institutions, Backus is able to give clients access to preferential rates. So far this scheme has resulted in lending of US$15 million. 85% of the loans were used to purchase Backus products, highlighting the direct advantages to the company. Furthermore, stronger business practices generate increased sales of Backus products: on average, the micro enterprises that receive help increase their Backus product purchases by over 31%.

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