FAVE Bags- Creating Opportunities for Women in Rural El Salvador via a Network of Home-Based Enterprises

FAVE Bags- Creating Opportunities for Women in Rural El Salvador via a Network of Home-Based Enterprises

El Salvador
Organization type: 
for profit
Budget: 
$10,000 - $50,000
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Over 50% of households in rural El Salvador struggle with poverty where there are few if any opportunities to earn the much needed cash to pay for school, medical or other essential expenses. Women in particular face a difficult time earning necessary cash due to their numerous household obligations. Instead of forcing women to leave for distant factories and cities in search of work, we are creating an embedded network of home-based enterprises in the countryside which produce FAVE Bags for export to the US and is empowering women to earn the cash needed to support their families. This new paradigm of decentralized production, made possible by the spread of IT, offers an alternative to standard export-lead growth, ensuring that benefits actual reach those who need it most, the rural poor.

About Project

Problem: What problem is this project trying to address?

San Pedro Nonualco is a rural municipality of about 10,000 people in El Salvador on the foothills of the Chichontepec Volcano. As in all of El Salvador the scars of the a decade long civil war are still healing twenty years later. Much more devastating were earthquakes which struck in 2001 destroying over 99% of houses in the municipality. Agriculture remains the largest employer here. In addition to the traditional corn and beans the region was a major coffee production zone but its cultivation is slowly being abandoned; instead many San Pedranos have taken up fruit cultivation, particularly oranges. Most young people though either have to leave at 5am every morning to travel and labor in the maquilas (export-oriented factories), head to the cities in search of work or attempt to emigrate to the US. Despite a years of “economic liberalization” (conversion to US dollar, joining CAFTA (free trade agreement), etc.), economic growth has been disappointingly slow in El Salvador and this manifests itself in the countryside with poverty affecting ~50% of people. With earthquake re-building efforts having been recently quite a success most people have a positive experience and view of engagement efforts by outside groups. In addition like elsewhere this community is intimately linked to the US. Nearly ¼ of Salvadorans currently reside in the US and the cultural exchange flows both ways. With over 60% of exports destined for the US and the use of the US dollar, it makes setting up an innovative production model for export to the US extremely feasible in San Pedro Nonualco.

Solution: What is the proposed solution? Please be specific!

The status quo in El Salvador is to develop through centralized factory and industrial production for export. In El Salvador there are 18 "free-trade" zones with thousands of workers making clothing and other products for export. While factories and international trade offers opportunities, the current model creates few benefits for those who most need them (including even the employees). The alternative promoted by many is often called “fair trade.” This generally relies on independent artists and cooperatives handcrafting goods and selling them in a non-systematic way to a developed world buyer. The end result is that “fair trade” goods tend to be expensive, artisanal goods that are sold in specialty stores and while benefiting workers, does nothing to disrupt or offer an alternative to the dominant paradigm of production for export. Our initiative proposes that a rural network of decentralized production can be price competitive while providing much larger benefits for workers and local communities (as “fair trade” proposes to do). Many village women are already expert sewers and have some spare time almost every day but not all-day blocks (which factories require). Our plan is to harness the assets of these women and the social cohesion of rural communities to create a low-cost and effective production process (w/few capital expenses). We are building an efficient and effective organization which can deliver consistently high quality products on-time and at competitive prices for sale at any grocery store not just “fair trade” stores.
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

We are working in El Salvador to offer an alternative to standard, factory-based, export manufacturing. FAVE Bags, a re-usable produce bag intended for sale in the US market, are being produced using a novel approach. In January of 2011, we began working with 25 women from San Pedro Nonualco and nearby villages. The women self-organized into seven different groups each of which is responsible for the assembly of 100-200 FAVE Bags, per month. These are delivered to a local coordinator who pays the women’s groups and ships the bags to the US for sale. The women are able to work in their homes (saving time and money from transportation) and on their own schedules (around meals, school hours, etc.). In addition to creating these immediate opportunities, we seek to foster their long term success by providing entrepreneurship training and a platform with which they can formalize and grow their enterprises. Raw materials and other necessities are purchased in bulk by the coordinator who then distributes them to the separate groups for production. With this decentralized model of production, FAVE Bag manufacturing creates far more benefits for the people and communities of El Salvador than a typical factory. With no infrastructure, minimal staffing, and the low cost of working in rural areas, FAVE Bags can expect to be retailed at competitive prices in the US. The benefits of this project don’t end in El Salvador; it is expected that each bag sold in the US will result in the avoidance of production, use and disposal of at least 150 plastic bags, a boon for the planet as well.
About You
Organization:
Sustaion Our World Enterprises
About You
First Name

Aaron

Last Name

Redman

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About Your Organization
Organization Name

Sustaion Our World Enterprises

Organization Country

, AZ, Maricopa County

Country where this project is creating social impact

, PZ

How long has your organization been operating?

Less than a year

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Innovation
What stage is your project in?

Operating for less than a year

Share the story of the founder and what inspired the founder to start this project

Aaron Redman spent two years as a Peace Corps Volunteer living in San Pedro Nonualco, El Salvador where we have begun this initiative. During that time Aaron grew intimately familiar with the many challenges this community and many places like it face, but he also realized that these places have a lot of assets which are not being utilized by traditional development. Aaron returned with a dedication to creating opportunities for the people of San Pedro Nonualco. Too often in development “experts” have brought their own ideas or technologies from elsewhere and tried to impose those solutions on a place with sometimes disastrous results. Aaron works from the opposite premise- begin with a particular community and search for solutions that leverage its assets to attack its specific problems. He is at home in San Pedro Nonualco and the people there are his second family. He found the knowledge he needed at the new Master's program at the School of Sustainability at ASU, which gave him the perspective, rigor and training required to create Sustainability initiatives. Additionally, while here in the USA Aaron has always sought to reduce his ecological footprint and support efforts to ameliorate troublesome issues such as the overuse of disposable plastic bags. Thus this initiative offers the perfect synergy of his activities here in the USA with his passion and dedication to the communities in El Salvador.

Social Impact
Please describe how your project has been successful and how that success is measured

In six months of operating this project has been very successful considering the limited resources and scale of this initial effort. This can be seen through several metrics.
Participation by women entrepreneurs: The continuing and enthusiastic engagement of the original 25 women who signed up demonstrates that this project offers them a worthwhile opportunity for improving their lives. “I love this opportunity, by being able to work at my home; I can earn the money I need so that my kids can get ahead and have the great future I wish for them.”
Money injected into local economy: In six months of operation ~$3,000 has been invested in the local economy of San Pedro Nonualco. One of the key metrics we have yet to fully develop is the hourly earnings of the participants, since we pay per bag produced. Until we collect more data we assume that continued participation can substitute temporarily.
Increased entrepreneurial and business skills: The participants have begun a year long course offered by a local NGO and completed several modules so far.
Sales of FAVE Bags in the US: So far 785 bags have been sold in the US at several retailers, farmers markets and online. Ultimately it is these sales that are the engine for the project and thus its success may be the most important metric. In addition this is an important metric for us because we estimate that each FAVE Bag purchase represents ~150 bag reduction in the need for disposable, plastic bags- a windfall for the Earth.

How many people have been impacted by your project?

How many people could be impacted by your project in the next three years?

101- 1,000

How will your project evolve over the next three years?

Rather than seeking to expand first, we will consolidate and improve upon our current system, a network of 7 groups representing 25 women. For the next year we will work exclusively with these women to improve the efficiency and ease of manufacture of FAVE Bags and tweak the logistics and communications until they are their most effective. During this time we will be increasing sales in the US. We estimate that we can double output before we need to begin to grow our production. We will do this first by slowly adding new groups to the network to a maximum of 12. This is a number that appears reasonable to expect one local worker to coordinate and manage. From there our expansion plan will be to create a new node in another El Salvadoran town with its own network of 5-12 women’s groups.

Sustainability
What barriers might hinder the success of your project and how do you plan to overcome them?

The most important barrier to the success of this project will be the sales (or lack thereof) of FAVE bags in the US. For this reason a designer and branding expert, Christen Forrester was brought onto the team from the beginning to help design the bags, create the look and labels and to craft an effective marketing campaign. Another barrier for sales is lack of knowledge about the concept of produce bags which will be addressed through advertising as well as an in-person at farmer’s markets and stores.

In El Salvador the biggest potential barrier for a project like this is a lack of trust and unfamiliarity with local traditions, laws and institutions. The reason for working in this community in the first places is Aaron’s deep relationship with the people and experience working in the local situation. The trust that was built after years of working in the community means that the women are willing to work and not get paid until the end of the month while the local postman helps to package and send the bags to the US for free because he sees the benefit for his community. The long-term success of this project will happen because of the local staff. To that end we have hired a local leader to facilitate and manage the decentralized production and are providing business and technical training to all the participants to increase their capacity for success. Finally, over the next ten years, the ownership of FAVE Bags will be passed to the local women who will during this time gain the experience necessary to own, operate and manage the business.

Tell us about your partnerships

San Pedro Nonualco Mayor’s Office: From the beginning we have been working closely with the local government to assure that we are in compliance with any local ordinances and maximizing our potential to bring economic benefits to the community.

CONAMYPE: This is a government ministry which facilitates training for entrepreneurs and small scale businesses. We have worked with them to provide monthly trainings for our participants.

Peace Corps El Salvador: Additional on the grounds support and initial help has been provided by Peace Corps volunteers located in and around San Pedro Nonualco.

Explain your selections

To start-up we have relied on capital from Aaron Redman, the Innovation Challenges Grant and hopefully Ashoka Changemakers as well! Once up and running though our only source of funding will be customers- buyers of FAVE Bags in the US (and eventually elsewhere as well). From the start our intention is to create a self-sustaining enterprises because this is the only way to create long-term viable opportunities for individuals and communities.

How do you plan to strengthen your project in the next three years?

We have three goals for our enterprise:

1) Improve our manufacturing network: This will including assisting the participating women in upgrading their sewing machines, formally incorporating in El Salvador, and improving communications/logistics. The outcome of these and other efforts will be to bring down costs and enable increased production levels.

2) Improve our supply chain: With this or other grants we will buy our raw materials in bulk, enabling us to significantly lower prices. Also we will work with experts to analyze and improve the sustainability of our supply chain (energy, materials etc.).

3) Create a nation-wide sales network: In three years we plan to have FAVE bags available in grocery stores across the US. We will do this by beginning in Arizona and expanding, state by state.

Challenges
Which barriers to employment does your innovation address?
Please select up to three in order of relevancy to your project.

PRIMARY

Underemployment

SECONDARY

Restricted access to new markets

TERTIARY

Lack of skills/training

Please describe how your innovation specifically tackles the barriers listed above.

Underemployment: There is very little employment in rural areas, and most people must cobble together various odd jobs to make ends meet, which changes dramatically by season. FAVE Bags will provide a steady stream of income for women by making their spare hours during the day much more productive without them having to journey to a distant factory.
Access: Without an effective and efficient organization and connection to a US-based organization, the barrier to accessing the US market, at scale would be impossible for this community.
Lack of skills/training: Basic accounting and other business skills are essential to succeed as entrepreneurs. Manufacturing FAVE Bags gives them a safe and steady space to practice and develop skills, which will also be directly imparted through trainings.

Are you trying to scale your organization or initiative?
If yes, please check up to three potential pathways in order of relevancy to you.

PRIMARY

SECONDARY

Enhanced existing impact through addition of complementary services

TERTIARY

Influenced other organizations and institutions through the spread of best practices

Please describe which of your growth activities are current or planned for the immediate future.

As described early, to meet projected sales growth we will create new ‘nodes’ of 5-12 enterprises in other municipalities in El Salvador. This will only come though, after we have consolidated and streamlined our system in San Pedro Nonualco. As we are already doing, this network provides the opportunity to add impact through complimentary services. Beyond the business training we will look into things from health care outreach to the micro-consignment model, as other ways to leverage our network to create income opportunities for our participants and improve the community. Finally we will work with researchers and students at Arizona State University to catalog and research our process and outcomes and to publicize and share the results and best practices with the broader community.

Do you collaborate with any of the following: (Check all that apply)

NGOs/Nonprofits, For profit companies, Academia/universities.

If yes, how have these collaborations helped your innovation to succeed?

Working with NGOs, local government and national ministries were all essential to our success in establishing our manufacturing network in El Salvador. We also have collaborated with a, small, local printing agency to produce all of our labels and tags. In the US, several non-profit grocers and farmers’ markets were essential to kick-starting our sales. Finally Arizona State University providing the nurturing environment that brought together a team of people of different backgrounds, as well as a grant for start-up which were the foundation of our success.