Sundial Brands Community Commerce program

Global Shea Alliance

Shea Trade and Industry

Conference

NYC 2014

SheaMoisture and Nubian Heritage was founded on the streets of New York by way of

Liberia and Sierra Leone. Rich’s grandmother, Sofi Tucker, started trading shea nuts at

the village marketplace in Bonthe, Sierra Leone in 1912 at the age of 19. The widowed

mother of four started making shea butter-based concoctions at home and was selling

them throughout the countryside. These products are her legacy

Co founders Richelieu Dennis and Nyema Tubman found themselves without a country

to return to after graduating college in the US with civil wars taking place in their native

Liberia. Richelieu had experience making products from shea butter from having spent

summers working for his grandmother in Sierra Leone.

Richelieu and Nyema started making products in their kitchen and selling them on the

streets of Harlem, they soon developed a distribution network.

Today, NH and SM products are sold all across the United States in every state, and

are being sold in Canada and on-line everywhere, Sundial employs over 200 people

SheaMoisture Products

SheaMoisture Products

Nubian Heritage Retail Displays

SUNDIAL’S COMMUNITY COMMERCE

Thought Leadership in Socio Economic Empowerment through Sustainable Commerce in Indigenous Supplier Communities

Community Commerce: What is it?

A business model that recognizes poverty alleviation is best attained through increased, mutually beneficial commercial activity, and linking producers in developing countries to the global economy and treating them as equal partners in business relationships. It is a model that empowers people in our supply chain, especially women. Sundial is establishing this model and sharing it in the shea industry. We are starting with shea and then moving to other raw and semi-finished materials in our supply chain.

Community Commerce: Why we do it

To alleviate poverty in our supply chain— • Recognize and pay for value of

labor in production process • Invest in cooperatives to

decrease labor and environmental impact, and improve efficiencies

• Invest in value added production to expand commercial activity of cooperatives

• Shea industry is highly unregulated and not well understood

• No central pricing or commodity market for shea nuts

• Industry dominated by a handful of major industrial processors

• Women collector groups and shea butter processors have no negotiating or bargaining power in the marketplace

• Roughly 90% of shea products go into confections and the edibles industry

Community Commerce The Shea Industry

• Five cooperatives consisting of 300 women supply shea butter

• For each kilo, Sundial pays an “ethical wage premium” to the women directly on top of the market price paid for the raw butter. Equal to about 10%-depending on market price

• According to our research of labor and cost inputs in the traditional process, paying this premium effectively doubles their wage for production of raw butter.

• Our aim is to ensure the members each at least double the daily minimum wage (presently roughly $2.20 in Ghana)

Shea Butter Supply Chain in Ghana

• The program also is procuring semi-finished soaps from two cooperatives: black soap and virgin shea soap

• Semi-finished soaps are blended in our bars of soap with our own ingredients and fragrances

• Coops will be paid for soap production and a back-end royalty for each bar sold through this program

• We will package and distribute nation-wide in Target retail outlets under a special promotional program

• Potential for coops to earn thousands of dollars annually through this program

Shea Butter Supply Chain in Ghana

• Starting program to link coop with communities that engage in fruit collection and nut yielding

• This has the potential to benefit an additional 1,250 women in Ghana

Shea Butter Supply Chain in Ghana

• Have a grant agreement with SNV Netherlands office in Accra to provide direct support to cooperatives for the following:

• Invest in energy savings technologies to reduce cost of inputs and decrease labor and make process more environmentally friendly—less firewood

• Improve health and safety conditions of coop processing centers

• Train coop leadership in business development and record keeping, fair trade

Shea Butter Supply Chain in Ghana

• Grant to SNV includes funds to purchase updated processing equipment for the coops and invest in energy savings production methods

• Increased production capacity per woman will increase yield and decrease cost of production

• Women earn more for their labor

• A small portion of the wage premium is given to coop central fund for additional investments in the coop and community projects

• Coops develop sustainable production capacity to increase production and market products to additional clients. Our investments aim to help the coops thrive as businesses

Shea Butter Supply Chain in Ghana

Community Commerce Impact

• Improve on fair trade by paying a fair wage component directly to 300 women to double their incomes, and higher prices to 1,250 collectors

• Investments in production improvements and energy efficiencies will result in wider profit margins for producers (decrease labor input)

• Investments in value added processing will increase commercial activity (soap, black soap)

• Increase purchase of shea butter from 25% of our annual usage to 100% in 2014 through community commerce

• Buy semi-finished back soap and virgin shea soap at premium wage price and pay a back end royalty to increase income of soap producers

• Increased income through a model that values the wage input

• Helps cooperatives understand the value of their labor and appreciate the concept of calculating cost of inputs and production efficiencies

• Imparting the Value of branding products to improve marketability of goods

• Help coops with the capacity to move onto producing additional value added products that Sundial can help them market through our nation-wide distribution channels

• Share and learn with others in the industry with the ultimate objective of improving the livelihoods and working conditions of all in the supply chain

Implications

Community Commerce: Validation

• Monitor and evaluate the program by partnering with SNV, an international NGO to train cooperatives and introduce energy and production efficiencies in Ghana

• In the application stage to obtain a Fair for Life handler certification from IMO