Conscientious consumers are repeatedly encouraged to eat local, buy organic, seek out fair trade labels and ask about the traceability of a product’s supply chain. As sales of organic and ethically labeled products rise, companies both large and small have focused significant resources on this market segment. Small start-ups that entered the market at the beginning of this trend had a “first mover” advantage, but more recent social impact start-ups must ask how they can distinguish themselves in a growing and diverse market.
Last summer, I spent 12 weeks interning in Lima, Peru, with agribusiness start-up Shared-X. While my counterparts on Shared-X’s coffee and banana farms labored to harvest and package containers of ethically produced crops, my task back at the main office was to develop a brand and marketing strategy around Shared-X’s social impact value proposition.
Founded in 2015, Shared-X owns and manages five farms where it deploys advanced technology to sustainably increase yields in coffee, bananas and cocoa. Workers on these farms earn a fair wage, but Shared-X goes beyond ethical standards to have a broader impact on the surrounding community. By sharing its farming methods with neighboring farms, Shared-X enables them to increase yields by as much as four times over prior years. They aggregate harvests from participating farmers to secure international contracts, which an individual smallholder farmer could never achieve alone. At the end of the day, profits from the international sales are shared so that smallholder farmers gain not only from higher yields but also from higher profit margins.
Each social impact company or organization has a story of how it creates value for a disadvantaged group. However, the first challenge is to tell that story in a way that resonates with stakeholders ranging from the end consumer to channel partners and suppliers. Time and again, people would tell Shared-X about companies they thought were doing the same thing. In reality, they were only aggregating crops or providing processing facilities. Shared-X’s distinctive model creates a deeper impact than most companies in the same product lines, so it is important for Shared-X to tell its story.
However, even when a social impact company tells its story well, the story may not create value. Some businesspeople I met during my internship believed that meeting social and environmental goals was simply a requirement of doing business. Their perspective was that once most companies claim to promote social impact, it becomes a mainstream, required standard for all firms instead of a differentiating factor. The added value of a deeper impact would be diluted by the multitude of competitors making similar claims at a surface level. Thus, they would argue, instead of messaging its social impact, a company like Shared-X should focus on communicating the quality of its products and leave social impact and sustainability as a footnote.
Through my internship at Shared-X, I confronted these questions every day, but I also saw a solution within the emerging trend of storytelling. Any company can add an ethical label to a product or make a one-line claim about sustainability. The question is whether that claim is part of a cohesive story. When I traveled to Shared-X’s farms, I heard the stories of farmworkers and neighboring smallholder farmers. Their accounts brought the Shared-X model to life, but they did not fit into a single, prescribed model. Some stories were about access to clean water. Others emphasized how higher yields or having a job at a processing facility benefited an entire family. Through the diversity of stories, I saw that a truly impact-focused company like Shared-X develops stories of impact as a byproduct of its everyday operations. In that sense, the impact is simply part of doing business. However, those stories also show that holistic impact is not something that can be manufactured for publicity or counted like a metric for an annual ethical certification review. The diversity of stories that flow with the creation of shared value and high-quality products marks the difference between a high-impact company like Shared-X and others that simply meet industry standards. While not every consumer will take the time to read the story on the back of a coffee bag or scan a QR code to learn about a banana’s supply chain, Shared-X is distinguishing itself as a start-up with a cohesive story that will be sustained through the test of time.