On Monday, July 19, representatives from dozens of companies gathered in Miami for a Base of the Pyramid (BOP) Modeling Workshop organized by the Inter-American Development Bank’s Opportunities for the Majority Initiative and Dalberg Global Development Advisors. The participants came from a wide variety of sectors, including construction, manufacturing, agro-industry, financial services and business consulting. But they all shared an interest in learning more about BOP business models – that is, how companies are finding new ways of engaging with low income communities.
After brief welcoming remarks from Opportunities for the Majority manager Luiz Ros, a panel took the stage to talk about some of the successful BOP projects already up and running in Latin America. Ricardo Charvel, a vice president at Mexican cement manufacturer CEMEX, spoke about his company’s first BOP project, “Patrimonio Hoy,” which was launched a decade ago and is still going strong. Through a microcredit facility, it allows low-income families to build homes incrementally. CEMEX has also introduced other BOP projects, like “Mejora tu Calle,” a microloan program through which residents of poor neighborhoods can participate in financing infrastructure improvements like paved roads. Marco Gorini of Vox Cred Tenda, a major mass market retailer in Brazil, explained how training and empowering small and micro business owners had become part of their overall corporate strategy. Josafat Solis of McCann Erickson Latin America, then gave a presentation with the provocative title “Latin America’s Largest Country is Not Brazil,” referring to the fact that the BOP consumer base in Latin America is 200 million strong, and its collective purchasing power makes it the third largest economy in the region. He shared some of the valuable insight he and his colleagues have gathered on the demographics, needs and preferences of these emerging consumers. [See the “Related Resources” box at right for links to slides from each presentation.]
Now informed by the experiences presented by the panel, the participants broke into small working groups for a first round of idea generation. Dalberg moderators presented a representative BOP family, the “Juarezes” – farmer father, vendor mother, three sons – and as they went around the group, helped each participants consider what his or her company could do for and with such a family, asking how members of the Juarez family might serve as consumers, employees, distributors or suppliers. Soon, the posters around the room were festooned with multicolored Post-It notes as people came up with ideas for each others’ companies as well as their own.
Over lunch, Luciana Aguiar of Plano CDE, a Brazilian research institute, gave a presentation titled “Myths and Realities of Low-Income Markets,” in which she challenged some of the preconceptions that exist about BOP markets. She also offered some fascinating examples of companies, including multinationals like Nestle, Unilever and Coca-Cola, who are using information about the base of the pyramid in order to develop new products and distribution networks specifically targeting low-income consumers.
The participants then broke out into a different configuration of small working groups, joining up with participants from similar industries. During this session Dalberg facilitators and OMJ experts assisted the participants to develop some of the ideas generated in the morning session into more detailed and concrete business concepts.
Next, Dalberg’s Paul Callan introduced the new Corporate Leaders Program for Success in Majority Markets. This program will choose, through a competitive application process, up to 10 companies with especially promising BOP business concepts. The selected companies will be able to receive valuable consulting services from Dalberg to assist them in developing their ideas into detailed business plans. Participants were given time to look over the application and seek one-on-one advice from the IDB and Dalberg experts in the room.
Opportunities for the Majority's Elizabeth Boggs Davidsen and Francisco Mejia then provided a recap of the concepts covered during the day and gave an idea of the experience of working with the IDB. As well as covering eligibility criteria, they spoke about the financial products (loans & credit guarantees) offered by the IDB and also touched on the technical cooperation component which often accompanies these products. After some closing remarks, the discussions and networking continued into the evening.
While those who attended the workshop were able to get a deeper understanding of the entire scope of possibilities when it comes to working with the BOP, as well as helpful guidance on the Corporate Leaders Program application, the program is open to all companies who are ready to get started on BOP projects. The application deadline is Monday, August 16, 2010 at 6 pm EST.
For more information about the program, including application forms in English and Spanish, visit majoritymarkets.org/corporateleaders.
