There’s no denying that charcoal cookstoves are a huge problem in Africa. Used to cook meals in many family homes, they contribute to massive deforestation to create the charcoal, which is expensive to buy, and when they are operated, they fill homes (and lungs) with dirty black soot. And, it’s hard to control the temperature of the cooking flame. Imagine cooking by an indoor campfire for every meal of your life.
There are many companies and NGOs working to attack the problem from different angles. We’ve covered solar cookstoves a few times here on TriplePundit before, and they have an obvious benefit with their clean, free fuel. However, they still lack the ability to control temperature and are difficult to use indoors unless you have a lot of windows. None of these solutions has managed to gain traction despite the multi-million dollar economic opportunity they represent.
One company, CleanStar Ventures, understands both the financial opportunity and the social and environmental imperative. CleanStar invests in, builds, and scales triple-bottom-line business models in emerging markets around the world. CleanStar Mozambique, their latest and fastest growing project, was founded to tackle the cookstove problem with a bilateral solution: new clean-burning ethanol stoves and an ethanol processing facility to fuel them. This full-service solution means that they’re creating jobs not only for the folks who market and sell the stoves, but for producers and cassava farmers to create the ethanol. Thus far, they’ve had multiple investments in the 7-figure range from multi-national corporations including Novozymes, ICM, and Bank of America.
We’ll be covering the entire value chain in a series of posts – starting with this simple question: how do you enter a market that is pretty much entirely fragmented with individual charcoal vendors and stove welders? Try a western model, applied to an African audience: the Avon lady.
CleanStar Mozambique has been moving fast, with a staff of 15 on the ground and two stores selling stoves and fuel in Maputo, the capital of Mozambique, in only two years since the venture began.
The key to their success has been a focus on local need and local innovation. Says Stefan Maard, Senior Advisor, Sustainability Development at Novozymes, and one of CleanStar Mozambique’s partners on the project, “There’s a reason I’m not in charge of marketing.” Despite the high financial stakes involved, the managers trust that locals understand the needs and opportunities better than an outsider might. They’ve settled on an old but reliable marketing plan: bold, consistent branding of a local name, NDZiLO, door-to-door marketing, and doorknob hangers. The staff goes door-to-door in neighborhoods demonstrating the products and leaving door knob hangers when no one is home.
And it’s working. NDZiLO has received 3000 pre-orders for the stoves, despite the fact that they’re nearly 10 times more expensive than a traditional charcoal stove and the fuel also costs more.
While health concerns and carbon emissions associated with charcoal smoke are the biggest concerns sustainability advocates have about the traditional cookstoves, they are barely mentioned in the pitch and door hangers.
The local sales and marketing director, Thelma Elizabeth Venichand and her team decided to focus on the real pain points of their customers: convenience (the ethanol stoves heat up instantly and the level of heat is controllable), safety (local LPG alternatives have a reputation for exploding on occasion), and cleanliness (what self-respecting woman wants her hands, face, and home covered in soot?) Sales have been much higher than expected and CleanStar Mozambique hopes to open 200 stores by 2014.
Says Maard, “We’re not patronizing people. We’re not trying to drop in a solution to a problem we see. We’re looking at the people of Mozambique as real customers with real concerns and trying to meet them.”
Greg Murray, Chairman of CleanStar Mozambique, says that the key to his ventures’ success is traditional market segmentation: they’ve tapped into the 70 percent of urban residents who make up the low- and medium- income brackets between $100 and $500 per month – enough money to spend a little bit to make daily life a lot easier.
CleanStar is pushing hard to make this venture a success and is currently subsidizing the cost of the stoves by over 100 percent. But, since they will benefit financially from the sale of the fuel, it’s a great plan to gain customers.
Check out this video to see a demonstration of the stoves in action and the joy and passion NDZiLO employees bring to the sales process. (They even love to sing!)
*Video by Novozymes
*Travel and accomodations to Mozambique provided by Novozymes