Inclusive Agri-food Enterprise
Starting a locally-sourced grocery
Ma7ali (meaning “local” or “my store” in Egyptian Arabic) is a locally-sourced gourmet grocery and delicatessen.
Ma7ali’s grocery includes a wide range of both fresh and packaged products sourced from local small-scale enterprises in Egypt. These include: dried fruits and vegetables, spices, spreads, pastas, breads, soups, cheeses, oils, honeys, eggs and meats, and raw produce. They are sourced from across the country, including Cairo, Sinai, and Siwa.
In addition, Ma7ali produces its own line of food products using ingredients sourced from local farmers.
Rooted in values
Ma7ali’s vision is to foster a food culture in Egypt valuing food that is good (flavorsome), clean (healthy and sustainable), fair (for producers and consumers), and local (indigenous, locally-produced).
The Starting Point
From their past experiences with farming and food communities, the Ma7ali team knew that while much knowledge still existed in Egypt around traditional and heritage food in rural communities, this was rarely valorized. With limited rural opportunities and increasing urban migration, food knowledge and practices were disappearing.
In Cairo, there were next to no stores or markets focused on providing high-end Egyptian heritage food products. Most high-end supermarkets sourced food from large farmers and factories, with small-scale farmers and producers given few entry opportunities. Very few of packaged products in supermarkets were healthy, sustainably produced, based on indigenous knowledge, and traded fairly. Contracts, with long payment delays (often 90 days), were also targeted towards large-scale industries, prohibiting small-scale enterprises from participating.
Standardization of small-scale food products across the country was widely variable. Quantities were not always guaranteed, and product quality was often quite low.
Many small-scale food producers themselves faced challenges related to access and knowledge of infrastructure. Most of the available food production equipment in the country targeted large factories and restaurants. Much small-scale equipment was not available locally and had to be specially ordered from abroad. Knowledge of how to use that equipment was limited.
In addition, small-scale producers faced challenges in packaging and ordering systems. Food packaging – especially environmentally sustainable packaging – could often be difficult to find, and much of it was required to be ordered in large quantities, which was cost-prohibitive to small-scale producers. In addition, most small-scale producers and farmers lacked efficient ordering systems, including proper invoicing and receipting, effective communication channels, and adequate transportation and delivery equipment.
Making it Work
Before launching the store, the Ma7ali team developed a core set of values that would be used to guide their decision-making in sourcing, producing, and selling food products. Values were developed through a three-step process. Prior to opening the store, the team traveled the country discovering and tasting heritage foods and dialoguing with farmers and producers. Assessing opportunities and needs of the small-scale food community, they researched international value systems and in particular used the core values of the international Slow Food Foundation (good, clean, and fair) as a guide. Third, they worked to adapt these values to local contexts and needs, and outlined what each of those values meant to the Ma7ali store.
For the food products Ma7ali features in its store, they choose suppliers based on three criteria. The first is a knock-out test – whether the products they offer are produced locally. Suppliers that do not produce locally are immediately turned away. Second, they test quality, including taste, packaging, and shelf-life. If quality isn't up to the standards of the store, they offer feedback to the supplier for how they could improve it. Third, they host an open conversation with the producer around their values, including how they produce, and what they aim to achieve with their products. If the producer does not align with Ma7ali's stated values, they together explore ways the supplier could attempt to better reach these values.
Sourcing raw products
In production of its own meat, cheeses, and sauces, Ma7ali seeks as much as possible to source ingredients from local farmers employing clean and sustainable farming techniques. Often this will initiate through exploration of small-scale farmers that can maintain a certain level of quality. The team then has a series of conversations with the farmers, determining how they may be able to improve their practices to be more clean and environmentally friendly.
To maintain quality and adhere to values, often farmers need a structure for consistent credit. Ma7ali has partnered with several farmers, including for poultry and meat, to offer a consistent line of credit that helps the farmer purchase inputs such as animal feed and keep the production going. Ma7ali provides the credit and places the orders in advance, providing a steady and guaranteed income stream for the farmer.
Ordering and payments
When negotiating prices and ordering systems with producers, Ma7ali first analyzes price margins that will work best for the store. Producers are offered contracts that include a percentage sales cut by Ma7ali, which are similar to current market rates.
Ordering and delivery systems are managed in ways that make it easy for the supplier. Because many suppliers have not established formalized ordering systems, ordering and invoicing is adapted to each supplier's needs, which may be through email, WhatsApp, or on the telephone. Ma7ali always attempts to keep its own computer records of both orders in deliveries, helping to reduce common mistakes in these processes. In particular, Ma7ali asks suppliers about their production schedule, and attempts to place orders enough in advance giving suppliers the time needed to plan and produce.
Payments are made frequently and regularly, often several weeks and no later than one month after the last delivery. This helps small suppliers maintain a positive cash flow. Payments may be made in cash or bank transfers as the supplier prefers.
Over the years, in producing its own products and helping to solve problems of its suppliers, Ma7ali has gained much experience in small-scale production infrastructure. Ma7ali has attempted to share this knowledge and infrastructure in a way that is mutually beneficial. When certain producers face challenges finding needed equipment or packaging, Ma7ali will provide advice as to where to look and how to use certain equipment.
For packaging in particular, Ma7ali collaborates with several producers to purchase and distribute packaging in bulk. The store will buy hundreds of glass jars at a time, and sell them to producers at cost. This reduces costs for both Ma7ali and the producers, while not requiring too much storage space for Ma7ali. It also increases access to more sustainable packaging options that act as alternatives to plastic.
Ma7ali seeks to share information with its customers about the origins and processing techniques of the products it sells. With each supplier, the store asks a series of questions about each food product, including how traditional or indigenous it is, whether it is locally produced, the cleanliness and sustainability of its production, the quality and health value of its ingredients, and the fairness of the prices for producers and their own suppliers.
This information is logged in a shared document, which can be referred to by any employee at any time. When customers ask about certain products, Ma7ali store employees refer to this document to be as transparent as possible. This allows open and honest relationships with Ma7ali's customer base.
For Ma7ali, helping farmers and producers improve the quality of their products is a continual process. Ma7ali communicates feedback from its staff and customers on quality, presentation, marketing, and perception. These conversations are always personal, either through phone calls or one-on-one meetings – email and WhatsApp are rarely used. This helps ensure the information shared is based on trust, communicated properly, and allows for questions and clarifications.
By providing small-scale suppliers with timely information, Ma7ali has help many overcome certain barriers they may not know how to solve, or even be aware of – all while helping the store provide the best products they can.
Lessons Learned on Local Sourcing
Build the market first
At the start, Ma7ali would begin by searching for clean, indigenous, and local products to source, and then develop products they produced in their deli. But from the farmers, they would faced challenges in consistency of quality. On the other hand, the store itself often faced difficulty in guaranteeing regular order quantities due to variance in sales to their customers.
Over time, however, the Ma7ali team found the opposite approach more successful. They would begin by building a market for a product, sometimes based on a customer request. With customers, they would perform small-scale tests using everyday ingredients bought from local markets until it reached popularity – and then turn to the farmers to source clean, quality products.
This occurred, for example, with Ma7ali's smoked chicken. The team begin producing the product in response to a customer request, using industrial chickens available on the market. Once the product grew in popularity and achieved a relatively guaranteed market presence, Ma7ali then went to a farmer in their network and asked him to produce a certain number of chickens at a specific level of quality and cleanliness. This provided the farmer with a guaranteed market, acting both as a means of financial sustainability as well as a financial incentive for using more sustainable farming techniques.
Trusting in suppliers
While Ma7ali has a step-by-step process for choosing its suppliers, trust plays as an important factor in the final decision-making. In the beginning, they worked primarily with individuals and organizations they knew well and trusted. As they expanded, because the team has limited resources for monitoring adherence to values, trust has been one of their most important criteria for choosing whether they work with suppliers. Strong, trusting relationships with their suppliers helps guarantee the quality and standards of their products to their customers.
Trust is built both through continual direct conversations, conversations with others that know the individual and their history, as well as both the store and supplier proving their adherence to shared values and agreements. Often, a decision may be based simply on a "gut feeling". In the end, if the Ma7ali team feels they cannot trust a supplier to speak honestly, be transparent, and act fairly, they may turn down the supplier.
"Intention" towards values
Ma7ali has never required its suppliers to adhere 100% to its values. They recognize that many challenges in Egypt – from pollution, to infrastructure, to information access – are currently insurmountable. They thus often put more emphasis on intention to work towards achieving values, rather than actual ability to achieve them.
For example, requiring products to be only organic and GMO-free may only be possible in certain desert environments that have been untouched by pollution. Ma7ali instead works with suppliers that attempt to be as clean as possible. Others may use only imported products, but this may be because they are unaware of how to source locally. Ma7ali may work with these producers to think through how to better source locally, and monitor if and how they change their production habits in the future.
Ma7ali has begun to grow, and may soon be launching an online store. However, as they grow it has become more difficult to sustain informal relationships and conversations. Ordering and customer feedback systems across many small-scale producers have become very time intensive. Attempts to reduce the time investment and its costs, without sacrificing the human relationship, is proving difficult.
Guaranteeing quality & values
In recent months, Ma7ali has been trying to systematize the process for accountability and oversight. Currently Ma7ali is gathering information on their suppliers adherence to values and quality. Their aim is to post this information on our website, helping to add an extra level of transparency and make themselves and their producers more publicly accountable to their values.
However, as Ma7ali grows they also have less oversight over their suppliers' adherence to agreed-upon values, as well as changes they have made towards better achieving those values. Trust cannot be the only determing factor. Sometimes feedback given to suppliers is not considered or listened to. There is often no way to know how accurate suppliers are in the information they provide.
Many of the small-scale producers still face significant challenges in infrastructure. Investing in proper production spaces can be cost-prohibitive. Much small-scale equipment still is not available on the local market. And transportation can be a major challenge for producers – especially those that come from afar and lack their own means of personal transportation, often using public transport, which can be inefficient and costly.
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