"Most companies would shy away from working with smallholders because of the challenges, but we have shown that it is possible and it can be done successfully."

Marco Cruz, Superior Foods International

Marco Cruz is CEO and president of Superior Foods International, a partner of the Sustainable Food Lab and a member of the Guatemala Highland Value Chain Development Alliance. We talked with him about the intersection of smallholder sourcing and development, organizational learning, and what this means for his company.

How did the Guatemala Highland Value Chain Alliance and Superior get started working together?

We were invited to join the Alliance by our colleagues at Sysco. The idea was to connect smallholder producers to Sysco, one of our biggest customers.

We have been sourcing from smallholders in Guatemala for 20 years, but these highland farmers were new to our supply chain and in dire need. They lacked access to financing, technology, and training, and were farming very small plots with steep slopes and poor soil. The Alliance has helped them to increase their yields and professionalize their farming practices and as a result, their incomes are increasing.

Since 2010, Sysco, the Food Lab, Oxfam, and Superior Foods have worked with our in-country teams at ADAM, a local NGO, and SUMAR our Guatemalan vegetable processing facility, to design and implement an inclusive business model that links small-scale highland vegetable farmers in Guatemala to modern markets. Over the past 4 years we have connected more than 300 new highland farm families into our supply chains. These farmers—40 percent of whom are women—are organized through producer organizations and have provided us with more than 400,000 pounds of broccoli.

We saw this project as an opportunity to learn more about the development impact of our sourcing and to validate the impact that we have in smallholder communities. Through this project we have been able to raise awareness of impact of sourcing this way.

How has your involvement in the Alliance changed the way you work?

One change is our working relationship with NGOs like Oxfam. There is a positive element to including NGOs in our work and I think NGOs are seeing the same thing for including the private sector in the initiatives. In the past we may have had antagonistic objectives, but to me the perspectives are not conflicting. We will benefit immensely from working together. In fact, I think that sustainable economic development will be limited without the complement of the other.

Also, the collaborative model developed as part of the Alliance could be applied in some of our other chains and the same or similar systems can be applied.

You have been sourcing vegetables from smallholder farmers for 20 years; tell me what you have learned in the process.

Doing business with smallholders is completely different than more professionalized large farmers. We are just much more involved in every detail of the production, including seed selection, and designing systems for production and transportation that make this viable.

Most companies would shy away from working with smallholders because of the challenges, but we have shown that it is possible and it can be done successfully.

In the past, some customers saw risks and obstacles when working with smallholders. That has been a challenge for Superior. We realized that we needed to design our sourcing and processing systems in a transparent way that would convince buyers that those risks are mitigated. This is tough, but not at all impossible.

So clearly you are not doing this for altruistic reasons, explain what the business case is beyond just securing supply.

There are many reasons why sourcing from smallholders benefits our business; one main one being that customers and consumers have evolved in their thinking around social equality and farmer empowerment. By highlighting the impact that Superior has in smallholder farming communities we have generated some brand trust and loyalty.

Our commitment to smallholders also helps us with recruitment of good employees. The current staff and Executive Team at Superior all feel proud of being part of this meaningful work. It attracts good people and motivates them.

Smallholder sourcing also opens new markets. It allows for some product differentiation. We are not really able to quantify this benefit at this time, but I think this will grow as we move forward.

What is the most surprising thing you have learned through your involvement in this project?

I have learned so much, but the thing that stands out the most to me is the value of investing in women. Throughout the 20 years of smallholder sourcing in Guatemala, I thought we were investing in 3500 families. Then someone asked me, “Are you sure you’re helping 3500 families?” I said, “Of course we’re helping all those families. What do you mean?” He replied, “The whole family? Do you have a roster?” We showed him the farmer roster and it included no women farmers, only men. We got the point.

We were supporting a status quo that needed to change. A direct benefit of working with the development community is that they brought this to our attention, and now we have an initiative to engage women in our supply chains. The research says that when women have more decision-making power the whole family benefits. We believe this.