Friday, May 18, 2007

Bicycle Vendors spreading Nutrition

When I was in Ghana last summer I often patronized Fan Milk bicycle vendors for an afternoon ice cream treat. They represent a highly successful microfranchise model. Fan Milk itself has total assets of US $17.4 million, provides indirect employment to over 8,000 and was awarded the "Business of the Century" Award at the Millennium Excellence Awards in Accra.

An individual can become a vendor for US $22 which goes towards purchasing the bike. They sell a simple line of products, namely yogurt, chocolate milk, ice cream, and fruit popsicles. Each day the vendor buys US$33 of inventory and can make an average daily profit of $5.50 (even higher in the dry season). Vendors have the option of returning the bike if they leave the company. Vendors average 8 years with the company. Vendors can move up in the company or purchase additional bikes and sub-lease them out to new recruits.

As the franchisor, Fan Milk provides free equipment repair, biannual training on product handling and hygiene. They provide the option of health insurance to vendors. They require US$.55 per day in forced savings, which Fan Milk distributes when they leave the company.

This example has so many social benefits: environmentally friendly bicycles, high nutritional product distribution, positive employee packages (insurance, education, etc) and a high provider of employment. My major criticism of the model would be the amount of trash generated and littered from the individual packets. After plastic water sachets, the bright pink Fan Milk packaging was the most common site of trash.

This model reminds me of a couple other projects:
The recent Grameen-Danone yogurt partnership highlighted onDefeatingGlobalPoverty.

Design for the Other 90%exhibit in New York, Transportation section.
Practical Action's collection of bicycle modifications and trailers as well as the idea of a bicycle ambulance.

I think the bicycle vendor model as a microfranchise can be applied to so many different products.