Sustainable Business Spotlight: Algramo
A company based in Santiago, Chile is revolutionizing the way we package, distribute, and buy our staple foods. Algramo, (Spanish for 1 gram), was founded by José Manuel Moller in 2012 after a period of time spent living and working in one of Chile’s poorest communities.
Moller realized that much of the cost attached to the food we buy is the result of a convoluted means of distribution and a general lack of access to food in bulk. The increase in cost amounts to a “poverty tax” as people with low incomes and those who are living in poverty have less access to food in bulk, and end up paying more for smaller amounts. If you could cut out the middle man and provide a means for people to have more direct access to food, you could simultaneously provide a needed service sustainably, and help to improve people’s lives in a concrete way.
Moller, who was instilled with an interest in social justice and sustainability from an early age, took this realization and ran with it. He used contest awards from Universidad Católica and Desafío Clave 2012, a government sponsored innovation contest, and succeeded in developing the technology which underpins their trademark product dispensers in 2012. He created a unique vending machine that dispenses products in bulk. The machines were originally configured to dispense a slightly less revolutionary product: detergent. Soon, the company had placed 20 prototype machines in Juechuraba, Chile.
Algramo soon perfected the technology which underpins their current food dispenser, making it capable of dispensing up to 6 different foods. Mainstays like rice, beans, lentils, sugar, and chickpeas, as well as detergent, can be purchased according to weight in reusable containers that customers are encouraged to bring back on their next visit. This reduces packaging waste and further extends the company’s philosophy of sustainability.
An interesting aspect of this project is the relationship that Algramo has with the stores it serves. Moller recognized from the beginning that the stores in the community provided a feeling of stability and played an important social role. Moller said, “Going to the corner store is really the only time people talk to their neighbors. We want to preserve this connection.” Algramo isn’t trying to replace stores and storekeepers with vending machines. Instead they are building relationships with owners to forge a mutually beneficial partnership. Algramo installs the dispensers (free of charge), transports the product directly from the supplier to stores, and splits profits from sales evenly with the stores it supplies. This sustainable business model translates to an estimated 40% reduction in cost for customers, and gives small businesses a way to compete with larger chains. Algramo is currently in partnership with 474 stores, and is seeking funding to scale up their operations and expand into low-income communities throughout Latin America.
It’s refreshing to come across a company with a potential for profit that is able to simultaneously encourage real environmental, social, and economic sustainability for its customers and partners, and provide a high quality product. Algramo’s people-first philosophy shines through every aspect of the project, and the result is a green business model that is beneficial to many people on multiple levels. Algramo recognized an ignored food gap and filled it (a food gap that also exists in many low-income communities in the United States), and in the process, has shown that there is room in the marketplace for a truly innovative company driven by the principles of social change.