Examining the Sustainability of Fair Trade Social Enterprises in an African Context: A Case Study of Meru Herbs in Kenya

• In Event: Sustainability management: Drivers, challenges and opportunities

Abstract

Social enterprises, a form of third-sector organization, have been identified worldwide (Thompson & Doherty, 2006) and have had their pluralism recognized (Coraggio et al., 2015). Thus, contextual analysis for African countries (Ciambotti et al., 2023) in resource-constrained environments (Ciambotti & Pedrini, 2019) is crucial. Understanding the operation and survival of African social enterprises is fundamental (Farhoud et al., 2023) to sustainable development and poverty reduction in sub-Saharan Africa (Rivera-Santos et al., 2015). One social enterprise arena to be explored is that of fair trade social enterprises (FTSEs), which are organizations focused on fair trade in trading activities (Huybrechts, 2012). Kenya was chosen as the context for this study, as it is “home” to social enterprises (Ciambotti & Pedrini, 2019, p. 4), with around 44,000 recognized social enterprises (British Council, 2017).

The research question of this study is to identify the key factors influencing the sustainability of an FTSE in rural Kenya. The study employed a case study approach, using secondary data, interviews, and direct observations. It applies the “organizational response analysis method” (Shigetomi, 2021) to analyze the creation of an organization and the response mechanisms to an FTSE’s business as an “output” of the community. It investigates Meru Herbs, an FTSE that has worked with local and international stakeholders for more than 30 years. The organization processes fruits and herbs from contract farmers into jams, herbal teas, and other products in its factory. It also sells organic products domestically and internationally in cooperation with international FTSEs in Italy, the United Kingdom, Canada, and Japan.

It was found that the following factors have allowed Meru Herbs to operate sustainably to date: (1) community acceptance of the irrigation project prior to starting the organization; (2) strong ties with a religious institution; (3) collaborations with international FTSEs for fairtrade businesses; (4) contributions from the Italian founder; (5) participation of rural women in the factory and contract farming; and (6) the Kenyan national cultural value, Harambee, which is the mindset of collective efforts to develop social enterprise for community benefits (Vershinina et al., 2018). However, severe water shortages over the last 10 years due to the increasing number of farmers using one river as the intake for irrigation since its inception, along with climate patterns changing between dry and rainy, have seriously threatened the sustainability of the organization.

This study provides a deeper understanding of the factors influencing the sustainability of an FTSE in the African context. The case study offers insights into how the organization has operated and survived in a resource-constrained environment in rural Kenya. It highlights the factors that have enabled its sustainability, including community engagement, strong partnerships with international FTSEs, the participation of rural women suffering from a lack of economic opportunities, and the Kenyan cultural value that influences the behaviors of the people involved. It also highlights external factors threatening the organization’s sustainability, such as water shortages and changing climate patterns.

References

British Council. (2017). The State of Social Enterprise in Kenya. https://www.britishcouncil.org/sites/default/files/state_of_social_enterprise_in_kenya_british_council_final.pdf
Ciambotti, G., & Pedrini, M. (2019). Hybrid Harvesting Strategies to Overcome Resource Constraints : Evidence from Social Enterprises in Kenya. Journal of Business Ethics, 0123456789. https://doi.org/10.1007/s10551-019-04256-y
Ciambotti, G., Pedrini, M., Doherty, B., & Molteni, M. (2023). Unpacking social impact scaling strategies: challenges and responses in African social enterprises as differentiated hybrid organizations. International Journal of Entrepreneurial Behaviour and Research, 29(11), 25–57. https://doi.org/10.1108/IJEBR-02-2022-0156
Coraggio, J., Eynaud, P., Ferrarini, A., Filho, G. C. de F., Gaiger, L. I., Hillenkamp, I., Kitajima, K., Laville, J.-L., Lamaitre, A., Sadik, Y., Veronese, M., & Wanderley, F. (2015). The thoery of social enterprise and pluralism: Solidarity-type of social enterprise. In J.-L. Laville, D. R. Young, & P. Eynaud (Eds.), Civil Society, the Third Sector and Social Enterprise: Governance and Democracy (pp. 234–249). Routledge.
Farhoud, M., Bignotti, A., Hamann, R., Kauami, N. C., Kiconco, M., Ghalwash, S., De Beule, F., Tladi, B., Matomela, S., & Kgaphola, M. (2023). African perspectives on researching social entrepreneurship. Social Enterprise Journal. https://doi.org/10.1108/SEJ-04-2023-0053
Huybrechts, B. (2012). Fair Trade Organizations and Social Enterprise: Social Innovation through Hybrid Organization Models. Routledge.
Rivera-Santos, M., Holt, D., Littlewood, D., & Kolk, A. (2015). Social Entrepreneurship in Sub-Saharan Africa. Academy of Management Perspectives, 29, 72–91.
Shigetomi, S. (2021). Nouson Kaihatsu niokeru Jyumin Soshiki to Chiiki Shakai [Residents' Organizations and Communities in Rural Development]. In Shigetomi, S. (Ed.) Chiki Shakai to Kaihatsu [Local Initiatives in Development] Vol.3, Tokyo, Japan: Kokon Syoin.
Thompson, J., & Doherty, B. (2006). The diverse world of social enterprise: A collection of social enterprise stories. International Journal of Social Economics, 33(5), 361-375. http://dx.doi.org/10.1108/03068290610660643
Vershinina, N., Woldesenbet Beta, K., & Murithi, W. (2018). How does national culture enable or constrain entrepreneurship? Exploring the role of Harambee in Kenya. Journal of Small Business and Enterprise Development, 25(4), 687–704. https://doi.org/10.1108/JSBED-03-2017-0143

Author

• Tomoko Ichiyanagi, Ritsumeikan University, Open Innovation & Collaboration Research Organization