Over 75% of Uganda’s population live in rural areas (Uganda Bureau of Statistics: 2020 Statistical Abstract). Most of these rural dwellers also make up the bulk of the low-income groups with limited access to nutritious food, jobs and social amenities that urban dwellers enjoy.
Yellow Star, one of the Innovations Against Poverty (IAP) -supported companies in Uganda, produces quality fortified and blended holistic nutritional soya, millet, maize, rice, and cassava flour is changing this narrative one rural community at a time. Having understood the business opportunities available in low-income markets, Yellow Star developed affordable packaging that could allow the company to sell its nutrient-rich instant flour to low-income communities at half the price.
In under three years since it was selected as one of the eight companies in Uganda to benefit from the IAP Innovation Challenge Fund, Yellow Star has increased its production capacity, producing 297 tonnes of different products (millet flour, soya rice flour, pure rice flour, soya rice flour mixed with oats and milk, soya rice mixed with silverfish). Of these, 123 tonnes were sold to low-income markets, impacting the lives of 13,300 low-income people.
Better quality of life
Low-income markets represent a large business opportunity. They embody a significant consumer market that is often underserved and provide potential labour, supplier and distribution channels that can support expanded production and market supply. This offers significant scope for entrepreneurs like Yellow Star to positively impact low-income people’s quality of life, which is one of the objectives of the IAP project. In 2018, Yellow Star partnered with Healthy Entrepreneurs, a community-based social enterprise that specialises in the implementation of last mile distribution models of reliable products and information. Their partnership has increased incomes for 876 (838 of whom are women) low-income people, who are now employed as last mile distributors and sales agents of Yellow Star’s nutritious food products to consumers in hard to reach and remote areas.
The company also signed supplier contracts with 13 farmer groups working with over 2,897 smallholder farmers (2,030 women). These were all trained on good agricultural practices such as soil testing, garden preparation, good seed selection, post-harvest handling of crops and bookkeeping. With the contracts and farmers trained, Yellow Star now has a guaranteed supply of quality grain for processing, and the farmers have an assured market for their grain, a win-win situation for all.
The company is however not sitting on its achievements. With support from IAP, the company was able to put together a new proposal for additional investment. Subsequently, Yellow Star secured a loan from Uganda Development Bank at a significantly lower interest than commercial banks. The company used part of the funds to complete their processing factory and invested the rest of the funds towards expanding their distribution channels. With their new modern processing factory's construction now complete, Yellow Star expects to increase their production capacity from 215,500 kg to 1,460,000 kg per annum. In anticipation of the increase in production, Yellow Star is already strengthening its partnerships with more distributors and companies to enter high consumption communities such as refugee communities and hospitals. The company has already signed a partnership agreement with Caritas Uganda to supply quality nutritious foodstuffs to communities leaving in IDP (Internally Displaced People) camps.
'My company has grown to a higher level largely because of the support we got from IAP. When you have partners like IAP, you can grow more than when you are on your own. Through the technical and business support from the IAP team, I have gained a deeper and broader understanding of my business and its impact beyond just the operations of the business,' Florence Okot, Founder of Yellow Star, said.
IAP is funded by Sida (Swedish International Development Agency) and managed by SNV in partnership with BoP Innovation Center and Inclusive Business Sweden.