The Challenge
The Cusco region of Peru houses one of the world’s true wonders and most popular tourist attractions, Machu Picchu. The hospitality industry has been growing at a steady rate over the years; however, this has not translated into a parallel increase in employment opportunities for local residents. Many smallholder farmers are unable to meet the rigorous demand of the local hotels, high-end restaurants or supermarkets. These barriers prevent these smallholder farmers from selling their products to these high-value buyers.
This limited supplier capacity presents additional challenges to the local hospitality industry as hotels, restaurants, and supermarkets must procure their products from more reliable sources outside of the area. This logistical issue is compounded by Cusco’s remote geographic location which forces these companies to incur unnecessarily high transportation costs.
The Innovation
Cusco’s hospitality and agricultural industries have untapped potential which creates a situation ideally suited for capitalizing a Supply Chain Enterprise. We understand that in order to create a “win-win” relationship for all stakeholders, we must work with the smallholder farmers, equipping them with the tools and capacity they need to meet the demand requirements of the industry, and, the high-value buyers.
Therefore, in coordination with MINCETUR (the Peruvian Ministry of Foreign Trade & Tourism), we have developed Alianza Cusco, a pre-incorporated Enterprise that will address gaps within the hospitality industry while significantly contributing to poverty alleviation.
The Enterprise will purchase products from local smallholder farmers and sell them to Cusco’s hospitality and restaurant industry. Any profits realized from these sales will be re-invested into the Enterprise.
The Impact
Our Supply Chain Enterprise model effectively removes the typical barriers between smallholder farmers and high-value buyers. Alianza Cusco is expected to generate over $5,000,000 in aggregate supplier income over the next five years, and over 1,800 beneficiaries will be incorporated into more formal value chains, allowing them to earn more income.
