Concept

Apply the “Avon Lady” sales model to train, equip, and deploy individual merchants to sell goods that treat the diseases of the poor and promote health.

Use a market-based approach to increase access to basic health items by:

Making it profitable for mobile salespeople to sell in their communities.

Offering products that are otherwise unavailable or unaffordable to the poor.

Model

Employ franchise business model: methodical screening for agents, strict quality control, uniform branding and product mix, economies of scale, penalties for violating franchise rules.

Partner with microfinance institutions (BRAC in Uganda), local consumer product distributors, NGOs and community groups to train loan clients to sell health and hygiene products door-to-door.

Extend credit to these salespeople, called “Community Health Promoters,” for inventory.

Develop basket of goods for profitability and public health, with a focus on a short list of diseases that account for 2/3 of mortality and can be prevented and/or treated at low cost, including malaria, diarrheal diseases, worms, and TB.

e.g., oral rehydration salts for childhood diarrhea; bed nets to protect from mosquitos and malaria; toothpaste and sanitary pads for hygiene.

Document training manuals and systems with the aim of replicating to new countries, or becoming “master franchisor” to other orgs that want to implement system in their network.

Leadership

Chuck Slaughter, founder, was the director of HealthStore, the micro-clinic franchisor, before leaving to create LG. He built and sold a travel goods catalog business and remains a private investor. After undergrad at Yale, he worked for an early microfinance organization. MBA also from Yale.

Mission

To sustainably defeat diseases of the poor while creating lasting livelihoods for village-based health workers.

Living Goods

Analysis

This is one of our 4 key investments in the field of health franchising. Very similar to Freedom from Hunger, the key difference is that LG is a start-up led by a dynamic, experienced entrepreneur who has built strong partnerships, while FFH is large and was founded in 1946.

Learning from HealthStore experience, Slaughter is laser-focused on making sure Health Promoters are individually profitable. And then organizationally, LG can break-even in poor yet dense areas. But may need govt. subsidies in poor less populated areas with higher costs?

Once the distribution system is ironed out, LG can add other development products for the poor, like VisionSpring reading glasses, cook stoves, solar lamps, and water pumps.

Health Promoter yearly sales of $2400, with retail margin of 25% and $100 in costs, project to earn a net yearly profit of $500. That’s a bit less than twice the average per capita income in Uganda.

Progress

Living Goods began in Uganda in 2007, now operating in 8 districts, plans to reach 15 in ‘08.

DWFF contact: Josh Kwan, Director of International Giving. joshkwan.dwff@gmail.com

Updated: 8/08. Site visit: n/a. www.livinggoods.org 1World Health Organization, 2USAID

Plan for Scale

Jul-Jun Fiscal Year 2008 2009 2010 2011 2012 2013

Health Promoters recruited 200 500 1080 1440 210 --

Total HPs, after attrition 200 690 1736 3089 3144 2987

Expenses per HP $2457 $838 $563 $415 $347 $333

Uganda costs $544k $664k $1.28M $1.74M $1.37M $1.26M

Uganda contribution margin -- $71.9k $246k $571k $969k $1.02M

US costs $123k $357k $407k $432k $450k $469k

Profit / Loss ($667k) ($949k) ($1.4M) ($1.6M) ($848k) ($703k)

Problem

Many of the diseases of the world’s poor are easily treatable. But partly due to a lack of knowledge and access to basic health products, each year 1 million people die of malaria1 and 2 million from diarrhea-related causes2.

Status: Approved May 2008Since: new

A “Health Promoter” in Uganda