The initiative invested in resources, and capacitation of 14 companies in Recife and its Metropolitan Region, selected through a Request for Proposals.
By the end of 2021, in a challenging economic outlook worsen by the Covid-19 pandemic, three private social investors – Baobá Fund for Racial Equity, General Mills, and Verizon – launched the Request for Proposals Black Business Food. Part of a broader Program for Economic Recovery and Black Entrepreneurs, the initiative aimed at directing resources and specific support for those facing social and economic challenges, and presented itself as an important alternative to strengthen and increase resilience in 14 companies of Black entrepreneurs in Recife and its Metropolitan Region.
Why invest in the food sector in Pernambuco?
Because it is vital in difficult moments, the food sector was selected as the focus of the request for proposals, amidst the resilience of nano-, micro-, and small businesses led by the Black population of Pernambuco, one of the most diverse and culturally rich states in Brazil. In order to adapt to new circumstances, local entrepreneurs took advantage of a growing demand for delivery services of essential goods in the food sector.
It is notable the impact of the food sector outlook in all states of the country, especially in Pernambuco. It has 18,960 companies in the food sector, corresponding to 3.5% of all companies in Pernambuco, slightly above the national average (3%). Most of these businesses (90.35%) are Individual Micro-Companies (MEIs, in the Portuguese acronym) and Micro-Companies (ME, in the Portuguese acronym, 6.63% of businesses), percentages similar to national averages (respectively, 86.33% and 10.18%). The growth is also visible in Sebrae’s studies that point to the opening of 3,032 new MEIs in the food sector of Pernambuco between March and Abril of 2020, following a national trend.
Strategically, the request for proposals selected the Metropolitan Region of Recife, involving 14 towns, including the capital, that concentrate 56% of businesses formalized up to May 2020. Six of these towns concentrate 90% of food businesses (48% in Recife itself). Notably, 37% of all food businesses in the region are in the category of street vendors, which goes to show the diversity of entrepreneurs in such dynamic sector.
As part of the evaluation process of its investment, focusing on learning and improvement of the support offered, Fundo Baobá relied on an external consultant, Janela 8. The evaluation methodology included document analyses, online research, interviews, and focal groups, allowing for a holistic analysis of the results, which are systematized in the Executive Summary
The support injected considerable resources in capacitation and strengthening of the 14 companies supported in Recife and its Metropolitan Region. It also offered a set of benefits to selected people. Besides the seed-capital of R$ 30,000, the funding included the assistance of Fa.vela (a hub of education and entrepreneurship innovative, digital, and inclusive learning), which provided a series of activities: diagnostics, and customized improvement plans; constant technical assistance; online education and mentorship; and organizing live meetings for networking, and sharing of experiences.
Profiles of people and companies supported
The diversity of the food sector was present in the profiles of supported businesses, comprising from catering to food delivery services, food trucks, and restaurants. The supported group had a majority of women, but also different gender identities: 11 cis women, one transvestite, one cis man and one transgender man, with ages going from 18 to 64. Regarding education, most entrepreneurs had graduated in college (65%).
It should be noted that 86% of supported projects (12 of them) are in urban areas, mainly in peripheral regions (71% or ten companies). At the start of the project, most entrepreneurs had a monthly family income up to R$ 3,135.
Isamara Costa, one of the entrepreneurs supported, owns Acarajé da Tia Joana, a kiosk selling and delivering acarajés, beverages, and desserts. The inspiration for the company came from her mother, Lucivânia. “A Black woman, recently separated, with two children to raise, she started selling food at the Praça da Várzea, and stayed there for five years”, Isamara recalls. “Then, she was invited to sell her food at the Madalena, where we remain to this day. I started in 2018, and here I am.” Isamara responded to the request for proposals in order to make true a dream: to have her mother’s face as the symbol of Acarajé da Tia Joana.
Impact on lives and communities
The focus on the food sector in a specific territory allowed for targeted investments, and for more exchange between entrepreneurs facing similar challenges. Most of supported businesses (71%) have their company as the main source for family income, while for 29% the business is a supplemental income. Thus, results go beyond the impact on the entrepreneurs’ life, and reach their families.
As for the strengthening of businesses, the main changes are connected to general management improvement, including financial organization and productivity increase. Companies have recorded an increase in revenue and in number of clients. These changes were noted throughout the duration of the project, and are still valid today, more than a year after the end of the initiative.
One of the women entrepreneurs described how the initiative improved the situation of her business, and contributed to also improve her quality of life: “In my personal life, I managed to have a wage, and to take a week of vacation after years working non-stop. Now, we’re planning to open a physical location in order to expand the business and reach more clients. We never lose the focus on being a business led by Blacks, and serving with excellence the peripheries of the North Zone of Recife”.
Racial awareness, and the strengthening of Black identities
The support also stood out for its inclusive and sensitive approach. An important differential is that the initiative was developed by Black people, and focused on the Black population. As a result, it is clear that it had a crucial role not only for businesses, but also in building a stronger community for debates about race, and confronting racism: 64% of entrepreneurs report an increase in self-esteem, and 82% acknowledge a broaden racial awareness.
In general, the Black Business Food support was a successful initiative, by the design of the support offered, and by its execution. It stands out for focusing on Black entrepreneurs in the food sector, and for offering a broad support, including financial resources, education, and exchanges among peers.
It worked as leverage, i.e., changes that would take much longer to happen were potentialized by the intervention. Such transformation might eventually happen, but in a much slower pace, and with partial results for most businesses.
Lessons learned with the Black Business Food, and its impact resonate not only in business itself, but also in communities, in the self-esteem and empowerment of the Black population in Pernambuco, and by extension in the whole country.