Trying to Grow Business-to-Business Sales as a Social Enterprise? You Might be Approaching the Wrong Person

When was the last time you had a cup of coffee in an office, plane, or meeting that you knew helped solve homelessness in your city? Unless you work at SAP UK, the answer is probably never. Change Please is a social enterprise on a mission to tackle homelessness through coffee. Between its storefront café and bulk operations, Change Please provides employment opportunities at living wages for those experiencing homelessness, as well as ancillary support to qualify for housing. By using a jobs model rather than a housing-first model, Change Please creates opportunities for people to sustainably lift themselves out of homelessness - while delivering a high quality product to corporate offices, airlines, catering services, and more.

So, how does a social enterprise like Change Please secure corporate partnerships with some of the world’s biggest brands, like SAP and Virgin Atlantic? In past S-GRID webinars, we shared advice for approaching the private sector for partnerships and sales from both the perspective of a social entrepreneur and from the perspective of a large corporate client. In our most recent S-GRID webinar, we had the opportunity to bring these two sides together along with another type of actor you may not have considered: intermediate suppliers. These suppliers and distributors, sometimes unlovingly called middlemen, play a vital role in partnership building.

In some industries, especially in agriculture and packaged goods like coffee, suppliers are experts in licensing and operations that help get products from the entities that produce them (like Change Please) into places like offices or cafeterias where end-users consume them.

To explain how this works, we assembled the following panelists: Change Please CEO Cemal Ezel, SAP Procurement with Purpose Lead Kelvin Ward, and Compass Group’s Global Responsible Sourcing Lead Laura Neville. Learn how these three actors came together to bring fair trade, socially impactful coffee into SAP offices, along with key takeaways to help you grow your own business through partnerships, below. 

How Suppliers Help Improve Corporate Procurement

To understand how Change Please coffee ended up in all these different locations, let us take a step back to look at the corporate procurement process. As previously explained in our three-part webinar series (and summary article) on procurement, all major businesses have procurement teams. Some companies allow social enterprises to pitch directly to Procurement, but for multinational corporations with multiple offices around the world, managing relationships with each and every supplier along the value chain can get tricky.

That’s where companies like Compass Group come in. Compass Group is the world’s largest food services provider and a tier one supplier to many global brands. Tier one suppliers aggregate products and services from across the value chain to provide directly to clients such as SAP through a single source.

Increasingly, organizations like this are taking the struggle out of managing many different suppliers, and in fact, they are innovating with partners to supply more socially responsible products, too. As one example, Compass Group’s procurement arm, FoodBuy UK, was the first food and beverage company to join the Buy Social Corporate Challenge led by Social Enterprise UK. Just last year, it was recognized for its support of social enterprises and awarded Best Initiative to Deliver Social Value through Procurement at the 2020 CIPS Excellence in Procurement awards. 

As Laura explained, “Compass Group provides catering services to many companies across the world, including SAP, at a number of their global sites. We manage the relationships between the brands we supply (such as Change Please) and the clients we supply them to (like SAP), which includes onboarding, auditing, contracting, vetting, and ensuring that the products meet the level of quality our clients are looking for. It takes the stress away from the client because instead of actively having to manage multiple supplier relationships, they only have to manage the relationship with Compass Group, where we have a growing portfolio of 20- 30 social enterprise suppliers that we manage for our clients.”

Simplified example of supplier tiers in the value chain of an organization. Source: Guidance on organizational life cycle assessment (2015)

Many industries have organizations like Compass Group that are experts in licensing, operations, supply chain, and distribution. Starbucks rarely buys coffee directly from individual farmers, and instead buys in bulk from large coffee cooperatives that can best source and process beans in their regions. Car manufacturers have up to 30,000 components in their vehicles supplied by different producers along the value chain, so a car company like Volkswagen will work with a company like Amatech rather than with each individual producer. Gucci partners with artisan communities or specialty manufacturers that also produce for other brands. Healthcare providers and hospitals rely on organizations like Cardinal or McKesson to procure technology, medina, and supplies. Unilever has an interactive map showing where tea (and other products) come from. Patagonia does, too, and we expect this trend to keep growing.

How Suppliers Help Social Enterprises Grow Sales

When Change Please started, it had a goal of serving all its coffee through storefront cafes. However, as Cemal shared, there was a bigger opportunity to be found in supplying other businesses: “Working with corporates was actually a perfect fit for us because these organizations already want to have a positive social impact, and our product gives them an opportunity to have that impact on a day to day basis,” 

But finding the right business-to-business buyer is hard work. As Cemal started this process, he spent time networking at events trying to find out how big businesses, catering companies, and event companies might incorporate Change Please coffee into its portfolio of offerings. At one of these events, he met Laura from Compass Group and realized that instead of selling directly to all these different clients, he could just sell to one company that already had the ability to get his coffee into all these different locations.

This was not only beneficial to Change Please, but also to Compass Group which was getting requests from some of its big customers, like SAP, to increase the amount of money it was spending with social enterprises. Laura shared that last year, Compass Group came together with SAP to understand what it could do to enhance its social enterprise offerings. “We worked with our local social enterprise network, Social Enterprise UK, to better understand what options were available, mainly in the cold drinks, grab and go snacks, and in the hot beverages categories. From there, we spoke to individual social enterprises to see if they had the internal capacity to supply to us, and then brought samples of their products into SAP offices to test with the staff. We ultimately got about 10 different social enterprises onboarded to SAP in the UK, one of which was Change Please.”

It’s worth noting here that working with a supplier like Compass Group holds multiple advantages not only for the end corporate client, but for the individual social enterprises as well. Once a social enterprise becomes part of Compass Group’s portfolio of suppliers, Compass Group will continue to present its products or services to future clients as well, opening new doors to other large consumer or business environments. In fact, Compass Group was already working with Change Please for another client when the opportunity to be supplied into SAP arose. 

Key Takeaways

Does your social enterprise have a product or service that could be a great match for a corporate client? Keep these key takeaways from our panelists in mind to help:

Find the suppliers in your category

In our S-GRID program, we often see social entrepreneurs who want to sell to a certain client and then try to pitch them directly. Sometimes that works, but players like Compass Group, who specialize in managing relationships with suppliers and clients in your specific category, can provide a fantastic conduit for sales.

Laura explained that, “In most product and service categories, there tends to be a tier one supplier.” Kelvin echoed this, suggesting that social enterprises “look into the strategic (tier one ) supply companies out there that work with corporates who will bring on all kinds of products and services from different social enterprises together. There are companies out there who will buy from you and sell your product and/or services on to corporates.”

The possibilities that this route holds will only continue to grow. As Kelvin shared, “since this experience, we’ve taken the Compass Group model and started to implement it with other tier one suppliers, like Facility Management companies and Marketing agencies. We also now include a clear statement in every Request For Proposal we issue that SAP want to do business with social enterprises and diverse suppliers, and want to know what the proposing company is doing from a social impact perspective and which suppliers they will bring into our business and into their supply chain.”

Network and get conversations started

A big piece of business development is putting yourself out there to network and discover new opportunities. As Laura shared, “It’s really important for social entrepreneurs to get in touch, knock on some doors, and get the conversation started. Start small - maybe even use LinkedIn to find companies that have made public commitments to social values, track down their buyers, and then send some samples to try and get a conversation started.”

Kelvin echoed the importance of networking, adding that “As someone who works in procurement, I’ve learned more from social entrepreneurs about what social enterprises out there are capable of doing business with us than I have from any other source. Plus, the people you network with also network with each other - both on the corporate side and social enterprise side - so the more you can get your name out there, the better your chances. When you approach procurement teams, what procurement wants to know is your value proposition; how your offering is different from anybody else's, and what you can provide that we don’t have already.”

Cemal added an important caveat here also worth keeping in mind. As a social entrepreneur, it can be intimidating to approach people in the corporate procurement world. But as Cemal shared, “We need to change the narrative and stop asking for ‘support’, because that’s not what you’re asking for - you’re making a commercial proposition. A social enterprise is still a business, and you need to understand how to position your product as different from others on the market in an effective commercial argument in line with the values/procurement processes already in place within that organization.”

If at first you don’t succeed, keep trying

You may not hear back from the first, second, or even third person you reach out to, but do not let that discourage you. Even if you aren’t the right fit for the tier one supplier or corporation you’re pitching, you’re still on their radar and have an opportunity to gain valuable feedback about what you can improve next time to be even more prepared to seal the deal.

Laura shared that, “some social enterprises that approach us don’t have the capacity to supply at the level we need - for example, they don’t yet have an established distribution and delivery network. We still want to talk to them though, and even if they aren’t a fit right away, we hope to work with them in the future once they iron out their internal processes to the point that they are partnership ready.” 

Cemal added to this point about being prepared to partner, sharing that “Take the time to really understand what it takes to become supply ready (and what scale you need to be at), and then at that point you can start identifying partners that share your mission and values. A lot more corporations are actively following SAP’s lead with socially responsible procurement, so the right one will come when your organization is ready. In the meantime, even if you aren’t ready to reach out to a tier one supplier or corporate client directly, it’s a good idea to do research to see what small/medium size organizations are looking for who might not use tier one suppliers. The bottom line is that you have to test your business model to ensure it’s commercially viable and impactful before you can reach the next level, so starting with smaller deals and working your way up to larger deals is a good option. As soon as you win one contract with an SAP or equivalent, it will be even easier to scale and build confidence to approach other corporate clients directly.”

Quality and social impact cannot be mutually exclusive

Corporations want to do business and spend their procurement budget with organizations creating social good, but not at the expense of quality. As Kelvin shared, “we treat social enterprises like any other business. As an example, in addition to Change Please’s social impact, the coffee they supply to SAP meets our quality bar. Whatever type of business we do with other businesses, that’s the ultimate factor - if the product doesn’t reach that quality bar, it doesn’t reach the next stage in the procurement process.”

That being said, Kelvin also noted that “of the 20+ social enterprises brought on by SAP last year in the UK, all of them without a shadow of a doubt are providing more value to SAP than we obtained from the companies we used previously. If you’ve got the quality and the social impact, we want to know more about you!”

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As you can see from the Change Please example, business to business sales have the potential to help your social enterprise grow revenue, scale impact, and create more world-positive jobs. If your social enterprise is seeking support building capacity to make new revenue-based partnerships with the private sector, apply to our S-GRID program.