Innovation

The innovations three main objectives are as follows:

1. Train farmers to cultivate sorghum following best practices to attain best grain quality.

2. Provide farmers with technical knowledge and business skills to be able to negotiate with other sorghum potential clients to establish fair price on the crops based on the “Sorghum Futures Prices” in international markets (Chicago Mercantile Exchange), and to avoid the abuse of large intermediaries towards the communities.

3. Buy sorghum harvest from these farmers that were located minutes away from the farm in a more periodic way reducing the level of inventories in the farm, and assuring fair price and high volume intermediary-free orders.

Note: Farmers were free to sell their sorghum harvest to any client they would feel comfortable doing so; this allowed them to become competitive in the market.

The community saw a great value in Grupo RYC Alimentos proposal, and started to grow sorghum each time in greater quantity, harvest that was sold to the farm directly and periodically. This way, an additional bond was created in the value chain through the development of local supply and a sure client for their crops.

Today, after 20 years, this same process is still carried out in the communities and we have nearly 113 producers that provide the farm with more than 2 thousand tons of sorghum a year. Training does not stop in agricultural aspects, Grupo RYC Alimentos also instructs them on how to integrate their operations into the formalized economy, through the constitution of Sociedades de Producción Rural – SPR (Societies of Rural Production), and the emission of invoices for commercialization of their products.

In 2017, 4 societies, comprised by 113 producers, harvested more than 2 thousand tons of sorghum, which represented a total income of approximately $ 438,000 USD.

In José Ignacio’s own words “this has been a quite heartwarming experience, to be able to attend to the communities to teach people eager to learn, to look at their job, their successes and mainly to guide them towards getting the best grain yield.” He continues: “I would go to the harvest sites and enjoy so much that people were very interested and committed to his sorghum, so that we could have the best grain to feed our cattle… people has always been grateful.”

Inspiration

In Mexico, family units as a business structure have an enormous relevance in society, Grupo RYC Alimentos (RYC Nourishment Group), a family business with more that a 100 years of service, has in its roots the family-oriented values that have allowed the company to transcend throughout generations, and to forge a unique culture based on collaboration that permitted them to transform that rustic wheat grinding hacienda, into the productive, inclusive, and growing company that we know today, all along the way controlled by the Lozano family.

It all began in 1837, when Mr. José-Ramón Lozano-Traslosheros’ great grandfather, bought the wheat grinding farm in Atlixco, Puebla; specifically, in Tenextepec community, a beautiful rural zone surrounded by green and fertile fields, near from Popocatépetl and Iztaccíhuatl volcanoes. This company has been inherited generation to generation, until being in control of Mr. José-Ramón Lozano-Torres and siblings.

One of Mr. Lozano-Traslosheros’ son had the idea to buy a couple of pigs to have in the farm, so one day, he and his son went out for a walk in the search of a pig that could become the new pet of the farm, without knowing that this random walk would become a great new adventure that would bring a complete different business model to the farm, and would be the initiation of the great company we know today.

Stories have been numerous since the company’s establishment in 1837 in Tenextepec, where rural families have devoted their lives and loyalty to the construction and prosperity of Grupo RYC Alimentos. Around 20 years ago, bearing in mind all the benefit and growth though the years, Mr. Lozano-Traslosheros and José-Ignacio Lozano-Torres (veterinary doctor and current general director of the farm), envisioned and put on practice the idea of retribution to this community that has hosted them for almost 2 centuries, and has given the family the opportunity to grow.

“What can we do to help the people in our community?” And “How can we help our communities to make the best out of their lands, and at the same time providing decent and prosperous job opportunities?” – Lozano’s family main questions.

José Ignacio (director of the farm) along with Ramón (food engineer), decided to make a field work outside the farm, to have a close look inside the community and to get to know people and identify their main needs and that way, be able to help them. Mónica Gendreau✞ (Ramon’s wife), a very respected sociologist in the region, got very interested on this initiative and joined the project.

It wasn’t long after they noticed the complex situation the community was facing, when not many families were taking care of the land; furthermore, men in the communities had fled to the U.S.A. in the search of a better life for them and their families, this was a very common practice in the community.

As soon as this problem was detected, Mónica decided to initiate a research study focused on identifying the reasons held by migrating people to flee to the U.S.A. and started a project that would help women that remained in the community. As time went by, due to a terminal illness, Mónica passed away, but fortunately Mónica’s initiative went on, taking different shapes and based on her research, to the point where Don Ramón, along with two of his sons José-Ignacio and Ramón Jr., had the vision to create groups of farmers in the local communities that would be able to seed sorghum, good quality grain that is a fundamental part of pigs’ diet in the farm, and this way they could help these groups to attain a great quality harvest with the assurance that it would be bought by the farm.

At this point, the Group decided to create the Mónica Gandreau Fund – FMG (in honor of Mr. Ramón Jr.’s wife), that would later join the Fundación Comunitaria de Puebla IBP – FPC (Communitarian Foundation of Puebla).

Overall impact

Developing these groups of sorghum farmers in the surrounding communities has caused a significant impact in a variety of dimensions. What started by being a project to help the local communities, turned out to be a very profitable initiative not only for Grupo RYC Alimentos, but for the community and the environment as well.

However, the benefits for the parties involved can be summarized as follows:

• The Producers: First, they have become experts in a subject that they barely knew before, they are able to perform a productive activity and provide for their families in a regular basis. They have been equipped with knowledge and skills to both develop rural productive societies, and expand their reach to many more clients apart from Grupo RYC Alimentos.

• The Region: Develop the region and turn it into a Sorghum farming community and reduce the number of people from the community that migrate to the U.S.A.

• The Government: Initially, these people used to have informal jobs, but by the creation of the Rural Productive Societies, they are being incorporated into the formal economic system, which should enhance tax collection in the area that can be used to develop the communities.

• The Environment: Before this initiative, Grupo RYC Alimentos used to buy all its sorghum from producers in distant communities, now that the sorghum is bought in the local community, the enterprise has eliminated every pollution related to the long distance transportation and logistics of these grains.

• The Business (Grupo RYC Alimentos): Besides beginning to fulfill their goal to repay this moral debt to the community, the company discovered that they have decreased their costs of transportation, while improving the quality of the sorghum and avoiding shortages of grain that could interrupt the day-to-day operations.

This series of small efforts, that once added to each other, create a big positive change that is summarized in Grupo RYC Alimentos’ corporate mission statement: “We understand profitability as value generation in terms of: earnings, people growth, environment, and community.” As we saw earlier, not only do they generate profits, but also, they promote the development of poor people through training and dignifying jobs, at the same time of nurturing the community through promoting fair trade businesses and creating a new economic activity in the region, while benefiting the environment by eliminating the utilization of long distance transportation.

Business benefit

• Long distance transportation cost reduction.

• Quality improvement of the sorghum by the constant supervision and training of the farming groups.

• Avoidance of grain shortages that could interrupt the day-to-day operations.

• Creation of employee engagement through benefiting the employees’ family that cultivate sorghum in the local area

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Social and environmental benefit

Before these efforts, there were 103 producers (with their respective families) that were struggling to provide for their homes and that felt tempted to migrate to the U.S.A. Now, the community has found a new way to perform productive activities and to provide for their families in a regular and formal manner. They have broadened their perspectives to new horizons, and they have expanded the operations by reaching new clients besides Grupo RYC Alimentos. All the time that the farmers spend working the crops, is time spent in a productive activity. Because of this initiative, people find a way to stay away from harmful vices and to provide for their families.

As of today, the farm buys approximately 2 thousand tons of sorghum, before this initiative, all these tons were brought to the farm by trucks, and since the sorghum is now grown in the surroundings of the farm, the pollution due to transportation by trucks has decreased

Interview

Ramon Lozano Torres, My Name Is Ramon By The Way

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