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Auntie Akos serving Tober to a customer

Know Your Customer – Market Research and Donut Delights

Auntie Akos serving Tober to a customer

It’s a typically hot morning in Accra, Ghana when I step out of the passenger side door of my taxi.  It’s 9:15am, and my back is drenched in sweat from the 10 minute taxi ride from my apartment to my office.  I walk towards Auntie Akos and receive my normal morning greeting:  A huge smile, a wave of the hand, and a call of “Oh, Bri Yaw, Bri Yaw.  Good morning, ete sen?”  I respond in my typical broken Twi, which generates a collective smile and hearty laugh from all the bystanders as I walk up to the stacked plastic containers to purchase my breakfast for the day.

Akos runs a small roadside eatery next to Acumen Fund’s temporary office in the Osu neighborhood of Accra.  Every morning from about 7am – 10am, Akos cooks and sells Tober and Koose to men and women on their way to work and children on their way to school.  Tober is a flour-based dough that is deep-fried in palm oil and is similar to an American donut.  It is also the breakfast version of Bofrut, a similar food that is usually served in the afternoon.  Koose is a fried bean cake and provides a decent source of protein for breakfast.

I pay my 50 pesewa (about USD 30 cents) for one Koose and one Tober, tell Akos I’ll see her later, and start to make my way to the office.  As I walk away, I catch a glimpse of the dusty red stove Akos is using to cook her food and I’m reminded of the business plan for fuel-efficient cookstoves that I read through the previous week.  Acumen Fund, along with several other impact investing peers and international development agencies, has been trying “crack the nut” for years on how to achieve a sustainable model that can provide fuel-efficient cookstoves in multiple developing economies.

”Improved Cookstoves”, or cookstoves that are built with advanced design techniques which allow them to minimize fuel-consumption, have the potential to provide enormous environmental benefits as well as improvements in the overall health and financial situations of low-income consumers.  By requiring less fuel to achieve suitable cooking conditions, improved cookstoves can benefit the environment by reducing the amount of wood used in the preparation of each meal and by reducing the amount of carbon emissions produced during the cooking process. Burning wood is a highly inefficient process, and it also releases large quantities of particulate matter, which is becoming a major factor in global climate change.  From a health perspective, improved cookstoves expose cooks (predominantly women) to less smoke and toxic emissions and over time, can reduce diseases related to inhalation of polluted air.  Finally, with the ability to generate carbon emissions offsets and sell them in international carbon markets, improved cookstove providers can use this “carbon revenue” to subsidize the cost of the stoves so that they are affordable to low-income consumers.

The challenge to date in achieving widespread uptake of fuel-efficient stoves is that market conditions, preferences, and practices vary drastically across regions – even within relatively small geographic regions – and thus the design, specifications and price of the stove must appeal to relatively specific demands.  Basically, there is no “one size fits all” strategy that can be implemented and replicated across multiple geographies.

With this knowledge in mind, I approach Akos to ask her about her stove.  The stove is markedly better than many of the informal stoves I’ve seen other roadside chefs use, so I’m hoping she’ll be able to provider her insights on what she thinks is a good stove and why she purchased this one.

“Auntie Akos, can I ask you a few questions about your stove?”  She gives a large, shy smile and responds with a soft “yes.”

Cooked Tober sitting next to the pan of palm oil and gas stove used to prepare the food.

“I see that you’re using gas to cook.  Why gas instead of charcoal or wood?”

“It’s much better, it’s cheaper.  I can cook two weeks with this tank.  A bag of charcoal is more expensive, it won’t last that long.”

“Where do you get the gas from?”

“Just down the street, at the petrol station.”

“So why do the people up the street use charcoal?”

“Some people, they are scared. They are scared that the gas will burn them. They have used charcoal forever, so they don’t want to change.”

Akos’s friend chimes in.  “And it depends.  For some food, the gas is no good.  It’s too hot.  For Fufu, it’s too hot. You need to use wood or charcoal.”

“Ok, I see.  So you use different types of stoves for different foods.”

“Ah huhhhh.  Yes.”

“So Akos, how much did this stove cost?”

“About 50 cedis (~USD 30).  I have a smaller one too.  For maybe, maybe 25 cedis.  I use the small one at home.”

“Where did you buy them?”

“Makola.  You know Makola? They have plenty, plenty stoves there.”

“Yes, I know Makola.  I will have to go there and look around.  Medase pa (thank you).”

My quick conversation with Akos was telling for me in two regards.  First, it simply confirmed one of our general beliefs at Acumen Fund that low-income consumers are extremely knowledgeable about the products they use and generally make rational purchasing decisions based on price and perceived value of a good or service.  Secondly, although I suspect Akos is in the minority of consumers that use gas instead of wood or charcoal, her gas stove is evidence that there is a degree of differentiation amongst consumers in the relatively small market of Accra, and that a visit to Makola and surrounding peri-urban markets would certainly be necessary if I was to proceed with any future diligence of the cookstove opportunity.

I unlock our office door and sit-down at my desk while taking a bite of the warm, greasy Tober.  As I reflect on my discussion with Akos, I think of a common challenge we encounter at Acumen Fund while looking at investment opportunities:  “How do we get a product that is superior to existing alternatives (more cost-effective and better health-wise and environmentally) into the hands of low-income consumers  in a financially sustainable model that achieves large scale?”  There’s no one right way, but getting to the answer will certainly entail more conversations, more consumer education, and more understanding.

Sean Moore is a Portfolio Consultant at Acumen Fund. He spent 7 months in Accra, Ghana, helping set up Acumen’s West Africa office and launch its portfolio.

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