Clément Chenost – Lessons learned on investing 80M into vertically integrated agroforestry companies in LATAM and Subsaharan Africa

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Clément Chenost, the Co-Founder and CEO of Moringa Partnership/ Fund, joins us to discuss the role of de-commoditizing value chains, vertical integration, and consumer behaviour in regeneration. We also discussed consumer demand and commoditisation that leads to premiums of sometimes over 100% and drives the regenerative transition.

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What has Moringa Partnership learned after investing over 80 million in the last eight years into vertically integrated agroforestry companies in Latin America and Sub Saharan Africa? What has changed in the last 10 years in the investor and the consumer markets? What’s the key to getting significant premiums? 

Moringa Partnership and its Investors

Moringa Partnership is an impact investment fund with a blended source of investment namely development finance institutions and private investors. Their current focus is small and medium enterprise working in agroforestry and agroecology, which they believe to be “big” on paper and plans, but are actually needing more attention in terms of execution. Moringa Partnership’s goal is to “get big premiums”, so they work with companies that are BRC-certified, ISO 22-certified, organic-certified, or Fairtrade certified to make sure that they support regenerative companies. 

“What we acknowledged more than 10 years ago is that you’ve got solutions, you’ve got entrepreneurs, but what’s needed is money investment to scale up. Philanthropy and cooperation money are not enough—private investments are needed.” – Clément Chenost

Key to Significant Premiums 

Significant premiums or better prices for de-commoditized products are a game changer for farmers, cooperatives, brands, and other stakeholders. The key to getting significant premiums is to publicise the production process- it has to be regenerative- and highlight the benefits that come with the products. When the consumers see the added value to the products they consume, the companies gain the right to demand better prices. One good example is Nespresso, a company Moringa recently signed a deal with. 

“Where you’ve got real potential is when you build a story around the products.” – Clément Chenost

Investing in Vertical Integration 

There is a lot of potential in vertical integration, especially for food companies. Vertical integration allows companies to streamline their production process (from processing, marketing, to distribution) to ensure better quality. This gives companies an advantage as consumers these days show interest in transparency, and they’re starting to seek the origins of the products they consume. 

“The vertical integration is crucial, especially for healthy food segments, because you want to know exactly what you eat.” – Clément Chenost

Finding the Best Partner

One of the most important lessons learned in the investment industry for over 10 years is finding the right partner. As agriculture is quite a complex industry, it matters to work with the right people that have the same vision and principles. This is also the reason why Moringa Partnership choose to work with companies that match the pillars of Moringa’s business plan. 

“It’s not really about having the right business plan; it’s about having the right partners.” – Clément Chenost

Other Points Discussed

Koen and Clement also talked about the following: 

  • There is a very important market opportunity for the forests and ag sector in carbon;
  • Trustability is important. Consumers should be able to trust companies that their products are sustainable and are not bringing harm to anything or anyone;
  • There should be an accessible “tool for sustainability” where consumers can track where their food comes from;
  • Agriculture is complex. You’ll encounter many problems. But you need to be prepared, as you will reap many benefits in the long run. 

To know more about Clément Chenost and Moringa, download and listen to this episode. 

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The above references an opinion and is for information and educational purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.

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