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The Alliance for Artisan Enterprise, founded in November 2012 and hosted by the Aspen Institute, is a collaborative effort of over 70 artisan businesses, artisan support organizations, corporations, government agencies, and other partners who are working together to promote the full potential of the global artisan sector.  

The Alliance for Artisan Enterprise was created to elevate the importance of the artisan sector, support and grow artisan businesses, and share best practices in a collaborative learning community. 

Lessons Learned from Launching, Growing and Closing a Social Enterprise in the Craft Sector

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Lessons Learned from Launching, Growing and Closing a Social Enterprise in the Craft Sector

Gina Rogari

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An interview from AOW Handmade with Hedvig Alexander of Far & Wide Collective. Read the original post on the AOW Handmade blog

This month, AOW connects with Hedvig Alexander, founder of Far & Wide Collective, a social enterprise and leading global artisan brand that brought a new approach to the craft sector. F & W partnered with artisans around the world, empowering them to share their talents and products. This past month, F & W sadly closed its doors. As a way to share lessons learned about launching, growing, and closing a social enterprise, we asked Hedvig to reflect on the experience and provide his insights on what needs to be done to strengthen the craft sector.

“We launched Far + Wide Collective five years ago with an ambitious goal: to build a global brand in a competitive market that would take a new approach to the craft sector.  The goal was for Far + Wide to have close relationships with artisan partners around the world, empowering them to share their talent and products with customers everywhere.  I truly believe in economic empowerment: it is the only reliable way to build strong economies.  In this regard, the craft sector has enormous potential.

We successfully raised investment, sold online and forged partnerships with a number of large retailers who showed, through strong sales, that there was demand for the kind of high quality, beautiful and well-designed products our artists produce.  However, we were still lacking one important element – public sector involvement.  Despite growth fueled by the private sector, we were unable to generate enough support from governments, foundations or donors with an interest in the craft businesses with which we worked.  That investment was needed to train, elevate and position craft businesses on the ground for global success. Most of the businesses we worked with had trouble scaling their production; as a result, we could not grow either.  My observation is that there is now very little financing – private or public – available for the craft sector.  There is a very important segment of financing missing between micro-finance and larger loans around $100,000. There is also a critical lack of real interest in or attention to exploring new and more effective models for partnership and investment to achieve development and business results.

The underlying challenge that inspired me to create Far + Wide Collective remains unresolved. Craft production and the handmade economy represent (after agriculture) the second largest income opportunity in most low-income countries.  The sector is dominated by women, most of whom work in the informal economy with limited production, income or potential for growth.  To help these women truly realize their potential, in some of the poorest communities in the world, we need viable, sustainable solutions.  It is frustrating for our team to see women in advanced economies breaking barriers by speaking out against discrimination, harassment, and outdated social constructions, while women in poorer countries remain invisible.

In the craft sector I have met some of the most incredible people, with unique talents, who richly deserve support on a much larger scale.  Eighty percent of our partners are women; very few have received loans, grants, training or support in any form.  Far + Wide Collective had hoped to help these producers by building a stronger market. I still believe we can reach our goal.  When one considers how much investment the fair-trade coffee industry has received over the past 15 years, it confounds me that the craft sector has received virtually none.  I sometimes wonder if this is because the sector is dominated by women and easy to ignore.

It strikes me as both logical and inevitable that this imbalance will one day be redressed.

To this end, I remain extremely committed to the same beliefs that led me to launch Far + Wide Collective in the first place.  By connecting local artisans with the global marketplace, we have shown that such empowerment has the power to transform lives, lifting some of the most vulnerable people in the world out of isolation and poverty.  Success for the craft sector has enormous impact, helps us achieve the Global Goals, and is in every respect the right thing to do.  Together with a number of proven partners and like-minded entrepreneurs, I am reflecting on how we can give promising artisans the right access to financing to create a strong supply chain and provide sustainable livelihoods for them, while making a new universe of beautiful products available to a growing range of consumers worldwide.

For the craft sector to function effectively it needs to be modernized, professionalized and regarded as a real business sector.  The gap between producer and buyers has to significantly narrow. In our experience buyers want to buy but are held back by either quality, design, lack of certification, or ability to scale. A number of elements need to be in place to achieve significant change in the sector: market demand, strong supply chains with effective support to producers, as well as access to financing.  In my view, a strong private-public hybrid funding model will be crucial to elevate the sector and make it truly sustainable, as was the case for fair-trade agricultural products starting 15-20 years ago.

In the case of coffee, significant investments were made in the supply chain in the form of loans, grants for technical assistance and equipment leasing programs.  These investments raised the capacity of local coffee producers, making it easier and less risky for large businesses, notably Starbucks and later Nestle, to buy from them.  Today it is the craft sector that needs the right combination of financial and technical tools to narrow the gap between producers and buyers.

The fair-trade coffee sector had champions like the Rockefeller and Ford Foundations, alongside great implementers such as Root Capital and others.  Who will now champion the craft industry?  No matter who takes up this opportunity for partnership, it will be vital to ensure genuine collaboration among all players who care about poverty reduction, market access (particularly for women), and growing businesses in the field.  This will allow enterprises such as Far + Wide to use their revenues and private funds raised to invest properly in building their brands, marketing their products and establishing strong sales channels.  In today’s marketplace, all products – even ethical and sustainably produced ones – have to be well-designed, beautifully-packaged and presented to customers through a strong brand offering and with all the conveniences other major brands feature.  With the right partnerships, financing and commitment, the craft sector can drive a new wave of business success and consumer satisfaction, while lifting vast numbers of people out of poverty and into new lives as dynamic entrepreneurs and exporters, designers and educators.

Yes, we can do this. But we need a more business-oriented approach to both selling handmade products and investing in the people that produce them.”

- Hedvig Alexander, Far & Wide Collective.