What inspired you to start āluān in Sumatra?
My journey to founding āluān in Sumatra was deeply rooted in my connection with nature and a desire to explore work opportunities outside of New Zealand, where I grew up on a farm. A turning point came when my now mother-in-law pointed out an opportunity for volunteer work, which led me to work with Indigenous peoples in Borneo. This experience, coupled with witnessing the effects of palm oil plantations on landscapes, was eye-opening. After completing my degree, my husband and I seized the chance to study in Singapore, which eventually led us to work in Aceh, Sumatra, post-tsunami and conflict. There, we recognized the critical importance of the region’s ecosystem, hosting tigers, orangutans, rhinos, and elephants. Our focus includes supporting local and indigenous groups to pursuing sustainable, long-term commercial strategies to protect these ecosystems, leading to the establishment of āluān.
āluān stands out by adopting a business model focussed on conservation and ecosystem protection rather than relying solely on charitable donations. Jane also runs the EcosystemImpact Foundation, which operates in the same area. They play a dual role, with āluān raising and deploying investment finance and the Foundation employing 40 full time community rangers who protect the frontlines from poaching of critically endangered sea turtles, song birds and other species.
This approach ensures long-term presence and systemic change. In regions like Sumatra, the primary threat to ecosystems is industrial activity. By investing in alternatives like replanting coconuts for small farmers, we can prevent destructive land use like palm oil plantations. This model allows us to shift the economic foundation of an entire landscape, making a lasting impact. It's about changing the industry to protect the environment and improve the local economy, marking a shift from traditional charity models as well as from local business models.
What is your perception of sustainable palm oil?
The term 'sustainable' has lost its significance over time, often just meaning maintaining the status quo. Our world is asking us for much more than this. In contrast, regenerative practices improve both environmental and economic conditions, adding value in multiple dimensions. It’s about moving beyond sustainability to truly enhance and rejuvenate ecosystems and communities.
How can āluān’s model be replicated in other parts of the world?
Our model is straightforward, centered around sourcing directly from smallholder farmers, adding value locally and selling high quality coconut oil directly to personal care and food makers.
Key to our approach is forming partnerships with organizations like Lush, which support our mission through higher purchase prices, upfront payments, and investments in our conservation work. Lush understands the role the can play as a lighthouse in the industry and they use their purchasing power and kind touch to do so.
Our model is finance-driven, blending investments from charities and other sources to de-risk projects. By focusing on transparent sourcing and processing, and partnering with like-minded businesses, we demonstrate a viable path for replication in other regions. It’s not rocket science: patient investment and buyers who are willing to purchase from truly impactful businesses like ours will help us change the environmental trajectory of an entire landscape.
"By focusing on transparent sourcing and processing, and partnering with like-minded businesses, we show a viable path for replication elsewhere."
How does your business model work with smallholder farmers and what makes it transferrable to other commodities?
Our business model is focused on empowering smallholder farmers, who individually may seem insignificant, but collectively represent a strong force. By working with around 5,000 smallholder farmers, we invest across their lands and add value through processing high quality coconut oil at the origin. This approach reduces middlemen in the supply chain, allowing farmers to retain more value. It also ensures quality as we are involved in every step of the process. This model is adaptable to any agricultural commodity, such as coffee, cocoa or rubber. The choice of coconut oil was driven by existing landscape conditions and the opportunity to add value, not by the product itself.
To replicate our model in other areas like the Amazonian rainforest, the first step is to build relationships with local farmers and conservation organisations or work with groups that already have these connections. The second step involves developing these relationships into an organizational collective. Thirdly, analyze the supply chain or supply web to understand existing relationships and identify opportunities for adding value. The final step involves setting up processing facilities, which will likely require significant partnerships and investments. Understanding the market dynamics is crucial in this process.
How can consumers identify products that are truly natural and sustainable?
Identifying truly natural and sustainable products can be challenging for consumers. We address this through certifications like organics, wildlife friendly, and partnerships with companies like Koltiva who enable our coconut oil and other products to be traced from our farms to consumers. However, the current certification systems can be exclusive, often sidelining small producers. There's a growing trend towards direct traceability, which I believe will become more prevalent as you can identify exactly where your product came from and determine whether it was responsible for deforestation. Although organic certification is extremely trustworthy and rigorous, I do spend time contemplating a simpler way. I foresee a move towards simplification in this area and a more local voice.
What are āluān’s next steps?
The immediate focus is on scaling up our production facility to reach profitability. We aim to establish new partnerships and buyers for our coconut oil in the next 12 months. Ideally, these partnerships would be semi-vertically integrated within our supply chain, fostering a collaborative and mutually beneficial relationship rather than a traditional client-supplier dynamic. We're also looking to diversify into other products, especially exploring the potential of coconuts and intercropping on smallholder farms to bring new products to market.Some additional points in case it’s helpful:
Protecting endangered ecosystems by investing in smallholder agriculture and conservation.
First case: Simeulue Island, Aceh Indonesia.
WHY?: To shift the economic basis of the economy aware from an extractive to a regenerative one (i.e., one that adds value to the ecosystem).
How? by establishing 2 x organisations (a private company and a not-for-profit foundation) that address the key social/economic/political drivers of environmental degradation & destruction in the landscape be institutionally embedded in the community over the long term.
