It all started when Robert Max Metcalfe, who was heading the Ikea India operations at the time, called Industree co-founder Neelam Chhiber and expressed interest in engaging with Industree as a prospective vendor. He had visited one of Industree’s retail outlets in Chennai and was impressed by natural fibre products that he had seen there.
Neelam then arranged for Max and the Ikea team to visit the Self Help Groups (SHGs) that were involved in the production of the natural fibre products. Industree, at that time, bought products directly from SHGs. While the Ikea team loved the inclusive, social enterprise model that Industree was following to empower artisans, they flagged that it would be quite the challenge to get Industree on board as vendors, since it would not meet IWAY compliances. IWAY or Ikea Way was the supplier code of conduct, outlining environment and social & working conditions, that all vendor of Ikea needed to adhere to. And Neelam was more than happy and willing for Industree to take up the challenge.
The very first order from Ikea was for about 8 SKUs for their exhibition in Germany. The Industree team worked very hard to complete this order – this was at a time when the team was small and the structure, very informal. This engagement gave insights into how difficult it would be to fulfil compliances. It was also the fillip that Industree needed.
Neelam understood that in order to work towards social empowerment of artisans, customers who insisted on following social and ethical compliances were key. By engaging with customers like Ikea, Industree would need to ensure that social norms were embedded in the ecosystem that it was building for artisans. Another key fact that came to light was the scale of operations. At low scale, it was practically impossible to ensure compliances; this meant that producers had to be aggregated. To ensure that environmental compliances and safety norms could be monitored centrally, common facility centres were required. All of this required investment!
Industree raised capital from Future Group in 2008. This investment enabled Industree to launch the brand Mother Earth. At the backend, it helped aggregate artisans into a producer company, and set up a supply chain team that would provide professional management support to the producer company. In parallel, Industree also worked on the challenges that came to light during its interaction with Ikea.
In 2011, 5 years post the first interaction with Ikea, Neelam approached them to reinstate the partnership. Happily for Industree, Ikea was at the time looking to tie up with social enterprises in India for their ‘Next Gen’ initiative, which aimed to enable social entrepreneurs gain access to global markets. And thus, the partnership was restored!
Tracing the value chain in pictures… Photos: Ikea
Since then, 2,000 artisans have been embedded in the end-to-end value chain of banana bark products and have benefitted through the partnership. Over 6 lakh pieces manufactured by producers in areas like Madurai, Erode and Bangalore have made their way to over 72 Ikea stores in Europe, Japan and Korea.