Favela supply firm merges to succeed in 5,000 communities
- August 4, 2022
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Buying a product online and having it delivered to your door is a common experience in big cities. Less for those who live in the slums. With the intention of putting an end to this difficulty, Celso Athayde, founder of the Favela Holding group of slum companies, and Luciano Luft, shareholder of the logistics firm Luft Logistics, have consolidated a project that is beginning to take shape in the country.
Favela Log, the group’s logistics company created in 2014, is now called Favela Llog, with an “L” more than Luft. The business merger with new partner Luciano Luft, which in corporate jargon is called a joint venture, aims to expand the e-commerce delivery service to residents of Brazilian favelas based on the expertise of those who know these territories and the intricacies of logistics.
The company serves 112 favelas and 12 neighborhoods in Rio de Janeiro. The duo’s rather daring goal is to reach more than 5,000 communities where Cufa (Central Única das Favelas), the social arm of Favela Holding, operates. In addition to these territories, the company also intends to reach indigenous, quilombola and riverside communities, locations where entrepreneurs delivered food baskets during the covid-19 pandemic.
The Paraisópolis favela, the second largest in São Paulo, located in the south zone, gained the first distribution center of this new phase. In fact, the delivery men are people released from the penitentiary system who are looking for work through the Recomeço Project, also run by Cufa. Currently, there are 50 employees and the number could reach 600 by the end of 2023.
According to a survey by Data Favela, the research institute of the conglomerate of companies founded by Athayde, and Instituto Locomotiva, 17 million Brazilians live in favelas. This corresponds to 8% of the entire population.
Each favela shows a challenge
On paper, the role of the new Favela Llog is simple: to offer favelados —as Athayde rightly says, without the pejorative sense— the insertion into the consumer market. In practice, however, the business duo recognizes that there are challenges to be overcome.
“We need to understand the reality of each [das favelas] to assemble a project based on your needs”, says Celso Athayde.
In the favelas, for example, the shacks do not have a number, which makes delivery difficult. They, who usually live in this territory, have neighborhood associations and community leaders as allies, who help in locating the address of a particular customer.
Another obstacle is that a community may have, for example, steep streets that prevent the entry of cars or an indigenous village that can only be accessed by river. “We will arrive by motorcycle, bicycle and stroller if necessary”, jokes Athayde.
“We’re going to map people and their addresses. This means that you bought will have a referenced position. [A entrega] it will be much easier after the second purchase”, adds Luft.
From Sao Paulo to Brazil
In this first moment, the growth of the logistics operation will be from São Paulo. After Paraisópolis, the Heliópolis favela and the Santo Antônio neighborhood, both in the south of the capital, will have distribution centers.
In eight years of operation, Favela Log —before the second L— served the giant P&G, owner of brands such as Gillette, Pampers and Vick and currently has Natura as its only partner. Soon, six new partners will be announced, which the duo of entrepreneurs did not want to reveal, but who operate in the consumer, hygiene and cleaning and retail segments. “These are big companies”, says Celso Athayde.
After the state of São Paulo, businessmen seek new destinations across the country, but do not reveal expansion projections. “We can go to Minas Gerais, Bahia and go up the Northeast. Let’s analyze the market’s need”, declares Luft.
In addition to the option to receive at home, consumers will also be able to register the address of the distribution center in their region on an e-commerce site to pick up the goods there.