Vending machines packed with staple foods are helping cut prices and alleviate poverty in Santiago. In Latin America, 73% of the population survive on less than $4 a day.
That means few can afford to bulk buy basic essentials and most, due to the lack of low-priced supermarkets, are forced to shop in smaller, more expensive local stores. Algramo – founded by Jose Manuel Moller in Santiago, Chile, in 2011 – believes one answer lies with its pioneering vending machines.
Meaning ‘by the gram’, Algramo uses its own vending machines to deliver staple foods (typically rice, beans, lentils, sugar and chickpeas) at up to half the price charged by local bodegas. Customers buy only what they need or can afford.On their first visit they are given a container which they are encouraged to reuse whenever they shop. Not content with reducing waste and packaging costs, Algramo also cut out the middlemen, dealing directly with local shops, installing its machines for free and sharing profits equally with the store owner. As a result, Algramo has cut the cost of staple foods by 40% for more than 56,000 people every month.
The company has recently expanded its product range to include such household essentials as detergent and cooking oil.As a student, Moller lived on the outskirts of Santiago, doing several jobs yet earning barely enough money to feed himself. As a business and design graduate he was inspired to develop the vending machines with industrial designer Salvador Achondo. Moller says: “Going to the corner store is really the only time people talk to their neighbours. We want to preserve this connection. But the cost of food at these stores is so prohibitive.” He began to see the pricing as a poverty tax and set out to change it.
Its network has extended across Chile – it has 350 stores outside the capital – and into northern Colombia (where it has 25 stores) with expansion into Peru and Mexico planned. The scheme recently received a US$300,000 cash boost when it won Chivas Regal’s Venture award for the most promising social entrepreneur.