Bhutan’s Mountain Hazelnuts: a transformative model in a remarkable part of the world

Peter Henry, Dean Emeritus of NYU’S Stern School of Business once said, “You can actually make a lot of money and do a lot of good in the world.” 

That’s the motivation behind the business model of Mountain Hazelnuts.  To make things even more interesting, we want to create a transformative model in a remarkable part of the world – the Himalayan Kingdom of Bhutan.

Mountain Hazelnuts partners with thousands of farming partners to plant 10 million hazelnut trees, significantly increasing the income of 15 percent of the population.  By providing a sustainable cash crop and employment in the mountains of Bhutan, we keep vulnerable communities and families intact and reduce rural-to-urban migration.  By planting on degraded mountain slopes, we prevent further erosion, restore soil quality, and re-establish ecosystems.  In the process, we are sequestering 8 million tonnes of CO2.  These are some of the ways that Mountain Hazelnuts “does a lot of good”.  By supplying 3 percent of the global US$ 5 billion market for hazelnuts, both the company shareholders and our grower-stakeholders can “make a lot of money”.

A benefit of introducing a new commercial crop in Bhutan is that our hazelnuts have full traceability from nursery through processing, so international customers can know where, who and how the nuts were raised.  Most Bhutanese farmers have chosen to produce organic hazelnuts; given the country’s pristine environment, this makes for a very attractive offering to premium buyers.  This ties in with Dean Henry’s assertion – doing good makes good economic sense.

One of our grower-partners is Chunu. Her story is shown in a short video that provides her perspective on Mountain Hazelnuts’ value proposition.

The private sector must play an essential role in meeting the Sustainable Development Goals.  There should not be a contradiction between making a profit and engaging with stakeholders in a socially responsible manner.  We believe that such a relationship is necessary to achieve true sustainability.  All too often charity projects collapse when their sponsors leave, or funding dries up.  For an impact venture to succeed in the long-term, it has to be economically viable.  Mountain Hazelnuts would not have attracted private capital if the potential profit was not significant.  Who would invest tens of millions of dollars in a landlocked country with limited infrastructure, provide millions of trees to thousands of farmers, nunneries, monasteries, and schools, employ a thousand people, and wait a decade for a harvest to market, if there wasn’t an attractive upside?

While Mountain Hazelnuts is a private company, it operates as a public-private-community partnership, receiving important cooperation from the Royal Government of Bhutan. Thus far we have planted 7 million trees in more than 11,000 orchards and have become the largest private sector employer in the country.  We believe it’s important to share our learning and have built this business as a model for other impact ventures, developing a kit of tools and practices that we find valuable. The success of Mountain Hazelnuts is due to executing single-mindedly with granular attention to detail, building capacity and scale, and developing innovative technology.

There have certainly been daunting challenges in developing an ambitious agricultural enterprise in a pioneer market.  However, we have never strayed from the business plan we conceived in 2008 despite the hiccups – Mountain Hazelnuts remains committed to having positive social, economic, and environmental impact for all its stakeholders.

 

By Teresa Law, Mountain Hazelnuts Co-founder and CFO

 

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