Tuesday, August 20, 2019 | Updated at 2:01 PM ET


Algramo Startup: How Chilean Vending Machine Company Delivers Food Staples, Economic Fairness to Society

First Posted: Jan 22, 2016 09:47 AM EST
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One of the main problems in Santiago, Chile is where to buy budget-friendly food. This problem is what urge Jose Manuel Moller and his three friends' to build a business like Algramo.

In 2011, the inspiration for Algrama was built in the heart of Moller and his friends. According to the Fast Company, their vision sparked when they've decided to go deeper in the outskirts of Santiago to experience what it's like to be in a poor community. When he and his friends learned how hard it is for the common people to budget their money, they started to work on a business idea about a vending machine which can supply the needs of these people for staple food without paying for "poverty tax."

To the founders, "poverty tax" is the 30-40 percent additional costs of goods when people buy them in lesser grams than in bulks. For their customers to cut this expense and make the most out of their money, especially to those who can't buy in bulks, Algramo offers their unique mechanical dispensers to the market.

Their business transaction starts from buying staple food from suppliers such as beans, rice, sugar and lentils. Then their agents will distribute it to their "dispensers" located in almost 300 different supermarkets across Santiago. By then, customers will be able to use these mechanical machines to purchase their goods without the additional costs from long distributions chains. After the product was consumed, the customer will just have to refill the empty containers with the desired content instead of buying the whole product again.

With the "reusable packaging system," customers are only oblige to pay for the packaging at the first purchase. As they reuse their containers, the following purchases would now only cost the actual content.

"By eliminating these intermediaries we generate a fair sales system for the community that is furthermore sustainable because of the reusable containers," as posted in Algramo.

Algramo doesn't offer a lot of products for everybody. That's another way on how they cut the cost. The focus of their business is inelastic food products that most of the consumers need. Their products are also non-perishable eliminating the risk of inventory expiration.

With 474 stores, 56,880 benefitting people and 113,760 kilos of reduced waste, Algramo is indeed one of the best innovative businesses available in the market now. Anyone who wants to include Algramo's dispenser in their shop and be a part of their growing community for free can check Algramo.com for more information.

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