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A New Social Venture Takes the Lead from TOMS Shoes to Fight Child Hunger

Two Degrees addresses malnutrition in developing countries with a get-one, give-one sales approach.
May 24, 2011
URL: http://www.entrepreneur.com/article/219626

Lauren Walters still can't believe what he witnessed in the pediatric ward of a village hospital in Rwanda. As an advisor with the Boston-based nonprofit Partners in Health, he had visited impoverished and disaster-ravaged areas around the world. But in that pediatric ward he got his first up-close look at the harsh effects of malnutrition on children--many also suffering from tuberculosis, HIV or malaria.

By the Numbers
"We started this to give people very simple opportunities to make a difference," Hauser says. "To see that actually happening is really satisfying."

925 Million: Undernourished people worldwide in 2010 (nearly 16 percent of the population of developing countries).

10.9 Million: Annual number of child deaths. Poor nutrition contributes to approximately half of that total.

160 Number of days each year that undernourished kids may suffer from illness.

"I had never seen somebody who was severely malnourished," Walters says. "You think, ‘How could this happen?'" What shocked Walters most of all was that the protocol for treating malnutrition is a simple, 500-calorie nutrition pack. So simple, yet often unavailable. The experience stayed with him.

Meanwhile, longtime friend Will Hauser, who worked as an investment-banking analyst for Goldman Sachs, was feeling the call of social enterprise. He and Walters, both sons of physicians, discussed their desires to make a difference, and by August 2009, Hauser had left his job to work with Walters on Two Degrees, a nutrition bar company that would donate one nutrition pack to kids for every bar sold to consumers. The duo believed people would choose their product over the competition if they knew the purchase would help feed a hungry child, so they modeled Two Degrees on social entrepreneur Blake Mycoskie's Toms Shoes, which donates a pair of shoes to a child in a developing country for every pair of shoes sold.

Through their own resources and 20 angel investors, Walters and Hauser raised approximately $1.3 million and launched Two Degrees in January 2011. During a trip to Malawi in February, they made their first donation to Partners in Health: 10,800 nutrition packs that would feed children in Neno, a small village in southern Malawi.

Two Degrees' nutrition packs are manufactured in the capital city of Lilongwe, less than 300 miles from Neno, by production partner Valid Nutrition, which hires Malawians and uses mostly local ingredients. "During the trip, we oversaw the production and distribution process of our first donation," Walters says. "It was incredibly inspirational to see it all come together."

The operation is still small. Two Degrees' three bar flavors are sold in just 45 small retailers across the U.S. The company hired 35 students at colleges and universities to act as sales and marketing agents to cafeterias, bookstores and other retailers on their campuses and in the surrounding communities. Within three months, 12 colleges started selling the bars.

In July, Two Degrees bars will be available in Whole Foods Markets nationwide, according to Hauser and Walters. They also forecast that they will be selling more than 5 million bars per year by the end of 2011.