The niche cookstove with mainstream ambitions
BioLite’s roots are in selling a recreational product, but its strategy is increasingly shifting towards low-income emerging market customers.
Ask Joe Speicher to name a startup that inspires him, and he will mention BioLite — a company that got its start 10 years ago making portable, wood-fueled cookstoves for campers. Speicher is the executive director of Autodesk Foundation, the philanthropic arm of a company whose name has become the proprietary eponym for engineering and design software. Though Speicher has seen a lot of design innovation, it’s a US$70 cookstove that most excites him.
“BioLite has taken our tools and optimized the efficiency and design of cookstoves,” Speicher says. “They’re taking a proprietary technology and putting it in a new context.”
That new context is African and Asian countries, where BioLite is selling an adapted version of its ultra-efficient camping stove for off-grid, low-income families to use for daily cooking. BioLite has actually been selling its HomeStove in emerging markets, mostly in East Africa, since 2013. But last year, the company launched a redesigned stove and an off-grid solar home lighting system as part of a major shift that puts energy-poor households at the center of its business strategy.
“We’re hoping over the next year to [sell] somewhere between 80,000 and 100,000 units across our stoves and our solar home system,” says Ethan Kay, BioLite’s emerging markets managing director. “That would be about two times what we [sold in 2017], and we’re continuing to forecast for the next few years a doubling of our sales volume.”
It isn’t an easy road to reach those goals. Many of BioLite’s target customers are remote, unbanked, or both. Getting the product in front of them is challenging enough, but then BioLite has to convince them to pay for it. For many, the HomeStove costs more than a month’s wages.
What’s more, the improved cookstove market is full of stories of poorly made or unsuitable products, unsuccessful marketing and distribution strategies, adoption failures, and consumer financing woes. So why would a company that has already made a name for itself with a product for an elite base of customers go to the trouble?
The financials, for one. Camping gear is a $31 billion annual market in the U.S., according to the Outdoor Industry Association’s 2017 Outdoor Recreation Economy report. Most of that is spent on vehicles, however; equipment and accessories comprise only a small part of consumer spending.
By contrast, the world’s population of people living on less than $3 per day collectively spend $133 billion annually on energy expenditures, according to World Bank global consumption data.
There’s also significant potential for positive social and environmental impact in selling high performance cookstoves to energy-poor customers. Nearly three billion people rely on open fires or traditional but smoky household stoves for their daily cooking. Securing fuel to keep cookfires alight is expensive, both in terms of money and time. And the cookfires, many of which are tended indoors, emit a lot of smoke and particulate matter that cause respiratory diseases and are linked to four million deaths annually. Meanwhile, the smoke and particulate matter that gets outside and into the atmosphere has a negative impact on the environment.
Recreational niche
Most of these issues weren’t on BioLite’s founders’ radar when they decided to build a high-efficiency, portable cookstove. The Brooklyn-based company’s founding story is mostly rooted in recreation and convenience. The founders, Jonathan Cedar and Alec Drummond, are both avid outdoorsmen who enjoy long backpacking trips. In order to cook meals outdoors, however, their campstoves required hydrocarbon fuel, packaged as canisters of butane or propane, which added to their load and left the campers with fuel containers to dispose of when they were empty.
What Cedar and Drummond wanted instead was a portable stove that burned readily available wood fuel. They also wanted a stove that could do this efficiently by achieving near full combustion, unlike a campfire. Other campstoves achieved this by utilizing fans, but running a fan would require a power source, but they didn’t want to carry the extra weight of batteries. Instead, they looked for mechanical solutions for generating electricity, and eventually settled on using a thermoelectric generator.
What the technology does is it converts heat flux into electrical power. The generator is essentially a semiconductor, which the BioLite team compares to a solar panel for heat instead of light. As the heat differential on either side of the generator grows, electrons scurry across the membrane, creating electricity. The larger the differential in temperature, the more electricity gets generated. That electricity can, in turn, be used to power a fan that bring fresh oxygen into the fire and help it burn hotter, and thus more efficiently.
Cedar and Drummond’s earliest prototype of their aptly named CampStove came out in 2006. In 2008, the founding team took the stove to a global cookstove conference where it was recognized for its ultra clean burn. It was the only stove at the conference that didn’t need to be plugged into an outlet to achieve such a high level of combustion efficiency.
It was also at the conference that the co-founders learned about the scale of the indoor air pollution problem.
Broader application
The reason traditional cookfires generate a lot of smoke is because they don’t get enough oxygen at the point where the fire mixes with the fuel. “As a result, the combustion process is incomplete, and that incompleteness creates small particles, which get into people’s lungs and cause fatal respiratory disease and also go up into the atmosphere and contribute to climate change,” explains Kay.
Having addressed this problem with their CampStove design, Cedar and Drummond realized their product could have an application beyond the camping sector, and that there was a much larger market in which the stove could have a greater impact.
It took several years for the BioLite team to develop a prototype of its first HomeStove. The model was about the size of a 20-liter bucket. It was designed to burn any biomass fuel source from wood to cow dung to crop waste, which the user would feed through a side opening and light much like a common three-stone open fire.
Performance-wise, the HomeStove emitted 90 percent less smoke and particulate matter than an open fire, which, like the CampStove, it achieved that by utilizing a thermoelectric generator and a fan. Also, because the stove could generate more power than the fan needed, the stove could also power small electronics via a USB port on the side of the stove.
After the first HomeStove prototype in 2010, the BioLite team went through four full rounds of prototyping, small production, user testing, refinements, and design iteration before taking the HomeStove into production in 2013, and another four years before launching the current model, HomeStove 2. During the years in between, they made improvements in user design, performance, and cost of goods.
Functionally, the basic design has remained the same. It works with any locally available fuel, but the current model has a wider fuel mouth. “We increased the mouth of the stove by about 50 percent compared to the last version,” Kay explains. “Cooks can feed larger pieces of fuel into the mouth of the stove. It’s also made it easier to light the stove.”
Perhaps the most significant improvement is that the HomeStove 2 accumulates about 80 percent less char, or unburnt fuel, in the combustion chamber than the original HomeStove design. One can cook for three or four hours without having to scrape out the char. “This differentiates [HomeStove 2] not only from the previous version of the stove, but frankly from every other stove that’s in the market. Typically, after about 30 minutes of feeding wood into the mouth of the stove, the cook needs to dump out the char, which is choking the combustion chamber,” Kay says.
This greatly improves the “clean cooking” aspect of the HomeStove. That is because when cooks have to clear char from the stove, the char is typically still burning and giving off smoke, which essentially creates an open, smoky fire inside the home — not unlike the traditional cookstoves and fires households would otherwise use.
BioLite’s team has also reduced the HomeStove’s emissions by an additional 10 percent, bringing its improved emissions performance over an open fire closer to 95 percent.
“That matters because public health experts argue that a minimum 90-percent threshold is required to have any impact on health, because the relationship between smoke and respiratory disease is not linear,” Kay explains. In other words, a 10 percent reduction in smoke does not lead to a 10 percent reduction in respiratory risk.
“[The relationship] is actually logarithmic, so a 10x reduction in smoke is required to [impact] the risk of respiratory disease,” Kay continues. “It’s ultimately asymptotic, and we’ve gotten about as close to the asymptote as you can get with the biomass stove.”
BioLite has also increased the amount of firepower in the new HomeStove by about 50 percent. By producing a hotter flame, cooking time with HomeStove 2 is much faster than the previous version.
And finally, the team has also increased electricity output of the USB port by about 25 percent. “As people’s phones are moving from feature phones to smart phones [which require] larger batteries, we’re able to meet those growing energy requirements,” Kay explains.
Distribution conduits
BioLite’s HomeStove and HomeStove 2 are fairly advanced cooking technologies, relative to other products available to their emerging market customers. At about $70 per stove, the product isn’t cheap for BioLite’s target market. So to reach customers, BioLite primarily works through credit-enabled distribution channels — outlets that offer end-user or consumer finance. These distributors include micro-finance organizations, agricultural cooperatives, banks, and more recently, companies that sell and finance solar products.
“The reason we prioritize credit channels is because for cash-poor households, being able to pay off the cost of the stove in small installments is really attractive,” Kay explains. Financing the product works in customers’ favor because the monthly installments customers pay add up to less than the monthly cost of cooking fuel, lighting, and cell phone charging services.
In short, from the moment that a customer buys a HomeStove, they are able to save money on the product. Then once they’ve paid it off, typically after six to 12 months, the stove provides recurring financial savings.
BioLite embeds its own sales agents within distribution partner organizations to provide HomeStove demonstrations to prospective customers and train them at the point of sale. These “Burners” as BioLite calls its agents will go into a community with a loan officer from a microfinance institution, Matt Goldberg, BioLite’s grant program manager, explains. “Our agent will demonstrate the product for customers who are interested and provide on the spot training so that people understand how to use the mobile charging capability and the light and understand what kind of wood to use, how to tend the fire, and how to clean the unit.”
The team also provides comprehensive after-sale service in case customers have problems.
A test of time and heat
Repair services can be costly for a business selling products to customers in remote places or communities with limited resources. BioLite’s team therefore put in a lot of work upfront to minimize the risk that such services would be needed for its HomeStove.
“[We’ve spent] a lot of time making sure the product itself is as durable as possible,” says Ryan Gist, BioLite’s director of product development.
BioLite’s engineering spent years studyingdifferent failure modes of the thermoelectric generator, the fans, and the solid-state electronics. They’ve also examined the longer-term corrosive effects of different fuel types and heat on the stove’s metal components and the parts that sustain the cooking surface. And they spent the better part of three years reengineering the combustion system to improve the stove’s performance, cut the cost of product goods, and improve the stove’s durability.
To test durability, the team set up 24-hour test facilities in India and in their lab in New York and burned several stoves full-time for four months to accelerate the life-testing of the product. They also set up high-tech test rigs on each of the core components of the product.
“We have never put a product through the paces from a durability and performance standpoint like the HomeStove,” Kay says.
For the thermoelectric generator, they made a wind tunnel to characterize airflows. For the fan, they set up a heat cycle-test on the stove’s the power pack, which is where all the electronics are. The cycle-test continuously emulates high-heat cooking and no-heat cooling conditions.
Many of the improvements made for the HomeStove 2 launch have been based directly on user feedback. BioLite also set up a call center to follow up and collect feedback from all 20,000 of its original HomeStove customers. The team wanted to understand customer demographics, satisfaction and whether they were properly trained at the point of sale.
“All of our customers were given an opportunity to provide feedback on the product over the phone, and we [continue to] do those customer check-ins just after purchase, and then at six-month and 12-month intervals,” Kay says.
BioLite also received support from the U.S. Department of Energy to conduct customer field trials and then consolidate, characterize, and synthesize user feedback.
“Most of the learning [from] our different field trials was just to find out what pain points people were experiencing,” Gist explains. “Often those pain points were centered around preparing the fuel and having to chop the pieces into really small parts, or having to have access to the charcoal economy or a pellet economy.”
“We witnessed people burning crop waste and big chunks of bark, and animal dung and pretty much every kind of biomass material you could imagine,” Gist adds.
Back in the lab, this led the team to focus on fuel flexibility and to designing the stove’s air injection system to perform at a high level independent of how well prepared the fuel was.
Tapping into aspiration
In spite of how well designed a product is, there are numerous challenges to introducing a new product to a new market. The improved cookstove market has confronted some particularly high hurdles and hard lessons, says Kip Patrick, senior director of partnerships and communications at the Global Alliance for Clean Cookstoves.
“People have cooked over open fires for what, 10,000 years? Trying to get them out of that habit is hard [as is] convincing them that they need to change, that they actually should buy the product,” he says. “And then we have to make sure they’re using the product properly.”
“Those three things are sort of the perfect storm, and it’s a challenge,” he adds.
Gender barriers also present an obstacle in the improved cookstove sector. Ethan Kay wrote his PhD dissertation on cookstove adaptation and distribution before joining BioLite and knew from field research in India that women were mainly responsible for household cooking and that they and their children disproportionately suffered from health impacts. Yet it was men who made household purchasing decisions. For BioLite, that meant that the company would have to find a way to market the cookstove to men. It did this by emphasizing the stove’s electricity generating and charging capabilities.
“Men wanted the stove alongside their wife, and it really resolved the purchasing tension between husbands and wives that I had seen with other stoves,” says Kay.
Also, for BioLite’s relatively high-tech design, the company’s materials and manufacturing costs are higher than other improved cookstove models, which means it has to put a higher price tag on HomeStoves than other stove manufacturers.
“We really believe that we’ve got the best technology that will actually have the most impact in terms of reducing smoke, but it takes a certain amount of cost to be able to do that,” Gist says. “Not all of the people at the base of the [economic] pyramid who really need access to this technology can afford it, which means a lot of the work we have to do now is beyond engineering and manufacturing,” Gist says.
This is why BioLite is focusing so intensely on identifying new distribution partners and new customer financing models that will work with customers to purchase the stove on affordable but profitable terms.
Patrick says this is a critical issue to many improved cookstove makers, but that some cost-reduction options for companies with higher quality stoves include using local materials, local distribution points, and incorporating government subsidies.
BioLite’s team says that one other aspect of its product has helped them overcome cost issues with its emerging market cookstove customers: the fact that its product was originally designed for high-income customers.
“Households really aspire to not only have the comforts of ‘the city’, but in certain cases, to have the types of technologies that folks in wealthier countries have access to,” Kay says.
This was a surprising discovery to BioLite and has been significant to the company’s overall business strategy. In the early days of its “parallel innovation” approach, BioLite’s team expected that its camping customers would appreciate the company’s mission of supporting energy poor customers worldwide. But learning that its emerging market customers valued BioLite’s product in part because customers knew the company made high-quality products for wealthier markets, has helped instruct BioLite’s growing emphasis on emerging market sales. And, Kay concludes, it has helped BioLite uncover “a way to bring modern conveniences that create aspiration.”
This case study was written by Demand contributing editor Sara Goudarzi and is featured in Demand’s Winter 2018 issue.
