Firms target nutrition for the poor

Published by rudy Date posted on July 3, 2009

Rip the top off a small sachet, the size of a hand, and inside is a delicious, creamy peanut goo that you suck from the packet.

It is messy and delicious.

And it has already saved the lives of countless children on the brink of death from starvation around the world.

Inspired by a hazelnut chocolate spread eaten by children throughout Europe at breakfast time, these sachets are used to treat children suffering from severe acute malnutrition.

They contain a high-energy food crammed with high-protein peanut, milk, sugar, oils and fortified with extra vitamins and minerals.

The sachets have revolutionised emergency feeding in humanitarian emergencies because they can be eaten directly from the packet, do not require refrigeration or mixing with clean water – often in short supply – and can be stored for years.

Soaring sales

Importantly, the gooey paste can be absorbed by extremely ill children.
That is why packets of so-called Ready-To-Use-Foods have become the cornerstone of humanitarian aid projects around the world.

Unicef, which buys three quarters of the world’s supply, bought 10,000 tonnes of these sachets last year, more than triple the volume bought in 2007.

Two or three packets a day for about three months can help a malnourished child recover, according to Unicef.

Medecins Sans Frontieres and the former US president’s Clinton Foundation are major buyers too.

Made in Africa

The demand for peanut life-savers has shot up so dramatically in recent years, that two British doctors – who have worked in some of the world’s most devastating humanitarian emergencies from Darfur to Rwanda – have decided to start manufacturing packets in Ethiopia this month.
Their food company, Valid Nutrition, is manufacturing in Africa to ensure local labour and foods, such as peanuts, are sourced there too.

The company already owns a factory in Malawi, and has also subcontracted local factories in Kenya and Zambia.

It also provides technical know-how on food quality rules, so that manufacturing facilities are up to international quality standards, the branding and links to buyers in non-government organisations (NGOs).

Not diverted

The company is entirely not-for-profit.

While day-to-day manufacturing is managed by industrialists with experience in food manufacturing in the world’s largest companies, the board is made up of humanitarians who have worked for major NGOs such as ActionAid and Plan International.

“It’s a lovely form of business,” says Dr Steve Collins, who set up the company with colleague Dr Alistair Hallam.

“I didn’t want the production of these foods to be in a for-profit company,” he says.

“Money could have been diverted not for humanitarian purposes, but to shareholders.”

Rapid expansion

Dr Collins turned from medicine to food manufacturing after fears that rocketing global demand for Ready-To-Use-Foods could not be met by the firm that owned the patent for the recipe, French Nutriset, which sells its food under the brand name Plumpy’nut.

As a result, Valid Nutrition has become one of a growing band of companies paying Nutriset a royalty to use its recipe.

Valid Nutrition’s Malawian factory has firm orders for almost 11 million sachets so far this year, compared with just 88,000 three years ago.

Another is the Ethiopian Hilina Enriched Foods Processing Centre, which plans to expand Plumpy’nut production from Ethiopia into east Africa this year.

A third, Norwegian manufacturer Compact for Life, began manufacturing in India two weeks ago and plans to expand to countries where Nutriset has not patented Plumpy’nut.

Added nutrition

But supplying emergency rations to aid agencies is not the only market targeted by firms such as Valid Nutrition and Hilina.
They are now trying to fortify everyday foods that can be sold to consumers.

The idea is to target people suffering from a less acute, but more widespread form of malnutrition that affects a staggering two billion people worldwide.

Many eat enough calories to live, by consuming staples such as rice or bread.

But far fewer can afford foods containing crucial nutrients provided by meat, pulses or vegetables, a situation that has been exacerbated by last year’s food crisis. Food prices are still higher than before the crisis began.

Each year, this type of malnutrition kills 3.5 million under-fives and damages 178 million others.

Fortified food

Children malnourished in the first 1,000 days of life suffer irreversible damage to their bodies and brains, explains Katherine Kreis of the Bill & Melinda Gates Foundation, which is funding companies that want to combat malnutrition.

“You are never going to be able to recoup what you lost in the first 24 months,” she says.

The few fortification schemes in existence have already had an impact on malnutrition.

Defects such as spina bifida dropped by 40% after South Africa passed a law to compel companies to fortify maize, a staple eaten throughout Africa.

Fortification is cheap too.

Foods supplemented with Vitamin A cost consumers a few pennies per year, but prevent blindness in children.

It is surprising, then, that few larger companies fortify foods as standard.

Reasons are legion; there is no market pressure and few companies see public health as a business imperative, according to Marc Van Ameringen of Global Alliance for Improved Nutrition (Gain), a Swiss not-for-profit organisation created at the UN to convince companies to fortify foods for the poor.

“It is pretty incredible that [fortification] isn’t being done across the board,” he says.

“Most people consume food from the private sector so we do need to mobilise it if we are going to make a dent in the number of people who are at risk.”

Incentives offered

Gain is a kind of dating agency for the public and private sector.

It brings together producers, NGOs and governments to create national strategies, and even laws, to fortify foods eaten by majority of a population.

Programmes that could eventually reach a billion people read like a shopping list of international cuisine: wheat flour for Egyptian Beladi bread, Vietnamese fish sauce, to Ghanaian palm oil.

But crucially, it is designing financial incentives to nudge more firms to develop new, affordable nutritious foods by convincing business it is missing a vast untapped market; an enormous number of consumers earning less than $3,000 (£2,450) per year, disappointingly referred to as the bottom billion.

Those incentives include loans, micronutrient and marketing subsidies and plans to buy debt eventually too.

Gain has already provided funds to Acumen Fund, a philanthropic venture capital firm, to invest in innovative producers.

Serious implications

But during a recession, companies may not be as willing to put resources into new products for previously untested market segments.

Decades of controversy over substitutes to breast-milk and other baby products sold to poor women have deterred companies from entering the space altogether.

Some activist groups are opposing the sale of Ready-To-Use-Foods, according to Arne Andreassen, managing director of Norwegian firm Compact for Life.

But Gates’ Ms Kreis says decisions by business not to produce such foods cost lives.

“There are clear implications for continuing with the status quo,” she says.  –Tatum Anderson, BBC News

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