Friday
June 11
2010

chris walker

A Private Sector Approach to Malnutrition in BoP Markets

“Food…represents the largest share of BOP household spending and the largest BOP market,” estimated at US$2.89 trillion, according to WRI and IFC’s “The Next 4 Billion” report. In many countries, over half of the typical BOP household budget is spent on food. These are astounding numbers, and they represent a significant market opportunity for businesses both large and small.

Equally astounding are the numbers on malnutrition. In a series of articles published in 2008, The Lancet reported that maternal and child undernutrition is the underlying cause of 3.5 million deaths a year and accounts for 35% of the global burden of disease in children under 5 (and 11% of the total global disease burden).

Combine the size of the BOP food market with the significant burden of malnutrition, and it seems improving nutrition would be an issue tailor-made to BOP business approaches. Yet malnutrition receives relatively little attention in BOP discussions (a search for “malnutrition” on the NextBillion blog yields only two pages of entries). So what is the relevance to the private sector? After all, aren’t the poor undernourished because they can’t afford enough food to eat?

In reality, only a portion of the malnutrition burden is due to lack of access to food. While increasing agricultural production is certainly important in fighting undernutrition, the experience of large-scale initiatives to increase food supply has shown that the nutritional quality of food consumed is also a key determinant of positive health outcomes. Without nutrients such as iron, Vitamin A and essential fatty acids available in the foods people eat on a regular basis, malnutrition is perpetuated.

The question of how the private sector can work to improve nutrition at the BOP guided discussions at the recent Global Alliance for Improved Nutrition (GAIN) annual Business Alliance Global Forum in Dubai. This gathering of large and small businesses, non-profits and policymakers, and foundations and investors demonstrated the enormous potential of harnessing private sector energies to address the age-old problem of poor nutrition and its consequences.

Many social entrepreneurs have already recognized this opportunity, as demonstrated by the 253 entries in a recent Ashoka Changemakers competition co-sponsored by GAIN with the theme of “Improved Nutrition: Solutions through Innovation.” GAIN invited five of these innovators to Dubai to open the Global Forum with presentations on their nutrition solutions that span the value chain. Coming before the opening plenary of the forum, the discussions of their inspiring work energized participants and set the tone for the coming two days. To kick-start your day with the same inspiration, you can read more about the entrepreneurs’ work and watch interviews with them here.

This dynamic start was essential, as the Global Forum was less of a “sit back and listen” and more of a “get up and do” conference, designed to engage participants in the tools and techniques of addressing malnutrition through business-led approaches at the BOP. The conference was organized around four interactive workshop sessions that not only gave participants first-hand experience in working through business issues at the BOP; they also facilitated networking and interaction among conference attendees, creating the seeds of new partnerships and collaborative efforts that could bear fruit in the coming year (pardon the food pun…):

  • Design and Innovation: “Do you know who your customer is? Do you understand what they really want and need, and how to design your service or product offering to meet those needs?” These questions were at the core of a workshop that introduced participants to design thinking and its relevance to nutrition. Led by Jocelyn Wyatt of the design firm IDEO, participants worked in small groups to design nutritious products based on the “human centered design” approach. While this approach can take several months from the first brainstorm to the final product, the workshop condensed the process to give everyone a taste of how it could be useful in reaching the BOP.

    Each group of participants gathered around a board displaying photos that BOP consumers had taken of their daily lives through a “self-documentation” exercise. For instance, Kona, a resident of Bangladesh, uses a cell phone every day, lives in informal housing, and would like to have a bicycle. Her favorite beverage is a branded, packaged fruit drink. When she’s sick, she eats eggs and sliced bread. Based on initial consumer insights such as these, participants discussed what types of nutritious products might meet customers’ preferences and desires. One group designed a nutrient-fortified sauce that could be added to home-prepared meals in India, complete with a brand (Achi Maa, meaning Good Mother) and packaging. Participants in the final workshop built prototypes of several of the products to show how they would be packaged, marketed, and displayed in stores. The relevance of design to tackling malnutrition was clear, whether in generating new food products or in tailoring marketing campaigns and package design to the tastes and preferences of BOP consumers.

  • Measuring Impact: Led by Susan Stout, formerly of the World Bank, this workshop explored impact measurement from the perspectives of both “generators” and “users” of impact data. Several experts provided insights on the importance of using metrics to figure out how to achieve success, not just to punish poor performance. Participants engaged in social investing also illustrated some of the complexities involved in measuring impact at the BOP and how to utilize data to make better decisions about allocating resources.

    Workshop participants then took on the roles of various impact data “generators” (such as social enterprises, non-profits, universities) and “users” (corporate leaders, social investors, foundations) to gain a better understanding of the challenges and opportunities faced by each group. They also focused on how new partnerships could be formed between seemingly disparate groups of generators and users to enhance the value of impact measurement. Discussions revealed a range of ways in which these groups could work together to generate impact measurements that are more useful to decision makers.

  • Business Models for the Base of the Pyramid: “There is no holy grail to business models at the BOP.” So concluded the series of workshops led by Pradeep Prabhala of Monitor Group’s Inclusive Markets Practice. This key lesson argues for a nuanced approach to developing each business model, based on a deep understanding of local customers (echoing the theme from the design workshop). In fact, in many cases only incremental changes are needed to existing business models in order to reach the BOP.

    Workshop participants generated principles to guide the development of BOP business models, and then put these principles into practice by tackling two different business scenarios. In one scenario, a local food company wanted to introduce a fortified porridge into the Indian market and achieve significant market share within four years. What distribution channels should it utilize? What is the optimal marketing strategy? What does the competition look like? These and other questions engaged participants in a lively discussion, highlighting the challenges and opportunities in enhancing nutrition at the BOP.

  • Partnerships and Collaboration: Led by Gib Bulloch, Director of Accenture Development Partnerships, this workshop asked participants to imagine the role that partnerships could play in helping to eliminate malnutrition by 2025. Given the diversity of the organizations represented at the Global Forum, all of which have a substantial interest in reducing malnutrition, the potential for innovative partnerships was a dominant theme throughout the conference. By the end of the workshop sessions, participants had generated concrete ideas for four different nutrition partnerships and pitched them to the broader group.

In addition to the workshop sessions, several plenary panels explored themes ranging from “Women and Nutrition” to “From Corporate Philanthropy to Social Business: The Evolution of Corporate Engagement”. In closing remarks, Jay Naidoo, Chairman of GAIN’s Board, noted four key drivers of nutritional change: the central role of mothers; schools; the business sector; and governments. Given the diversity yet centrality of these different groups, it is easy to recognize the importance of collaboration and partnership in reducing malnutrition at the BOP.

Due to the growing urbanization of the developing world, more and more of the malnourished are now located in cities, where they are purchasing rather than growing their own food. This translates into a growing consumer base for businesses that produce and sell packaged foods and store-bought staples. As the private sector’s role in providing food grows, the potential for businesses to have a positive impact in improving nutrition grows with it. For those wishing to improve health outcomes at the BOP through business-led approaches, joining the fight against malnutrition would be a good place to start.

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