The nutrition sector is at a critical point in its development. Scientists and economists are in agreement nutrition is critical to good health and economic growth. New platforms like the Scaling Up Nutrition (SUN) Movement, have seen more than 50 national governments develop nutrition strategies, and new pledges to nutrition were announced at the Nutrition for Growth summit last year.
Funding for public health nutrition programming is beginning to flow – but this is only part of the picture. Today, more than two billion people suffer from malnutrition. Yet, public funds cover just a tenth of the $10 billion per year the World Bank estimates as the cost of solutions. Can the private sector fill the gap?
The theme of the Nutrition for Growth high-level meeting last year was “Beating Hunger through Business and Science”. A laudable aim but something that’s easier said than done in the field of nutrition. In agriculture, during the lull in public funding leading up to the 2008 food crisis the private sector picked up the slack in new research, with companies spending more than 7% of total sales on new product R&D. In the pharmaceuticals sector the private sector carries an even larger load, spending 15-20% of total sales on new R&D. Yet in the food sector, companies invest only 1-2% of total sales.
The food sector is unique in that the bulk of the industry focuses on fast-moving consumer goods (FMCGs) – products that are sold quickly and at relatively low cost. Unlike in the agricultural and pharmaceutical sectors, where product-related R&D drives new sales of products with high margins, investment into creating and testing new products is relatively low compared to spend on understanding consumers and markets. Increasingly clear is very little funding goes into research on nutritious foods, and even less into nutritious foods for low income consumers in developing countries.
Numerous obstacles make getting a reasonable return on this type of investment unlikely. These include the lack of consensus from the development community on appropriate products, target populations and labelling guidelines; lack of demand for nutritious foods among low-income consumers; and inexperience in navigating multiple distribution channels. In sum, the costs and risks of entering new markets with new products often outweigh the potential financial returns.
To lower this risk GAIN has worked with ten global companies to launch the Business Platform for Nutrition Research (BPNR). These companies, including Unilever, GlaxoSmithKline, Mars and Pepsi, have tremendous capacity for supporting new research, as well as expertise in issues such as behavior change communication and food safety. The platform seeks to define, fund and disseminate research which addresses public health priorities and also has relevance to potential new products and services.
The link between public health research and commercial application is often missing in traditional nutrition research. Scientists lament that their research “sits on the shelf” and businesses lament the lack of high-quality, commercially relevant research. The BPNR will close this gap – exploring research topics “pre-competitively” so multiple companies will co-invest in mutually beneficial research that does not generate intellectual property for any company.
While some will undoubtedly question the credibility and independence of a platform which puts business at the centre of research, the BPNR goes to great lengths to ensure transparency and rigor in all its work. It is co-funded by a public sector partner, the Government of Canada; research will be conducted by independent research universities and overseen by an advisory group of global nutrition experts; and all results will be published regardless of outcome.
No matter your perspective on the role of business, we can all agree we need more investment in nutrition research – and the public sector can’t bear the cost alone. New platforms can help generate more investment in research which is crucial if we are to tackle malnutrition in our lifetimes.
One Response
To add to the list of research topics, I’d like to add research on how the ecosystem of players that is required to implement action on nutrition can coordiate. This ecosystem typically includes various public sector agencies, private companies, non-profit organizations, the consumers, and sometimes even farmers. With the Harvard Kennedy School CSR Initiative, we researched SAFO, the Strategic Alliance for the Fortification of Oil, in Tanzania in 2011. SAFO took a deliberately systemic approach in bringing all these actors to the table to develop and execute a shared implementation plan. Thanks also to the efforts of the Worldbank, obligatory fortification of oil has come a long way in Tanzania. The case study offers just a one-off snapshot of this process. It would be great to track the dynamics of such systemic initiatives over the years to better understand how these many players can collaborate effectively and what causes delays and failure.