What role can business play in tackling nutrition?
A few months ago, I travelled to Tanzania to research and understand if and how the private sector can overcome challenges relating to distribution, affordability, acceptability, and nutrition impacts among others; where policy support can be needed; and to learn lessons about innovative and effective business models. The findings were recently published in the case study 'The role of business in providing nutrient-rich foods for the poor'.
The case study focused on Power Foods, the only company in Tanzania that operates a dual business model: the traditional business of the company, Power Flour, which makes consumer products; and Power Foods brand, which produces RUTF2 for institutional buyers such as UNICEF. This allowed us to compare the challenges faced by a more traditional market based business model (Power Flour) with a public non-profit distribution one (Power Foods brand).
Power Foods is a local pioneer medium-sized company producing blended flour, along with other products. Its products are fortified with essential micronutrients, packaged and branded, and certified by local regulatory agencies. Anna Temu, its founder, started the business 20 years ago to “process and distribute quality nutritious food products for children at affordable prices”, though still today, they struggle to reduce their costs and make their product affordable and accessible to low-income consumers, especially those located in remote rural areas.
What is striking about the findings is that the majority of Power Flour challenges are outside the company’s control. These include a lack of market signalling mechanisms to control the nutritional quality of its products, low consumer awareness about nutrition, and weak distribution channels to reach the most vulnerable areas3. These create an environment where it is very difficult for businesses to produce fortified products at affordable prices. On the other hand, Power Foods’ experience of selling RUTF exemplifies how, having the quality, demand and distribution channels guaranteed by donors like UNICEF, these products reach their targeted population. However, RTUF is typically used in emergency situations only. Sustainability and funding are the critical challenges for non-profit distribution models.
How can these challenges be overcome?
Power Foods has proven successful at developing a business model selling nutrient-rich foods, well-known for its high-quality products and commitment to nutrition; however, it has not succeeded at making these products both available and affordable to low-income groups.
Chronic undernutrition affects over 30% of all children in Tanzania; it is clear that public distribution, or private business alone are not enough. In order to cover this gap, a holistic approach is required, with alliances that target systemic changes and involve other stakeholders, like governments, donors or civil society. Collaborative initiatives like running nutrition behaviour change communications and campaigns, or creating certification schemes for particular products.
The recent launch of the SUN business networkin Tanzania, with more than 100 organisations, local companies, multinationals, UN, government, civil society, is an example of this collaboration. However, it is necessary to follow its activities to ensure they target structural nutritional challenges. They might find helpful the recommendations of this case study on how to collaborate with businesses to catalyse their potential.
This post originally appeared on the IDS blog Globalisation and Development.
2. RUTF stands for ready-to-use therapeutic food and it is used for the treatment of severe acute malnutrition. For a more detailed discussion about these products, see Lybbert (2011)
3. These constraints have also been encountered by businesses in other African countries, see Anim-Soumah et al (2013) and Robinson and Humphrey (2013) for examples of this.
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