Marketing to the malnourished

In the West, we worry about obesity, but “hidden hunger”—a lack of access to essential vitamins and minerals in the diet—may be a more serious problem. Around the world, more than 2 billion people suffer from micronutrient deficiencies, and half of all deaths among children under the age of five can be attributed to malnutrition.

How can the world solve this problem? The good news is that tackling malnutrition is second only to control of HIV/AIDS in terms of development effectiveness and value for money, according to the venerable economists of the Copenhagen Consensus. The challenge has been to get governments, donors, and, crucially, the private sector to pay attention.

Companies have a huge role to play in combating malnutrition, and they have real incentives to add vitamins and minerals to their food products. Recent research led by the Corporate Social Responsibility Initiative at Harvard has better outlined the business case for corporate action:

Fortified foods provide new opportunities to add value, and economies of scale will lower prices and reach new customers. In addition, raising product quality will stimulate competition and trade. 

The countries whose children are worst affected by malnutrition include many of the biggest emerging markets for private sector investment, such as India, China, Nigeria, Indonesia, and Vietnam, so the incentive is there. Multinational firms are starting to take notice, and the topic featured on the program at Davos this January. 

Key is the development of local supply chains. Unilever has nearly doubled the use of iodized salt in Ghana, at the same time creating a network of hundreds of local people to distribute to towns and rural areas. Tetra Pak supports school feeding programs that facilitate production of locally sourced milk or fortified beverages that don’t need refrigeration. Danone is teaming up with French soccer superstar Zinedane Zidane and Nobel Peace Prize winner Muhammad Yunus and his Grameen Bank to produce and sell fortified yoghurt in Bangladesh (even aiming to have edible packaging). These experiences suggest that success in large part relies on an innovative business model and effective partnerships.

One other lesson: It’s best to concentrate on the daily staples of each region, be it flour in Uzbekistan or soy sauce in Laos. Production for these items is often highly localized, so engaging local companies to fortify them is critical. This is not as easy as it sounds. The science for effective fortification is far from simple, and the cost, while low, still matters when margins are so small.

This raises the question: Should government mandate fortified production or rely on voluntary approaches? Mandatory approaches require enforcement—few countries can match China’s capacity to create an army of salt police to ensure that salt is iodized. A global business alliance supported by the Global Alliance for Improved Nutrition and the World Bank Institute tries to tackle such tricky issues. Time will tell how successful they are.

Michael Jarvis is a corporate responsibility specialist for the Business, Competitiveness & Development Program at the World Bank Institute. He is a regular contributor to the Private Sector Development Blog. Writers from the PSDBlog contribute a regular series of posts for Passport entitled “Fighting Poverty With Markets.”