Food Fortification An Investment into the Future...SunCo took ‘dual bottom line’ advantages from oil fortification -> Customer Success SunCo VA Oil was internationally awarded

BASF Food Fortification www.food-fortification.com 1 9/14/2012

Food Fortification

An Investment into the Future

BASF Food Fortification

Dr. Andreas Blüthner Teamleader

Better Foods for Better Lifes 3rd Edition

Fondation Merieux – 13th September 2012


1. Why Food-Fortification ?

BASF Food Fortification www.food-fortification.com

Micronutrient Malnutrition What does food fortification look like?

Oil – Ghana Fortified with vitamin A,

Low cost package

Soup Cubes – Spain Fortified with vitamin A,

Sold accross Africa

Products from Africa:

Oil, Milk and Margarine

Cooking oil – Indonesia Fortified with vitamin A


FF Projects Chile

Brazil

Bolivia

Venezuela

Dom. Rep. Cuba

Indonesia

Cambodia

Bangladesh India

China Turkey

Libya

Togo

Morocco

Congo

Cen. Af. Rep.

Sudan

Ethiopia

Tanzania

Uzbekistan

Pakistan

South Africa

Egypt

Algeria

Belarus

Burkina F.

Benin

Peru

Germany

El Salvador Guatemala

Cote d’Iv.

Ghana

Iran

Jemen

Canada

Colombia

Kenya

Malaysia

Nicaragua

Nigeria

Philippines

Zambia

Saudi Ar.

Senegal

Spain

Syria

Thailand

Uganda

USA

Vietnam

Arab

Emir.

Mongolei

Cameroon

Active and potential FF countries

Global Overview


Micronutrient Malnutrition The Global Challenge

1 million children to die before the age of five

50,000 women to die during or soon after childbirth

19 million infants to be born with impaired mental capacity

100,000 infants to be born with preventable physical defects

6 billion US$ in lost adult work performance

In the next 12 months, vitamin and mineral deficiencies will cause globally:

Vitamin A deficiency affects 40-60% of children under-five in the

developing world, compromising immune systems, and causing a

million deaths a year.

Source: GAIN, UNICEF


Complementary Interventions Supplements, Fortification, Dietary Diversification

Covera

ge

Time

Years 0 5 10 15 20

Fortification

Supplementation

Dietary improvement

Vietnam Egypt

Bolivia

Nigeria South Africa

Central America

Columbia, Ethiopia,

Mongolia, India


Cost of Fortification - Selected Product Applications

Product Level Impact on food price

Sugar (vit. A) 50 IU/g @ 0,5 – 1 %

Flour (vit. A) 10 IU/g @ 0,2 – 0,5%

Veg. Oil (vit. A) 45 IU/g @ 0,1 – 0,5 %

Milk (vit. A) 10 IU/g @ 0,1 – 0,4%

Yoghurt ”Big 5” @ 0,2 – 0,5%

Soup Cubes (vit. A) 200 IU/g @ 0,1 – 0,3%

…Fortification is not costly – but cost-effective

Micronutrient Malnutrition

Cost of Food-Fortification


VM Deficiencies

Economy/ Employment

Education

Health

Poverty/

Standard

of Living

Estimated Economic Impact (GDP) in Selected Countries:

Kenya - 0,8 % ~ 328 Mio US$

Ghana - 1.1% ~ 660 Mio US$

S. Africa - 0,4% ~ 2300 Mio US$

Pakistan - 1,7% ~ 256 Mio US$

Iran - 0,3% ~ 151 Mio US$

Thailand - 0.4% ~ 113 Mio US$

China - 0,2% ~ 274 Mio US$

Philippines - 0,7% ~ 122 Mio US$

Vietnam - 0,6 % ~ 476 Mio US$

India - 1.0% ~ 1102 Mio US$

Uzbekistan - 1,2% ~ 372 Mio US$

Kazakhstan - 0,6% ~ 300 Mio US$

Peru - 0.5% ~ 580 Mio US$

Paraguay - 0,7% ~ 112 Mio US$

Data: UNICEF/MI Damage Report and US Government (2003)

Micronutrient Malnutrition Benefits of Food-Fortification


Cost-benefit ratio: Food Fortification: 1:200 Supplementation: 1:43

Copenhagen Consensus Rating 2008/2012:

Micronutrient Malnutrition

Challenges and Solutions Cost-Effective Investment into Development

Rating Rank Challenge Opportunity

Very Good 1. Malnutrition Micronutrient supplements for children

2. Trade Implement the Doha Development Agenda

3. Malnutrition Micronutrient fortification

4. Diseases Expanded immunization coverage for children

Good 5. Malnutrition Bio-fortification

9. Malnutrition Community-based nutrition promotion

10. Women Provide support for women’s reproductive role

Fair 13. Water Rural water supply

www.copenhagenconsensus.org


2. Our Approach to FF


The ‚Dual Bottom Line‘

Business success

Partnerships

Innovation Communication

CSR1)

Employer Branding Market access

‘Dual Bottom Line’ benefits estimated 1,5 times of sales value*

1) CSR = Corporate Social Responsibility

* FH LU (2010)


Our Partnership Contributions

Product

Solutions

Processing

Solutions

Societal

Contributions

Technical capacity building

Analytic support and guidance with trials

Support for quality control (test kits)

Access to cost-effective, stable and save products

Innovative packaging solutions

Support in marketing and business planning

Support for realizing communication benefits

Partnerships with international organizations

Access to academic network and alliances

Positioning in multi-stakeholder fortification alliance

Access to international know-how


Product Solutions: Highly Stable Vitamins

Simple Spray Dried Material vs. BASF Encapsulated Vitamin

Beadlets are up to 80% more stable and cost-effective. Encapsulation

guarantees desired health safety and impact of fortification projects

Quality, Effectiveness and Cost Effectiveness

Dry Fortification


Cis- versus and all-trans Retinol

Decisive for effectiveness of VA oil FF is all-trans retinol

All-trans retinol is more stable compared to cis-forms because

cis-forms are more likely to form kitols, which are not bioavailable.

OR

O

O

R OOR

All trans Vitamin A

// (Stable)

Kitols – no Vitamin A effect

Cis Vitamin A

+

The di-en compound must be Cis-form Ref: Runge F and Heger R, J. Agric. Food. Chem.

Vol 48, no 1, 2000


Oil Fortification


0

10

20

30

40

50

60

70

80

90

% Remaining

after 21 days

45°C

BASF Competitor 1 Competitor 2 Competitor 3

Stability in flour


Stability of VA in Application


Contact SAFO Technical Advisory Team: Claus Soendergaard

Global Application Manager [email protected]

Technical Advisory Service


FF Partnerships:

Basic Principle

BASF Engagement Model with Partners

Common goal

Mutual

benefit

Complementing

Contributions

Diverging

interests

Diverging

Interests

Differing

motives

Differing

motives


FF Partnerships:

Complementary Contributions

Partnership: Goal & Complementary Contributions

GIZ/UN/Government/NGO‘s BASF

Common Goal: Reaching 100 Mio undernourished people with Vitamin A fortified foods

Multi-stakeholder dialogue with local partners Technical and analytic support for local

companies (customers)

Institutional development of local governments Quality control (Test Kits)

Advice on developing local industry standards

and labelling schemes

Business planning with customers

Advice on regulatory processes

Scientific advice (fortification level calculation)


Danone DREAM Project

(Bangladesh)

Price: € 0,06 per 90g cup

Cup: Bio-Degradable (BASF)

Nutrients: BASF

Strategy: Market Entry backed

by profitable products, decentra-

lized, HQ-driven

Production: Small and local

Supply: without cooling chain

Distribution: ‘Danone Ladies’

Financing: Grameen Bank ->

loans for distribution trolleys

Strong COM benefits for brand

MNC BoP Project: ‚Shoktidoi‘

(Best Practice)


Creating a FF Champion

(Best Practice)

Success Story Oil FF Indonesia

Business success

Partnerships

Scientific Marketing Customer Recognition

and Loyalty

Gov Relations

Employer Branding Media

SunCo took ‘dual bottom line’ advantages from oil fortification -> Customer Success

SunCo VA Oil was internationally awarded as ‘Indonesian Superbrand’ in 2010


Market Framework and

Quality Control

Oil Fortificaton: Market Segements and Target Group Reach

Reach into Target Group Upper Market Segment Snacks, Milk, Bottled Oil…

Middle Class

Pouches

BoP

Barrels §

Same products differ in packaging material and size depending on BoP segment


Vitamin A Analysis Hardware available for Vitamin A Analysis

23 INTERN

1. HPLC 2. BASF TestKit 3. iCheck TestKit

30,000USD for equipment

Technical highly trained staff

50-100$ per analysis

Cost effective 0,02-0,05$

pro analysis Ready to use

Low skills required

Testing closer to the end

60% less cost compared to

common methods 8-15$ pro analysis

Reduced analysis time

Lower technical demands High precision

22/8/1012


BASF Food-Fortification

www.food-fortification.com

Thanks for your

attention

• Hunger Maps

• Legislation

• Potential Calculator

• FF News


FF Program Sequences (1)

FF Engagement Model: Clock

Advocacy stage

Facilitation of multi-stakeholder dialogue

Consensus building on optimal

fortification levels

Producer Awareness

(Management & Technical)

Technical pilot phase

Technical capacity building for

staple food producers

R&D approval, management commitment

Business plans including CSR aspects

and cost-effective BoP business models for producers and association


FF Engagement Model: Clock

Voluntary/Standard setting phase

Include FF into standards, labelling

and legislative frames

Involvement of public sector partners

Involve local media, government and

Producers into awareness raising

Quality control and compliance stage

Advice to national authorities on developing a long-term strategy on legislation

Support for the development of monitoring, evaluation and quality control capacities

Provision and introduction of Test Kits

FF Program Sequences (2)

Documents

Food Fortification An Investment into the Future...SunCo took ‘dual bottom line’ advantages from oil fortification -> Customer Success SunCo VA Oil was internationally awarded