Investing in the middle of the chain to diversify diets

Bonnie McClaffertyDirector, Agriculture and Nutrition, Global Alliance for

Improved Nutrition (GAIN)

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The malnutrition problem

• Malnutrition remains a serious problem despite decades of attention.

• While the quantity of food available remains an issue, the nutritional quality of food eaten is widely missing. The poor eat largely staples but diverse quality diets are essential

• Current efforts are largely therapeutic in nature rather than preventative and are not easily sustained nor do they address the root causes of malnutrition, an inadequate food system.

• To date, few public nutrition interventions have demonstrated sustainable impact at scale. Markets must play a role. Even farmers are net purchasers of food

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Between 40-51 nutrients

Photo credit: Hungry Planet: What the world eats. 2006

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Mapping sources of food for the undernourished: Foods move within a system

Markets

On Farm Consumption

X X X

Local Market X X X X

Formal Markets X X X X X X XPublic Institutions

X X X X X X X

Inputs into Food

Production

Food Production

Food Storage and

home processing

Industrial Food

Processing

Distribution, Transport &

Trade

Food Retailing,

Marketing & Promotion

Food Preparation & Catering

“Value-chain concepts offer considerable potential for enhancing efforts to improve nutrition, and they provide a framework within which opportunities for leveraging agriculture for nutrition can be identified and implemented” – IFPRI (2012)

Traditional Food based intervention focus areas

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Mapping sources of food for the undernourished

Markets

On Farm Consumption

X X X

Local Market X X X X

Formal Markets X X X X X X XPublic Institutions

X X X X X X X

Inputs into Food

Production

Food Production

Food Storage and

home processing

Industrial Food

Processing

Distribution, Transport &

Trade

Food Retailing,

Marketing & Promotion

Food Preparation & Catering

“Value-chain concepts offer considerable potential for enhancing efforts to improve nutrition, and they provide a framework within which opportunities for leveraging agriculture for nutrition can be identified and implemented” – IFPRI (2012)

Traditional Food based intervention focus areas

Private Enterprise Drive Agricultural Value Chains

Seeds, fertilizer, pesticide, irrigation,

equipment, crop selection

Farming practices, harvest and post-

harvest techniques

At or near the farm: home or

warehouse storage & processing

Industrial: food storage &

manufacturing

Bulk packaging and transport to market Point of purchase Point of

consumption

Farmers , fertilizers, diverse

horticultural seeds,

biofortification

Storage and handling at the farm gate. Prevention of loss and food safety

Commodity storage to reduce

degradation Reduced milling & polishing time

Cold chain & storage systems

FortificationReduced milling & polishing time

Nutrition-sensitive bulk packaging &

transport (e.g. cold chain,

storage systems)

Nutrition-sensitive retail packaging &

brandingPromoting

importance of good nutrition

Promoting importance of good nutrition. At home

fortification

Inputs into Food

Production

Food Production

Food Storage and

Home processing

Industrial Food

Processing

Distribution Transport &

Trade

Food Retailing,

Marketing & Promotion

Food Preparation & Catering

The Marketplace for Nutritious Foods

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Business planning support. Grants and Technical

assistanceTraining and information

access

Access to investors

Marketplace for Nutritious Foods: A Community of Practice of Local Enterprises

“The Community of Practice gives us the opportunity to learn more about how to improve and make our business grow. This initiative is very important for us because by participating in its convenings, we learn about new approaches to position our product. We are learning more about nutrition and its importance and how we can contribute to improve the nutrition of Mozambicans.” Octávio Muchanga, Managing Director, Xikhaba, Mozambique

As of December 2013Country Membership ConveningsMozambique 70 8

Kenya 100 6Tanzania 109 2

• Training and seminars

• Dialog with Policy

• Networking

• Communication Platforms for Engagement

• Business Mentoring

• Investor Interface

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Innovation Accelerator: Stimulating and surfacing local innovation

Enterprises apply to the Innovation Accelerator, which provides advanced services to scale their innovative businesses for nutrition impact

Enterprises from the Community

of Practice, apply to the Innovation Accelerator

Decision/action pointsTechnical Advisory Committee at the Secretariat reviews applications; prepares an assessment report & ranking to award business planning.

External investors assess enterprises and make investments via Loans, Equity, Guarantees etc.

Investment Committee at Geneva reviews the awarded business plans to provide de-risking grant (financial + technical assistance).

Concept review Business planning Investment and leverage

Technical Advisory Committee assessment:• Nutrition contribution• Business viability• Agricultural product feasibility• Legal & ethical compliance

Specialized technical support to selected high impact Ag-Nut enterprises in business planning, capacity building, policy support.

De-risking grant and external investor interface.

Business and nutrition

delivery scale up via

investments

2 cycles per year

Marketplace Small Grants – Mozambique, Tanzania, Kenya

Enterprise Product Need

Vegman (Moz) Vegetable production and marketing company. Wholesale and retail of diverse vegetables in Chimoio, Beira and Tete.

Cold storage

Mkuza Chicks (Moz) Poultry processing, eggs, day old chicks. Innovation: Micro retail outlets in low-income settlements. Offering affordably packaged products.

Business planning TA and distribution, marketing and sales, possible capital.

Power Foods (TZ) Commercial processor of blended flours and complimentary foods. Focus on complimentary foods.

TA for market research, code compliant marketing and distribution to BoP

Morogoro Centre for Food Processing Training and Consultancy Services (MCFPTCS) (TZ)

Extruded amaranth and orange-fleshed sweet potatoes based dry vegetable soup/comp/sup food.

Some capital equipment, nutrition TA on formulation, code compliant marketing and distribution to BoP

ThinQubator Aquaculture Consultants (Kenya)

Nile Tilapia and catfish fingerlings Increase breeder stock and out grower ponds. TA for financial management, and marketing

Maziwa King (Kenya) Pasturized milk from dispensing machines. Coin operated

Cold chain management and additional machines. TA for financial management and marketing

Chicken Choice (Kenya) Chicken parts at low prices Refrigeration truck, coop feeders and drinking machines. TA

Catalyzing Investment for Local Nutritious Food Enterprises

Support incubated and investment-ready businesses in accessing capital through:• Links to local banks, angel investors, venture capital funds, and other business

partnerships and investors• Existing GAIN partnerships and potential new investment funds, such as:

• Root Capital• IFC• GAIN Food and Nutrition Security Fund

• GAIN-created funds under development:• Nutrition Credit Facility• Food and Nutrition Security Fund

Investment Vehicles and PartnersGAIN – IFC Nutrition Trust Fund

LGT Venture Philanthropy

Description

• Grants to incentivize private sector companies to tap market opportunities for nutritious foods for low-income consumers; IFC provides investment capital

• Grants, debt and equity to businesses that are meeting a broad range of nutrition needs

Root Capital Innovation Fund

• General Mills and Rockefeller Foundation are partners in a wide variety of nutrition initiatives through loans to organizations in Africa and Latin America

Investment size (USD)

2 million +

250,000 – 2 million

50,000 – 500,000

Other investment institutions (if needed)

• Provide capital to companies/projects where current partners are not present or do not have appetite (e.g., IADB – Ancalmo in El Salvador; Bio – PKL in Cote d’Ivoire; Fanisi, Pearl Capital, Soros)

500,000 – 5,000,000

Food and Nutrition Security Fund

• Debt and equity to support GAIN-led projects throughout global network

500,000 – 5,000,000

Nutrition Credit Facility• Short-term debt to private companies looking

to invest in nutritional quality of operations10,000 – 500,000

In development

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