USAID Institutional Capacity Building Grant, World Vision USPreventive Speakers Series: HIV/AIDS & Nutrition

Tuesday, December 11th9:00 am until 1:30 pm

Ebenezers Coffeehouse Basement Level205 F Street, NE

Washington, DC 20002

“Value” in Value-Added Food ProcessingA Commercially Sustainable Business Model for Enriched Ready-to-Eat-Foods

Land O’Lakes International Development

Rolf Campbell, consultant

Introducing a nutrition product development activity in Zambia.

Who: Land O’Lakes International Development supporting 3 Zambian food processors with a food industry advisor.

What: Assist food processors over 2 years to develop and commercialize nutrient enriched foods that are already familiar in the markets and in the diets of Zambians.

Where: Zambia: Lusaka, Ndola

Goal: Increase the available options for nutritious, processed and packaged foods for people living with HIV/AIDS and others who will benefit from better nutrition.

“Value” in Value-Added Food ProcessingBackground

“Value” in Value-Added Food Processing

A Commercially Sustainable Business Model for Enriched Ready-to-Eat-Foods

Project Background

Rationale

Value Added Processing: Potential Benefits for Consumers

Where Zambians Obtain their Food – the “Food Basket” & Sources

A Commercially Sustainable Business Model

Commercial Success Factors

Product Design Criteria & Product Descriptions

Product Development Status

Project Outcomes with Food Processors

Relevance, Benefit for PLWHA

Remaining Project Hurdles, Critical Outcomes

Contact Information

April 2004, Land O'Lakes begins implementing a $12 million multi-year Title II program in Zambia working with smallholder dairy producers, to build their access and supply to markets, support the milk processing sector, and collaborate with food distribution to NGOs/PVOs. Using a Title II ICB Grant (USAID Office of Food For Peace), Land O'Lakes has embarked on a very small sub-activity assisting Zambian food processors to develop nutrient enriched foods

(1) Conducted data base research through a desk study, literature review, interviews, and field work in Zambia;

(2) Consulted with NGOs / PVOs implementing PEPFAR and food aid programs that address nutritional needs of PLWHA in Zambia

(3) Engaged in ongoing work with Zambian food processors selected for their capacity to develop, produce and market enriched ready-to-eat foods.

(4) Working with these Zambian food processors to commercialize their enriched foods in 3 market channels

NOTE: Product development costs and marketing are entirely funded by the Processor businesses who also control the rights to their proprietary formulas and processes.

Background of Land O’Lakes ICB Nutrition Sub-Activity

Host country Food Processors are accountable to improve the nutrition impact of their products in the diets of consumers in their country.

Under-nutrition and the presence of food aid should signal a challenge and an opportunity for processors in countries receiving US commodities (such as wheat, maize, oil, legumes) and “value added” fortified blended foods (such as fortified corn-soy blend, wheat-soy blend).

Because the ultimate aim of foreign assistance - including food aid - is to address a temporary gap, not to become an endless alternative to long term self-sufficiency.

Rationale: The Call to Action

1. People require and acquire food daily from a wide variety of sources: (the food basket, grazing). Processed, packaged foods are one of these sources.

2. Ready-to-eat processed, packaged foods can be important, convenient sources of nutrition.

3. This puts the food industry in a position to contribute positively to the nutrition requirements of their consumers.

4. Small adjustments to the formulation of consumer foods can improve their nutrition contribution to the diet for little increase in cost.

5. Commercially processed foods can be adapted to Food Assistance and Institutional nutrition requirements.

Commercially viable (market demand) enriched foods create their own incentive for a “sustainable” food supply when: they benefit consumers while returning profits to processors.

Rationale

“Value Adding” Food Processing POTENTIAL Benefits for the Food Supply

1. Commodity assembly, storage, protection, handling2. Cleaning, grading, sorting, standardization3. Safety analysis for pathogens, culling for pests, foreign materials, cleanliness4. Drying, milling, pealing, de-hulling, crushing, grinding, pressing5. Intermediate bulk packaging6. Refrigeration, freezing7. Pre-cooking (& instant-ized) ready-to-eat foods contributes convenience, reduces

or eliminates need for cooking fuel, time preparing food. 8. Thermal processes: Pasteurization, sterilization, aseptic filling9. Pickling, salting, fermentation, culturing10. Filtration, sifting, isolation and concentration of food components11. Formulation: blending, combining foods, seasoning, adding performance factors

like enzymes, nutrition, and culinary appeal12. Fortification with vitamins and minerals13. Consumer Packaging protects, contains, portion controls, and identifies contents

with detailed product information as well as identifying the manufacturer accountable for the contents.

14. Concentrate food nutrients and caloric density: people to ingest better nutrition while eating less volume.

15. Processed shelf stable foods remain fresh, safe, with nutrients intact, allowing for distribution and longer storage far away from manufacturers even into remote areas

1. No or reduced cooking (cooking heat / time) – pre-cooked

2. Improved Digestibility / Bioavailability of pre-cooked nutrients such as

proteins and carbohydrates

3. Convenient – no preparation including sorting, cleaning, peeling, grinding,

mixing, cooking

4. Often hand-held, portable, and portion controlled

5. Nutrient preservation (reduced thermal processing)

6. Nutrients / foods can be combined & balanced

7. Increased Nutrient concentration or density

8. Safety, sanitation of food

9. Packaging for containment, protection, storage, re-closing, identification,

portion control

Processed, Packaged, Ready-To-Eat-Foods:POTENTIAL Values to the Consumer

People do not seek or eat “nutrients”, we eat foods.

Most people do not eat one food; we eat meals.

People are seeking foods and making food choices continually.

The only nutrients that count are in the foods people CHOOSE to eat.

Therefore: Make a variety of foods that people are choosing to eat - more nutritionally complete.

Food and Nutrition

Nutritious Foods

Restaurant, Street &

Away from Home

“Prepared”

Commercially “Processed” &

Packaged

Home Kitchen“Cooked”

Fresh “Raw” Foods

The “Food Basket” Partnership For Delivering Improved Nutrients

HAWKERSSTREETFOOD

SUPERMARKETS

SHARING

FARM DIRECT

SMALLSTORES

HOMEGROWN

HUMANITARIANNGO

assistance

INSTITUTIONALSCHOOLS

WORK

CONVENIENCE STORES

KANTEMBAS

FRESHMARKETS

FOOD SOURCES

Goal: Target Places Zambians Procure Their Food

ZAMBIAN FOOD

PROCESSORSManufacture and sell more ENRICHED

FOODS

Forward ContractsFor Enriched Foods

Aggregated DemandFor Enriched Foods

3INSTITUTIONAL

CHANNELWORKPLACE,HOSPITALS,

CLINICS,SCHOOLS buy and

distribute ENRICHED FOODS

Forward ContractsFor Enriched Foods

Aggregated DemandFor Enriched Foods

1FOOD

ASSISTANCE CHANNEL

HUMANITARIAN:WFP, NGOs, PVOs,

buy and distribute ENRICHED FOODS

De

ma

nd

De

ma

nd

ZAMBIANHOUSEHOLDS

,

PLWHAMultiple Access

Channels forENRICHED

FOODS

FBOs and CBOs

Three Market Demand Channels - Three Market Supply Channels

2RETAIL

CHANNELSENRICHED

FOODS boughtDirectly By

PLWHA and other consumers

NGO, PVO, CBO, Donor

Network of People Living with HIV/AIDS (NZP+)Project Concern International (PCI)RAPIDSCatholic Relief ServicesClinton FoundationWHOUSAIDAnd many others

Institutions / Food Service

Hospitals CHAZ: Church Hospital Association of ZambiaPrivate HospitalsGovernment ClinicsPublic SchoolsPrivate SchoolsWorkplace and commissariesMilitaryAirlines

Some Organizations Consulted by the Project, with Possible Future Interest in Foods

1. Processors utilize the Zambian ingredient supply chain 2. Enriched ready-to-eat foods become available across Zambia including high

need areas that may not meet humanitarian food program inclusion criteria. 3. Processors employ existing warehouse and distribution capacity for their

retail business thereby increasing reach into both rural and urban markets.4. There is dependable Quality Control; their facilities comply with good

manufacturing practices (GMP)5. Processor technical expertise is increased and leveraged for the

development and marketing of enriched ready-to-eat foods leading to ongoing nutrition products innovation that benefits all Zambians

6. Processors make capital equipment investments in response to market demand increasing long term food variety, quality, and availability

7. Processors continually work on their own “sustainability” as a commercial enterprise so that enriched ready-to-eat foods will be available over time throughout Zambia.

8. Enriched products (supplemental foods) may be transformed into a domestic food industry surge capacity available for high need food crisis periods.

Leveraging the Processing Sector for Better Nutrition:Advantages of a Commercial, Sustainable Business Model

Market and economic analysis Set boundaries on selling price, cost of product to produce, buying intentions

from key market channel leaders for these or similar replacement products

Buyer and consumer education about the nutritional value of enriched ready-to-eat products. Customers and

consumers must embrace the critical significance of choice: making enriched foods a regular part of their diet; the price/value of the products themselves (to deliver them this value); discretionary buying decisions over many marketplace alternatives (such as the existing non-enriched foods)

Foods should deliver a nutrient-dense, balanced combination of macronutrients and micronutrients

Measurably contribute to improved nutrition status when eaten under the right circumstances (adherence to diet, duration, amount consumed, other foods in the diet, physical condition, needed medical interventions). Nutrition experts must recognize the products’ nutrition advantage and consumers must experience the implied “product promise” of long term health, energy, and growth from improved nutrition.

Some Key Success Factors for Commercial Sale of Enriched Foods

Target Product Design Criteria

Strive to meet guidelines for nutritional needs of Zambians including those PLWHA

Conform to Zambian dietary practices

Conform to National Food standards

Meet “mass market” consumer expectations for price, packaging, and eating appeal

Formulate (enrich), process, and packag based on principles of food and nutrition science and good manufacturing practices (“GMP”)

When possible, be compatible with the operations and logistics of NGOs, PVOs, and their local partners that provide nutritional supplementation to PLWHA.

Enriched milk-maize-soy, fortified drink:

Culturally familiar; ancient tradition as a nutritious drink in Zambia; emotional value: (“my maheu”), sought out by all ages.

Plain Maheu with added milk solids, fat energy, soy protein, vitamins. Shelf stable without refrigeration for 8 months Ready to drink from either 300 or 500 ml plastic bottles. Nutrition quality, a balance of micro and macronutrients in fluid form Digestibility: processing includes the use of enzymes which break down grain starches for

ease of digestion. Portable, can be carried and drunk anywhere, any time Hand-held, convenient for children Can be to drunk through an elbow straw while lying down Soothing, slightly viscous, and easy to drink for anyone with mouth or teeth problems or swallowing difficulty Portion controlled packaging that is easy to open and drink from Ready-to-drink, no preparation Delicious and familiar food, adds variety to the diet Convenient for ready between meal snacks when medications necessitates food intake Contributes to “food water” re-hydration and enhanced nutrient absorption

Product Description: Enriched MaheuManufactured by Trade Kings, Lusaka, Zambia

TRADE KINGS LIMITEDFor Samples or Quotation Inquiries contact: Mr. Winani - TEL: 00-260-1-

286117; E-mail: tradekings@zamnet.zm; LUSAKA, ZAMBIA

Two enriched baked whole grain-based biscuits enclosing an enriched peanut butter based “cream” filling

Ingredients include: whole wheat, whole oats, soy flour, soy protein concentrate, peanut butter, milk powder, whey protein, vegetable oil, sugar, honey, vitamins, mineralsNutrition quality and density, delivering balanced vitamins, minerals, protein, carbohydrates, fat, fiber, and energy in a compact and stable form Portability: can be carried, stored, and eaten anywhere, any time Shelf stability: 9-12 months depending on storage conditions Hand-held, no utensils or bowl needed, convenient for children Portion controlled packaging to protect the food, easy to hand out & open Ready-to-eat, fully baked, no preparation Biscuit becomes a creamy porridge when liquid is added – for spoon eating They are a familiar food in our Southern African diet; such desirability encourages healthy eating and adds tasty variety to the diet Offer a variety of 11 different nutritious foods we have assembled into a “Full Plate” for between meal & on-the-go nutrition supplementation – along with the fortification Natural Foods: NO preservatives, artificial colors, trans fats, hydrogenated fats

Product Description: Enriched Sandwich BiscuitManufactured by Sunrise Biscuits

Ndola, Zambia

Sunrise Biscuits Company Ltd.For Samples or Quotation Inquiries, Contact: Mr. S. S. Langar

Lukasu Road, Light Industrial Sites; P.O. Box 70506, Ndola – Zambia;Phone: +260-2- 650637 / 8; Fax: +260-2-650132; Cell: +260-955 434846;

E-mail: sunrisebc@zamnet.zm

CHILD

(age 5-9)

TEEN AGER

(age 15-19)

ADULT

(age 20-59)  

Number Biscuits Eaten

/ Day

4 Biscuits (120 g)

6 Biscuits (180 g)

8 Biscuits (240 g)

100 g = 3.3

biscuits

Macro-Nutrients

Actual Amount

in 4 Biscuits

Providethis % of

RDA

100% RDA*

ActualAmount

in 6 Biscuits

Provide this % ofRDA

100% RDA*

Actual Amount

in 8 Biscuits

Provide this % of RDA

100% RDA*

Nutrient Content / 100 grams of

Sandwich Biscuits

Fat (grams)

31 35% 88 47 39% 120 62 57% 109 25.9

Protein (grams)

23 36% 64 35 40% 88 47 59% 80 19.5

Carbohydrate (grams)

58 25% 233 87 27% 317 116 40% 289 48.3

Fiber (grams)

2 8% 25 3 8% 38 4 17% 25 1.7

Energy total Kcal (male) WFP**

600 30% 1980 900 33% 2700 1200 49% 2460 500

* World Health Organization: Recommended Dietary Allowance; **WFP - Assumes people living under stress

Sunrise Enriched Sandwich Biscuit Nutrient Contribution

Products Status and Next Steps

Enriched Mahue Final formula confirmed. Being submitted to NFNC for acceptability

opinion. Scale up runs and commercial samples to be produced in January. Retail launch planned for March.

Enriched Biscuits Market ready. One order received from NGO; Retail launch being

staged; Institutional client (private hospital) engaged in efficacy trial.

Pro-biotic Mabisi Final formula being confirmed. Marketing strategy being developed for

3 channels. Product Technical Bulletin being developed. Scale up runs and commercial samples are pending.

Active interest and involvement in the nutrition of their consumers and the nutrition value / impact of their products.

Business Growth Opportunities & increased Customer Options

Technical know-how in food fortification with vitamins and minerals

Relationships with non-governmental (NGO) & community-based organizations (CBO)

Enhanced staff know-how, processing capabilities and quality control procedures

Product technical specifications, formulations, ingredients for nutrition products

Enlarged capabilities into nutritional product category

Relationships with Institutions for meeting nutrition requirements

Development of sophisticated nutrition product and nutrition promotion material

Increased collaboration with GORZ and other Donors in Zambia for contributing Zambian business-based solutions to the Zambian nutrition crisis

Project Outcomes with Food Processors

Food Processors: Getting Involved With Nutrition and HIV/AIDS

One of the Processors is now active on the National Food and Nutrition Commission sub-committee on HIV/AIDS and nutrition

One Processor is actively engaged with a private hospital investigating the benefits of buying nutrition supplements for patients receiving treatment who also show symptoms of moderate malnutrition.

Another Manager has made visits to a major HIV/AIDS public clinic with a life changing effect for him - and through him, for the Business Owners

A third is actively looking for using distribution channels that will access rural Zambians people most in need of their form of product.

All three are open to the proposed creation of HIV/AIDS training programs for their staff. This will begin in 2008.

Potential Benefits for People Living with HIV/AIDS

Three forms of foods that are familiar, widely consumed, and found throughout Zambia, will now be enriched and more nutritious.

Promotion of these products in the markets will contribute to consumer knowledge about proper diet and better nutrition generally.

Zambian processors will be manufacturing and offering enriched supplemental foods for sale not only at Retail but also to Institutions, and to NGOs, PVOs, CBO’s

Sustainable Food Options: All of the above was developed by the food businesses and will stand – or fail - on its own based on value chain incentives: Consumer (buyer) Demand, Supply, Competition.

1. Support to Processors for achieving sales in all 3 market channels and earning returns on their investment

2. Evaluating / measuring long term value of the products for consumers

3. Receiving VAT relief (17.5%) from GORZ for enriched products and duty relief for nutrient ingredients – passing on the savings to consumers

4. Nutrition Promotion and Education campaigns for Trade and Consumers

5. Ongoing product optimization and innovations; Quality Control Procedures

6. Processor sponsored HIV/AIDS employee awareness and service programs

Remaining Hurdles / Critical Outcomes

In Africa – Todd Thompson Land O’Lakes Country Director, Zambia, Africa; E-mail: todd@landolakes.com.zm; Phone: 260 21 1 263 929 / 30; Fax: 260 1 265 053

In USA – Mara Russell Land O’Lakes Title II Director, WDC;E mail: marussell@landolakes.com; Phone: (703) 524 1739; Fax: (703) 524 3668

Rolf Campbell consultant; E mail: rolf.campbell@att.net; Phone: 612 839 4050; Fax: 612 823 4688

Project Contact Information

HAWKERSSTREETFOOD

SUPERMARKETS

SHARING

FARM DIRECT

SMALLSTORES

HOMEGROWN

HUMANITARIANFOOD

assistance

INSTITUTIONALSCHOOLS

WORK

CONVENIENCE STORES

KANTEMBAS

FRESHMARKETS

FOOD SOURCES

11 Places Zambians May Find Food