Thursday, 6 September 2012

Part one: Profiting from undernutrition? Businesses and processed nutrition food products

By Ewan Robinson

When the issue of global nutrition is mentioned, the first image in many people’s minds – and beside many headlines – is that of an emaciated child clutching a foil pouch containing emergency food aid. Indeed, with the ongoing food crisis in the Sahel following last year’s famine in the Horn of Africa, these images of acute malnutrition have become too familiar. Now notice that ever-present foil pouch: it wasn’t there in images representing food crises 20 years ago.

Från 5,7 till 6 kg på en vecka
The image of the foil pouch indicates the rapid rise of a product that today might be an unofficial symbol of emergency relief: the fortified peanut butter paste called Plumpy’nut.

Plumpy’nut is the dominant example of a type of product known as ‘ready-to-use therapeutic foods’. Because these foods are sealed in sterile packaging and do not require adding water, they have allowed acutely malnourished children to be treated without being hospitalised. This increases children’s survival rate and cuts the number of personnel needed to deliver emergency relief.

Today, Plumpy’nut dominates the market for therapeutic foods, making up 90 per cent of UNICEF’s supply (UNICEF is the largest single distributor). But Plumpy’nut has also triggered a controversy: the product is patented by French company Nutriset, which prevents potentially lower cost competitors in developed countries from entering the market. NGOs including Médécins Sans Frontiers have argued that patents should not be allowed on food aid, since they increase costs and reduce the number of people who can be reached (for more details on the Plumpy’nut story, check out this New York Times article from 2010).

From emergency relief products to everyday complementary foods
Yet if the market for therapeutic foods like Plumpy’nut is big, the potential stakes are much larger for the emerging field of processed, nutrient-fortified foods. Therapeutic foods are used to treat acute malnutrition, the kind that reduces children to skin and bones. But hundreds of millions of people are also chronically undernourished. Some are just plain hungry, not getting enough calories. Others suffer from so-called "hidden hunger". They may eat enough calories, but don’t get the vitamins and minerals (micronutrients) that are essential, especially for children’s development.

Alongside therapeutic food products, a range of other processed foods, such as fortified biscuits or nutrient sprinkles, could target these widespread micronutrient deficiencies.

The market for these ‘complementary foods’ (which provide micronutrients but don’t replace people’s normal diet) is potentially huge; around 1 billion people suffer from micronutrient deficiencies. While the therapeutic food market is currently worth about 200 million USD, the complementary foods market might someday be worth 5 billion USD (check out this interview with the CEO of Valid Nutrition; scroll down to view a table estimating the size of the markets for processed nutrition foods).

5 billion is big enough that some major multinational agri-food corporations have expressed interest. The world’s largest snack producer PepsiCo is involved in trials.

Where do big agri-food businesses fit into nutritious foods?
The involvement of big businesses has critics. Companies like PepsiCo produce and market sugar- and fat-filled snack foods linked to the obesity crisis that affects 1 billion people, increasingly including people in the developing world (see this analysis of the link between under- and overnutrition). Will nutrient-rich processed foods become a gateway to unhealthy snack foods marketed by the same companies?

Of course, producing food products is only one piece of the puzzle. Much more is needed if we want to make sure people have access to nutritious foods. My next post will look at other key pieces in the puzzle.

Image credit: UNICEF Sweden / Flickr


Jess said...

While patents seem cruel in their limiting competition and keeping prices high for life-saving products such as Plumpynut, without them, companies would not have the motivation to develop these foods. A market with such a high expected return will quickly attract many producers to replicate products without patents. The market influx would then lower profits and discourage future research and expensive attempts by companies to produce a better product, or a new life-saving product. While perhaps patents could be shortened slightly for products such as plumpynut, they must still exist as a method for encouraging product development.

Additionally, in a world where extreme hunger and childhood malnutrition exists, it seems a bit preemptive to worry how a company such as Pepsi or Coke may impact the future of the market if they are the creators of the next "superfood." Although their other products have created obesity problems in some places, when it comes to aiding people in extreme hunger and malnutrition cases, it seems wrong to close the market off to a company that has the money and resources to contribute something positive.

Ewan said...

Jess- Thanks for your comments. The debate over the Plumpynut patent has been fierce. What's interesting is Nutriset's response, which has been to emphasize its commitment to humanitarianism and license a number of producer firms in developing countries (and one in Rhode Island, USA) to produce Plumpnut, while fighting back against other producers in the North. This has assuaged some NGOs' critiques. Questions remain about what kinds of businesses would invest in future markets for nutritional foods distributed through private channels: Will it be small specialized firms like Nutriset, or giants like Pepsi Co? I'd be interested to hear what you think.

On your second point, I agree that we can't rule out involvement of multinational agri-food firms in producing and delivering nutritional foods in the future. Here I wasn't talking about acute malnutrition, but about the potentially much larger market targeting chronic nutrient deficiencies. There's a lot of excitement here about the involvement of businesses. I think we need to be paying attention to the incentives faced by businesses in this market, including how nutritional foods might link to less-healthy packaged foods. My next post will look more at value chains for nutritional foods.

Thanks again for your comments. It would be great to keep up the discussion!

Jess said...

Ewan- Thanks for the response. I did not know that Nutriset had permitted some additional companies to produce Plumpynut. That is generous of them economically, despite obvious worries of equity on the part of NGO's.

I think that if the market demands, all kinds of businesses will put in an effort to win it over. Unfortunately, I believe you are correct to worry about how the foods are marketed to the people, and how to ensure that they indeed contain the nutrients missing in their diets. In my experience I have seen that a great marketing scheme can make people buy almost anything, even things that are detrimental to their health, and despite minimal wages at their fingertips.

Due to different requirements in terms of packaging, labeling, and marketing, I think it would be wise for the NGO's distributing Plumpynut to take a look over each new product as it comes to market. If they can react first as to its validity as a nutritional food, it should give some weight to its presence in the field. In the long-run, a push to promote government policies requiring certain ingredients for certain labels would be ideal, but a direct approach by trusted NGO's and other local organizations could assuage some of these potential problems.

Also, I worry if marketing worries are a bit preemptive. Even if the race to the market produces some undesirable products, one would hope that something else, some extremely desirable product, would result as well. Perhaps encouraging people to buy one of both, would be sufficient. Certainly it would be better than nothing.

Ewan said...

Jess- Thanks again for your insights and recommendations. I'm especially interested to hear more about your experience with marketing schemes.
Would you be willing to share your affiliation and contact details via email so we can continue the conversation? You can reach me at

Carol Garcia said...

What a fantastic idea! ...Thanks for the easy guide.

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