Expositor: Anthony Hehir – Director Programa Mejoramiento de la Nutrición de DSM Seminario Internacional sobre Experiencia exitosas en Nutrición, organizado por el Programa Mundial de Alimentos de las Naciones Unidas (PMA) en Colombia y DSM. 14 y el 15 de mayo de 2015. Bogotá, Colombia.

1. Market-based nutrition
innovation opportunities
Anthony Hehir
Director - Nutrition Improvement Program
Bogotá, 15 May 2015

2. Page 1
The world economic pyramid
Annual per Capita income
based on 2005 purchasing
parity in US$
Population
Source: World Resources Institute, 2005 data
$ 3,260 - $ 20,000/year
More than $ 20,000/year
Less than
$ 3’260/year
0.5 billion
2 billion
4 billion
Emerging Markets
Mature
Survival Markets
Base of Pyramid

3. Page 3
Where are the 4 billion consumers?
Source: World Resources Institute, the next 4 billion
Africa:
486 million
people
429 billion USD
income
Asia:
2,86 billion people
3,470 billion USD income
Eastern Europe:
254 million people
458 billion USD income
Caribbean +
Latin America:
360 million people
509 billion USD
income

4. Page
Spending on food
4
Global:
2,894 billion USD/year
each square represents approx. 5 billion USD
Latin America:
199 billion USD/year
Africa:
215 billion USD/year
Eastern Europe:
244 billion USD/year
Asia:
2,236 billion USD/year
Source: the next 4 billion

5. Page
Food dominates household budgets
% of spend on food
5
US 7%
Nigeria
40%
Kenya
45%
Mexico
24%
Brazil
25%
Egypt
38%
Pakistan
46%
India
35%
China
33%
Indonesia
43%
Source: Time Magazine, February 28, 2011
If you spend such a high percentage on food, the smallest price increases
in the world market, e.g. for flour and other staples, can become life-
threatening for people in developing countries.
Europe 6-15%

6. Page
High prevalence of micronutrient
deficiencies
1/3 of the world’s population
suffers from micronutrient deficiencies, the lack of essential
vitamins and minerals in a person’s diet.
Most of these people live at the
Base of the Pyramid.
6

7. What happens if we ignore
these 4 billion consumers?

8. Page
The vicious cycle of income poverty will
not stop.

Individuals
Countries

Business

9. What happens if we DO
serve these 4 billion
consumers with nutritious
food solutions?

10. Page
Four reasons to serve these 4 billion
10
High
economic
return
High impact
on economic
growth
Health
improvement
Poverty
reduction
Increase of GDP
because of increased
productivity and less
burden on health
care systems
Expand into new markets,
broader product
portfolio, competitive
advantage, image =
more growth
and profit.
Better able
to move up the
income ladder. Normal
physical and mental
development of children
increases chances as adults.
Less health care
cost, more
productive and able
to perform well.
Better learning and
concentration
 

11. The way to serve
4 billion people

12. Page
Knowing your BoP target group
13
Low income
3-6 USD/day
Subsistence
1-3 USD/day
Extreme poverty, some
depending on aid
less than 1 USD/day
Provide attractive
and affordable
solutions with
added nutritional
value for an
existing consumer
market
Work with local
partners in product
development,
distribution and
marketing to
ensure acceptance
and accessibility
Form Public Private
Partnerships with
governments and
non-governmental
organizations to
ensure best
solution and reach
The issue is not finding new target groups. Assuming products are affordable,
there are plenty of under- and non-consuming customers to tap.*
*Source: the business solution to poverty

13. FOR INTERNAL USE ONLY
Emerging
economies
and Base of
the Pyramid
Public health
interventions and
social safety nets
Institutional
feeding
Humanitarian aid
Higher
income
We believe there is one sure way, and
only one way, to foster genuine social
change on a large scale among the
world’s poverty-stricken billions – by
harnessing the power of business to the
task.*
*Source: Polak & Warwick: The business solution to poverty
”
Public health need
Business case
Market
solutions
Knowing your BoP target group

14. FOR INTERNAL USE ONLY
Where is the money?
Source: LGT Venture Philanthropy

15. FOR INTERNAL USE ONLY
Business model spectrum
Non-
profit
Non-
profit
with
income
Social
enterprise
Business
with
social
impact
Business
Non-profit structure
For-profit structure
Philanthropic capital
Commercial capital
Financial
returns
Social
returns
Source: Jed Emerson “The Blended Value Proposition:
Integrating Social and Financial Returns”, 2003

16. FOR INTERNAL USE ONLY
Differentiating between traditional charity,
venture philanthropy and impact investing
High social return
Low social return
Negative financial return Positive financial return
Traditional
charity
Venture philanthropy
Impact investing

17. Examples

18. Hybrid models to deliver micronutrient
powders (MNPs)
Image: http://www.tropmedex.com/ghana/ghana_en.html

19. Page
Healthier snacking for kids in Jakarta
20
Issue
• High prevalence of micronutrient deficiencies
• Snacking in Indonesia is part of daily diet
• Many snacks lack nutrients
Challenge
• Raise awareness of partners to act
• Develop a product with more nutritional value
• Raise awareness about healthier eating and
importance of micronutrients
Partners
• Aisyiyah schools in Jakarta
• Indofood, the largest food producer in Indonesia
• DSM’s Nutrition Improvement Program (NIP)
Solution
• GoVIT snack with added micronutrients
• Schools and open market
• Education and awareness program

20. Page
Healthier snacking for kids in Jakarta
Combining goals and strengths
Aisyiyah
schools
Indo-
food
DSM
21
Indofood, Indonesia’s
largest food producer:
• product development
• marketing
• distribution
DSM’s Nutrition
Improvement Program:
• scientific and technical
support in fortification of
product development
(micronutrient
composition)
• education program
development for kids and
teachers
Aisyiyah schools for primary school children in
Jakarta:
• committed to improve health
• offer platform for a pilot, study and education
program, willing to scale up

21. Page
Miller’s Pride, Tanzania
Partnership with World Vision to fortify
maize milled at hammer-mill level
22
Insti-
tutions
World
Vision
DSM
DSM’s Nutrition
Improvement Program:
• scientific and technical
support in fortification of
product development
(micronutrient
composition)
• training and support of
millers
World Vision:
• experience in similar
projects
• local presence and
network, access to
government bodies
Institutions working on nutrition improvement:
• Tanzania National Fortification Alliance (TNFA)
• SIDO (Small Industries Dev. Organization)

22. Page 23
ONE GOAL is a
movement of
1.4 billion
football fans
tackling the
issue of child
malnutrition in
Asia. We have
one goal:
Nutrition for
every child.

23. Page 24
Sizanani Mzanzi (South Africa)
Non-profit with income

24. Page
Partnerships are crucial for market
solutions
- Design products consumers want
- Create market demand
- Supply chain and distribution
- Sustainable business case
- Meeting consumer health need
25
© Sight and Life

25. Page
FOR INTERNAL USE ONLY
Social education
26
Understanding Acceptance Demand
Behavior
change
Investment in social education is a key
success factor and not a ‘nice to have’.