Market review of nutrition product "Litto" in Nepal

1. MARKET REVIEW OF NUTRITION PRODUCT (LITTO) IN NEPAL
I. Nutrition Product
According to the new WHO Child Growth Standards, under nutrition is significant in Nepal,
with one in two Nepalese children under five years of age stunted ( short for their age), and 39
percent underweight. Micronutrient deficiency is an important cause of childhood morbidity and
mortality. Nearly one in two Nepalese children age 6- 59 months are classified as anemic, 22
percent moderately anemic and less than 1 percent severely anemic. This shows a huge demand
of baby nutrition products in Nepal.
The commercial manufactures are marketing their products in cities to target the upper class and
middle class customers. The urban market is lucrative for them as the customers are willing to
pay premium price for the products. The demand for the baby products like CERELAC and
Sarbottam Litto is increasing due to the rapid urbanization of cities. Women taking professional
jobs like that of their male counterparts have been escalating.
But, the commercial products are confined to the cities. They are reluctant to sell the products in
rural areas, as the market size for their products is very small. The products are unaffordable to
the rural people due to high Market Retail Price (MRP).
Nevertheless, there is a huge demand for baby nutrition product in rural areas as people's
willingness to purchase pre cooked packaged baby nutrition products is increasing. Anecdote
report suggests that the housewives of rural districts are ready to purchase the product if the
MRP is at affordable range.
The data from the 2006 NDHS reveals that the child mortality rate is consistently higher in rural
areas than that of urban areas. And the deficiency of micronutrients contributes significantly in
malnutrition and high child mortality rate. These facts indicate a potential for high demand of
baby nutrition products in the rural areas.
COMPETITION REVIEW
Nestle
Nestlé is a multinational packaged food company founded and headquartered in Vevey,
Switzerland and listed on the SWX Swiss Exchange with a turnover of over 87 billion Swiss
Francs. It originated in a 1905 merger of the Anglo-Swiss Milk Company for milk products
established in 1866 by the Page Brothers in Cham, Switzerland and the Farine Lactée Henri
Nestlé Company set up in 1866 by Henri Nestlé to provide an infant food product.

2. In 1867, Henri Nestlé, a pharmacist invented the first infant milk cereal to overcome the
malnutrition problem at that time. Today continues that pioneering heritage by developing
scientifically advanced nutrition to address the needs of growing children all over the world.
Nestlé has put 135 years of experience in infant nutrition to arrive at the Nestlé Developmental
Nutrition Plan. This plan is designed to provide the baby with the right nutrition and eating
experience during infancy. As the baby progresses from Stage 1 through to Stage 3, the Nestlé
Developmental Nutrition Plan offers tastes and textures, while helping develop a well-balanced
nutritious eating habit.
All three stages of Cerelac Manufactured by Nestlé India Limited are available in the Nepalese
market. The net weight of 375 gm Nestle Cerelac is available in an attractive packaging. The
pack provides the complete information related with products like preparation steps, Market
Retail Price (MRP),
expiry date,
manufacturer's name,
and nutrition plan. The
Market Retail Price of
the product is
approximately Rs 200.
Nestle has taken the
lead role in Corporate
Social Responsibility
(CSR) and Societal
Marketing as in each pack " Mothers Milk is Best for Your Baby" is highlighted. Similarly, the
pack provides information on immunization like what vaccines a child ought to receive starting
from the day of birth until 16 years.
The ingredients that one pack of Cerelac contains are wheat flour, milk solids sucrose, corn oil,
matodixtrin, vitamins and minerals.

3. Shakti Sarbottam Litto
Pasupati Food Products manufactures Shakti Sarbottam Litto. The product has attractive,
packaging and labeling. The net weight of the product is Rs 500 gm, and the Market Retail Price
is Rs 80. The product contains ingredients such as, Soybean 25 %, Maize 20 %, Gram 20%,
Wheat 20 %, Peanuts 5 %, Sugar 5 %, and Cashew 5 %.
The 100 gms of Shakti Litto contains 17.7 gm Protein, 5.2 gm Fat, 73.2 mg Carbohydrate, 51.03
mg Calcium, 13.8 mg Iron, 430 u Vitamin A, 45 u Riboflavin, 7 u Niacin, and 32 u Folic Acid.
Besides, information on preparation of Shakti Litto is provided in the packaging.
The product has a clear positioning as a picture of smiling child is shown in the pack. However,
the product lacks clear marketing objective, as it has no clear product differentiation. The
packaging, pricing, and promotion strategy is similar with that of Chaudhary's Sarvottam
Premium Litto. The product falls in the "me to products" category.
Sarvottam Premium Litto
Chaudhary Group, the First Nepalese Conglomerate with over 40 Companies under its umbrella,
today commands an investment outlay of over US $250 million. Being the first Nepali
organization to have a distribution network spanning the subcontinent, it has made substantial
presence in South Asia's fiercely competitive Food and Beverages market.
Chaudhary's Sarvottam Premium Litto is ISO 22000: 2005 food safety management system
certified product. The net weight of the product is 400 gms and Market Retail Price of the
product is Rs 80. The product is available in Apple flavor with extra Calcium and Iron. Equally,
the Litto is fortified with vitamins and minerals.

4. The product contains ingredients such as Wheat, Soybean, Rice, Whole Milk Powder, Sugar,
Dextrose, Corn fat; Vitamins, Minerals, and Apple concentrate with added micronutrients per
100 gm. The nutrient value per 100 gm consists of Protein 16.78 %, Carbohydrate 65.17 %, Fat
6.25 %, Moisture 7.95 %, Dietary Fiber 1.85 %, Calcium 210 mg, Iron 13.5 mg, and Energy
value 400 K Calories.
The product has a smart packaging; the branding is distinct and superimposed. The Apple
content is highlighted in a circle. The packet provides information on preparation and proper
storage of the product.
Unbranded Litto
The Litto manufactured and marketed by Multi Purpose Resource Center of FPAN falls under
this category. The product is manufactured in small scale using locally available ingredients and
packaging materials. The product is targeted to the rural households having low income. The
target groups of the product are rural housewives who want their babies to be healthy and strong.
The Litto contains all the essential nutrients such as proteins, vitamins, and minerals required for
children's growth.

5. References:
1. Annual Report, Department of Health Services, 2006/2007
2. Fundamentals of Marketing Decisions, K.D. Koirala, 2004 Edition, M.K.Publisher &
Distributors, Kathmandu, Nepal
3. Marketing Management, 10th Ed. ( The millennium Edition) By Philip Kotler
4. Nepal Demographic and Health Survey, 2006 Report
5. Strategic Plan , 2005 -2009, Family Planning Association of Nepal
Prepared by: Uttam Raj Regmi
MA Sociology, Tribhuvan University Nepal
MBA Pokhara University Nepal
BSCE (Civil Engineering) University of Baguio, Philippines
Address: Dhapasi 6, Kathmandu, Nepal
Email: uttamregmi@yahoo.com