Business-Based Strategies for Improved Nutrition: The Case of Grameen Danone Foods

Abstract

There is increasing interest in the role that businesses can play in promoting the consumption of nutrient-dense foods as part of strategies to reduce the prevalence of micronutrient deficiencies in developing countries. To date, however, there has been little in-depth analysis of the extent to which viable business opportunities exist for nutrient-dense foods in the context of markets catering to communities. Furthermore, whether businesses can deliver sustainable improvements in the nutrition of poor populations at scale is not yet evident. This article examines the case of Grameen Danone Foods Ltd, a social enterprise that specifically aims to bring about improvements in the micronutrient status of poor children in Bangladesh through the sale of fortified yogurt. The article examines the degree to which this business has been successful at establishing a viable market for fortified yogurt amongst poor communities, and the challenges it has faced in trying to achieve this.

Are Low-Income Consumers Willing to Pay for Fortification of a Commercially Produced Yogurt in Bangladesh

“…The socioeconomic characteristics of the sample segments show that GDFL has been successful at reaching households that are in the second poorest income quintile rather than the poorest. Indeed, Agnew and Henson 28 suggest that the marketing strategy of GDFL may have put Shoktiþ beyond the reach of the lowest income households. While GDFL has come to recognize that these households may be better served by publicly funded interventions, there is still significant potential for nutritional impact among households with slightly higher incomes.…”

“…For example, little is known about the prices that low-income consumers are able and willing to pay, the nature and level of demand for such products, 25 and how the nutritional attributes of products are tradedoff against other product characteristics (ie, quality, taste, and color). 5 Given the considerable costs associated with catering to bottom of the pyramid markets, especially related to marketing and distribution, 28,29 the resulting risks associated with these endeavors can be prohibitive, especially for micro-, small-, and mediumsized enterprises. Advancing this area of research will support efforts to increase the array of nutritionally enhanced foods offered to lowincome households in LMICs and increase the potential for positive nutritional impact through the market.…”

Which Choice of Delivery Model(s) Works Best to Deliver Fortified Foods?

“…A case where voluntary fortification has been successful on a large scale is the example of condiments/seasonings in South East Asia which has benefited primarily where there are centralised production, i.e., few firms with high market share. Social marketing/awareness among populations is a key constraint challenge in other situations identified [88] alongside distribution challenges/reaching the poorest due to price and an appropriate regulatory environment [89]. A positive example here could be the tiered price system for a locally produced micronutrient powder in Vietnam; marketed to caregivers of infants based on their disposable income which showed a positive correlation between the number of sachets bought by caregivers and the wealth index [95].…”

“…As with fortification efforts, elements of social marketing may also be needed in order to encourage the use/consumption of new varieties [12]. Social marketing may also enable a better understand of tastes/traits consumers prefer which may influence the choice of food vehicle to be fortified or biofortified crops/practices being produced [80,86,88]. Having said this, the literature is relatively silent on the subject of who might finance this effort.…”

“…Voluntary fortification or market driven whereby a food manufacturer takes a profit driven approach have rarely gone to scale in LMICs [87]. Agnew and Henson [88] have shown the challenges of bringing a fortified yogurt to scale in Bangladesh; affordability being the main reason that consumers did not purchase the product; however, challenges in marketing (particularly in facilitating repeat purchasers) and distribution were also cited as significant challenges. Market driven approaches such as the case of Tiger biscuits (aimed at poorer households) in India have also been unsuccessful in reaching scale; due in part to low awareness among poor consumers, cheap alternative foods, and a unfavourable institutional environment e.g., lack of food safety standards/regulation [89].…”