Small and Medium Enterprises – Key to Good Nutrition

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According to our estimates, 600 million jobs will be needed by 2030 to absorb the growing global workforce, which makes SME development a high priority for many governments around the world[i].
(The World Bank)

Small and Medium Enterprises, commonly referred to as SMEs, constitute approximately 90% of all businesses worldwide, accounting for nearly 50% of total employment[i]. They are also the most significant actors in many developing countries’ food systems, and yet SMEs often struggle to attract interest and investment. Most high productivity technologies rest with conglomerates in the global north who benefit from large consumer markets and, more importantly, pools of venture capital to develop disruptive innovations. These innovations are vital to boosting nature-positive production of agricultural goods while preserving and advancing equitable livelihoods. The disparity of investment between conglomerates and the SMEs of low and-middle-income countries (LMICs) limits the latter’s ability to stay ahead of the innovation curve[ii]. This in turn caps a community’s economic development and stifles its citizenry’s upward mobility, making access to affordable and good nutrition more challenging.
 
If we want to help improve the nutrition levels and health of a population, we should therefore look to bolster its SMEs.

Room for improvement

Sight and Life has long been interested in finding ways to boost the productivity and income of SMEs in LMICs and has researched different business models which can be most effective. Recently, we investigated constraints in egg production in four countries – Kenya, Ethiopia, Malawi, and India – and identified five business models that are viable and sustainable (read more on why we love eggs here). Of those five, the Egg Hub model has proven to be the most successful. An ‘Egg Hub’ is a centralized unit providing high quality affordable inputs, extension services, training, and market access to small and medium farm enterprises (out-growers) involved in layer farming.  This approach showed rapid increase in egg yields, achieved self‐sufficiency, reduced the price of eggs, and provided a high income for the farmers, a majority of whom are women. We found that this model was successful in improving hen productivity from an average of 40 eggs per bird to 270-300 eggs – an outstanding result.

It should be noted that private companies were the ones to develop the Egg Hub model, and although the commercial players did not see any immediate profit, they will have long‐term sustainable gains through increased market share, justifying their initial capital investment.[iii]

20% lower egg prices “We now eat eggs frequently as they are easily accessible, unlike in the past.” – Young mother
3X more income “We are very happy as we are able to support our family through the business.” – Smallholder farmer
2x more eggs “We have raised the bar in our standard of living. Even our children will be able to find jobs through the same business of raising chicken.”  – Farmer

This study demonstrates how impactful the right kind of efforts can be on SMEs, the livelihoods they support, and food systems. To enable more of this sort of targeted investment all along the value chain, Sight and Life is initiating Food Systems Innovation Hubs in rapidly emerging markets such as Nigeria, Bangladesh, and Rwanda. These hubs will work to alleviate malnutrition through corporate partnerships, impact investors, and government collaboration in the context of a robust entrepreneurial culture in these geographies.

Food Systems Innovation Hubs can help unlock the full potential of SMEs by using proven strategies and increasing capital flow to LMICs. We encourage you to join us in this effort by joining the upcoming webinar on February 2 to learn more about this initiative and how you can contribute.


 
 Read further about our ideas for the Food Systems Innovation Hub HERE

References

[i] The World Bank
[ii] https://www.worldbank.org/en/topic/smefinance. Accessed online on January 17, 2021
[iii] Beesabathuni K, Lingala S, Kraemer K. Increasing egg availability through smallholder business models in East Africa and India. Matern Child Nutr. 2018;14(S3):e12667. https://doi.org/10.1111/mcn.12667

Valuing Nutrition

 

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“It would be easy to give the public information and hope they change behavior, but we know that doesn’t work very satisfactorily. [If it did] none of us would be obese, none of us would smoke and none of us would drive like lunatics.”
– Ian Potter, Director New Zealand Health Sponsorship Council

Why do we choose the foods that most commonly make it to our tables? Are they the cheapest options? The tastiest? The easiest to grow? Are they perhaps infused with nostalgia or promoted by an irresistible advertising campaign? Not surprisingly, a multitude of factors are at play, although their hierarchy is naturally affected by a person’s buying power and economic status.

Consider, for example, the habits of consumers considered to be Bottom of Pyramid (BoP). Fully two-thirds of the world’s population fall into this category, many living in the Global South’s rapidly emerging economies. Some of these booming communities continue to struggle with malnutrition and micronutrient deficiencies, even as their buying power increases. It turns out that increased availability of nutritious foods by itself will not generate change on the scale necessary to meet national and global commitments related to hunger and malnutrition. Interestingly, it has been demonstrated that BoP consumers are ready to pay more for nutritious products if they deem them to be valuable. For example, mothers will want to give their children the best food they can afford, selecting something they perceive as higher quality, not necessarily the cheapest product on the shelf. [i]

Understanding the consumer

Encouraging a shift towards nutritious, safe, and tasty and affordable foods in the developing world will require social marketing campaigns to generate demand for these diets by shaping the consumer’s understanding of what is valuable. How can we best support efforts to empower consumers to make healthy choices?

Sight and Life has studied the ways alternative protein brands have chosen to engage with their consumers in High-Income Countries. Two American companies, for example, appealed to certain narrative “archetypes” – The Hero and The Innocent – providing the brands a more human feel and allowing their consumers to identify either as a climate change fighting Hero, or as a person free from any societal guilt, ie. an Innocent. (You can read more on this study here). But would these archetypes speak to BoP consumers in the Global South? Can we alter the manifestations of such archetypes such that they resonate with low-and-middle-income consumers? Can the sense of purpose be made more personal and placed within the Global South consumer’s needs?

An innovative solution

Such an avenue of exploration can be undertaken by Sight and Life’s new initiative, Food Systems Innovation Hubs. The factors that drive demand for nutritious foods in the Global South are convenience, affordability, and aspirational value. The Innovation Hubs – located in places such as Bangladesh, Nigeria, and Rwanda – will address all three factors by engaging in downstream activities such as running market surveys and consumer campaigns, lowering distribution costs through common logistics, shaping industrial policy towards nutrition, and creating an enabling environment through regulatory and marketing support. Most importantly, these hubs will focus on discerning and amplifying the values and priorities of the communities it serves, ultimately helping them choose healthy, nutritious diets.

To learn more about the Food Systems Innovation Hubs by joining us on February 2 for a webinar or reading the blog series HERE.

 

References

[i] “Marketing Nutrition for the Base of the Pyramid”, Report by Hystra – Hybrid Strategies Consulting, April 2014