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International Food Aid ConferenceKansas City

April 16, 2008

Value in Value-Added Food Processing

A Commercially Sustainable Business Model for Enriched Ready-to-Eat-Foods

Land OLakes International Development

withUSAID Office of Food For Peace and PEPFAR

Rolf Campbell,consultant

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Introducing a nutrition product development activity in Zambia.

Who: Land OLakes International Development supporting 3 Zambian foodprocessors with a food industry advisor.Funded by: Title II ICB Grant - USAID Office of Food For Peace, and PEPFAR -Office of the Global Aids Coordinator)

What: Assist food processors over 2 years to develop and commercializenutrient enriched foods that are already familiar in the markets and inthe diets of Zambians.

Where: Zambia: Lusaka, Ndola

Goal: Increase the available options for nutritious, processed andpackaged foods for people living with HIV/AIDS and all otherswho will benefit from better nutrition.

Value in Value-Added Food ProcessingBackground

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1. People require and acquire food daily from a wide variety of sources: (thefood basket, grazing). Processed, packaged foods are one of thesesources.

2. Ready-to-eat processed, packaged foods can be important, convenientsources of nutrition.

3. This puts the food industry in a position to contribute positively to thenutrition requirements of their consumers.

4. Adjustments to the formulation of consumer foods can improve theirnutrition contribution to the diet for little increase in cost.

5. Commercially prepared enriched foodsand Processors new expertise -

can be adapted to Food Assistance and Institutional nutritionrequirements.

Commercially viable (market demand) enriched foods createtheir own incentive for a sustainable food supply when:

they benefit consumers while returning profits to processors.

Rationale

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Value Adding Food Processing

POTENTIAL Benefits for the Food Supply and Nutrition Quality

1. Commodity assembly, storage, protection, handling2. Cleaning, grading, sorting, standardization

3. Safety analysis for pathogens, culling for pests, foreign materials, cleanliness4. Drying, milling, pealing, de-hulling, crushing, grinding, pressing5. Intermediate bulk packaging6. Refrigeration, freezing7. Pre-cooking (& instant-ized) ready-to-eat foods contributes convenience, reduces

or eliminates need for cooking fuel, time preparing food.8. Thermal processes: Pasteurization, sterilization, aseptic filling

9. Pickling, salting, fermentation, culturing10. Filtration, sifting, isolation and concentration of food components11. Formulation: blending, combining foods, seasoning, adding performance factors

like enzymes, nutrition, and culinary appeal12. Fortification with vitamins and minerals13. Consumer Packaging protects, contains, portion controls, and identifies contents

with detailed product information as well as identifying the manufactureraccountable for the contents.14. Concentrate food nutrients and caloric density: people to ingest better nutrition

while eating less volume.15. Processed shelf stable foods remain fresh, safe, with nutrients intact, allowing for

distribution and longer storage far away from manufacturers even into remoteareas

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1. No or reduced cooking (cooking heat / time) pre-cooked

2. Improved Digestibility / Bioavailability of pre-cooked nutrients such as

proteins and carbohydrates

3. Convenient no preparation including sorting, cleaning, peeling, grinding,

mixing, cooking

4. Often hand-held, portable, and portion controlled

5. Nutrient preservation (reduced thermal processing)

6. Nutrients / foods can be combined & balanced

7. Increased Nutrient concentration or density

8. Safety, sanitation of food

9. Packaging for containment, protection, storage, re-closing, identification,

portion control

Processed, Packaged, Ready-To-Eat-Foods:POTENTIAL Values to the Consumer

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People do not seek or eat nutrients, we choose foods.

People prefer to not eat just one food; we choose meals.

People are seeking foods and making food choices

- continually.

The only nutrients that countare in the foods people CHOOSEto eat.

Therefore: Make a variety of foods that people arechoosing to eat - more nutritionally complete.

Food and Nutrition

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HAWKERSSTREETFOOD

SUPERMARKETS

SHARING

FARMDIRECT

SMALLSTORES

HOMEGROWN

HUMANITARIANFOOD

assistance

INSTITUTIONALSCHOOLS

WORK

CONVENIENCESTORES

NTEMBAS

FRESHMARKETS

FOODSOURCES

11 Places Zambians Find Their Food

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FRESH MARKET FOODS

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NTEMBAS

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SMALL MARKETS

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HAWKERSSTREETFOOD

SUPERMARKETS

SHARING

FARMDIRECT

SMALLSTORES

HOMEGROWN

FOOD AID

INSTITUTIONALSCHOOLS

HOSPITALS

CONVENIENCESTORES

NTEMBAS

FRESHMARKETS

FOODSOURCES

Goal: Target Places Zambians Procure Their Food

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ZAMBIANFOOD

PROCESSORSMake & SellENRICHED

FOODS

ForwardContracts

AggregatedDemand

3INSTITUTIONAL

CHANNELWORKPLACE,HOSPITALS,

CLINICS,SCHOOLS buy and

distribute

ENRICHED FOODSForwardContracts AggregatedDemand

1FOOD AIDCHANNEL

HUMANITARIAN:

WFP, NGOs, PVOs,buy and distribute

ENRICHED FOODS

Demand

Demand

ZAMBIANHOUSEHOLDS

,

PLWHAMultipleAccess

Channels forENRICHED

FOODS

Three Market Demand Channels - Three Market Supply Channels

2

RETAILCHANNELSENRICHED

FOODS boughtBy PLWHAand other

consumers

Nutrition informationflows to consumers;Consumer needs

Information flows toFood Suppliers.

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1. Processors utilize the Zambian ingredient supply chain

2. Enriched ready-to-eat foods become available across Zambia including highneed areas that may not meet humanitarian food program inclusion criteria.

3. Processors employ existing warehouse and distribution capacity for theirretail business thereby increasing reach into both rural and urban markets.

4. There is dependable Quality Control; their facilities comply with goodmanufacturing practices (GMP)

5. Processor technical expertise is increased and leveraged for thedevelopment and marketing of enriched ready-to-eat foods leading toongoing nutrition products innovation that benefits all Zambians

6. Processors make capital equipment investments in response to marketdemand increasing long term food variety, quality, and availability

7. Processors continually work on their own sustainability as a commercialenterprise so that enriched ready-to-eat foods will be available over timethroughout Zambia.

8. Enriched products (supplemental foods) may be transformed into adomestic food industry surge capacityavailable for high need food crisisperiods.

Leveraging the Processing Sector for Better Nutrition:Advantages of a Commercial, Sustainable Business Model

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Market and economic analysis

Set boundaries on selling price, cost of product to produce, buyingintentions from key market channel leaders for these or similarreplacement products

Buyer and consumer educationabout the nutritional value of enriched ready-to-eat products. Customers and

consumers must embrace the critical significance of choice: makingenriched foods a regular part of their diet; the price/value of the products

Foods must deliver a nutrient-dense, balanced combination ofmacronutrients and micronutrients

Measurably contribute to improved nutrition status when eaten under the

right circumstances (adherence to diet, duration, amount consumed,other foods in the diet, physical condition, needed medical interventions).Nutrition experts must recognize the products nutrition advantage and

consumers must experience the implied product promise of long term

health, energy, and growth from improved nutrition.

Some Key Success Factors for Commercial Sale of Enriched Foods

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Target Product Design Criteria

Establish Product Design Criteria and Product Acceptance Criteria

Meet guidelines for nutritional needs of Zambians including those PLWHA

Conform to Zambian dietary practices and preferences

Conform to National Food standards, regulatory

Meet mass market consumer expectations for price, packaging, and

eating appeal

Formulate (enrich), process, and package based on principles of food andnutrition science and good manufacturing practices (GMP)

When possible, be compatible with the operations and logistics of NGOs,PVOs, and their local partners that provide nutritional supplementation toPLWHA.

E i h d S d i h Bi it

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Two enriched baked whole grain-based biscuits enclosing an enriched

peanut butter based cream filling Product Benefits

Ingredients include: whole wheat, whole oats, soy flour, soy protein concentrate, peanutbutter, milk powder, whey protein, vegetable oil, sugar, honey, vitamins, minerals

Nutrition quality and density, delivering balanced vitamins, minerals, protein,carbohydrates, fat, fiber, and energy in a compact and stable form

Portability: can be carried, stored, and eaten anywhere, any time Shelf stability: 9-12 months depending on storage conditions Hand-held, no utensils or bowl needed, convenient for children Portion controlled packaging to protect the food, easy to hand out & open Ready-to-eat, fully baked, no preparation Biscuit becomes a creamy porridge when liquid is added for spoon eating They are a familiar food in our Southern African diet; such desirability encourages

healthy eating and adds tasty variety to the diet Offer a variety of 11 different nutritious foods we have assembled into a Full Plate for

between meal & on-the-go nutrition supplementation along with the fortification Natural Foods: NOpreservatives, artificial colors, trans fats, hydrogenated fats

Product Description: Enriched Sandwich BiscuitManufactured by Sunrise Biscuits

Ndola, Zambia

Sunrise Biscuits Company Ltd.For Samples or Quotation Inquiries, Contact: Mr. S. S. Langar

Lukasu Road, Light Industrial Sites; P.O. Box 70506, Ndola Zambia;

Phone: +260-2- 650637 / 8; Fax: +260-2-650132; Cell: +260-955 434846;E-mail: sunrisebc@zamnet.zm

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CHILD

(age 5-9)

TEEN AGER

(age 15-19)

ADULT

(age 20-59)

NumberBiscuits

Eaten / Day

4Biscuits (120 g)

6Biscuits (180 g)

8Biscuits (240 g)

100 g= 3.3

biscuits

Macro-Nutrients

ActualAmount

in 4

Biscuits

Providethis % of

RDA

100%RDA*

ActualAmount

in 6

Biscuits

Providethis % of

RDA

100%RDA*

ActualAmount

in 8

Biscuits

Providethis % of

RDA

100%RDA*

NutrientContent / 100

grams ofSandwichBiscuits

Fat(grams)

31 35% 88 47 39% 120 62 57% 109 25.9

Protein(grams)

23 36% 64 35 40% 88 47 59% 80 19.5

Carbohydrate

(grams)58 25% 233 87 27% 317 116 40% 289 48.3

Fiber(grams)

2 8% 25 3 8% 38 4 17% 25 1.7

Energy totalKcal (male)WFP**

600 30% 1980 900 33% 2700 1200 49% 2460 500

* World Health Organization: Recommended Dietary Allowance; **WFP - Assumes people living under stress

Sunrise Enriched Sandwich Biscuit Nutrient Contribution

P d t D i ti E i h d M h

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Enriched milk-maize-soy, fortified drink Product Benefits:

Culturally familiar; ancient tradition as a nutritious drink in Zambia; emotional value:(my maheu), sought out by all ages. Plain Maheu with added milk solids, fat energy, soy protein, vitamins. Shelf stable without refrigeration for 8 months Ready to drink from either 300 or 500 ml plastic bottles. Nutrition quality, a balance of micro and macronutrients in fluid form Digestibility: processing includes the use of enzymes which break down grain starches for

ease of digestion. Portable, can be carried and drunk anywhere, any time Hand-held, convenient for children Can be to drunk through an elbow straw while lying down Soothing, slightly viscous, and easy to drink for anyone with mouth or teeth problems or

swallowing difficulty Portion controlled packaging that is easy to open and drink from Ready-to-drink, no preparation Delicious and familiar food, adds variety to the diet Convenient for ready between meal snacks when medications necessitates food intake Contributes to food water re-hydration and enhanced nutrient absorption

Product Description: Enriched MaheuManufactured by Trade Kings, Lusaka, Zambia

TRADE KINGS LIMITEDFor Samples or Quotation Inquiries contact: Mr. Winani - TEL: 00-260-1-

286117; E-mail: tradekings@zamnet.zm; LUSAKA, ZAMBIA

P d t D i ti S bi ti F t d Milk M bi i

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Nutrition quality, delivers a balance of milks nutrientsProven probiotic delivery: Contains efficacious quantities of living probiotic colonies

together with prebiotics that feed beneficial bacteriaProbiotic therapy: probiotics modulate the innate and adaptive immune system in a dose-

and strain-dependent manner. In particular, some Lactobacilli and Bifidobacteria

strains have been shown to induce the production of secretory IgA and IgG. [1]Digestibility: a naturally fermented milk drink with reduced amount of lactoseShelf Life, up to 36 days with refrigeration

Hand-held, Portable, Ready-to-drink, no preparation,convenient for childrenCan be to drunk through an elbow straw while lying downSoothing, slightly viscous, and easy to drink for anyone with mouth, throat, or teeth

problems or with swallowing difficultyPortion controlled packaging that is strong yet is easy to openDelicious and familiar food; Convenient for ready between meal snacksA fluid that contributes to re-hydration and nutrient absorption

[1] Cathy Alherda, et al, (2007). Effects of probiotic therapy in critically ill patients. Am J Clin Nutr 2007, 85: 816 - 823

Product Description: Synbiotic Fermented Milk: MabisiManufactured by Pamalat, Lusaka, Zambia

Studies show that daily consumption of Bifidobacterium lactis, BB-12 - such as thosefound in one 250 mil serving of Lacto-Live Mabisi - may contribute to overall

digestive health with the associated benefits.

For Order Information: Mr. Sandress Nyierenda, Zambia Sales & Marketing ManagerOffice Phone : 211 286 855 - 287 745; Mobile: 0977 770 318

E mail: sandress.nyierenda@parmalat.co.zm

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Active interest and involvement in the nutrition of their consumers and thenutrition value / impact of their products.

Business Growth Opportunities & increased Customer Options

Technical know-how in food fortification with vitamins and minerals

Relationships with non-governmental (NGO) & community-based organizations(CBO)

Enhanced staff know-how, processing capabilities and quality controlprocedures

Product technical specifications, formulations, ingredients for nutrition products

Enlarged capabilities into nutritional product category

Relationships with Institutions for meeting nutrition requirements

Development of sophisticated nutrition product and nutrition promotion material

Increased collaboration with GORZ and other Donors in Zambia for contributing

Zambian business-based solutions to the Zambian nutrition crisis

Project Outcomes with Food Processors

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Potential Benefits for People Living with HIV/AIDS

Three forms of foods that are familiar, widely consumed, and foundthroughout Zambia, will now be enriched and more nutritious.

Promotion of these products in the markets contributes to consumerknowledge about proper diet and better nutrition generally.

Zambian processors manufacture enriched supplemental foods for salenot only at Retail but also to Institutions, and to NGOs, PVOs,CBOs

Sustainable Food Options:

All of the above was developed by the food businesses and willstand or fail - on its own based on value chain incentives:Consumer (buyer) Demand, Supply, Competition.

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In Africa Todd Thompson

Land OLakes Country Director, Zambia, Africa;E-mail: todd@landolakes.com.zm;Phone: 260 21 1 263 929 / 30;Fax: 260 1 265 053

In USA Mara Russell

Land OLakes Title II Director, WDC;E mail: marussell@landolakes.com;Phone: (703) 524 1739;Fax: (703) 524 3668

Rolf Campbell

consultant;E mail: rolf.campbell@att.net;Phone: 612 839 4050;Fax: 612 823 4688

Project Contact Information

mailto:todd@landolakes.com.zmmailto:marussell@landolakes.commailto:rolf.campbell@att.netmailto:rolf.campbell@att.netmailto:marussell@landolakes.commailto:todd@landolakes.com.zm