Opinion: The route to market for nutrition commodities

Rukhsat Bhuiyan is 12 weeks pregnant. She is a mother of two and lives in a family of six, together with her in-laws in rural Bangladesh. She works with her husband in the field but also does household chores such as cooking for the family. Food prices are rising, and diets are limited with people like her not getting adequate micronutrients. However, Rukhsat knows she needs good nutrition for herself and her baby.

Thanks to Social Marketing Company’s rural pharmacy network, she can buy Full Care, a United Nations International Multiple Micronutrient Antenatal Preparation multiple micronutrient supplement, or UNIMMAP MMS, which improves birth outcomes. UNIMMAP MMS is on the World Health Organization’s list of essential medicines and, through SMC’s network of pharmacies, it’s available across Bangladesh at $0.04 per day. That’s half the cost of a cup of tea.

Food systems are under immense strain with the triple crises of conflict, climate change, and COVID-19. Food prices are rising everywhere but incomes are not, especially for the most vulnerable. Globally, there’s a spotlight on nutrition commodities — they are impactful and can make a huge difference to the current situation of hunger and malnutrition. However, the scale-up of nutrition commodities — such as MMS or ready-to-use therapeutic food — will require a thoughtful route-to-market strategy.

At Sight and Life, we believe scaling nutrition commodities can be achieved through work on two components:

1. Value chain: A series of consecutive steps that go into the creation of a finished product and making it available for the end-consumer. This broadly consists of production, distribution, and marketing.

2. Enabling environment: A combination of policies, incentives, and practices that support a positive environment for value chains to thrive.

Value chain: Production

There is a need to ensure quality affordable production of commodities. This includes investment in local and regional production centers. Lately, UNICEF is increasingly procuring ready-to-use therapeutic food locally.

Local production can reduce lead times for delivery and strengthen the local value chains. It also creates jobs and reduces the carbon footprint. For some commodities, the end price for local products can be less than for those procured offshore, due to taxation and distribution charges. However, large volumes of offshore procurement can sometimes have a price benefit.

Ultimately, it’s not an either/or decision; it’s an “and” decision — we need both local and global value chains. There are an estimated 228 million pregnancies  a year in low- and middle-income countries. This is equivalent to an annual demand potential of more than 40 billion MMS tablets. The current global supply availability is only enough for 30 million pregnancies or 13% of the total annual demand potential, according to Sight and Life estimates based on available UNIMMAP MMS figures. Investments are needed for improving the production of nutrition commodities.

Value chain: Distribution

When we think of improving public health indicators, we usually think of the public distribution system, where governments ensure adequate supply to citizens, especially for nutrition commodities. However, it’s important to understand our consumers and plan the distribution system so that we can reach everyone. If we, for example, look at the consumer segmentation for a country like Ethiopia, we can see that over 70% of all pregnant women can afford nutrition commodities like MMS.

It’s true that those who cannot afford nutrition commodities face a disproportionate burden. However, using multiple distribution channels can help us reach all consumer segments. Markets can also be used to subsidize some commodities for those who cannot afford them.

From our market assessment of over 20 countries, we learned that most of the maternal supplement brands on the shelves are poorly formulated and exorbitantly priced. With increasing urbanization, pharmacy density, and reliance on the private sector for health care and nutrition, it is essential that the right nutrition commodities are made available even to those who can afford them. This can be done through various channels such as pharmacies and clinics, and even through e-commerce where relevant.

Affordability must be at the core of the market-based approach. Innovative business models and routes to consumers need to be identified in order to unlock the market potential for reaching those who cannot afford them. Social enterprises, franchise networks, and cross-subsidy models adopted by social enterprises could be key enablers of market accessibility of nutrition commodities.

Value chain: Marketing

Marketing can offer a human-centered approach to generating demand for nutrition commodities. Traditional marketing promotes products in the absence of understanding the consumer and their problems.

Social marketing, which capitalizes on commercial marketing concepts and principles, can help encourage behavior change by understanding the consumers’ needs. In low- and middle-income countries, social marketing is increasingly being looked at as a tool for encouraging the uptake of products such as oral rehydration salts and contraception. We need to use it more for nutrition commodities.

Enabling environment: Drug versus supplement

For local production to be cost-effective, certain incentives can be put in place to facilitate a stronger business case for the manufacturer. This could include partial or complete exemption on raw material import, subsidies on utilities, and other product-linked incentives.

Nutrition commodities could be subjected to very country-specific production, quality, packaging, and marketing regulations. MMS is, for example, a multi-nutrient supplement with most of its nutrients within daily dietary limits set by national food and drug authorities. Still, some nutrients have been found to be marginally higher than these daily limits. This may classify them as an over-the-counter drug rather than a dietary or health supplement.

Drugs are subject to more stringent process, quality, marketing, and dispensing controls. While it helps ensure better quality and stability, this may lead to increases in the unit cost of the product and limit its accessibility through licensed pharmacies, as well as the marketing of the product.

Most supplement manufacturers avoid drug classification by developing formulations that have lower amounts of vitamins or minerals than required for daily intake. Not only are they poorly formulated but also more likely to violate label claims. To test this, we looked at formulations of more than 130 products from 20 countries and tested 17 popular prenatal supplements for label claims — and none of them met the label claims entirely.

When shaping the market for nutrition commodities, it is extremely important to reform private sector regulations in parallel to the market-shaping and advocacy efforts.

As we build momentum for nutrition commodities, there is a need to better understand the route to market and invest in strengthening local value chains led by country leadership. Only then will we create sustainable change.