Commercial investment in small and medium agri-food business is key to improving nutrition among the poor

Nairobi, 22 October 2018 – “Fueling the Business of Nutrition: What will it take to attract more commercial investment into nutritious food value chains?” A new white paper – released today by the Corporate Responsibility Initiative of the Harvard Kennedy School and the Global Alliance for Improved Nutrition (GAIN) – helps answer this critical question.

One in every three people around the world today is malnourished. There are a number of adverse factors making it challenging to eat sufficient quantities of diverse, nutritious foods, especially among the poor:

  • Nearly half of all fruits and vegetables produced worldwide spoil before they can be consumed, reducing supply and increasing prices.
  • Processed foods high in calories, sugars, salt, and harmful fats are often cheaper and more convenient than healthier options. Processed food sales are growing rapidly in lower middle-income countries.
  • The global population will reach almost 10 billion by 2050, increasing demand for food by some 50% compared to 2013, and placing additional pressure on water and additional arable land. Climate change is reducing yields and nutritional value of major crops, reducing protein, vitamins and minerals.

In many developing and emerging markets, these challenges can also present opportunities for businesses, especially small and medium enterprises (SMEs), who along with smallholder farmers, make up the bulk of the food system. They have solutions to deliver more nutritious and safe food options to consumers.

But these SMEs are too often struggling to attract financing. They are challenging to finance because of their modest needs, limited collateral and uncertain growth costs. This white paper discusses three building blocks to address these issues and help drive commercial investments to viable agri-food SMEs:

  1. the opportunity to better define the opportunity space;
  2. innovative approaches to investment; and
  3. the need to improve the enabling environment for investments in agri-food.

The paper also provides lessons learned from successful private investments into nutrition, as well as examples of innovative financing models.

“Over the last year, GAIN has been identifying nutrition investment opportunities across Africa with a focus on Kenya, Mozambique, Nigeria and Tanzania,” said Greg S. Garrett, GAIN’s Director of Food Financing. “We’re developing a ‘dealbook’ of investment opportunities ranging from $100K to $2M with an average of around $1M. GAIN is currently defining ways of bridging the gap between these investment opportunities and investors so that we can help agri-food SMEs achieve a financial return while also delivering more nutritious foods to those who need them. This white paper provides a strong framework with examples and lessons learned to help us and partners further design investment solutions for nutrition.”

Download the report: Fueling the Business of Nutrition