Marketplace for Nutritious Foods

Small and middle size enterprises (SMEs) create around 80 percent of Africa’s employment[1]. These enterprises are fuelling demand for goods and services and are a critical source of food for low income and nutritionally vulnerable populations. Typically, even smallholder farming households are net food buyers — that is, they purchase more food than they consume from their own production. Thus, what is available in the markets affects their food purchases and their diet[2]. Supporting SMEs that produce nutritious food is an important intervention along the supply chain that will make nutritious food available and affordable to low income populations.

However, little has been done to support the SMEs that produce and sell nutritious foods in emerging economies. These small shops, vendors, and kiosks are often thought to be a risky investment, despite the crucial role they play in nutrition and food security for poor communities. To respond to this lack of support, GAIN has partnered with USAID to create the Marketplace for Nutritious Food program, which helps accelerate the growth of local SMEs that produce and sell nutritious foods in these communities.

 

[1] https://www.weforum.org/agenda/2015/08/why-smes-are-key-to-growth-in-africa/
[2]SPRING. 2014. Understanding the Food Production Pathway. Brief 2. Improving Nutrition through Agriculture Technical Brief Series. Arlington, VA: USAID/Strengthening Partnerships, Results, and Innovations in Nutrition Globally (SPRING) Project.

How does the Marketplace work?

The Marketplace for Nutritious Foods (“The Marketplace”) works with small and middle size businesses that are producing nutritious foods locally to support innovations all along the agricultural value chain — from production of crops to processing and food preparation providing finance, networks, and technical assistance. It is a platform that fosters innovation and drives investment in the production, marketing, and consumption of nutritious foods made from locally-sourced agricultural products. The Marketplace’s two-pronged approach supports a broad network of stakeholders with information and knowledge through the Community of Practice. At the same time, the Innovation Accelerator provides targeted technical and financial support these enterprises

The Community of Practice is a network open to entrepreneurs, businesses, universities, regulatory bodies, NGOs, associations, and anyone else interested in knowing more about running a business that helps transform agricultural potential into nutritious and safe foods. The Community of Practice convenes regularly for networking and capacity building events, with over 2800 businesses, financial institutions, universities, and civil society organizations have taken part in meetings. Between meetings, the Community connects with its members through various outlets including newsletters, Marketplace websites, a dedicated Facebook page, and a business directory.

The Innovation Accelerator is the Marketplace’s grants-making component that regularly opens calls for proposals in which companies are invited to submit concepts for investible, nutrition-enhancing business ideas within the agricultural value chain. After careful review, the most promising proposals are eligible for technical assistance to support the development of a feasible business plan. Once business plans are completed, they are reviewed by the Marketplace Investment Committee (MIC), which selects the most investible and impactful concepts to receive grant funding and technical assistance to support the implementation of the business plan.

Marketplace by the numbers

After four years of implementation in Kenya, Tanzania, Mozambique and Rwanda, the Marketplace disbursed USD 3.03 millions to businesses, leveraging USD 1.6 millions (or 53 percent of funds invested) in private sector investment.

69 companies received business development services, and 39 companies were supported with grants and technical assistance

An assessment conducted in 2017 determined that:

  • Providing support to SMEs can result in profitability for the business and can reduce production costs
  • The proximity and appearance of retail locations are important for targeting low income consumers
  • Small serving sizes increased the likelihood that foods reached low income populations
  • Where innovations around convenience were introduced they were largely successful

Key Achievements

The Marketplace for Nutritious Foods was launched in Mozambique and Kenya at the end of 2013, in Tanzania in 2014, and in Rwanda in 2015.  Across four countries, 10 cities hosted Community of Practice events, and some 39 grantees were supported with technical assistance and grant funding. Between 2013 and 2017, over 34 million servings of low cost, nutritious foods were produced by the Marketplace’s grantees. Companies that have been supported by the Marketplace are continuing to produce safe and nutritious foods, and thereby, capitalizing public investment for sustainable nutrition enterprise development that will keep on producing and expanding over time.