India has one of the highest malnutrition rates in the world. According to Unicef a third of the worlds malnourished children live in India, with half of India’s children under the age of three affected by stunted growth and three-quarters of pre-school children suffering from anaemia.
Addressing an issue of this magnitude is by no means easy, but a project supported by the Global Alliance for Improved Nutrition (GAIN) is showing promise.
Using centralised production to support a decentralised network
In the state of Andhra Pradesh in south-east India, fortified foods producer Andhra Pradesh Foods (AP Foods) has been working to improve child nutrition since 1974. A government-owned organisation, AP Foods was initially established with support from Unicef, Care and the federal government of India to produce a fortified snack suitable for malnourished children, pregnant women and breast-feeding mothers. Today its large-scale facility in Hyderabad produces ready-to-eat fortified foods and mixes for over 3 million people.
In recent years and as part of the Integrated Child Development Services (ICDS) outreach program the Indian government has shifted focus away from large-scale production centres in favour of decentralised networks and local self-help groups run by rural women. This approach has seen the widespread exclusion of commercial producers of nutritional products and the proliferation of some 1.3 million local Anganwadi Centres (AWCs) that provide education, healthcare and nutritional support to local people.
These centres are also the primary means by which women and children can access free supplementary foods, such as those produced by AP Foods. Since AP Foods is not a commercial producer it still supplies the AWCs in Andhra Pradesh, but has been struggling to extend its reach or develop its products against the longstanding trend of decentralisation.
Boosting local impact through better business
While a decentralised model has many advantages, it also has many challenges – including most notably achieving the kinds of efficiencies and economies-of-scale that a large organisation such as AP Foods is able to.
Seeing an opportunity, GAIN first approached AP Foods in 2008. A formal partnership was entered into in 2010 to increase production capacity as well as improve the nutritional value, shelf-life and quality assurance of AP Foods products. As a result of GAIN’s involvement and convinced by the project’s potential to significantly impact child malnutrition in Andhra Pradesh, the state government made a commitment to fund 75% of a brand new US$7.3 million production facility and delivery system.
The new facility, which has just been completed, will enable AP Foods to go from supplying just 222 of the AWC community centres to all 385 in the state of Andhra Pradesh. The new facility will also result in a raft of other benefits including: improvements to packaging features and product shelf-life; the removal of all trans-fats from production processes; the addition of milk powder to products meant for babies and very young children, as well as wholesale modernisation of AP Foods’ quality assessment and control systems.
Some of these benefits could only have been achieved with a new plant, but many could have been pursued – and were indeed delivered before the new plant was finished – simply by applying better business practices to drive efficiency, quality and safety.
Using mobile tools to lower costs and improve distribution
But action at AP Foods HQ was only part of the story. While the benefits of large-scale centralised production are clear, there are challenges. With such a large operation, efficient distribution is a primary concern, with it often being difficult to know if the right people are getting the right products and, crucially, using them correctly.
With the support of GAIN, AP Foods has started using mFoods, a mobile technology and web-based supply chain management tool. Relying on workers at the local AWC centres to input orders via mobile phone, mFoods enables AP Foods to better meet demand and improve production efficiency. This new approach also means less waste and better accounting due to improved demand transparency.
This partnership with mFoods offers AP Foods significant scope for future improvements to distribution as well as valuable business development opportunities.
The promise of business-focused public delivery to boost nutrition
Using a market based approach GAIN was able to work with AP Foods to meet the needs of Andhra Pradesh’s malnourished women and children while also taking steps to ensure the continued viability of the organisation. This approach involved striking a balance between creating the ‘ideal product’ and working within the restrictions of budget, price, quality and demand.
While differences in actual nutritional impact and end consumption rates have not yet been measured, this project has already demonstrated the extraordinary potential of applying a business mind-set to a public delivery system as a model for centralised food production in India. The involvement of independent advocacy organisations such as GAIN has also been shown to add credibility to the project and so unlock government or wider funding.
AP Foods is one of several programs improving nutrition for mothers and their children, that will be highlighted at GAIN’s 1,000 Day’s Symposium
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