This report presents case studies of two Nigerian food-processing businesses and analyses
their efforts to produce nutrient-rich foods for undernourished populations. It provides lessons
for other businesses, and for donors, government agencies and NGOs that are committed to
working with the private sector to tackle nutritional deficiencies. The companies examined
are Lisabi Mills and Dala Foods, businesses which have pioneered successful and innovative
strategies in food manufacturing. Lisabi Mills has been at the forefront of developing
packaged traditional foods and fortified products in southern Nigeria, while Dala Foods is a
leading manufacturer of packaged traditional foods in the northern part of the country. The
two businesses use different models: Lisabi Mills focuses on premium and fortified products
aimed primarily at middle- and upper-income consumers, while Dala Foods produces low
cost products for a market where most consumers have limited spending power.
Although both companies have been successful, their experiences reveal a tension between
producing fortified, nutrient-rich foods, and marketing these products to poor populations. A
number of constraints make it difficult for mid-size companies to build commercially
sustainable models around nutrient-rich foods for the poor. The two case study businesses,
however, have had some success through working with non-profit organisations: Dala Foods
developed a fortified product which it sold to a donor-funded programme. This programme
then distributed the product free of cost to vulnerable populations. Lisabi Mills is also
interested in producing for non-profit distribution as part of its strategy to reach low-income
groups.
The case studies show that mid-size indigenous businesses – acting alone – face significant
challenges in the development, production and marketing of nutrient-rich foods to reach poor
and undernourished populations. Reaching these populations entails high costs, particularly
related to distribution, building demand and signalling to consumers that products are of high
nutritional quality. This makes it difficult for companies to produce these products at prices
affordable to the populations that need them most. This problem is compounded by the
difficult business environment present in Nigeria.
These challenges mean that food-based strategies to reduce undernutrition require publicprivate
partnerships between businesses and public agencies or non-profit organisations.
The case studies indicate that one type of partnership in particular has been successful: nonprofit
procurement and distribution. These systems reduce the risks faced by businesses and
bypass the key constraints outlined above. They represent the best potential in the Nigerian
context in the short term. However, chronic undernutrition is so widespread in the country
that non-profit distribution will never be able to cover all those affected. To fill the gap, other
types of public-private partnership need to be explored. Donors and federal and state
governments can help by funding nutrition awareness campaigns in order to increase
demand. They can also launch certification schemes that can signal to consumers which
products are nutritionally adequate. Public action can also help businesses build links with
farmer groups and develop higher-quality domestic supply chains for their products. Based
on the case studies, it is not possible to assess whether such partnerships will be able to
create businesses that can be sustained once public support is withdrawn. The central
conclusion is that non-profit distribution is an urgent priority and appears feasible under
current circumstances; other forms of partnership should be piloted and evaluated to learn
what works.