In Latin America and the Caribbean, an estimated 53 million people live without access to sufficient food, and 16% of children suffer from a state of chronic malnutrition.
Average food expenditures in these countries often exceed 40 % of household income. Limited resources and increasing food prices result in a direct negative impact on the nutrition and, consequently, health of low-income majority populations. Underserved consumers often have insufficiently balanced diets and have difficulties in providing their children with the needed nutrients required for normal and healthy physical and cognitive development.
Improving the nutritional status of majority markets represents a real challenge for most Latin American and Caribbean governments. Many countries are still struggling to create effective systems for improving nutrition through better products and distribution channels.
The private sector could play a promising role in developing solutions to help families at the base of the pyramid manage a healthy diet. However, the commercial market for low-cost, healthy food and other related products remains largely undeveloped, and the reasons why this is are not fully understood. There are multiple information gaps in terms of price points, distribution channels and target markets, which hampers increased private sector participation.
Creating a map of private sector solutions in nutrition in Latin America would be a first step towards a better understanding of underserved populations and the potential for creating synergies between public sector programs and private sector solutions for majority markets.
The IDB’s Opportunity for the Majority initiative, together with the Global Alliance for Improved Nutrition (GAIN) and Fundación FEMSA, the corporate foundation of the Mexican beverage company FEMSA, will attempt to address exactly these issues through a joint regional study covering ten countries in the region. This partnership is building a foundation for increasing the available knowledge of both the existing nutrition market and the potential market opportunities for private companies to supply better products to populations at the base of the pyramid.
The joint study is designed to identify the main drivers and roadblocks for increasing private sector participation in the production and distribution of low-cost nutritional products, and establishing and identifying successful business models that have a considerable and sustainable impact in underserved markets. At the end of the project, which is expected to last six months, the organizations intend to identify and, possibly, finance innovative business models of collaboration between private sector companies, government agencies and civil society organizations.
