Scaling up Food Safety and Nutrition-Related Innovations through Commercialization
How can commercialization contribute to scaling agricultural innovations to ensure safer and nutritious food? A recent multi-stakeholder forum tackled this critical question, with practical experience informing theory.
Technology and innovation play a critical role in building robust and resilient food systems. However, no matter how technically perfect they may be, agricultural innovations that are unused, or used only by an exclusive few, are of little to no value. To be useful, they must be available, accessible and affordable to a significant number of farmers and industry stakeholders.
For widespread diffusion to occur, food safety and nutrition innovators must identify and pave appropriate pathways for effective scaling of innovations. In recent years, a rising number of innovations targeted toward smallholder food systems are reaching users through commercialization.
But how do you successfully engage the private sector to scale up these innovations? What is the role of the government and other ecosystem actors in establishing an enabling environment for scaling to occur? And how do we accelerate the scaling of agricultural innovations for 21st-century food systems and commercialization pathways?
The answers to these questions are increasingly emerging from research, private sector, government and funders, and were discussed in depth at a March 2021 webinar on Scaling Agricultural Innovations through Commercialization for Sustainable Food-System Transformation.
Here are a few important lessons that came out of the discussion:
Most food safety and nutrition innovations require a blend of commercial and noncommercial support to successfully scale. This was the first of 10 practical tips from Lawrence Cooley, president emeritus and founder of Management Systems International. The other nine tips can be found in the Beyond Good Ideas: Private Sector Engagement in Commercializing Agricultural Technologies presentation. For scaling to succeed, “the public and private sectors need to find new, better and more creative ways of working together. Neither one can do it without the other,” noted Lawrence. Given the nature of these technologies and the issues they address, the best way to successfully scale up is to build an ecosystem of actors with the necessary capabilities, influence and shared vision.
Connect and construct at conception. From the outset, scaling must be an integral part of research and product development, and not a disconnected future phase to come. And, where ecosystems to support scaling agricultural innovations are weak, be innovative. “Build the ecosystem needed and bring in unusual partners,” advised Ndidi Nwuneli, managing partner at Sahel Consulting Agriculture & Nutrition Ltd.
Establish the value proposition for all stakeholders. Scaling innovations and sustaining their growth will only succeed when they come with clear value propositions for actors along the value chain. This includes farmers, private sector distributors, consumers and the public sector. “Value” means different things to different stakeholders, but for the private sector and farmers, establishing the viability of the business economics is essential. Governments and donors often want to understand the impact of the intervention in terms of nutrition, food safety and cost-effectiveness, particularly if public sector support will be needed to facilitate scale.
For Aflasafe, promoters were attracted by a deeply analytical commercialization strategy commissioned by the innovator, plus initial exclusivity for product manufacture and distribution. By articulating the value proposition and providing incentives, such as exclusivity rights and technical support, the innovator was able to license eight organizations that invested more than $5 million to set up four factories and to develop the market. Over a five-year period, these organizations sold more than 3,646 tonnes of Aflasafe, enough to cover 364,600 hectares of maize, groundnuts and sorghum in nine countries.
Develop realistic time horizons. Purdue Improved Crop Storage (PICS) bags are multilayer polyethylene bags that provide a simple, low-cost method of reducing post-harvest losses. The experience developing and commercializing this technology in small-scale farm settings has shown the effectiveness — though expensive — of village-level demonstrations to develop the market. Such community-level demonstrations were key to scaling up, and after several years of stable, government-led sales, the model reached an inflection point in 2013 when it began to see dramatic growth in private sector sales. As with many innovations targeted to poor consumers, the timeline to commercial sustainability took over a decade. Understanding and accepting the longer time horizons required to reach sustainability is essential for donors and other investors supporting the development and commercialization of these innovations with patient capital.
Transmit value for improvements in food safety and nutrition. Developing appropriate technologies and incentive structures that reward nutrition and quality improvements is critical. These include strengthening regulatory systems, developing and implementing grading, testing and sorting technologies, and increasing consumer awareness on the importance of safe and healthy food. In the case of biofortified foods, “Farmers do not always get value for the extra investment for producing high-quality food, given Africa’s largely informal and ‘liberal’ markets,” decried Elizabeth Nsimadala, president of the East Africa Farmers Federation and Pan-African Farmers Organization. “With very few exceptions, traders, middlemen and companies do not want to pay premium prices to farmers for high-quality produce,” she regretted.
According to Mark Huisenga, senior program manager, USAID Bureau for Resilience and Food Security, the value proposition for nutrient-rich or aflatoxin-safe foods needs to go one step further by integrating a simple and cost-effective traceability system to ensure that other actors do not capture the premium as quality product volumes rise.
Intermediation — the crucial cog in the wheel for all-round win-win. A successful commercialization approach to scaling up innovations with social impact rests on strong connections between innovators, governments and businesses. Facilitating and harnessing these connections are never a job done: they are by nature dynamic, finely tuned to changing needs and based on trust and accountability across partners who historically have not worked together.
So crucial is the intermediation cog, it calls for deliberate effort and dedicated funding. It is a function that must transcend specific, time-bound projects and take a long-term view in bringing an innovation to widespread commercial adoption.
The convergence of sectors is crucial for sustainable transformation of food systems. True and lasting transformation requires a demand-driven approach that draws from cross-sectoral convergence. Food convergence innovation (FCI) is a science- and data-driven approach that enables a holistic response to complex problems. As was explained by Professor Laurette Dubé, chair and scientific director, McGill Centre for the Convergence of Health and Economics, FCI views scaling innovations through the dual lenses of ecosystem and society, with people at the center and strong country ownership throughout the process.
As Fadel Ndiame, deputy president of the Alliance for a Green Revolution in Africa (AGRA), aptly put it, “COVID-19 taught us to rethink and rebuild food systems to meet the need and address the challenges of our century. Innovations will have to be developed as part of a human-centered system, and sit at the intersection of health, economy and environment.”
Effective scaling requires intentional financing strategies. As we design new initiatives or recalibrate existing ones with scaling in mind, we must also refresh financing mechanisms to effectively leverage funding from philanthropy, traditional donors, private equity, impact investors, government and entrepreneurs. Different capital providers have unique roles to play depending on the scaling pathway, level of risk and market failures involved at different points in the scaling process. Understanding the continuum of capital available, the evidence investors require to make decisions and the incentives different types of financing structures create is critical to ensuring promising innovations take the shortest and most sustainable paths to scale.
Many innovations in food safety and nutrition are overcoming critical market failures that prevent affordable access to safe and nutritious food. For these innovations, despite an increase in commercialization approaches, growth on purely commercial terms is often difficult or infeasible. To shorten the time span between development of an innovation and its widespread impact, improving our understanding of the scaling process is critical. Learning from previous experiences and improving these processes for future innovations is required for investors and implementers to effectively use resources and ensure that promising solutions can reach the greatest number of people. Only then can we attain the goal of sustainably delivering affordable, healthy and safe diets for all.
Other contributors: Njeri Okono (IITA), Dominic Scofield (McGill University — Desautels Faculty of Management) and Marcella McClatchey (Bill & Melinda Gates Foundation).
The three-part, three-day webinar series (March 2-4, 2021) was co-hosted by IITA and the Bill & Melinda Gates Foundation.
Experiences shared, as well as lessons and insights from the workshop will inform future activities to scale the three innovations showcased during the webinar, as well as other critical smallholder-relevant agricultural innovations with significant social impact.
In attendance were representatives of research organizations, the private sector, government officials from sub-Saharan Africa and their development partners.