Non-Profit Cereal Processing Plant Explained
Current State of Affairs
We know that many parents cannot fully provide for their own children’s daily nutritional needs. School Feeding Schemes then act as nutritional safety nets to the children growing up in these impoverished communities.
In South Africa, almost all School Feeding Scheme Operators serve pre-cooked or ready-to-eat cereals as morning meals. The Feeding Schemes buy these ready-to-eat cereals from large food processors.
The large food processors design recipes which they process, brand and sell. They make the decisions to include or exclude specific ingredients. Their decisions are largely commercially driven. Ingredient costs, shelf life, availability, and ultimately the profitability of their organisation is key.
Currently, all large food processor’s innovation efforts involving ready-to-eat cereals are aimed at finding the lowest-cost solutions. This is crucial to win contracts and continue supplying the Feeding Schemes. This is a classical ‘race to the bottom’.
Currently, almost always the lowest cost solutions are found in maize-sugar-salt blends. In very few cases recipes will also contain sorghum and soya. All these solutions are considered nutrient-poor, energy-rich. In laymen’s terms, these are very poor quality vegan meals.
Often bold claims are made around micro-nutrient fortification content (vitamins and minerals). These claims impresses the uninformed.
Micronutrients can never compensate for insufficient proteins and fats in meals.
Now the Question Begs
How can breakfast cereals offered to poor children via school feeding schemes be improved meaningfully? How do we fix inadequate recipe formulation?
By removing private shareholder interests, we changed the reason why the company create ready-to-eat recipes. (Returns on private shareholders investments are always an over-arching focus).
When both The Management Team and The Board of Directors drives towards selling nutrient-dense recipes at business sustainable rates, the required shift in focus comes.
The primary focus swings away from first making a profit for shareholders and moves towards finding solutions to meet the stated goals, mission and vision.
Scale advantages now strengthens the business ecosystem
The real good outcome is, when scale advantages start to kick in, profits are not stripped towards shareholders but re-invested to strengthen the model.
The transparent business nature of social enterprises is also extremely appealing to large donor organisations paying for the meals.
Suddenly now the following options are deemed beneficial and not a liability to the business;
Including multiple whole grains in the recipes,
Including multiple whole legumes in the recipes,
Including the germs & husks, to ensure all the actual natural nutrients are available,
Include milk powder to ensure the presence of animal sourced proteins and fats,
Reduce sugar as far as possible.
Our basic strategy
To trade our various nutrient-rich products with the open market at competitive market prices,
To trade with the feeding schemes market at “cost-plus” pricing formulas.
The strategy promises the enterprise to be self-sustainable with a strong financial future.
Key principles of a non-profit processing plant
The operating entity is a Pty (Ltd), and a fully registered SARS taxpayer,
100% of the shares are owned by the INANI Start Well Foundation,
Products are priced to ensure the sustainable future of the processing plant,
The non-profit shareholders have no dividend payment expectations,
Managers are paid market-related incentives.
- Scientist involved are not asked to compromise their scientific views when it comes to product development.
Recipes are designed and processed for their nutritional value, not their profitability,
The best possible raw ingredients becomes attractive to use,
The non-profit governance structures allow for total financial transparency to all stakeholders,
Feeding scheme institutions and organizations can now verify that the major costs drivers are the nutritional contents of the ingredients,
Donors and funders can be assured that most monetary value ends up with the stated and targeted beneficiaries,
Feeding scheme operators now have access to super quality ready-to-eat meals as an alternative to their current options.