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Non-Profit Food Processing Plant Explained

"Let's get down to business"

This well-known statement is the problem when it comes to food manufacturing for the poor.  When processing food for the poor with a profit motive, there is only one outcome:

Let's explore ready-to-eat product suppliers to feeding schemes for a moment. The company with the cheapest products will be awarded large contracts. To make money, stay competitive and in business, companies are forced to innovate towards finding the cheapest solutions. This dynamic skews the attention towards serving the shareholder interests and away from the consumer's needs. Very little innovation, care and attention go to the well-being of impoverished consumers or toddlers.

 

To create a shift in focus towards the ingredients in the recipes, we removed the shareholders and replaced them with beneficiaries in the business structure. Now more efforts are guaranteed to go into finding innovative and cost-effective ways to design healthy products. It is our business to work for our beneficiaries.

 

The Inani StartWell Foundation NPC built a first-of-its-kind, not-for-profit food extrusion, fortification and packaging plant in Springs, South Africa. Now we can take control and innovate towards increasing the nutritional value of our products while keeping them cost-effective. 

The malnourished, growing children in South Africa are the true beneficiaries of our efforts!

The Inani StartWell factory's official launch. First of its kind in the world as a not-for-profit food factory.

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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 decision 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’. 

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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 impress the uninformed.

 

The South African Child Gauge 2020 states:

  • Big food corporations are expanding into the global South, targeting children as consumers and flooding local markets with cheap ultra-processed foods - low in nutrients, high in sugar, salt and fat - which are fuelling a rapid rise in obesity and NCD's (non-communicable diseases). 

  • Most South African children now live in communities where healthy foods are no longer available or affordable.

  • By December 2020, child hunger had increased by 50% in South Africa with 1 in 6 households reporting that children went hungry in the last seven days because there wasn't enough food.

It is down to feeding schemes to provide them food, and the sad truth is that many just keep on giving the same starchy, nutrient-poor meals day in and day out!

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?

  • We suggest
    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.
  • Positive outcomes
    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.

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