Small and Medium Enterprises (SMEs) are essential to enable job creation, economic development and good nutrition, particularly in developing countries. This is why DSM is supporting up and coming entrepreneurs in this year’s SUN Pitch Competition, as Fokko Wientjes, Vice President of Malnutrition Partnerships and Programmes at DSM explains here.
The effects of the COVID-19 pandemic have exposed the fragility of food and agriculture systems worldwide. The pandemic has strained supply chains, driven up costs of production and distribution, and put pressure on the operations of businesses, large and small. As the situation continues, we are likely to see price shocks, unemployment, bankruptcies and food shortages. Just as after the food price crisis of 2008, a period of instability can be expected. We have heard it many times before, but now more than ever, we need to build back better. The pandemic has created additional urgency to reset and build the food industry in a sustainable way. This means we need to do more in developing local food production through small and medium enterprises (SMEs), which not only serve to bring nutrition to the market, but also support the development of jobs and local economies.
SMEs are responsible for most of the food that reaches consumers in low- and middle-income countries (LMICs) – they handle 70% of food consumed in Africa. SMEs are also the engines of LMIC economies. By some estimates, they contribute up to 33% of GDP in emerging markets and create over 50% of jobs (an even higher number if the informal sector were accounted for). Without money, people cannot buy food, so it is critical that we as DSM support job creation and economic development by investing in SMEs to ensure that everyone can access nutritious food. Solving ‘Zero Hunger’, Goal 2 of the Sustainable Development Goals (SDGs), and reducing malnutrition, must go hand in hand with tackling SDG1 – ‘No Poverty’.
In light of the global pandemic, now more than ever, governments should provide social safety nets to enable local agri-food enterprises to continue to produce, employ people, and buy from local farmers – so the whole economy keeps going. As long as we import huge quantities of food, we impair local economic development, which impacts job creation and stability. It is our shared duty to make sure we ‘buy local’ as much as we can – and we should build up SMEs and the ability of national and local food systems to deliver good nutrition, as part of national economic recovery efforts.
At DSM, we are committed to the global fight against malnutrition, particularly against hidden hunger, through our focus on vitamin and mineral deficiencies. We have been offering high quality, affordable and innovative nutritional solutions in emerging markets for decades. We have taken a leading role in the development of the SUN Business Network – which organises SMEs in low- and middle-income countries around opportunities to scale their businesses and reach more consumers with nutritious foods.
We also partner with UN agencies including WFP and UNICEF, NGOs such as World Vision, and local SMEs to develop more affordable nutritious products that have a positive impact on public health. For example, in Rwanda, we are producing fortified porridge and we have invested in companies in Zambia and Bangladesh to support local SMEs in producing quality and affordable nutritious foods products.
The ‘3A’ nutrition award
We see the nutrition-job-economic development nexus as key to building up food industries through the SME sector, and the SUN Pitch Competition is an opportunity to strengthen this connection and an opportunity to invest in SMEs in order to build more resilient agri-food systems. As part of our support to this year’s competition, we will be awarding a cash prize worth US$10,000 for the SME presenting a business and nutrition opportunity which can best meet DSM’s focus on the 3As – and propose a business idea for making nutrition – (1) Accessible, (2) Affordable and (3) Aspirational.
Coming up with ideas for a product that is both nutritious and delicious is particularly important. While the field of nutrition has a scientific focus which looks to optimising the nutritional value of foods, it is equally important that these foods be desirable, so consumers choose to eat them. That is why, as one of the four judges in the SUN Pitch Competition, I will be looking for those entrepreneurs that offer a delicious nutritious choice; those who have been thinking about the consumer and about products that are extremely attractive, whilst of course being highly nutritious.
By investing in SMEs and local agri-food systems, DSM aims to see consumers buy more nutritious food, so there is an incentive for producers to offer more nutritious food. And as we develop more local supply chains and jobs through the SME sector, we will see improved economic development –because without empowering consumers, we will not achieve our goal of reducing malnutrition.
The poverty and malnutrition nexus needs to be addressed, and go hand and hand – we want to move from aid to trade, with more local value-addition. With over 60% of sub-Saharan Africa’s population working in the agri-food industry, and agriculture composing an integral part of Asia’s economy, investing in local food systems is a logical focus as well as a big opportunity. This is the industry that we should all be focusing on for jobs, prosperity and accessible, affordable and aspirational nutritious foods.