GAIN’s work on food loss and waste reduction
Teale Yalch and Stella Nordhagen
Chapter X: Market-based interventions to improve nutrition by reducing food loss in low- and middle-income countries
The importance of food loss and waste for nutrition
The mission of the Global Alliance for Improved Nutrition (GAIN) is to improve the consumption of nutritious and safe food for all people, especially the most vulnerable to malnutrition. [1] GAIN is concerned about food loss and waste because many of the most nutritious foods (e.g., fresh fruit and vegetables, meat, fish, dairy) are perishable and therefore most at risk of being lost or wasted before reaching the consumer. Indeed, a meta-analysis of six selected Sub-Saharan African countries showed that the highest post-harvest losses (without intervention) included fruits and vegetables (56 ± 25%), and fish (27 ± 14%). [2] When nutritious foods are lost or wasted along the supply chain, the total availability of that food in the market is reduced and that reduction in supply can causes prices to increase. As a result, consumers have less access to nutritious food, which is a key contributor to poor dietary diversity and malnutrition. In addition to losses in quantity, there can be losses in the nutritional quality of foods as well as their desirability – which also impacts on consumption decisions.
This chapter argues that addressing this issue requires a greater focus on the middle of the supply chain (i.e., after food leaves the farm or post farmgate) and increased collaboration with private-sector actors via market-based approaches. We provide examples, based on GAIN’s work, of how collaboration and market-based approaches can be fostered. GAIN has rich experience in creating supply chain alliances to improve coordination and collaboration among stakeholders and fostering innovations with real market potential. We conclude by discussing some of the future directions for market-based innovations to reduce postharvest food loss and improve nutrition.
The ‘missing middle’ in food loss interventions
In low- and middle-income countries (LMICs), most food loss and waste occurs along the supply chain from farm to retail. [3] In Sub-Saharan Africa specifically, experts have confirmed that perishable, nutritious foods like fresh produce, meat, dairy and fish are most likely to be lost post-farm gate during the distribution, packaging and processing stages. [4] Despite the concentration of loss for nutritious foods in the middle of the supply chain, a meta-analysis conducted in 2015 showed that over 80% of all postharvest loss studies in their sample focused on on-farm storage improvements for grains. [5] While addressing food loss on farm is critical to achieving Sustainable Development Goal 12.3, there is also a need to better understand the causes of food loss in the middle of the supply chain and to tailor interventions to support off-farm stakeholders in reducing food loss, particularly for nutritious commodities.
GAIN estimates that micro and small- and medium-sized enterprises (SMEs) in Africa produce, process and sell up to 70% of nutritious foods like fresh fruits and vegetables. [6], [7] Correspondingly, 80% of African consumers now purchase their food from informal or formal markets. Therefore, the economic success of small-scale farms that produce food largely depends on access to those markets. [8] SMEs provide crucial mid-supply chain services like warehousing, cold storage, logistics, wholesale, processing, and retail services that connect farmers to markets. [9] In recent years, more and more entrepreneurs have capitalized on the opportunity to link food supply to demand through innovative and dynamic businesses in these service areas. Yet, a considerable amount of food loss occurs within SMEs working in the middle of the supply chain. The increasing flow of nutritious food through mid-supply chain SMEs represents an important and underutilized pool of actors that can be engaged in the prevention of post-harvest food loss.
Alliances to support food loss reduction: the example of PLAN
In 2016, in collaboration with USAID, GAIN created the Postharvest Loss Alliance for Nutrition (PLAN) program to address challenges SMEs face along the supply chain that cause nutritious foods to be lost or wasted. Through expert consultations and in-depth landscape analyses, GAIN identified three key challenges: lack of coordination among supply chain actors; poor access to the technical expertise needed to adopt improved technologies, particularly cold chain, crating and processing; and insufficient access to the financial resources needed to facilitate this adoption. While a significant amount of food loss occurs on-farm, GAIN found that there were many agriculture organizations making significant progress with farmers to reduce loss on farm and that PLAN would add the most value by supporting businesses post-farmgate. To ensure that holistic and complementary support was provided to all elements of the food value chain, PLAN collaborated with projects that worked directly with farmers.
PLAN was designed to bring together supply chain actors from the public and private sectors to identify underlying causes of loss within a specific supply chain. The actors were supported to co-design and implement relevant solutions to address the local challenges. Under its theory of change, PLAN aims to achieve two primary outcomes: (1) increased adoption, procurement, and application of new technologies and/or new best practices by businesses to reduce post-harvest loss, and (2) improved policies, increased public sector allocation of resources, and private investments in activities that reduce post-harvest loss. These outcomes, in tandem, are expected to reduce food loss, extend the shelf life of target commodities (thereby lengthening the selling season), improve the quality of the target commodities (and thereby their desirability), and improve food safety along the supply chain (also improving desirability). These outcomes, in turn, are expected to lead to increased accessibility, availability, desirability, and perhaps affordability of the target commodity in the market. In the long-term, increased accessibility, availability, and desirability of a higher quality nutritious food are expected to lead to increased demand and therefore increase consumption, leading to better nutritional outcomes.
There are several assumptions that underpin PLAN’s theory of change, including the existence of appropriate technologies, businesses’ willingness to change practices and adopt new technologies, and that selected technologies will have the expected effect when used under real-world conditions. The link to improved nutrition assumes that reductions in loss along the supply chain will lead to increased consumption, and that consumption will improve diet quality. Improvement in diet quality can come about by increased consumption of nutrients (primarily micronutrients) in which the diet was previously deficient, or through the substitution of less nutritious foods (e.g., starchy staples) with fresh fruit and vegetables. Given this complexity, the link between food loss and waste reduction and improved nutritional outcomes has not yet been confirmed in empirical research.
While filling this gap in evidence is essential, the PLAN model offers an example of a promising approach to reducing food loss and waste that targets actors all along the supply chain. To achieve the outcomes laid out above, the PLAN model has three components: improving coordination among actors within a given food supply chain through the Alliance, building capacity and encouraging SMEs to adopt improved practices and technologies through business-to-business (B2B) mentorship, and fostering new innovations in post-harvest loss technology through Innovation Challenges (Figure 1).
As illustrated for the tomato supply chain in Nigeria in Figure 2, a considerable amount of loss happens in the intermediate stages of the value chain due to poor storage and transport, insufficient storage facilities (especially cold storage), and a lack of domestic processing capacity. Many value chains in LMICs display similar weaknesses. PLAN thus specifically aims to build capacity in three technical areas along supply chains for nutritious foods: packaging and crating, cold chain storage/logistics, and food processing.
PLAN is currently being implemented in Ethiopia (with a focus on tomatoes) and Indonesia (with a focus on fish). PLAN closed project-based operations in Nigeria in December 2019 after four years of supporting loss reduction in the tomato value chain; its work is being taken forward under an independent organization, the Organization for Technology Advancement of Cold Chain in West Africa (OTACCWA). The next sub-sections focus in on the Alliance component of the PLAN model, highlighting GAIN’s experiences with alliance-building for food loss reduction in Nigeria and Indonesia.
The Alliance
After four years of implementation, it is clear that one of the greatest contributions of the PLAN program has been creating both formal and informal connections between supply chain actors through the Alliance. The Alliance component of PLAN is a cross-sectoral platform for networking and sharing information. Alliance members are stakeholders involved in the target supply chain and include aggregators, logistics companies, cold storage companies, crate producers, market retailers, processors, banks, academic institutions, and government agencies and key government officials. The PLAN alliance provided an opportunity for private- and public-sector stakeholders to connect, to share knowledge, challenges and experiences, and to work together to address common issues related to post-harvest loss.
Given the informal nature of many supply chains for nutritious foods in LMICs, there are very few organizations, associations or networks that allow businesses working in the same sub-sector (e.g. production, cold storage, processing, or logistics) or with the same commodity (e.g., fresh fruit, dairy, vegetables) to meet, exchange knowledge and create professional linkages. At its core, the Alliance provides the means for supply chain actors to meet likeminded businesses, share market information and build social capital with other relevant actors. Social capital – the connections between individuals and groups and the norms, trust, common values, and shared understandings on which these connections rely – is a critical element of a well-functioning supply chain, particularly where formal institutions are weak. Links between entities upstream and downstream along the supply chain allow actors to effectively identify and address bottlenecks, improve efficiencies, and adequately respond to market demands. As social capital increases within a group so does the flow of information; this helps build individual capacity and the opportunities for partnerships that can lead to collective action.
PLAN Alliances in Nigeria, Ethiopia and Indonesia have helped businesses equip themselves with the tools, knowledge and connections needed to address their specific food loss and waste challenges by creating influential networks that build their social capital. A recent external assessment of PLAN has shown that in Nigeria and Indonesia, the Alliance has fostered private-sector initiative, public-private sector engagement and inter-ministerial collaboration aimed at reducing loss of nutritious foods [10]. The following paragraphs describe these experiences in more detail.
PLAN Nigeria – Encouraging private sector initiative and supporting private-public sector engagement. After several expert consultations, GAIN narrowed PLAN Nigeria’s (N-PLAN) focus to the tomato value chain due to the country’s high production and loss rates, prevalence of vitamin A deficiency and the government’s interest in promoting the commodity. Over the span of four years, N-PLAN created a multi-sectoral alliance with over 230 members [11] from across the tomato supply chain, including traders, growers, aggregators, distributors, local and federal government representatives, banks, cold chain companies, plastic crate manufacturers, and processors. The project team continually communicated, convened and trained members through 17 workshops, summits, and seminars held in seven cities across Nigeria on topics such as cold chain operations, proximate processing and food safety. These capacity-building opportunities allowed stakeholders to adopt technologies such as cold storage units and reusable plastic crates and other best practices. N-PLAN participants interviewed as part of the external assessment reported significant reductions in post-harvest loss, from 35-40% to under 10%. [12]
Not only did the platform create an opportunity for trainings, it also provided a discussion platform for actors from different sectors who would otherwise not be connected. Several stakeholders reported making business deals as a result of relationships developed through their interactions. For example, after meeting at an N-PLAN event, Cold Care (a cold storage manufacturing firm) began leasing cold room space to Fruits and Veggies Global (a fresh fruit and vegetable processing firm) in a transaction worth $12,000 per year to improve food safety and reduce post-harvest loss. [13]
A key outcome of the PLAN Alliance in Nigeria was instigating and supporting the creation of a privately led and funded business association focused on developing the cold chain in West Africa. The Organization for Technology Advancement of Cold Chain in West Africa (OTACCWA) was registered with the Corporate Affairs Commission in Nigeria in 2018. OTACCWA now has over 80 paying members comprised of cold chain professionals, original equipment manufacturers, transporters, logistics operators and refrigeration and air conditioning experts. OTACCWA’s mission is to organize the different industry sectors participating in supplying the cold chain supply used for perishable agricultural produce and other perishable commodities and represent their individual and collective interests in policymaking, standards setting and industry development. [14]
OTACCWA is recognized by Nigeria’s Federal Ministry of Agriculture and Rural Development (FMARD) and has been included as member of its Inter-ministerial Agriculture and Nutrition Working Group. Several organizations, including banks and international organizations, are currently aligning with OTACCWA for cold chain development as a means for reducing postharvest losses and improving effective health services delivery. Additionally, the combined influencing power of OTACCWA and N-PLAN resulted in the Ministry of Agriculture and Rural Development including a dedicated line item for post-harvest loss reduction in their annual budget. [15] GAIN considers the creation of OTACCWA an innovative, market-based outcome that will sustain and advance PLAN’s cold chain development objectives for food loss reduction in Nigeria long after the end of the donor-funded project.
PLAN Indonesia – Facilitating inter-government collaboration to address food loss and waste. PLAN in Indonesia (I-PLAN) was designed to focus on fish due to the government’s interest in increasing the supply and consumption of fish locally to address high rates of stunting. In order to facilitate I-PLAN’s design, GAIN worked closely with the Ministry of Health (MoH) and the Ministry of Marine Affairs and Fisheries (MMAF). By providing a third-party platform through which both ministries were presented as experts, I-PLAN has enabled the two government agencies to collaborate more effectively. A recent assessment of I-PLAN highlighted that one of the project’s most critical contributions has been supporting better collaboration between the MoH and the MMAF through government engagement. [16] In Indonesia, it is uncommon for different government agencies to collaborate on joint initiatives. The partnership between the two ministries was facilitated by I-PLAN, which served as an external party capable of taking care of the administrative processes that are required in order for inter-ministerial collaboration to occur. I-PLAN navigated lengthy government approval processes, a lack of incentive to collaborate, a lack of protocol for how to collaborate and a sense of competition over who ‘owns’ the successes of the program. I-PLAN was able to avoid these barriers through its role as a third-party program: its successes are seen as the result of both partners’ contributions.
The MoH and MMAF are now both board members of the I-PLAN Alliance and have been integral in shaping one of I-PLAN’s major annual events: the Innovation Challenge. In 2019, with significant input from the MoH and MMAF, the second Innovation Challenge focused on innovations in food design. The goal was to promote the minimal processing of fish to create healthy fish-based foods or snacks for local consumption. This type of processing is important not only for reducing food loss but also to make fish more available in the market and more desirable to and convenient for consumers.
As a result of I-PLAN’s coordination and advocacy, there has been increased activity from government to address post-harvest loss issues, including trainings from District Fisheries Offices (outposts of MMAF) to fish supply-chain actors on post-harvest management and government procurement of post-harvest loss technologies. [17] The MoH and MMAF have also recently signed an agreement – independent of GAIN and PLAN – to promote excellence in Indonesian human capital through increased fish consumption.
Identifying and fostering innovations for food loss and waste reduction
From its inception, PLAN has aimed to promote local innovations to reduce food loss and waste throughout the supply chain. One key part of doing so has been the Business Innovation Challenge, in which a competitive public call is made for innovative new technologies that can respond to an important social need. In 2018, I-PLAN conducted its first Innovation Challenge and received over 230 proposals for technologies that could help reduce the loss of fresh fish; these came from a diverse set of sources – academic researchers, technology entrepreneurs, government employees, and private businesses. A panel of experts then selected four finalists to receive technical and financial support to test, prototype and market their innovation. The four innovations were: Maslaha, a re-freezable plastic ice-pack to replace ice for cooling (also called the ‘cold bank’); CoFresh, a fish storage and display unit for motorbikes to be used by last-mile sellers to replace traditional styrofoam storage boxes; Prominator, a cooling attachment towed by three-wheeled motorbikes to maintain cold chain for fish deliverers; and a Coolla a fiberglass storage box and cooling system, similar in function to a portable refrigerator.
These innovations were all technically promising, but within a market environment, new technologies are only as good as their business model – i.e., the entrepreneurs’ plans for making a profit and thereby staying in business so that the innovations can be adopted. A viable business model identifies target customers and competitors and lays out a strategy to meet the demands of the market. To address these needs, I-PLAN provided the Innovation Challenge finalists with not only technical assistance to improve their product but also business support to ensure they adapted the innovation to meet market and consumer demands. Interviews with Innovation Challenge participants indicated that the technical and business support offered to winners gave PLAN’s innovation challenge significant added value over other innovation programs. [18] The I-PLAN support also invested in design iteration and consumer feedback – topics that are seldom covered in other innovation programs (particularly those that are government funded). We have found that such support is essential to ensure that innovations are well-tailored to user needs.
With the support I-PLAN provided, the finalists are presently (as of January 2020) working to finalize their designs, increase production, and take their products to the larger market. I-PLAN’s support is already yielding positive results. For example, after reducing the size of the cold bank based on user feedback and obtaining the intellectual property rights of the technology, Maslaha sold over 14,400 cold banks to fish supply chain actors in Indonesia from within 6 months. Through the I-PLAN Alliance, Maslaha’s owner was also introduced to a new distributor; this partnership has increased the business’s reach into new districts and has generated approximately 60% of Maslaha’s total sales just within the last 4 months [19].
In a tropical country like Indonesia, the benefits of ice are fleeting and expensive, and a cost-benefit analysis shows that Maslaha can make economic sense for fish sellers. Fishermen save approximately 1,500 IDR ($0.11) a day on ice by using Maslaha’s cold bank and make an additional 2,000 IDR per kilogram of fish by selling more, faster. Even if they only sell 1 kg of fish per day, their savings thus cover the cost of one Maslaha unit (25,000 IDR/ $1.81) in eight days of use. [20] Maslaha users interviewed in an external assessment also reported that they were sometimes able to sell fish at a higher price, due to the improved quality. Maslaha thus promises to save fish supply chain actors money while also helping to reduce food safety risks and prolong the freshness of fish, thereby reducing loss. Scaling up these types of innovations throughout the supply chain can significantly reduce fish loss – likely eventually resulting in increased supply at a lower cost.
Conclusion: unleashing the potential of market-based approaches for postharvest loss reduction
Finding win-win, economically sustainable solutions such as Maslaha is at the core of market-based approaches to reducing postharvest loss of nutritious foods. In particular, innovations and innovative businesses play a key role in reducing food loss and waste and fostering change in the food system. There is considerable untapped potential in this area.
In 2019, GAIN and the Global Knowledge Initiative (GKI) conducted a study to identify promising innovations in the food system with the potential contribute to improved access to nutritious safe foods. Using the Delphi methodology, GAIN engaged a diverse set of food systems experts to come to consensus on a complex topic. As a result, the experts selected 12 of the most promising innovations for improving nutrition via the food system. As shown in Figure 3, the majority of these innovations are relevant for SMEs working along the supply chain and applicable to food loss and waste strategies. Considerable work could be undertaken to further develop these ideas and bring them to market, supported by viable business plans and in-depth user-oriented market research and iteration. And these are far from the only promising market-based innovations that could have a major positive impact on postharvest loss reduction. Additional efforts to surface locally developed innovations, such as innovation challenges, can serve to identify new ideas that are well adapted to the diverse and challenging physical and economic environments that often influence supply chains for nutritious foods in LMICs.
As the experiences of PLAN in Nigeria and Indonesia demonstrate, there is also considerable potential for improving supply chain efficiency and reducing food loss and waste through greater coordination and capacity-building across supply chains. This requires expanding the focus of postharvest loss reduction efforts beyond the farm and into the broader supply chain, forging links and social capital among the key mid-chain actors. Efforts to do this so far have been very limited, with most nutritious food supply chains characterized by information bottlenecks and trust barriers – both of which contribute to loss. In addition to creating PLAN-like alliances in new areas and for new commodities, new endeavors could seek to build coordination and social capital in other ways, such as the use of technology-based platforms to foster transparency.
Future efforts at alliance-building and other approaches for the reduction of postharvest loss to improve nutrition must also invest in collecting data and assessing the impact of the intervention, particularly its effect on nutrition. There is currently scant evidence market-based interventions’ ability to reduce post-harvest loss and waste – or whether its reduction results in positive impacts for nutrition. Drawing on the lessons and successes of PLAN, GAIN looks forward to working with the international development community to further contribute to reducing loss and waste of nutritious foods.
References
[1] GAIN’s Organizational Strategy 2017-2022.
[2] Affognon, Hippolyte; Mutungi, Christopher, Sanginga, Pascal and Borgemeister, Christian (2015). Unpacking Postharvest Losses in Sub-Saharan Africa: a Meta-Analysis. World Development Vol. 66, pp. 49-68. Nairobi, Kenya.
[3] FAO. 2019. The State of Food and Agriculture 2019. Moving forward on food loss and waste reduction. Rome. License: CC BY-NC-SA 3.0 IGO.
[4] M. Sheahan, C.B. Barrett. Review: Food loss and Waste in Sub-Saharan Africa / Food Policy 70 (2017) 1-12.
[5] Affognon, Hippolyte; Mutungi, Christopher, Sanginga, Pascal and Borgemeister, Christian (2015). Unpacking Postharvest Losses in Sub-Saharan Africa: A Meta-analysis. World Development Vol. 66, pp. 49-68. Nairobi, Kenya.
[6] GAIN, ‘Role of SME’s in Nutritious Food Supply Chains in Africa’, Draft. Expected publication 2020.
[7] AGRA. (2019). Africa Agriculture Status Report: The Hidden Middle: A Quiet Revolution in the Private Sector Driving. Agricultural Transformation (Issue 7). Nairobi, Kenya: Alliance for a Green Revolution in Africa (AGRA).
[8] AGRA. (2019). Africa Agriculture Status Report: The Hidden Middle: A Quiet Revolution in the Private Sector Driving. Agricultural Transformation (Issue 7). Nairobi, Kenya: Alliance for a Green Revolution in Africa (AGRA).
[9] AGRA. (2019). Africa Agriculture Status Report: The Hidden Middle: A Quiet Revolution in the Private Sector Driving. Agricultural Transformation (Issue 7). Nairobi, Kenya: Alliance for a Green Revolution in Africa (AGRA).
[10] Dalberg Consulting. 2019. ‘Assessment of Nigeria Postharvest Loss Alliance for Nutrition (N-PLAN).’ Unpublished report for Global Alliance for Improved Nutrition.
[11] Including 176 men and 55 women.
[12] Dalberg Consulting. 2019. ‘Assessment of Nigeria Postharvest Loss Alliance for Nutrition (N-PLAN).’ Unpublished report for Global Alliance for Improved Nutrition.
[13] Dalberg Consulting. 2019. ‘Assessment of Nigeria Postharvest Loss Alliance for Nutrition (N-PLAN).’ Unpublished report for Global Alliance for Improved Nutrition.
[14] OTACCWA Constitution 2018.
[15] Dalberg Consulting. 2019. ‘Assessment of Nigeria Postharvest Loss Alliance for Nutrition (N-PLAN).’ Unpublished report for Global Alliance for Improved Nutrition.
[16] Dalberg Consulting. 2019. ‘Assessment of Indonesia Postharvest Loss Alliance for Nutrition (I-PLAN).’ Unpublished report for Global Alliance for Improved Nutrition.
[17] Dalberg Consulting. 2019. ‘Assessment of Indonesia Postharvest Loss Alliance for Nutrition (I-PLAN).’ Unpublished report for Global Alliance for Improved Nutrition.
[18] Dalberg Consulting. 2019. ‘Assessment of Indonesia Postharvest Loss Alliance for Nutrition (I-PLAN).’ Unpublished report for Global Alliance for Improved Nutrition.
[19] Dalberg Consulting. 2019. ‘Assessment of Indonesia Postharvest Loss Alliance for Nutrition (I-PLAN).’ Unpublished report for Global Alliance for Improved Nutrition.
[20] Dalberg Consulting. 2019. ‘Assessment of Indonesia Postharvest Loss Alliance for Nutrition (I-PLAN)’. Unpublished report for Global Alliance for Improved Nutrition.
End notes
1 Hansen, A.R., Keenan, C., and Sidhu, G. (2019). Nutritious Food Foresight: Twelve ways to invest in good food in emerging markets. Global Knowledge Initiative. Funded by Global Alliance for Improved Nutrition.