Procter and Gamble:Fighting Malnutrition

Business Innovation to Combat Malnutrition Case Study Series

Case B

This paper was prepared by Melissa Tritter (Harvard Business School), Michael

Jarvis (World Bank Institute), Bérangère Magarinos

(Global Alliance for Improved Nutrition), and

Djordjija Petkoski (World Bank Institute). It is based on

interviews with executives and scientists at Procter and

Gamble. We would like to express our gratitude to the P&G team for sharing

information with us, participating in numerous meetings, and providing

comments on the draft paper. Our particular thanks go to

Ethel Cormier.

For participation in interviews and follow-up guidancewe would like to thank

Haile Mehansho, Kenneth Smith, Don Compton,

and Mike Jensen of Procter and Gamble.

Copyright © 2007, the World Bank Institute and the Global Alliance for Improved NutritionThe views expressed in this paper are those of the authors only.

P&G withdrew NutriStar from Venezuela in

2003, and sought a buyer for the brand. After

it became apparent that none of the potential

buyers planned to truly leverage the product,

the R&D team advocated for keeping it. In 2004

they began working with P&G’s External Busi-

ness Development Group to move NutriStar

toward a licensing model.

External Development had been formed a de-

cade earlier to make use of the many patented

technologies that had not been incorporated

into commercialized P&G products. As with

the calcium-fortified orange juice, the plan was

now to license the GrowthPlus technology to

someone else who was willing to commercialize

it. The development team wrote up a prospec-

tus for NutriStar and began to actively market

it to third parties.

NutriStar’s first licensing partner was a lo-

cal manufacturer in Nicaragua who started

production in early 2004. The newly-simplified

manufacturing process resulted in dramatic

cost savings, as did the local manufacturer’s

ability to access naturally-occurring distribu-

tion systems. The project also relied on funding

from USAID – but in late 2004 the agency

shifted its focus from nutrition to HIV/AIDS,

and the manufacturer’s funding was cut.

Production of NutriStar ceased in Nicaragua,

despite signs of a promising market.

Ying Yang Zing

A related product was also just coming to mar-

ket. It was an iron- and calcium-fortified rice

intended for the Chinese market, branded as

Ying Yang Zing (YYZ) – which roughly trans-

lated as “NutriStar” in Mandarin.

In 2006, P&G was testing the commercial mod-

el for YYZ. One of the key challenges was the

strong regionalization of the Chinese market.

The product was selling, but it wasn’t flying off

the shelves – though P&G had not yet built up

a large branding campaign or concerted social

marketing effort to support sales.

P&G was actively seeking licensing partners for

YYZ, but so far had come up short.

Parting Thoughts

Mike Jensen, the R&D Vice President of Snacks

& Beverages, offered some optimism for future

sales:

One business model that is still open for op-

portunity is locally-sourced intervention for

school feeding programs. These have several

advantages. They’re centrally cited, so kids

come there and you can intervene with lots

of kids every day. They are also something

people are already investing in – so they

�

don’t require any new government spending. And

since they exist in many places already, you’re not

faced with the challenge of setting up a whole new

program

But many of the original product developers were

also feeling frustrated. Don Compton expressed a

common line of thinking:

In low income countries, our business still faces the

same problems we would in the U.S. – competition

with similar products, high trade margins, distri-

bution and logistics problems. But all that can be

solved if you have the right partnerships.

So we’ve learned a lot, we’ve done a lot, but the

technology is still not out there. In fact, technology

is not the issue – and process is not the issue, qual-

ity is not the issue, manufacturing is not the issue.

Willingness to get it done is the issue.

The micronutrient problem identified 30 years ago.

I don’t know why these people are still suffering.

There are solutions already – technical and busi-

ness solutions. Why it hasn’t happened is still the

big question.

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