When Bositu’s twin boys were three months old a government health worker visited her home in Goudaguda, a small village nestled amidst paddy fields in one of highland Orissa’s green valleys. She carried a weighing scale and a government issued weight graph. After examining the babies she told Bositu that they, like over 50 % of children born in the state, were underweight. In one of the village’s Adivasi enclaves Bositu and her husband stood out by virtue of his government job as headmaster in a neighbouring village school. He had heard of a special drink, Horlicks, which was meant to have health benefits for babies and children. The cost of one jar of the drink powder was 135 rupees. Each month for the next three months, Bositu’s husband travelled one hour by bus to Koraput in order to purchase the powder. It came in a brightly coloured jar, packaged in a shiny blue cardboard box, with Horlicks’ “five signs of growth” (more bone area, more muscles, better concentration, active nutrients and healthier blood) pictured on its side. Each morning and evening Bositu mixed the powder with milk from their cows and fed it to her sons from a bottle. By the time the babies were six months old, she thought they were looking plumper and healthier. Now they were ready to begin eating rice they would not be needing Horlicks anymore.

We are currently in rural Orissa, where the infant malnutrition rate is considered amongst the worst in India. Here multi-national food and beverage companies are beginning to work together with NGO’s and the state government to market “functional foods” and other “nutraceuticals” to the rural poor.

The nutraceuticals sector in India, which includes functional foods, functional beverages and nutritional supplements, is seen as a major growth area for the economy, with a current growth rate of 18% and an envisaged latent market of 148 million customers (Ernst & Young, 2012: 25). An urban, middle class market for products that cultivate “wellness” amidst growing awareness and fears about non-communicable diseases is well established.

This is where the malt-based health drink Horlicks, owned in India by the pharmaceuticals giant GlaxoSmithKline, has made its mark with a 50% share of the “functional beverages” market. Originally developed as an infant milk substitute during the 1870s in the United States, and then given to service men and women as a health supplement during the Second World War, before gradually receding into insignificance in the family drinks market, Horlicks has had a recent relaunch in India with specialist lines for school children, women and expectant mothers in a variety of flavours. Horlicks is currently the top selling packaged beverage in India after bottled water and sales are double that of Coca Cola and Pepsi.

Now food and beverage companies like Horlicks are seeing an opportunity for market expansion at the other end of the market, amongst those who have neither a sufficient calorific nor nutritional intake: the “rural poor”. As the rising costs of healthcare in India put curative medicine further out of reach for those living on less than two dollars a day investment analysts anticipate that they will become increasingly attracted to consumables that promise “wellness”. In 2009 Horlicks began marketing an affordable brand, Asha, to be sold in 2.5 rupee sachets, in villages across Andhra Pradesh. Pepsi is currently conducting market research for a new “nutribar” targeted at malnourished and nutrient deficient children. Coca-Cola is rolling out a new powder based micro-nutrient drink, called Vitingo, across 30 districts in Orissa.

Orissa has long been a hotspot for NGO, government and bilateral aid interventions around malnutrition. Today these organisations are increasingly looking to the private sector to facilitate the populations’ nutritional transformation. Both the World Bank and the United Kingdom’s Department for International Development are major donors to the state’s nutrition programme. The promotion of sustainable and healthy eating is slowly being replaced by the promotion of consumable goods that are sold as supplements to a nutrient deficient diet. Bositu’s story provides the first indication that these programmes are taking effect. But the story does not proceed quite as those organisations might have imagined and raises several questions for future research.

1. Horlicks is not being marketed as an infant milk substitute and does not meet current WHO standards for such substitutes. Nonetheless Bositu incorporated the drink into an established set of practices for supplementing breast milk when babies are seen to be underweight. Many of her Adivasi neighbours, who do not own livestock, feed their babies a milky-coloured fermented millett drink made from grain grown on their own land when they are considered too thin. Like the village’s high caste farming households Bositu was able to supplement breast milk with a store-bought powder and fresh cow milk. Does this imply that notions of “wellness” (an awareness of and responsibility for personal nutrition and healthy lifestyle) that multi-nationals imagine travel with their products are already present in rural households? Or are these established practices of dietary supplementation embedded in quite different understandings of health, personhood, and bodily substance?

2. Horlicks and other products such as Vitingo are marketed for their health-giving qualities. But a quick glance at the ingredients shows that they are also laced with sugar. What kinds of evidence is being harnessed to these companies’ health claims? Horlicks was relaunched as a clinically proven health drink following a study by India’s National Institute of Nutrition and they have now established their own “Horlicks Nutrition Academy” to carry out ongoing research. But nutritional experts also point out that supplements have little nutritional effect when consumed, as they often are in poor households, without other foods. Meanwhile, Bositu’s use of Horlicks as a breast milk supplement, which would greatly concern nutritionists, illustrates how consumer practices can deviate from “clinical studies” that purport to show the effectiveness of products. The lack of regulation of the nutraceutical sector in India is one reason why it has become attractive to investors. While nutraceuticals have lower profit margins than pharmaceuticals, they require a fraction of the R and D investment. GlaxoSmithKline, for example, is currently shedding its pharmaceutical portfolio in the United States at the same time as it is expanding its health foods portfolio in India and China. What role is science playing in the creation of new markets here?

3. Bositu gave her babies the classic version of Horlicks rather than the new “bottom of the pyramid” Asha version. In fact there is no evidence of Asha being distributed in this part of Southern Orissa, despite having been rolled out in neighbouring districts of Andhra Pradesh as far back as 2009. Horlicks remains too expensive for the majority of Bositu’s Adivasi neighbours, although it is now being sold in a town four kilometres away. On the one hand places like Goudaguda represent untapped opportunities for the expansion of existing product lines. On the other hand, as frontier markets for “bottom of the pyramid” goods, they are spaces where people have to be actively moulded into reliable consumers, for example by introducing scientific objects such as “vitamins” and “minerals” and concepts such as ‘nutrition’ and ‘wellness’.

In frontier markets, Bositu’s case suggests, the future trajectories of nutraceuticals remain underdetermined by their mechanisms of marketing and distribution.

We will be addressing these questions about the kinds of persons, relationships, bodies and institutions that are being shaped by the introduction and expansion of nutraceuticals in India through future research in the area.


Alice Street and Jamie Cross

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If we want to differentiate between responsible capitalism and business as usual in market based approaches to international development we need to expand the evidence base at the bottom of the pyramid.

This was one of the conclusions drawn by seven panelists from the world of business, strategic management and development policy who participated in an Oxford University debate on May 3rd about the merits and risks of the Bottom of the Pyramid approach, chaired by Simon Maxwell.

Panelists speaking on either side of the debate agreed on one point, that making markets work for the poor means producing better evidence of the intended and unintended consequences of doing business at the BOP.

When the evidence base is dominated by the stories that businesses tell about themselves, the debate concluded, it is difficult to know how the BOP approach transforms existing local markets for goods and services, and what kinds of risks, vulnerabilities and inequalities it creates.

Championing the BOP approach, Jack Newnham, project director at the UK’s Business Innovation Facility said, ‘What we’d like is a better evidence base for policy discussions.’ Renowned critic of the BOP approach to development, and management scholar at the Michigan Ross School of Business, Aneel Karnani, agreed. ‘The BOP approach is empirically weak. We need more research to understand what outcomes the BOP approach actually produces on the ground,’ he said.

During the debate champions of the BOP approach pointed to a rapidly growing portfolio of social enterprises or business initiatives that are delivering goods and services to the poor, and argued that these initiatives are meeting the universal aspirations of poor people to ‘get a job’ or ‘grow a business’. Meanwhile their critics questioned the appropriateness of turning the poorest of the poor into consumers and asked what kind of opportunities were actually being created by BOP markets, arguing that these invariably precarious and low value jobs in production or distribution.

Speaking in support of the idea that business interventions aimed at the extremely cash poor offer opportunities to do good while doing well, the audience heard from Unilever Vice President of Communications Patricia O’Hayer, Business Fights Poverty CEO Zahid Torres-Rahman, and Project Director at the Business Investment Facility Jack Newnham.

Zahid Torres-Rahman spoke of his personal excitement and energy about businesses at the bottom of the pyramid, and offered a few examples of ‘world changing’ BOP businesses – pulled, he said, from the thousands. Arguing that we are witness to an important shift that ‘goes beyond ideology’ he told the audience not to be fooled by the debate format. Business people operating in the field of development, he said, ‘left business as usual a long time ago’.

Jack Newnham, speaking as someone with experience of evaluating different BOP business plans, said that ‘picking the winners and backing the right horse’ was always difficult, but emphasized the need for a focus on ‘inclusive business’ models.

Unilever Vice President defended the company against stereotypes and accusations and focused on the employment it has generated through direct distribution networks. While she admitted that she didn’t find it appropriate that Unilever marketed ‘Fair and Lovely’ skin whitening cream to poor people in South Asia she argued that she remained proud to work for a company that made products like ‘Lifebuoy Soap’ – which encouraged hand-washing and reduced deaths from diarrheal disease – widely available.

Speaking against this claims the audience heard from War on Want Executive Director John Hilary, renowned management scholar and critic of C.K Prahalad Aneel Karnani, LSE social scientist Kate Meagher and author John Madeley. As they repeatedly stated, these critics are not against BOP markets per se but are concerned to see increased regulation, transparency and accountability.

Aneel Karnani reiterated his argument that there is nothing morally wrong with tying business to development outcomes, but that in the absence of a strong state capable and willing to regulate what businesses do, we will continue to see companies creating needs and desires for mass consumer goods that leave the poor poorer.

John Hilary challenged champions to tell us what was new about the role of business in development, telling the audience that he thought the 2000s had settled any question of whether free trade and the expansion of markets benefited the poor – in the negative.

John Madeley, who began his working life selling weighing scales to small businesses for a major UK company before travelling the world to write about global corporations, offered an activist’s perspective on the violence of the transnational corporation that gave voice to widely held views about the moral perils of big business.

Kate Meagher argued that direct distribution networks allowed large scale companies to ‘free ride’ on the networks of the poor and – by tapping into the links between NGOs and communities were undermining the legitimacy of civil society organisations. Contradicting claims made by Unilever, she argued that it was access to clean water rather than access to Lifebuoy Soap which reduced the risk of diarrheal disease.

Opening up the floor for a discussion Simon Maxwell fielded wide-ranging comments from social entrepreneurs, policy makers, students and academics, among the audience.

In the discussion a clear tension emerged between products and services, with critics arguing that poor people themselves rarely consider BOP products like soap or solar lanterns to be an adequate replacement for public services like clean water or grid electricity. Pushed to say whether they thought it was at all legitimate for businesses to sell products to the poor, the panelists argued that it depended on what those products were, in which context they were being sold, and what other kinds of products they displaced.

Consensus emerged around the need to widen the evidence base on which support for BOP business initiatives is based. This might involve examining the extent to which becoming an ‘entrepreneur’ or a ‘consumer’ is experienced as empowering in the long term, it might mean asking how social enterprises transform actually existing markets, it might mean asking what kinds of employment opportunities are actually created by large-scale social entrepreneurship, and whether poor people end up paying more for public goods that are financed by private money.

At the end of the event a quick show of hands from the floor suggested that the debate appeared to leave the audience of over 100 people broadly optimistic about the possibility of doing business responsibly in contexts of international development.

But as Simon Maxwell concluded, while BOP approaches are now firmly established as a means of bringing about development the debate about their outcomes is only just beginning.

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