Category C: Accessibility

Consuming a healthy and nutritious diet can be expensive, which requires healthy foods to be both made available and affordable, and adequately distributed, especially considering the needs of groups with lower socioeconomic status. In India, it is estimated that 22.5% of the population lives with less than US$1.90 (World Bank 2011, PPP) per day while the Indian Planning commission estimates that 21.9% of the population are poor and living below the national poverty line. At the same time, as of 2019, approximately one third of the Indian population lives in urban cities with some affluent groups having improved standards of living. This type of socioeconomic heterogeneity is visible in the variety of nutrition issues Indians face, where prevalence of overweight, obesity and diet-related diseases coexist with a high burden of undernutrition and micronutrient deficiencies, which further complicates the country’s nutrition challenges.

India has the sixth largest food and grocery market in the world, with retail contributing up to 70% of total sales. In 2019 around 90% of the Indian retail market was served by small corner stores (kirana) and other informal sellers such as street vendors, with only 8% by supermarkets and just 2% online. The food and beverage sector is the fifth largest manufacturing sector in India. The Ministry of Food Processing Industries expects the total value of the food and beverage segment in India to increase to US$1.142 trillion by 2025. As a result, a wide range of packaged foods and beverages are reaching Indian consumers from national and international companies, which offer them a range of convenience and staple foods. Lifestyle changes have also caused a shift in the habits of Indian consumers – from the consumption of traditional food to new food habits consisting of increased sugar, fat and salt. Worryingly, despite this increasing food availability, India ranks 94th among 107 countries on the Global Hunger Index 2020.

A study estimated that 63-76% of the rural poor could not afford the national recommended diet (based on the Food Based Dietary Guidelines for Indians) when compared against India’s wage data. Furthermore, in December 2019, India saw the worst consumer inflation since July 2014 at 7.35%, primarily due to high food prices. These issues indicate that there is a gap in affordability and access to healthy and nutritious foods and the food and beverage manufacturers, among other stakeholders, play a key role in closing the gap.

The Indian government has taken several actions to improve the country’s nutrition status, such as the flagship Poshan Abhiyaan program to improve nutritional outcomes for children, pregnant women and lactating mothers. The Food Safety and Standards Authority of India (FSSAI), with its existing and new regulations and guidance, the Eat Right India movement, etc., promotes safe and nutritious foods and raises awareness among consumers about healthy and fortified foods. Another government-led initiative is the Transformation of Aspirational Districts program, which ranks districts on several socioeconomic indicators, including health and nutrition, and aims to combat socioeconomic disparities between the most and least developed areas in India. The National Institution for Transforming India (NITI Aayog) has called for more participation from the private sector for the success of this program. Indian food and beverage companies, therefore, can look to these government-led initiatives for guidance in order to broaden the scope of their pricing and distribution efforts. Specifically, companies can incorporate the needs of aspirational districts in their overarching affordability and accessibility strategies. To support the Poshan Abhiyaan mission; the Eat Right India movement; and other government initiatives; as well as the nutritional needs of Indian consumers, more healthy, accessible and affordable products can and should be introduced to make a real difference.

• Hindustan Unilever achieves the highest score (5.5 out of 10) for its comprehensive pricing and distribution strategies that make its healthy products more accessible to all Indian consumers. The company captures consumers’ needs by having strategically analyzed price points and rural distribution techniques as demonstrated in the Shakti Project for its healthy products across all Indian states where the company operates. Nestlé India (4) and Coca-Cola India (2.7) follow Hindustan Unilever on the leaderboard. Worryingly, the average score achieved by all companies assessed is very low (1.4 out of 10), which makes this the lowest scoring thematic area of the India Spotlight Index 2020. This is similar to the average score in the 2016 Index, which confirms that limited progress has been made to improve accessibility and affordability of healthy products overall.
• Nestlé India and ITC are the only companies to have embedded their commitments to ensure the affordability and physical accessibility of healthy products in formal policies, although only ITC has evidence of having policies for both. Other companies show limited and/or specific commitments for either healthy products or products, which aim to address undernutrition and micronutrient deficiencies, such as fortified products. However, the research for this Index did not find evidence of any comprehensive approach to address accessibility and affordability of healthy food, nor did it show clear changes in the approach Indian food and beverage manufacturers have compared to 2016. Strikingly, some companies, such as Adani Wilmar, Amul GCMMF, Emami Agrotech, Hatsun Agro Product, Marico, Parle Products and Mondelēz India, do not appear to have developed any commitments or policies towards this key issue to help consumers eat nutritiously.

• Many companies assessed in this Index do not have a clear way of defining their healthy products. As a result, these companies are unable to formalize any specific accessibility strategy towards delivering healthy products and therefore score poorly in this category. Among the four companies found to have some approach for delivering affordable, healthy products , none of them have publicly disclosed any targets with regards to these strategies. There is therefore an urgent need for companies to define the products that meet healthy standards; formalize their approach to making these products accessible in a clear strategy; and set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) targets for achieving their strategic objectives.
• None of the companies have developed their commitments, policies, or strategies by specifically identifying or addressing the nutritional needs of groups in aspirational districts of India. The Indian government’s national development agenda has defined priority districts for development, with specific socioeconomic indicators measuring poverty, health and nutrition. While some companies have shared examples of initiatives aimed at low-income consumers and those that lack regular and proximate access to nutritious food (for example, rural areas/urban slums), the lack of alignment with the national development agenda is concerning.
• Companies show more emphasis – in terms of commitments, policies, and practices – on improving the physical accessibility and distribution of their healthy products than on making their healthy products affordable through appropriate pricing. This is indicated by the greater quantity of commercial and non-commercial initiatives addressing the physical accessibility of healthy products.

Hindustan Unilever’s new approach to affordable pricing and focus on rural distribution

Hindustan Unilever has developed an approach to improve the affordability of its healthy products using specifically defined price points, which ensures that products meeting its Highest Nutrition Standards (an in-house standard for defining its healthy products) are affordable for middle- and low-income groups. The company’s Living Standards Measure research and marketing tool is used to segment the Indian population into 18 sections based on their standard of living and disposable income. As part of the company’s innovation process, further research is conducted to evaluate pricing and purchase intention among people on low incomes. The company has also launched a cost-managing platform that allows it to minimize currency fluctuations or material inflation, thereby preventing it from passing extra costs onto consumers.

Further, Hindustan Unilever demonstrates a continued commitment to improving the accessibility of its healthy products through its Shakti project, which is an initiative to financially empower rural women and create livelihood opportunities. According to the latest figures, 100,000 Shakti entrepreneurs distribute Hindustan Unilever brands in many thousands of villages across 18 Indian states. The company provides training on basic accounting, sales, health and hygiene, and relevant IT skills. Entrepreneurs are also equipped with smartphones containing a mini ‘Enterprise Resource Package’ to help them run their business efficiently. The project provides a regular income stream for the Shakti entrepreneurs and their families. It focuses on making accessible products that meet Unilever’s Highest Nutrition Standards, which can help address micronutrient deficiencies in villages and rural communities that experience or are at high-risk of undernutrition and micronutrient deficiencies.

KMF Nandini’s milk distribution approach
KMF Nandini is the best performing India-headquartered company in this category, which can largely be attributed to the company’s distribution approach. While the company mainly operates in rural areas, and is oriented to stimulating rural incomes, dairy productivity, and rural employment, it also aims to supply good quality milk at lower prices to urban consumers in all area where the company operates. The company states its objectives, which include: “Achieve economies of scale to ensure maximum returns to the milk producers, at the same time facilitate wholesome milk at reasonable price to urban consumers.”

The company also shared evidence of building a strong network to increase milk product sales by opening depots within and outside Karnataka State. It has 14 milk unions, covering all districts, which procure milk from Primary Dairy Cooperative Societies (DCS) to distribute milk to consumers across towns, cities and rural areas in Karnataka.

Mother Dairy’s distribution of healthy and fortified products at affordable prices

Mother Dairy has undertaken several initiatives to improve affordability of its healthy and fortified milk. For instance, since implementing its approach to fortify all milk products in the National Capital Region (NCR), Mother Dairy has maintained the low price of milk products, making it especially relevant considering the food consumption and expenditure among Indian consumers. The company sells bulk-vended milk fortified with Vitamin A and, since 2016, with Vitamin D in the NCR. Furthermore, Mother Dairy’s horticulture products, such as fruits and vegetables directly sourced from farmers, are sold all year long in the company’s own retail outlets at lower price points. Mother Dairy also sells fortified edible oil products under the brand name Dhara in smaller stock keeping units of 200 ml each at low prices.

Mother Dairy has also shown improvement in its strategies to increase physical accessibility of its healthy and fortified products. Mother Dairy operates around 3,000 bulk milk vending units installed at its consumer touchpoints which include milk booths, franchise shops, kiosks, mini shops, insulated containers, Kamdhenu mobile units, container-on-wheels (COW), etc. thereby offering convenience and plastic-packaging free milk to reach village areas and urban slum areas. Kamdhenu are eco-friendly milk vending machines set up by Mother Dairy to distribute milk across the NCR.