PATH Sparks Market for “Ultra Rice” in India, Through Lunches For 60,000 Schoolchildren

5/20/09Follow @xconomy

[[Corrected version May 22]] One of the big ideas for tackling global malnutrition that’s been percolating for years at Seattle-based PATH is showing signs of its first real momentum in the marketplace. More than 60,000 children in India are now getting a daily serving of “Ultra Rice” fortified with iron as part of their school lunch programs, says Dipika Matthias, the project director at PATH.

I first wrote about Ultra Rice in this space back in August, when PATH, the nonprofit organization that works to improve public health in poor countries, had high hopes for it. I got the update on Ultra Rice from Matthias yesterday at PATH’s annual breakfast fundraiser.

PATH obtained the technology from a Bellingham, WA-based food scientist, who invented a way to pack vitamins into a staple food like rice by running it through a process commonly used for making pasta. It didn’t have commercial potential in the U.S., because we get our nutrients from other foods, but since rice is so cheap and widely available around the world, food scientists have long wondered how to turn it into a better vehicle for delivering vitamins and nutrients. To make it practical, it had to be engineered to withstand hot and humid storage conditions, and have a shelf life of as much as six months. Those hurdles are in the past—PATH’s job was to gin up market forces for this healthier brand of rice. The potential payoff for health is big. If millions of people got this on a daily basis, it could help ameliorate the chronic anemia that saps the energy and productivity of millions of people around the world.

“We’re trying to grow the market gradually,” Matthias says. “We’ve shown there’s supply and demand in India. We’re showing real progress.”

A lot of this depends on relationships, to hear Matthias tell the story. PATH made arrangements with the school lunch program in India, which could provide a proven distribution channel and a guaranteed market for the product, to give the Ultra Rice producer an incentive to manufacture it. For the first year, PATH got the Global Alliance for Improved Nutrition to buy the rice, in hopes that a government agency would buy it the next year, Matthias says. [[Eds--the previous story suggested the government agency had committed to buy the Ultra Rice next year, but it hasn't yet.]]

A big part of PATH’s argument was that it could offer good bang for the buck—each kid gets half of his or her recommended daily allowance of iron through the rice, for 75 cents per child per year, Matthias says.

PATH’s commercial partner in India considered this market reasonable enough, and started producing the fortified rice in December, Matthias says. The supplies are going to children in the state of Andhra Pradesh, along the eastern coast of India, she says.

But India is just one of the four markets that PATH plans to crack open for Ultra Rice—the others are Brazil, Colombia, and China. The picture isn’t quite as rosy in Brazil. Back in December, PATH terminated the license with its previous commercial supplier there, who didn’t deliver on the kinds of quantities PATH wanted to produce, Matthias says. That company chose to “de-prioritize” production of Ultra Rice during last fall’s financial crisis, in favor of other products that had higher profit margins, Matthias says.

Now PATH has moved on with another supplier in Brazil, a pasta manufacturer near Sao Paolo called Adorella, which started making production runs earlier this month, she says. About one metric ton of Ultra Rice has been stockpiled in Brazil. Now PATH is working on the demand side of the equation, meeting with influential local officials there who might provide a spark for the product, Matthias says. Some of them may need a little more convincing than others—in the form of clinical trials that prove a public health benefit from eating Ultra Rice, she says.

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