This activity is linked to the Production, Finance and Technology (PROFIT) Project's HVAB activity and is

the second year of a public-private partnership (PPP) between OGAC, two USAID programs (Food for

Peace (FFP) and USAID/Zambia), Land O' Lakes, and private Zambian food processors for the sustainable,

private sector development of food supplements for people living with HIV/AIDS (PLWHA). The objective is

to produce affordable, appropriate, fortified foods for PLWHA. Examples of such products include the "Food

by Prescription" commodity in Kenya at 22 cents/day.

In FY 2007, OGAC provided $250,000 to support this PPP. USG/Zambia will contribute $100,000 of its

PEPFAR funding in FY 2008 through PROFIT. Land O' Lakes will be the key implementing partner in this

PPP. USAID will leverage $250,000 in resources from Food for Peace ($60,000 from Land O'Lakes' Title II

Institutional Capacity Building Award (ICB) and $190,000 from the Land O' Lakes FFP Dairy Development

Cooperative Agreement). Private sector contributions and investments through Land O' Lakes and

Zambian Food Processors will be valued at $250,000. This is a total leveraged of $500,000.

The need for fortified foods for malnourished PLWHA in Zambia is well documented. According to the World

Health Organization: "HIV progressively damages the immune system, which can … lead to … weight loss

and diarrhea….HIV-related conditions can lower food intake by reducing appetite and interfering with the

body's ability to absorb food. HIV also alters metabolism, which … leads to increased energy and nutrient

requirements for people with HIV.... Care for people living with HIV and AIDS needs to include … a healthy,

balanced diet … rich in energy, protein and micronutrients."

PROFIT is a five-year USAID economic growth initiative, started in FY 2005 and implemented by a

consortium of organizations with strong experience in production, finance, and technology initiatives in

Zambia. Cooperative League of the USA (CLUSA), Emerging Markets Group (EMG), and International

Development Enterprises (IDE) work in collaboration with a diverse group of Zambian organizations

representing both the public and private sectors including key Government of Zambia (GRZ) institutions,

Zambian NGOs, and small, medium, and large private sector firms. As HIV/AIDS has had a negative

impact on Zambia's agricultural production, using a wraparound approach the USG will continue to leverage

the existing platform and human resources of the PROFIT Project to implement this public-private

partnership.

This activity will support the continuation of the production and marketing of fortified foods using a business

model that will: (1) build the capacity of sustainable food businesses in Zambia to produce fortified foods for

PLWHA; (2) provide the platform for fortified foods processing and marketing operations in Zambia; and (3)

provide technical innovations and assistance in fortified foods product development, processing and

marketing.

Land O'Lakes will continue to contribute its strength in food technology and its experience in working with

the food processing sector in Zambia to develop new/improved fortified foods that effectively address the

critical nutritional requirements of people living with HIV/AIDS and build a local private-sector capacity to

effectively develop and deliver high-quality, nutritionally dense processed foods at an affordable price on an

ongoing basis. Land O' Lakes will ensure the nutritional and dietary appropriateness of any fortified foods

by coordinating closely with the Food, Nutrition, and HIV/AIDS Advisor and Maternal and Child Health

Advisor at USAID and other nutrition experts in Zambia.

This activity will result in: (1) Three appropriate, new enriched food products made available for

malnourished PLWHA to use as a dietary supplement; (2) Three Zambian food processors with sustainable

capacity to develop nutritionally balanced and dense foods for the benefit of malnourished PLWHA; and (3)

NGOs/PVOs having access to additional nutritious foods to distribute through CBOs, FBOs, clinics, and

other channels to effectively assist PLWHA that require nutritional supplementation.

In addition, best industry practices will be shared between the USG and Zambia that will align USG, U.S.

food industry, host country food industry, NGOs, and government toward nutrition innovations that comply

with international health and food quality standards, and OGAC Palliative Care and Food/Nutrition Guidance

as mutually beneficial supply relationships between Zambian food processors and NGOs/PVOs are

established. Distribution to PLWHA will occur through processors selling their nutritional products into

multiple market channels such as: (1) food assistance and HIV/AIDS household care networks of

NGOs/PVOs, i.e., World Food Programme (WFP), RAPIDS, SUCCESS, and others; (2) retail channels as

branded consumer products: markets, kiosks to a limited extent; and (3) institutional sales: clinics,

workplace, schools, hospitals, GRZ. It is anticipated that provision of products through channels (1) and (3)

only will occur with the funds from this request.

As part of the project, the technical staff of NGOs/PVOs will act as advisors, assuring that there is wide

distribution when the products become market-ready. Land O'Lakes will utilize its own grant resources and

FY 2007 PEPFAR funds to help food processors commercialize these products with the hopes of capturing

consumer demand. If these products become commercialized, it is anticipated that a percentage of profits

earned by processors from sale of retail products will be applied as a "cross-subsidy" to reduce the price to

NGOs/PVOs for the products used in food aid. The food industry will access the best food and nutrition

science from the Land O'Lakes network, and apply its experience and know-how on local food tastes and

market positioning, creating foods that meet the special needs of many Zambians.

Anticipated positive impacts on the people most affected by the HIV/AIDS crisis in Zambia include: (1) The

food industry will invest in the development of affordable, nutritiously dense foods that are widely distributed

to reach Zambian PLWHA in need of nutritious foods in consultation with NGOs; (2) In Zambia, PLWHA will

have access to safe, microbiologically clean, wholesome, processed food of standardized quality, packaged

for safe handling and storage, and labeled will be enhanced; (3) The needs of HIV+ food processing

industry employees will be addressed via programs that prevent stigma and offer services to prolong life,

and retain people as productive workers.

In FY 2007, 2500 malnourished People Living with HIV/AIDS will be provided with dietary nutritional

supplements as a result of fortified foods product development and processing. In FY 2008, it is estimated

that at a minimum an additional 2500 malnourished PLWHA will receive dietary supplements and that

fortified foods will be marketed in a number of provinces.

Activity Narrative: Sustainability is expected to be achieved early in the initiative, because it is a private sector undertaking,

built on the concept of a profit-making effort to develop products that people can afford to buy and that they

value. USG funding will only provide technical assistance to assist private food processing companies to

develop new formulas and to position them in "niche" markets, such as PLWHA and others affected by

malnutrition. The private companies provide the investment in plant, equipment and workforce. The private

companies then undertake marketing campaigns and distribute the products. The initiative is seen as an

innovative model that the USG may wish to replicate elsewhere. In conclusion, this initiative should result in

sustainable products made by sustainable companies, distributed and sold at affordable prices through

sustainable retail channels.

All FY 2008 targets will be reached by September 30, 2009.