AIF’s ‘Africa Feeding Africa’ Inclusive Model:

Sustainability with a Commercial Business Model?

“The world needs smallholder farmers. AIF can do its part by making rural livelihoods more
sustainable.”
1 - Amar Ali, CEO of Africa Improved Foods

INTRODUCTION

On September 22, 2019, Amar Ali, CEO of Africa Improved Foods (AIF), Rwanda, received
Corporate Social Intrapreneur of the Year Award from Schwab Foundation for Social
Entrepreneurship. Amar Ali had led AIF to become a purpose-driven social enterprise in Rwanda,
manufacturing high quality, fortified and nutritious complementary foods. He boasts of an inclusive
business model that aimed to reduce poverty, create jobs and address stunting and malnutrition
through partnerships. Through a value-chain approach, AIF aimed to benefit all the three segments
of stakeholders – Rwandan smallholder farmers, employees and consumers. Amar Ali planned to
combat malnutrition in Africa by producing nutritious foods in Africa, using African crops, by the
African companies, to feed Africans, instead of complete dependence on foreign aid.
However, access to finance had been a major barrier for the growth of nutritious foods in the
region. To address the funding challenge, AIF was formed through first-of-its-kind, innovative
Public-Private Partnership (PPP) model in the region, by establishing a state-of-art facility in Kigali,
capital city of Rwanda.
AIF serves its non-profit programs through two of its biggest accounts – UN’s World Food Program
(WFP) and Government of Rwanda (GoR). It also produces a range of commercial products –

(n.d.). Fighting malnutrition. Retrieved from https://www.buhlergroup.com/content/buhlergroup/global/en/stories/Afica-

Improved-Foods.html

This Case Study was written by Bala Bharathi Y., Vandana Jayakumar and Syed Abdul Samad, ET CASES. It is intended to be used as the basis
for classroom discussion rather than to illustrate either effective or ineffective handling of a management situation. The case study is based on
secondary research.
©www.etcases.com
No part of this publication may be copied, stored, transmitted, reproduced or distributed in any form or medium whatsoever without the
permission of the copyright owner.

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Nootri brand – which accounts for a meagre 5% of its total production. Amar Ali plans to quickly
boost the proportion of commercial products to become profitable enough to cross-subsidize its non-
profit programs.
Should Amar Ali focus on boosting the commercial business segment or should he find additional
sources of investments to support the growth of the not-for-profit business segment? What are the
challenges in choosing either of the two alternatives? How can he overcome them?

AFRICA IMPROVED FOODS - A SOCIAL INNOVATION AT RWANDA

Rwanda, an African country ravaged by a 1994 genocide which claimed a million people, had achieved
significant development since late 2000s 2, regained political stability and emerged as one of the fastest
growing economies in Central Africa. 3 However, in an attempt to rebuild the economy, there was
increasing dependence on foreign aid which amounted to a big chunk of around 30-40% of the
government budget. 4Also, humanitarian aid which lacked essential micronutrients led to significant
increase in malnutrition rates. Consequently, malnutrition remained a key public health concern in
Rwanda and was put at the forefront of GoR’s Vision 2020 Agenda. 5
An article released in 2013 titled “UNICEF: Africa’s Child Malnutrition Costs US$25 Billion Annually ”
has put a US$25 billion price tag on malnutrition and US$35 billion price tag on food imported
annually across the continent.6 Also, it was estimated that the broader costs associated with malnutrition
in Rwanda were at 11.5% of the country’s annual GDP.7 Upon realizing the underlying costs of
malnutrition and humanitarian aid, GoR took a proactive measure to launch a ‘1000 days’ national
campaign in 2013 to combat malnutrition. The campaign gave a solid evidence that the first 1000
days (from conception to the second birthday of a child’s life), are critical for a child’s physical and
mental development.
Also, according to the 4 th Integrated Household Living Conditions survey report, 48% of Rwandan
children below the age of five were still malnourished in 2014 with a slight reduction of 6% from
54% in 2010 (Exhibit I). Such alarming cases of malnutrition forced Rwanda to look for engaging
investors who could offer feasible solutions to effectively tackle the malnutrition challenge in Rwanda.
Consequently, GoR along with Clinton Health Access Initiative (CHAI) invited Royal DSM (DSM)
(a Dutch nutrition science company with a long record of food aid initiatives) to spearhead the efforts
of building a nutritious foods plant in Kigali.

2
Lakin, S. (2018, April 7). Rwandans discuss how best to commemorate genocide. Retrieved from http://theconversation.com/
rwandans-discuss-how-best-to-commemorate-genocide-94452
3
Hutt, R. (2016, April 7). 5 things to know about Rwanda’s economy . Retrieved from https://www.weforum.org/agenda/2016/04/
5-things-to-know-about-rwanda-s-economy/
4
Hutt, R. (2016, April 7). 5 things to know about Rwanda’s economy . Retrieved from https://www.weforum.org/agenda/2016/04/
5-things-to-know-about-rwanda-s-economy/
5
Vision 2020 is a government development program in Rwanda, launched in 2000 by Rwandan president Paul Kagame. Its main
objective is transforming the country into a knowledge-based middle-income country, thereby reducing poverty, health problems
and making the nation united and democratic.
6
Segawa, A. (2017, August 22). Op-Ed: Rwanda’s action to counter agricultural under production & malnutrition – a model for Africa
.
Retrieved from https://www.cnbcafrica.com/news/2017/08/22/malnutrition/
7
Wambaa, C. (2019, June). Nourishing New Beginnings in Rural Rwanda . Retrieved from https://www.ifc.org/wps/wcm/connect/
news_ext_content/ifc_external_corporate_site/news+and+events/news/improved-foods

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 Exhibit I: Rwandan Malnourished Children Below the Age of Five (2010-2014/15)

Source: Ngabonziza, D. (2015, October 1). Rwanda Contracts Dutch Firm To Combat Malnutrition. Retrieved from https:/
/ktpress.rw/2015/10/rwanda-contracts-dutch-firm-to-combat-malnutrition/

After accepting the invitation, DSM initially looked for corporate partners to help finance the new
venture. However, considering the risk proposition of the venture with its inability to get short-term
financial gains, it was not a favorable choice for traditional corporate players. Then DSM opted for a
different route as it recognized that economic independence through foreign direct investment is the
best way to improve the systemic issues with humanitarian aid. DSM tried to reach out to potential
investors like governmental agencies, developmental banks, private equity funds, NGOs, etc., through
a ‘road show’. Rwanda being the second easiest country to do business in Africa and being strategically
well positioned, lured a few international investors for partnership.
Finally, in 2015, in-principle agreements were signed by a consortium of four partners in Amsterdam
and Africa Improved Foods (Holding) BV was founded. Subsequently, Africa Improved Foods Rwanda
was established as a joint venture between GoR and the consortium with AIF having 92% equity
stake and GoR having 8% stake (Exhibit II). The four main equity sponsors were: (a) Royal DSM,
the majority shareholder of the venture; (b) International Finance Corporation (IFC), World Bank
Group’s private sector arm; (c) FMO, Dutch development bank; (d) DFID Impact Acceleration
Facility, British Government’s development finance institution managed by CDC Group Plc. Each
partner invested in AIF either through equity or debt route or both to enable manufacture of affordable,
nutritious and high-quality foods and improve the nutritional status of people in Rwanda and the
region (Exhibit III).

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 Exhibit II: Structure of AIF

Source: (2018, December). INNOVATIVE FINANCE OPPORTUNITIES FOR INCLUSIVE AGRI-BUSINESS . Retrieved from
https://www.inclusivebusiness.net/sites/default/files/2018-12/Innovative_finance_for_inclusive%20agri.pdf

Exhibit III: AIF Holding and Partners’ Investments

Main Partners Equity Stake Investments

DSM 47% $10.5 million

IFC 20% $21.5 million loan and $4.5 million equity investment

FMO 13% $4 million equity and $4 million debt

CDC 20% $10 million equity

Source: Case authors’ own

4 WIEmpower 2.0
AIF Rwanda was led by a British CEO, Amar Ali. GoR made in-kind contributions of land in the
Kigali Special Economic Zone, Nyandungu. Amar Ali said, “We could not achieve our mission without
8
the support of the Rwandan government, which is a shareholder, customer, and partner in all ways”.
Out of total investment of US$60 million, US$45 million was used in setting up the plant and
US$15 million was used in hiring staff and setting up operations.
By setting up the plant at Kigali, Amar Ali aimed to do something which was never done before in the
region before, i.e., providing highest product quality of global standard on a very large scale through
local sourcing. Though it had been a challenge, Amar Ali endeavoured to lead the for-profit social
innovation, AIF, to effectively make Rwandan population self-sufficient while simultaneously delivering
economic growth. Consequently, AIF became the first Public-Private Partnership (PPP) dedicated to
address hunger and malnutrition in the continent. Amar Ali explained, “We are working hard to
address the issue of malnutrition while encouraging local production and improving the quality of
yields through our local sourcing projects. While there are similar projects in the region, none combine
9
the elements of fighting malnutrition and a public private partnership model like we are doing.”
Importantly, Amar Ali’s goal was to reduce childhood stunting rates in Rwanda – from 38% to 32%
10
by 2020 – by exclusively using AIF Rwanda’s products. Also, Amar Ali aimed to support GoR’s
plans to spur agricultural transformation. With about 70% of Rwandans making their living from
agriculture, Amar Ali aimed to significantly boost the existing one-third contribution of agriculture
sector to the nation’s GDP.11According to the Global Nutrition Report, better nutrition could deliver
12
at least US$16 for every US$1 invested in the local economy, simply by improving general health.
Also, an independent study conducted by the University of Chicago estimated that from 2016 to
13
2031, AIF would generate US$756 million for Rwandans.
In September 2018, AIF received the first SDG (Sustainable Development Goal) Award for Sustainable
Consumption (SDG 12) from the Swiss Green Economy Symposium (SGES) that featured companies
committed to sustainability. After receiving the award, Amar Ali said, “With our economic development
model, we can make a strong and sustainable social impact on our entire environment, and this in a
sustainable way”.14 AIF could serve as a model to replicate across Africa where achieving the SDG of
Zero Hunger (SDG 2) by 2030 looked almost impossible with 250 million people still undernourished
as of 2019. 15

8
(2017). AFRICA IMPROVED FOODS – AKIJ Kigali, Rwanda. Retrieved from https://annualreport2017.buhlergroup.com/
customer-stories/africa-improved-foods-gf-africa/
9
(2018, June 11). Encourage Local Production to Address malnutrition – AIF’s Chief. The Guardian. Retrieved from https://
www.ippmedia.com/en/news/encourage-local-production-address-malnutrition-aif%E2%80%99s-chief
10
Mellon, L. (2017, September). HOW DSM IS HELPING TO FEED CHILDREN AND EMPOWER FARMERS IN RWANDA .
Retrieved from http://www.dukece.com/insights/how-dsm-helping-feed-children-empower-farmers-rwanda/
11
(2019). Rwanda – Agriculture
. Retrieved from https://www.export.gov/article?id=Rwanda-Agriculture
12
Sijbesma, F. (2019, July 15). Wiping out hunger in Africa could cost just $5bn. What are we waiting for?
. Retrieved from https://
www.theguardian.com/global-development/2019/jul/15/wiping-out-hunger-africa-could-cost-5bn-what-are-we-waiting-for
13
Adade M. (2019, September 3). A for-profit project has improved nutrition in Rwanda - is it a model that can eliminate hunger across
Africa?. Retrieved from https://www.weforum.org/agenda/2019/09/africa-could-be-about-to-wipe-out-hunger-for-good/
14
(2018, September 4). Africa Improved Foods receives first SDG Award for sustainable consumption. Retrieved from https://
www.wattagnet.com/articles/35538-africa-improved-foods-receives-first-sdg-award-for-sustainable-consumption
15
(2019, September 13). Food for thought. Retrieved from https://www.markflorman.com/food-for-thought/

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AIF’s ‘AFRICA FEEDING AFRICA’ BUSINESS MODEL
AIF was established with an objective to manufacture affordable, nutritious and high-quality food
products sourced locally to improve maternal and child health status in Rwanda and across Africa. It
featured an inclusive business model that addressed the nutrition problems of African populace with
African resources (Exhibit IV). “Our vision is for Africa to feed Africa,” Amar Ali emphasized. 16
comprehensive strategy to generate employment, decrease poverty and address stunting and malnutrition
was deeply rooted in its business model.

Exhibit IV: AIF’s Inclusive Business Model

Key Partner s Customers (Segments)

Government of Rwanda, •Non-profit programmes
Royal DSM, IFC, FMO, (WFP and GoR)
DFID Impact Acceleration
Facility •Commercial customers

Key Resources Client Relationships

Raw material from Rwandan Institutional and commercial
farmers, Production facility at products provide nutritious
Kigali employing local talent, foods to address malnutrition
collection centers, centralized and stunting; bringing back the
drying and threshing facilities money to the local economy
AIF’s Value
Proposition
Key Activities Channels
Local sourcing and production •Institutional channels (WFP and
of nutritious food products, GoR)
training intervention with
farmers •Commercial channels

Cost Structure
Revenue Streams
Funded by the
Bulk buying by
partnership, profits from
institutional customers,
the commercial Nootri
revenue from
brand cross-subsidize
commercial operations
non-profit products

Source: Case authors’ own

16
(2017, October 4). Africa Improved Foods
. Retrieved from https://www.africaoutlookmag.com/outlook-features/africa-improved-
foods

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AIF’s Products (Institutional Products & Commercial Products)
Institutional Products for Institutional Customers - AIF mainly produced porridge flours (with
added milk, vitamins and minerals) meeting the nutritional demands of different population segments
such as pregnant and lactating mothers, older infants and young children for the critical first
1,000 days of their lives. AIF predominantly catered to non-profit programmes and organizations
whose beneficiaries belonged to the most impoverished and vulnerable segments of society. Its two
biggest accounts were UN’s WFP and GoR that signed 5-year offtake agreements for non-profit
programmes.
WFP signed US$100 million contract to purchase Super Cereal Plus (an infant-based fortified porridge
formula developed by DSM) from AIF and supply it as emergency relief food to its beneficiaries
across Africa.17 Majority of AIF’s production output was purchased by WFP which amounted to
more than 25,000 metric tons of Super Cereal Plus. Amar Ali said, “The manufacturing for the
World Food Programme’s relief foods has always been done outside of Africa. That’s hundreds of
millions of dollars of food every year manufactured in Europe and America. Our first aim was to
bring that money into the local economy: Africa feeding Africa. The second is related to reducing
18
malnutrition and stunting—and the critical period for this is the first 1,000 days of life.”
Another similar product named Shisha Kibondo was developed for the GoR to offer nutritious foods
and increase its reach to the poorest in Rwandan society – those who cannot afford to spend money
on commercial fortified foods. Through the subsidized programme with the Rwandan Ministry of
Health and CHAI, the products were purchased at the cost price and distributed to all the public
health centres across the country. Shisha Kibondo brand included both an infant product and a maternal
product for the well-being of vulnerable children and mothers respectively who could not afford
healthy food. Pregnant and breastfeeding mothers from underprivileged communities had to get
registered at public health centres after which they received free nutritious products to feed themselves
and their children, three times per day. Local authorities ensured that the poorest of the poor also got
registered and CHAI monitored the supply chain, also acting as a research partner to assess the nutritional
impact.
Commercial Products for Commercial Customers
To make AIF’s products affordable to its non-profit programmes, the company launched a range of
commercial products under the ‘Nootri’ brand. The Nootri-range included Nootri Toto (for young
children), Nootri Mama (for pregnant mothers) (Exhibit V) and Nootri Family (for whole family),
which were made available across East Africa. The profits that accrued from its commercial Nootri
brand cross-subsidized the non-profit products/programmes, ensuring financial sustainability of the
organization. This way, Amar Ali strived to achieve AIF’s goal of sustainably catering to improve the
nutritious status of the most undernourished.

17
ANZILOTTI, E. (2017, June 8). This Rwandan Factory Is Revolutionizing How Humanitarian Aid Is Done
. Retrieved from https:/
/www.fastcompany.com/40427006/this-rwandan-factory-is-revolutionizing-how-humanitarian-aid-is-done
18
(2017, August 10). A new factory in Rwanda uses local produce to feed 1m .aRetrieved
day from https://apolitical.co/solution_article/
new-factory-rwanda-uses-local-produce-feed-1m-day/

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 Exhibit V: AIF’s Products Catering to Pregnant and Lactating Women and
Older Infants

Source: (n.d.). 1000 Days. Retrieved from http://nootriafrica.com/1000days/

nd
Its institutional and commercial products together generated a revenue of US$10.6 million in the 2
quarter of 2019 (Exhibit VI). AIF earned 85% of its revenues from earned income and 15% from
grants.19

Exhibit VI: Africa Improved Foods Ltd.’s Revenue

Revenue (in US$million)

20

15

10
15 19 12.2 11.8 10.6 10.6 10.2
5

0
18-Q2 18-Q3 18-Q4 19-Q1 19-Q2 19-Q3 19-Q4

Source: (n.d.). Africa Improved Foods Ltd. . Retrieved from https://www.zoominfo.com/c/africa-improved-foods-ltd/

382800813

19
Ali, Amar. (2017, December 29). Africa Improved Foods Rwanda. Retrieved from https://network.changemakers.com/challenge/
creatingsharedvalue/entry/africa-improved-foods-rwanda

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Building a Locally Sustainable Model
Local Sourcing of Raw Materials and Training Intervention with Farmers:In an attempt to help
promote agriculture in Rwanda, Amar Ali decided to source everything locally, which had a substantial
impact on the economy. The factory needed 28,000 metric tons of maize and 12,000 metric tons of
soy annually. 20 These raw materials were directly sourced from Rwandan farmers instead of traders.
Within one-and-half year of its inception, AIF was already working with 25,000 small-holder farmers. 21
Bernhard Banamwana, AIF’s Senior Relations Manager said, “Sourcing from local farmers is important
for building a sustainable food system in the country.” AIF worked extensively with local farmers to
produce high quality yield and build sustainable food value chain. The company established week-
long collection centres at cooperatives for the convenience of farmers during each harvest season to sell
their produce instead of transporting them to longer distances like before. To reach out to more
farmers, it also partnered with World Vision Rwanda and a local logistics company to increase the
number of collection centres, equipped with centralised drying and threshing facilities.
AIF also trained farmers in good agricultural practices to improve their produce and adhere to high
food quality standards. Farmers were given training in planting seeds, weeding, use of fertilizers and
pesticides, and proper handling of harvest by tracking end-to-end progress of their produce.
AIF also worked extensively with farmers to effectively eradicate one of the biggest problems in
agricultural value chain, aflatoxin, a highly carcinogenic and highly prevalent fungus . Improvement in
understanding of post-harvest handling techniques helped in dramatic decrease in the levels of aflatoxin
in maize from 90% to 20% of the harvest. 22
Impact
Increase in the Income of Farmers and Agricultural Yield: AIF paid higher than the market prices
to farmers for the quality produce which led to the increase of farmers’ income by 30%. 23As the sale
was guaranteed by a reliable large buyer, farmers could plan better to stay invested and consequently
agricultural yield increased by 20%. 24 Moreover, farmers were paid at the point of pickup, an unusual
but effective practice. All these led to stable income and greater food security for farming families.
Alex Nzeyimana, a member of ABISHYIZEHAMWE cooperative said, “Our living conditions were
difficult as we used to sell our produce to traders at an unfair price, AIF came as a solution. I managed
to construct my home, my children are in good schools, eat healthy and have medical insurance
thanks to Africa Improved Foods.” 25

20
(2018). Mechanized: Transforming Africa’s agriculture value chains. A Malabo Montpellier Panel Report
21
(n.d.). PPPs are the way forward for the nutrition sector. Retrieved from https://africaimprovedfoods.com/ppps-are-the-way-
forward-for-the-nutrition-sector/
22
Jayan, T.V. (2018, July 25). To tackle malnutrition, India must chew on Rwanda model. Retrieved from https://
www.thehindubusinessline.com/news/variety/to-tackle-malnutrition-india-must-chew-on-rwanda-model/article24513615.ece
23
Kaminski, I. (2019, January 9). How DSM is embracing the Sustainable Development Goals. Retrieved from https://
www.greenbiz.com/article/how-dsm-embracing-sustainable-development-goals
24
Kaminski, I. (2019, January 9). How DSM is embracing the Sustainable Development Goals. Retrieved from https://
www.greenbiz.com/article/how-dsm-embracing-sustainable-development-goals
25
(2018, July 13). From Farm to Mouth: Farmers’ take on AIF’s impact . Retrieved from https://medium.com/@quakebrandfix/from-
farm-to-mouth-farmers-take-on-aifs-impact-1434d845973a

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Employment Generation for Local Population: AIF also ensured that it hired local talent for its
Rwandan facility. The company invested heavily in training and development of its employees. They
were trained to adhere to high quality standards and strict operating procedures of the facility. Also,
the company flew many operators and shift leaders to factories in advanced countries which exposed
local employees to the best practices in the global food industry. Since the launch of the Rwandan
facility in 2017, many of AIF’s employees had risen through the ranks of the company to fill key
positions. One of the surveys revealed that employees at AIF earned 28% higher than their previous
jobs and casual workers earned 38% higher. 26 Fokko Wientjes, DSM’s Vice President of nutrition in
emerging markets and food systems transformation said, “We have seen the impact the project has,
which goes beyond nutritious food. There’s money flowing through the value chain, which makes it
more interesting for everyone.” 27
Supporting the Rwandan Economy: AIF’s local sourcing strategy had a substantial impact on the
Rwandan economy. By 2018, the factory gained capacity to feed 2 million people.28AIF offered
25,000 Rwandan farmers a stable, sustainable income for a proportion of their harvest. Around
60%-70% of AIF’s spending flowed back into the local economy pumping around US$20 million
per year.29
It created 300 jobs directly and in the process around 500 more jobs were created in the
supply chain.30 By 2025, AIF aimed to have reduced stunting by 16% besides having more than a
billion dollars’ impact on Rwanda’s economy. 31
As concluded at the Future Food-Tech 2018 by
Kamel Chida, Deputy Director of Private Sector Partnerships at the Bill & Melinda Gates Foundation,
“when business fights malnutrition, everybody profits.” 32
Health Gains and Social Stability: The AIF model enabled children to attain their full physical and
cognitive potential and it aided economic growth, in turn leading to better social stability.
Largely, what AIF’s inclusive business model tried to help achieve was a system where Africa was
feeding Africa, as envisaged by Amar Ali, and gradually there would not be any need for international
aid for Africa.

26
(n.d.). AIF’s priorities as an employer. Retrieved from https://africaimprovedfoods.com/employment/
27
Kaminski, I. (2019, January 9). How DSM is embracing the Sustainable Development Goals . Retrieved from https://
www.greenbiz.com/article/how-dsm-embracing-sustainable-development-goals
28
(2018, November 9). Africa Improved Foods receives first SDG Award. Retrieved from https://www.ibj-online.com/africa-improved-
foods-receives-first-sdg-award/376
29
(2017, August 10). A new factory in Rwanda uses local produce to feed 1m a day. Retrieved from https://apolitical.co/solution_article/
new-factory-rwanda-uses-local-produce-feed-1m-day/
30
(2017, August 10). A new factory in Rwanda uses local produce to feed 1m a day. Retrieved from https://apolitical.co/solution_article/
new-factory-rwanda-uses-local-produce-feed-1m-day/
31
(2017, August 10). A new factory in Rwanda uses local produce to feed 1m a day. Retrieved from https://apolitical.co/solution_article/
new-factory-rwanda-uses-local-produce-feed-1m-day/
32
(2018, October 24). “When business fights malnutrition, everybody profits”, says Bill & Melinda Gates Foundation exec. Retrieved
from https://www.nutritioninsight.com/news/when-business-fights-malnutrition-everybody-profits-says-bill-melinda-gates-
foundation-exec.html

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SCALING UP
Though AIF was recognized for its sustainable business practices, Amar Ali’s path was not without
challenges. Rwanda being a country plagued with uncertain weather conditions such as drought, floods,
poor rainfall, etc., Amar Ali found it challenging to procure the raw material from local sources alone,
especially during times of recurring famine as Rwandan farmers could not deliver adequate quality
and quantity. He had to depend on the imports from neighbouring countries. The European-level
food safety standards and regulations followed at the factory at Kigali too posed difficulties for Amar
Ali in running the plant, as it was a huge cultural change for Rwandan contractors and employees.
While on one hand, African nations faced micronutrient deficiency, on the other hand, fortification
was not mandatory. In addition, usage of poor quality, uncertified ingredients limited the benefits and
questioned the credibility of fortification programs. Hence, Amar Ali felt the need for a legislation
towards mandatory fortification, along with scaling up efforts to improve quality of agricultural
produce and fortified products in the region.
Replicating the Model in the Region
Leading global economists suggested that improving nutrition is the best investment that can be
made in global health and economic development. That is what GoR and its partners did when they
invested in the US$60 million facility and established AIF. With this initiative, Amar Ali aimed to
break the continuous cycle of malnutrition, foreign aid and economic stagnation in Africa, and empower
Africa to feed Africa. He had devised a solution to the unsustainable food systems from environmental,
resources and nutrition perspectives. His goal was to reach one million malnourished children, pregnant
and breastfeeding women annually by 2031, and support smallholder farmers and economic growth
of Rwanda.
AIF had the potential to generate US$756 million for Rwanda. It meant that if this initiative was
replicated 75 times, the whole of Africa could achieve lasting food security. As per the estimates of
Organisation for Economic Co-operation and Development (OECD), this would cost US$5billion,
one-sixth of the official aid to Africa (US$29 billion) in 2017. 33 With such positive outlook, experts
opined that scaling up the AIF model in the region seemed to be the most logical way, provided
individual country governments played their part – like sourcing locally, reducing imports, investing
in agriculture (to enhance regional economic and food security that would in turn address poverty and
stop migration of Africans) and use surplus crop to create a regional food network to help the drought-
hit regions.
In the long-term, Amar Ali’s goal is to encourage more local production of nutritious foods, which he
is planning to achieve (in part) by doubling the size – by setting up a new high-quality production
facility in Addis Ababa, Ethiopia. “Our products are already used in Rwanda and Uganda, and we will
soon start exporting to the DR Congo. We are also looking at other markets like Tanzania, Kenya and
Ethiopia as our aim is to be a regional player,” Amar Ali revealed. 34 He also added, “Many of the

33
Sijbesma, F. (2019, July 15). Wiping out hunger in Africa could cost just $5bn. What are we waiting for?. Retrieved from https://
www.theguardian.com/global-development/2019/jul/15/wiping-out-hunger-africa-could-cost-5bn-what-are-we-waiting-for
34
(2017, June 14). Africa Improved Foods on a mission to improve nutrition in Rwanda. Retrieved from http://www.hope-mag.com/
index.php?com=news&option=read&ca=6&a=3110

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high-quality nutritious foods available in the East Africa region are imported. A great opportunity –
and challenge – lies in increasing the import substitution of these foods. This involves convincing
both institutions and commercial distributors to increase their local sourcing, even though this may
not always be the cheapest option.” 35
Scaling up AIF Rwanda
It was said that for every US dollar invested in nutrition, the country would yield US$16. However,
a study of 300 African SMEs revealed that access to finance was the top barrier to the growth and
delivery of nutritious foods in Africa.36 GoR and DSM faced a similar challenge when they searched
for corporate partners to fund the venture (AIF) – given the social nature of its business and its
inability to achieve short-term financial gains. It had to then reach out to governmental agencies,
developmental banks, private equity funds, NGOs, etc., to establish AIF – as an effective model of a
public-private, for-profit partnership.
Unlike other social ventures, AIF’s key differentiator and a core support for its sustainability are its
commercial products like Nootri Mama, Nootri Toto and Nootri Family – which can be found on
supermarket shelves in Rwanda and Uganda – since profits accrued from Nootri brand would subsidize
AIF’s non-profit products/programmes and AIF would not have to depend on its investors for its
future sustainability. This would fulfil both its goals of being purpose-driven and for-profit.
While enough nutritious products are being produced at AIF and long-term contracts are in place to
serve WFP (US$100 million contract to purchase Super Cereal Plus) and GoR, the profitability of
the company is critical for AIF’s sustainability – since it’s not philanthropy, but a purpose-driven,
for-profit enterprise that is replicable and scalable. The company’s sustainability in turn is critical to its
local beneficiaries like farmers and employees. DSM estimated that, by 2022, AIF would contribute
US$36 million to the regional economy through spending on local feedstocks, energy and labor, and
would contribute 5-10% to Rwanda’s exports securing US$40 million per year in foreign exchange.37
However, though high in quality and nutrition, AIF’s commercial brands are sold at one-third the
price of comparable imported/competitor products, which results in much lesser profitability
(Exhibit VII). As a result, Amar Ali faces challenges in scaling up the sales of his company’s commercial
products. In addition, Amar Ali faces trouble in building awareness about the quality of Nootri
products (though fully complied with international and national quality standards), as the African
target consumers always perceived foreign products as superior in quality than locally manufactured
products, which in turn led to the dampened demand for Nootri brand. To address this issue, Amar
Ali planned to launch ‘Made in Rwanda’ campaign to create awareness of AIF’s products.

35
(n.d.). Africa Improved Foods – company information . Retrieved from https://www.lseg.com/resources/companies-inspire-africa/
companies-inspire-africa-2019/consumer-services/africa-improved-foods
36
(2018, October 16). SMEs in Tanzania have a key role to help end malnutrition. Retrieved from https://www.thecitizen.co.tz/
News/SMEs-in-Tanzania-have-a-key-role-to-help-end-malnutrition-/1840340-4808560-129xcls/index.html
37
Mellon, L. (2017, September). How DSM is Helping to Feed Children and Empower Farmers in Rwanda. Retrieved from http://
www.dukece.com/insights/how-dsm-helping-feed-children-empower-farmers-rwanda/

12 WIEmpower 2.0
 Exhibit VII: Competitors of AIF

Company Revenue Employees

Faus Group Inc. $21 million 105

Antur Teifi - 74

Cargill Inc. $5.8 million 29

Samuelsohn Limited $20.9 million 375

Fairtrasa - 24

The AdArt Company $20.9 million 459

Bionet America Inc. $7.4 million 37

Nulon Limited $26.6 million 133

Source: (n.d.). Africa Improved Foods Ltd.. Retrieved from https://www.zoominfo.com/c/africa-improved-foods-

ltd/382800813

In addition, the International Code of Marketing of Breast-milk Substitutes and subsequent World
Health Assembly resolutions restricted the company from involving in above-the-line marketing (i.e.
media advertisement) for Nootri Toto (the children’s product). However, below-the-line promotions
such as organizing meetings with nutritionists and distributing leaflets were not enough to increase
brand awareness and create sufficient demand. Thus, Amar Ali was unable to charge premium price
despite high quality of ‘Nootri’ products.
Furthermore, business with institutional buyers like WFP and GoR did not prove to be a viable
business model, as AIF had to align its prices with the lower European prices. Also, with rising raw
material prices due to bad weather conditions and poor harvest in the African region, AIF was losing
money on its institutional business. Nevertheless, despite the challenges, AIF model set an example
for finding solutions to global challenges through partnerships.
With all the existing restrictions/challenges, what should Amar Ali do in order to make his business
profitable? Should he only depend on institutional sales like WFP and the country’s government?
How can he build the image of his commercial brands in the market to scale it up and make it
profitable enough for cross-subsidizing the social purpose of AIF?

Assignment Questions
I. Considering the benefits and challenges of PPP model, discuss the reasons behind creation of a
social innovation like AIF trough PPP model.
II. Analyze AIF’s ‘Africa Feeding Africa’ inclusive business model and discuss its scalability prospects.
III. Should Amar Ali focus on AIF’s for-profit business to boost the non-profit business? What
should be Amar Ali’s strategy to ensure that AIF is not dependent only on institutional buyers?

WIEmpower 2.0 13