Project Title: Improving the Nutritional Status of Nigerians Given Nigeria’s population of over 170 million, there is a large domestic market for spices, spreads, sauces and complementary toddler food. However, this market is dominated by imports, and is highly fragmented. AACE Foods is committed to transforming this landscape by sourcing its raw materials from smallholder farmers across Nigeria, thereby enhancing their livelihoods, and filling a gap in the market by processing and marketing high quality spices, sauces and nutritious food products for both commercial and retail customers. To-date, AACE has targeted institutional buyers such as food processing companies, caterers, hotels, and fast food chains. It currently supplies spices in 25kg sacks (e.g. chili pepper, black pepper, ginger, yaji and garlic) to its commercial customers and retail pack sizes to its supermarkets. Over the next five years, with the right support, AACE Foods is committed to achieving the following objectives: 1) Dramatically growing its volumes and market share in the spice and spreads category, by operationalizing its factory, installing higher capacity equipment, and adding sterilization capabilities which will enable it to supply to a broader range of more sophisticated customers such as Nestle. 2) Developing and rolling-out its nutritious snacks, enabling it to fulfil the requirements of development partners such as the World Food Programme and UNICEF, who to-date, do not source from within Nigeria. 3) Expanding the scale and scope of its interface with smallholder farmers, thereby enhancing their livelihoods and ensuring sustainable growth and development. This third objective is integral to the accomplishment of the first and second objectives highlighted above. Over the next few years, AACE Foods will be focused on a growth phase – operationalizing its factory, installing higher capacity equipment, adding higher sterilization capabilities, developing and rolling-out its nutritious food lines and expanding the scale and scope of its interface with smallholder farmers. AACE will need to source larger quantities from smallholder farmers, and will need to actively partner with these farmers and non-profit organizations such as IFDC and Technoserve to ensure that they are able to meet the quality and consistency requirements and to improve their efficiencies. AACE Foods’ approach is innovative for four primary reasons: 1. Local Sourcing from Smallholders: AACE's business model represents significant innovation in the Nigerian and West African business landscape. To-date families, food processing and service companies and development agencies depend almost exclusively on expensive foreign imports of spices, jams, spreads and complementary food for toddlers. Through the support of we hope to get, AACE Foods plans to transform the food processing landscape in Nigeria, demonstrating the viability of sourcing raw materials locally and creating supply chains where none existed. In addition, though its partnership with local non-profit organizations, it will increase the productivity and effectiveness of local farmers, and will serve as the catalyst for the formation of farmer groups and collection centers. 2. Sterilization capabilities: To-date, no company in Nigeria has sterilization capabilities for locally sourced produce. As a result, by acquiring the increased capabilities to sterilize spices and grains, AACE Foods would be able to source produce from a broader group of farmers, regardless of the local drying techniques that they utilize. This will in turn allow it to improve the lives of more smallholder farmers, while at the same time, increasing its potential to supply to a much broader group of customers, especially those customers who still import spices, because they believe that no Nigerian company can match the low microbial content of imports. 3. Packaging: AACE Foods has also test marketed innovative packaging through its research and development for nutritious snacks and spices in laminate- single serve packaging which would appeal to the bottom of the pyramid. This and other products will enable it to cater to large masses of people at very affordable pricing. It also plans on utilizing similar packaging for its complementary food lines. 4. Production Efficiency: AACE is committed to implementing innovative production techniques. More specifically, the company will implement low energy-production techniques and waste and water management techniques. This will enable the organization to minimize its operating expenses, and ensure that it can distribute its products at affordable prices to its diverse target customers. The support would effectively enable AACE Foods to commercialize its complementary and nutritious food products, acquiring complementary equipment, fully developing its supply chain, marketing strategies, and launching and growing market share for these products. These products will not only transform the lives of chili pepper, ginger, garlic, soya, groundnut, maize, cow pea, carrot and sweet potato farmers in the country, but will also reduce the country’s dependency on the imports of complementary food for toddlers and RUTF products, not only in Nigeria but also in neighbouring countries such as Niger Republic. Finally, it will dramatically reduce the levels of malnutrition in the region. AACE Foods will be able to increase engagement from 10,000 small holder farmers who grow a range of spices, as well as soya, maize, groundnut, cowpea, carrots and sweet potato to over 20,000. AACE Foods will impact a range of stakeholders: Impact on Farmers: AACE Foods currently sources and will continue to source its produce, including chili peppers, ginger, garlic, soya, maize, groundnut, carrots and sweet potatoes from small holder farmers, the majority of whom are women. It has established early partnerships with farmer cooperatives and non-profit organizations such as IFDC, DDI and the Fantsuam Foundation, and is committed to purchasing specified volumes from the small holder farmers that they support. These partnerships are giving farmers better market information, informing their planning and harvesting processes and enhancing the predictability of their sales. In addition, by eliminating middle-men it is raising their incremental household income. Impact on Malnutrition: Through its introduction of complementary nutritious foods for toddlers, it will address the high rate of moderate and severe nutrition among the under 5 population. Early discussions with the Federal Ministry of Health, GAIN and leading funders in the region reveal a strong interest in more “home-grown” solutions to Nigeria’s high rates of malnutrition. The prospects of using local fruits and vegetables to displace products such as Plumpy’nut - a fortified peanut paste made by Nutriset which is actively imported by UNICEF and the Clinton Foundation, will ensure affordable and high-quality alternatives for more Nigerian children. This will in turn directly reduce the high rates of malnutrition in the country, and ensure that more children live full and meaningful lives. Impact on small scale artisans around AACE Foods factory: AACE Foods actively engages its host community for the provision of miscellaneous services. It uses welders, machine fabricators, and electricians from the community to help service and maintain its production machinery. It has engaged a neighbourhood 'kitchen' to provide daily lunch to its staff. For the renovations being done at our new Sango-Ota factory, we have (1) sourced building material (concrete blocks, sand, gravel, window nets, metal security bars, electrical materials, and plumbing materials) from neighbourhood artisans, and (2) have used labour from the community to do the renovations. We have also registered with our host community's development association so that we can jointly contribute to security and other initiatives agreed upon by the group.
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