Arla ingredient can kick-start Ethiopian yoghurt

An ingredient from Arla Foods Ingredients can help develop a cheap, nutrient-rich Ethiopian yoghurt. But import duty and packaging challenges serve as obstacles in the way of securing fewer malnourished children.

About  67 per cent of the adult population in Ethiopia were malnourished as children and suffer from stunting. The same goes for 40 per cent of the country’s children today. Stunting refers to the damage that occurs when a child does not receive proper nutrition in the first 1000 days of its life. This includes impaired mental development, impaired growth and an underdeveloped immune system, and each year, the overall consequences of stunting cost Ethiopia 16.5 per cent of its GDP.

An ingredient from Arla Foods Ingredients can help overcome part of this challenge. The ingredient is made of whey, full of lactose and minerals and is developed specifically for the yoghurt production at Ethiopian dairies. The ingredient has thus become an important component in a cooperation project between DanChurchAid, GAIN and the Confederation of Danish Industry, who have joined forces to try and make it possible for Ethiopian dairies to purchase the product and have the possibility to produce a fortified yoghurt.

“We want to help develop innovative solutions that contribute to combating malnutrition and create sustainable development in some of the world’s poorest countries. Concretely, the project would lead to increased earnings and better living conditions for at least 400 farmers who produce milk for the local dairy. The product would also be the first on the market that is both nutritional and cheap in order to reach the target group that is most in need of nutrition,” says Secretary General Birgitte Qvist-Sørensen, DanChurchAid.

Obstacles on the road

But before they get that far, there are a few obstacles that must be overcome. The biggest of these is that Ethiopia has imposed total custom duties of over 60 per cent on certain ingredients, which makes the import so expensive for dairies that if they use the ingredient, their products will become too expensive for end users.
“We are therefore collaborating with our sister organisation in Ethiopia to change import laws so dairies can buy the ingredient with lower – or absolutely no – customs duties. If we are not successful, it will be very expensive for local dairies to access to the product,” says consultant Karen Panum Thisted, the Confederation of Danish Industry.

In addition, there are challenges with regards to packaging for the final product that dairies are to have access to. “The packaging is currently classified as a so-called luxury product, which results in increased an customs duty. That makes it very difficult for the dairies to get the end price of the final yoghurt product down to a reasonable level. We are therefore also working together with our Ethiopian sister organisation to overcome this obstacle. And this will benefit the entire industry,” says Karen Panum Thisted.

 At Arla Foods Ingredients, the cooperation is part of the company’s mission to “develop ingredients that can make a positive difference in people’s lives”

UN Sustainability Goals

“We are inspired by the UN’s sustainable development goals and especially the goal of securing access for all people to food. Our company has competences that can contribute to reaching this goal, and at the same time, it can give us important knowledge of new markets for ‘affordable foods’, which we wish to cultivate,” says Henrik Andersen, CEO, Arla Foods Ingredients. He believes that the cooperation is a good example of what it means to run a sustainable business. “It creates value for all parties involved, and it’s the way forward when the goal is to ensure a long-term improvement of health and living standards for people in a developing country. It is highly motivating to see how our expertise can make a difference for Ethiopia’s many malnourished children, and at the same time, it is a good investment for us to support the development of Ethiopia’s dairy value chain and the producers who will become our future clients,” says Henrik Andersen.

Watch Arla Ingredients’ video on the Projects here

Source: Confederation of Danish Industry Business