Procter & Gamble, Coca-Cola Formulate Vitamin Drinks for Developing Countries
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November 27, 2001
Marketplace
Procter & Gamble, Coca-Cola Formulate Vitamin Drinks for Developing Countries
By BETSY MCKAY
Staff Reporter of THE
WALL STREET
JOURNAL
GABORONE, Botswana -- Every morning for eight weeks last spring, a group of local nurses drove into the dusty yards of two primary schools here, mixed bright orange powder with processed water in big metal vats and handed one paper cupful of the drink to each child, 250 in all. The beverage looked and tasted like Coca-Cola Co.'s Hi-C orange-flavored drink, but it contained extra ingredients: 12 vitamins and minerals chronically lacking in the diets of people in developing countries.
The daily ritual, a clinical test, was part of "Project Mission," a continuing Coca-Cola research-and-development effort aimed at creating a drink that could help combat anemia, blindness and other afflictions common in poorer parts of the world. By the end of the eight weeks, levels of iron and zinc in the children's blood had grown, test data show. Some parents said their children, whose diets consist mostly of cornmeal and rice, had more energy and had become more attentive at school. Marvin Viekeman said his eight-year-old daughter, Anah, had gained weight by the end of five weeks. "I was suspicious about it at first," he said, "but it has helped her."
And if all goes as Coke plans, the new drink, to be called Vitango, could help boost sales at a time when growth of carbonated soft drinks is slowing.
After its expected launch in a year or so, Vitango will put the Atlanta beverage company in head-to-head competition with Procter & Gamble Co., which has a similar drink that is already being sold. While the market for such drinks is limited, they offer both Coke and P&G a chance to play the role of good world-wide corporate citizen at a time when being perceived as such is increasingly important for U.S. multinationals.
A Coke document outlining plans for Project Mission puts it bluntly: The new drink is meant in part to help the company establish relationships with governments and schools that will "serve as a positive platform for brand Coca-Cola."
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![[mission art]](images/2f_mission11262001203234.gif)
"It's the right thing to do," says Steven Heyer, Coke's president and chief operating officer for marketing and noncarbonated-beverage brands. "The marginal cost is low, and the return to society high. It's a way of extending Coke's relationships." Coke has big hopes for Vitango in Africa and Latin America, where its products already reach some of the most remote areas. A second clinical test, to determine how well Vitango's nutrients are absorbed in the bloodstream, was just finished in Peru.
P&G launched its product, Nutristar, last month in Venezuela after years of research and development and clinical tests. A powdered drink that contains eight vitamins and five minerals, Nutristar is sold at most food stores in flavors like mango and passion fruit and boldly promises "taller, stronger and smarter kids." So far, the drink is "really doing well," says Carmen Silvia Garcia, a P&G food scientist and manager for external relations for the company's operations in Venezuela. Available also at McDonald's, Nutristar is the chosen beverage with about half the Happy Meals the restaurants sell, Ms. Garcia says. P&G is also offering samples in schools, she says.
Nutristar, selling at about 40 cents for a packet of powder that makes one liter of beverage, is priced at about 25% more than other powdered drinks and 30% below carbonated soft drinks, Ms. Garcia says.
Coke's pricing for Vitango has yet to be determined. The company had planned to test-market the drink in South Africa this month at a price of about 20 cents for an 8-ounce liquid serving but scrapped its plans at the last minute and said it would reformulate the drink. Mr. Heyer says the reformulation will reduce costs -- and prices -- to make Vitango more affordable to those who need it most.
"Micronutrient" deficiencies, or a lack of vitamins and minerals such as vitamin A, iron and zinc, are believed to afflict about two billion children around the world. Werner Schultink, senior adviser for micronutrient programs for Unicef, says the impact of micronutrient deficiencies "is huge, on learning capabilities, health and mortality."
With vitamin pills costly to distribute and pill-taking regimes hard to enforce, fortification of foods offers the most promising prospects for combating some deficiencies, Mr. Schultink says.
But how much of an impact the companies have will depend how many people they reach, and whether they make their drinks available in school feeding and other public programs in addition to selling them in stores. While not limited to the poorest of the poor, the problem is still most severe among those who can rarely afford a treat like a sweet drink. "It all depends on marketing strategy," Mr. Schultink says. Selling it at a price that makes it affordable only by a smaller part of the population "won't cause a major shift," he says. Both Coke and P&G are targeting middle- and lower-middle-class families who aren't destitute but who still may not have the healthiest of diets.
Developing a fortified drink that is cheap, effective and doesn't leave an aftertaste is a challenge. Coke made an attempt to develop one in the 1970s, but technology wasn't advanced enough at the time for the idea to work. P&G says it dedicated a "major investment" in the 1990s, including consultations with micronutrient experts, to develop its proprietary iron, vitamin A and iodine fortification technology, which it calls GrowthPlus. An initial "learning market" wasn't an immediate success. An orange-flavored powdered beverage, dubbed Nutridelight and launched in the Philippines in 1999, didn't sell well because its price was too high, at about 50% above other powdered beverages, Ms. Garcia says.
![[Map]](images/2f_botswana11272001122903.gif)
Coke's Project Mission got its start in April 2000, when a group of marketing and innovation executives paid a visit to the company's operations in Ecuador. Local managers there were looking for a less obtrusive way to advance the Coca-Cola name in secondary schools than through bottle-cap contests that promoted sales of cola. With economic conditions in the country deteriorating, children were poorly nourished and inattentive in class, recalls Jay Gould, head of innovation at Coke. "Mothers were very concerned," he says. "Their kids were falling asleep during class."
In developing the beverage, Coke determined that a powdered version of Hi-C sold to restaurants appealed to consumer groups tested in South Africa. With that information in hand, the company enlisted a "world-wide nutrition advisory board" to create a combination of vitamins and minerals that would be absorbed well and whose taste wouldn't be strong.
A pediatrician at the Houston-based Baylor College of Medicine, Steven Abrams, who has expertise in vitamin and mineral absorption, led the effort. A combination of 12 vitamins and minerals, which like GrowthPlus included iron, vitamin A, and iodine, was formed. The effort involved experimenting with different sources of iron and vitamin A to maximize both taste and effectiveness. Powder, liquid and even carbonated forms were developed. Concerned about water quality in Africa, Coke wants to sell Vitango there in a ready-to-drink form.
Both Coke and P&G are mindful of the suspicion and hostility created by Nestle SA's debacle with infant formula in developing countries and are moving cautiously with their fortified drinks. To succeed, the companies must win the support of nutrition and health experts. While the sugary drinks are packed with vitamins and minerals, they contain no actual juice, and the companies stress that they are intended as supplements.
"We're not marketing this as a one-stop shop for health," says Abby Rodgers, a vice president of Coke's Minute Maid unit who heads Coke's development effort. "We're not saying don't drink milk or juice. This augments a healthy diet."
Undernourished
The most common micronutrient deficiencies in the developing world:
Iodine: An estimated 43 million people worldwide suffer from varying degrees of brain damage and physical impairment due to iodine deficiencies.
Vitamin A: More than 100 million young children suffer from vitamin A deficiency, which contributes to 2.2 million deaths per year from diarrhea among children under five. Severe deficiency can also lead to partial or total blindness.
Iron: Nearly two billion people are estimated to be anemic worldwide. Iron deficiency anemia lowers resistance to disease and weakens a child's learning ability and physical stamina.
Zinc: Malnourished children with zinc deficiency are more susceptible to growth failure and infections. Zinc deficiency, which is increasingly widespread among women in developing countries, is associated with long labor, which increases the risk of maternal and infant death.
Source: Unicef
-- Emily Nelson contributed to this article.
Write to Betsy McKay at betsy.mckay@wsj.com1
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