Meeting the Coca Cola Challenge
Distributing health products in rural Indian communities
Many visitors to rural parts of low- and middle-income countries have observed the public health paradox noted by many: “why can we distribute Coca-Cola all around the world, [when] we can't seem to get medication to save a child from something as simple as diarrhea.”
The USAID-funded effort Market Based Partnerships for Health took up this challenge in implementing three models to distribute health commodities to rural, “last mile” communities in India. Negotiating with Indian companies, the project aimed to design, broker, and implement sustainable commercial partnership to increase access to key health product for rural, low-income populations.
A project of Abt Associates and partners—Futures Group International, the Monitor Group, Population Services International and Banyan Global—the Market Based Partnerships for Health project leverages revenue-generating mechanisms of the private sector to work toward accomplish national health goals.
Jeff Barnes, a principle associate at Abt Associates, recently presented to Private Sector Working Group colleagues on this initiative. I took some notes for those who couldn’t be there…
E-Choupal Sagar’s hub-and spokes model
In an audit of 119 retailers in villages in Uttar Pradesh, almost 50% of the retailers did not stock even basic health products. The project looked to the ITC’s 'e-Choupal' services to penetrate this remote market. E-Choupal delivers agricultural products to 6500 kiosks across 10 Indian states through a multi-tiered hub and spokes system.
Villages, or spokes, aggregate demand and supply to the district/town centered “hub,” and also service smaller “last mile” villages with agricultural information. The district-centered “hub” is mainly a procurement and storage space. Enhanced hubs serve multiple functions: procurement, storage and sales through rural hypermarts stocked with everything from soaps to tractors and insurance.
The project selected a basket of products to be sold by Village Health Champions. They worked closely with the outreach agents employed by ITC called Sanchalaks. Barnes discussed the negotiations his team had with ITC and manufacturers. Manufacturers had to pay a price to access the ITC network and the price of their goods had to be palatable at the village level while profitable for manufacturers. Finally, the partners hit upon a ‘basket’ of products including oral contraceptives, water treatment tablets, sanitary napkins, oral rehydration solutions (ORS), eye glasses and vitamins.
After being trained to discuss health issues, village health workers promoted the products at small discussion groups. The part-time retailers were soon making 800 Rs per month from these health commodity sales, a significant proportion of their income.
Creating Demand for Cook Stoves in India’s North
From vitamins costing cents, Barnes moved to discussing how the project created demand for advanced cook stoves, a high durable product priced at 1400-1600 Rs. or 25-28 dollars, an amount roughly equivalent to one month’s salary in northern India. The cookstoves distribution project leveraged a local microfinance institution (MFI), Sonata Finance, to help families finance the purchase of the stove.
There were challenges to the sales pitch. The stove’s price was steep, and its design was not ideal for the target customers. The stoves were too small for many of the large families in India’s north, and could not easily cook chipattis, the staple in this region. By contrast, Barnes noted that the stove sells well in the south where rice is the staple.
Despite the challenges, 2% of the MFI members exposed to one year’s worth of communication activities—largely consisting of small discussion groups and product demonstrations— purchased the product.
Stocking ORS at the Village level through Shakti Entrepreneurs
Diarrheal disease is one of the leading causes of death in children under five in India but most deaths can be avoided with prompt treatment with ORT salts.
With its vast distribution network into villages across India, Hindustan Unilever was an excellent partner to put ORS packets on the shelves of shops across India. For the duration of this project, women called [Shakti Entrepreneurs](http://healthmarketinnovations.org/program/project-shakti?display=default) marketed PharmaSynth ORS to people in villages with populations between 1,000 and 3,000. Incredibly, sales through Shakti entrepreneurs are reported to represent 15% of Unilever sales in rural India .
While this partnership seemed to work well for ORS—particularly during rainy season—Hindustan Unilever opted not to distribute contraceptives alongside ORS, saying that contraceptives didn’t complement the hygiene products they were known for, like Lifebuoy soap.
Learn more about the Market Based Partnerships for Health project.