 Good morning, everyone, and welcome. Glad to see you all here on this bright, whole January, Friday morning. I'm Johanna Nesseth, and I'm with CSIS. I'm Vice President for Strategic Planning, and I co-director our new project on US leadership and development, which is really focused on looking at how the private sector is engaging in development activities, and especially on economic development. My first love is food and agriculture. I head up our food security work, and so I'm really delighted to be able to kick off this year's Chevron Forum with a very special conversation about the type of partnership that is really at the heart of what we're doing in our development work. Today we have with us Tara Acharya with PepsiCo and Nancy Roman with the World Food Program. We're going to talk about a relatively new partnership that WFP and PepsiCo put together that absolutely embodies the type of approach that I think will take us into the future of development. Ethiopia is a partnership that they put together to help to raise the production of chickpeas in Ethiopia in order to help farmers to raise their incomes and their productivity level to help World Food Program and PepsiCo have new products and new production that they can use in products, and then ultimately to help with the processing and manufacturing so that WFP actually has a very nutritious and useful product in their feeding programs. It's a tremendous partnership and really has a lot of momentum going and a lot of opportunity. As we've been talking this morning, it's not without challenges. So I think what we want to do today is just hear some about what they're doing together and how they've approached it and what some of the hallmarks are, but also hear about what the challenges are of this type of partnership. So with that, welcome to you both. Thank you for spending time with us this morning. Just so you know, we are recording this program so that it can be webcast and people can take a look at it on our website. So I want to start just by asking you both to just lay out what you're doing with this partnership. What is it? How does it work? And really talk about the story of how it got started because it started at a very high level and with a big bang. So if I can turn it over to you, maybe Nancy, you want to start. Sure, well, thank you, Joanna. I'm delighted to be here. This is one of our most exciting partnerships and I think it's really important to talk about it and to share experiences as we go. Well, I love the way this partnership actually began because Derek Yakov Pepsico and myself both serve on the Global Advisory Council to the World Economic Forum. And so in November, not last year, but the year before, we were in Dubai with that Global Advisory Council meeting on what really were the cutting-edge food security issues that the world should take up. And after one of the sessions, Derek and I were sitting in the lobby talking and I was telling him at the time there were floods in Pakistan. I don't know if you remember that. But I was telling him about this very cool product that we have. It's in a packet like this. And it was something we were just making, made out of chickpeas with dried milk, lipid-based, super fortified with vitamins and minerals, specifically to address under nutrition. And I was saying how effectual it was in the floods, but that it was a shame that we didn't have enough capacity. We couldn't scale up. And so there was a nutritional need that wasn't being met. And Derek said to me, well, that's incredibly interesting and coincidental because we have just decided as a company to not only move more of our portfolio into nutritious foods, but to really try to develop the chickpea as a base product. And to work with the chickpea across Africa, one, because Africa grows chickpeas, two, because it's this super nutritious base product, 22% protein, lots of iron. So we began talking and realizing that PepsiCo was going to need chickpea demand really across the income pyramid. So they already had an existing business model where they would be taking high end and exporting to Europe and US hummus and middle of the plate to India and Pakistan. But then I think we really first began, but what about the bottom of the income pyramid? And I like to say, capitalism breaks down for the poorest of the poor. So you have these, I'm a big capitalist, but you have need in some of these hardest places, nutritional need, but you really can't even test supply and demand because you don't have the supply because companies aren't producing it. So we just started to brainstorm about how one plus one could be greater than two. They wanted to ramp up production of the chickpea. We had this chickpea product. We understand a lot about these countries because of the work that we do. The United Nations World Food Program is in 74 countries. So we started talking about it and very quickly, it was two months later, we were then at the World Economic Forum with an MOU signed by the Prime Minister of Ethiopia, Meles, CEO of PepsiCo, the head of the World Food Program, Rashad, the head of USAID. And as I say, Tara very quickly joined in. We took then in February a trip to Addis Ababa and right away began implementing on the ground. So it's come together quickly. Tara, tell us from your perspective, what were some of the beginning discussions and why was it such an important effort for you? So from PepsiCo's perspective, as Nancy was mentioning, chickpea was already a very interesting ingredient from us, particularly from the perspective of nutrition, but also from the perspective of environmental sustainability because as you know, it's a legume. So it's actually a nitrogen fixing crop and it uses relatively low resources such as water. And so from an agricultural perspective, it was an interesting crop for us as well. And perhaps for the audience just to set the context, Inder Nui has said in many external fora that at its heart, PepsiCo is really an agricultural company. So if you, I think for many people when they think PepsiCo, they usually just think Pepsi Cola, but PepsiCo is a little bit broader than that. So some of our major brands include Lays as well as Lays and Doritos and all those associated products. But also Quaker Oats and Gatorade and Tropicana. And so we do have very close relationships around the world with our contract farmers. And furthermore, we have a deep interest in expanding our offerings to consumers in sub-Saharan Africa. And the opportunity then to work with the World Food Program is particularly intriguing and exciting for our senior leadership and particularly for visionary leaders within PepsiCo like Inder Nui and several of her senior leadership. Because it offers us the opportunity to then reach beyond the one billion consumers that we do reach today in the world and start exploring how we can bring better, more nutritious products to consumers in sub-Saharan Africa. But also what was really wonderful about this partnership was the opportunity to work from the ground up. So we were really intrigued by this idea that we could work with farmers in sub-Saharan Africa to boost their supply of chickpea and then use that chickpea to produce nutritious products that could then help them improve their health status. And so that combination of both the health and nutrition as well as the agricultural supply was really motivational for us. And that's what I think we try to achieve that in many other parts of the world as well. But I think where we faced a challenge in sub-Saharan Africa was that we don't have a lot of experience in that geography. Whereas the World Food Program has a deep and broad experience across the world. And we felt that it was particularly advantageous for us from the private sector to work with an agency that is as influential as the World Food Program. I wanna just stand those points for a couple of minutes because I think you have both highlighted a couple of things that are really hallmarks of public-private partnerships, especially in the ag and food space. There is an enormous market to be served in food and agriculture. Companies are able to reach new markets. They have in many cases very low dollar products that people can actually afford. But a number of companies, and there's a lot of growth in this area. There's a lot more demand. But companies I think oftentimes have a tough time figuring out exactly how do we operate in these new markets. So for you all it was really a strategic priority to have this partnership in part to understand how these markets work. And maybe you can say a couple more words about that. Right, I mean I think that we have begun to explore exactly what you're talking about, exploring new innovative business models in geographies such as India and China and Brazil. But I think for Sub-Saharan Africa it's a slightly different ball game. Because, and particularly in Ethiopia it's a different ball game. Because these are not consumers that have been exposed to a wide variety of products. And so we have very little understanding from the private sector perspective of how those consumers would behave where they faced with such a product. So what we've actually done with the World Food Program is a slightly different take if you like on the commercial perspective. PepsiCo Foundation has supported the World Food Program with a grant of three and a half million dollars. Whereby the World Food Program is actually going to take the lead on product development and optimization. And as well as testing the product in the market. And they're going to do this, and this is the piece where I think it becomes really interesting. The World Food Program is going to do this in partnership with a local manufacturer. And so what we're hoping is that we as PepsiCo are going to develop some learnings about how consumers react to such products, how they adapt their consumption behaviors, but not through a commercial business for PepsiCo. From that perspective I think we felt that this is a great learning opportunity for us, but it's also a great opportunity for a local manufacturer to establish a profitable business for themselves. While at the same time helping to meet the World Food Program's objectives. This is an interesting point and I always think that we give very little thought to how much effort goes into getting that little bag of lays into our vending machine or to our table. That there's an immense amount of research and marketing research and testing. And there's also a huge amount of quality control that goes into creating products. In World Food Program you spend a lot of time on this and have a lot of expertise. And I wonder if you could talk a little bit about how you're managing that and how you're bringing to bear some of these tests and approaches that Tara's talking about. Okay, sure I'd be happy to talk about that, but before I really wanna touch on your broader point, which I think is a critical one. Food companies right now are moving into the developing world because the market in the developed world is not completely saturated but certainly more saturated. There's enormous opportunity. And the decisions those food companies make, I think will just be fundamental to the way the world is nourished. These are big decisions because to your point, they, consumers at the bottom of the market and to your point, yes they will buy low price products but what are their offerings? And unfortunately one of the painful realities is the more nutritious food is usually the more expensive it is to produce. And so the reason that there's so much junk food that's hovering at the edge of these markets is simply because it's cheaper to produce. So that's one point I wanted to make. And it takes courage for companies and some are doing it to say, listen, keeping price point in mind, how can we be as nutritious as possible as we move into these markets? And I have to applaud Indra Nui's leadership for the way PepsiCo's thinking about that one point. The other point that I think is really, really important for the audience to understand and appreciate is that while, again, I'm a capitalist and I like the fact that companies sell products and earn money and I think there's nothing to be ashamed of about that but it's very important to understand that PepsiCo will not profit for the sale of the product at the bottom end of the income pyramid. And those conversations were long and there were many of them on the ground in Addis Ababa about how do we get to this issue? Because of course, companies rightly want to be testing products that will be at that place in the market but we were talking about the poorest of the poor, the hungriest of the hungry and for PepsiCo to be profiting on that with foundation was very complicated so there will be a profit made by local Ethiopian manufacturers. Some of the testing that we've been doing in December we were looking at different local Ethiopian manufacturers about which would be best and most likely, frankly, to come in at the right price point because the other point I wanted to make this will be a global good. This is not something that we will try to own and patent and keep to ourselves. We want this global good to be available for other United Nations agencies, NGOs to really help nourish the very, very, very bottom of the pyramid so it's an interesting structure and I think it took courage on Pepsi's part to sever itself from the profit portion of it at the bottom end. It's very important that you understand that. As far as the quality control and so forth, I mean there's many decades of history and understanding nutrition but the thing that's most exciting that has gone on and I think many of you are aware of it but is the understanding most recently about what happens to a child's brain and body in the first 24 months of life? It used to be, I like to say, when I was a girl in the 60s, we were helping feed hungry people out of compassion. We felt it was the right thing to do. We didn't like to think of people being hungry. Now we're doing it because wow, we get it. There's so much more at stake than compassion. If a child receives the right nutrients in that fundamental window in the first 24 months of life, frankly their potential for IQ is different. Their body's immune system is different. I will send around here, this is something you can't see from there but I would like you to be able to see it. It's the brain scan of two, three-year-old children. One who's normal and one that's been malnourished and on the back side are the neurological synapses and you see how different it looks. The picture of a child that's been nourished and a child who hasn't. So to your points about testing, I'm not the best person to get into all the technical aspects of it but we've built on a lifetime of experience and learning about the vitamins and minerals, fundamental and necessary to prevent malnutrition, the product where there's two. Could you show them an example? Yeah, sure, it won't look like this in package because it's not branded but I wouldn't mind passing this around to Renee because you can sort of feel what it feels like so it's a little bit like a sweet hummus. If you imagine it's got chickpeas soft so that a young child can ingest lipid-based milk protein and vitamins and minerals that have been formulated and we are looking again for maximum formulation because what we want this to do is to prevent malnutrition rather than to treat it. We don't want it to get to the treatment stage. We have a different product to treat it when a child's already at death's door and so much of the damage has been done. That's important work too and UNICEF also is involved in that work but no, we're all about trying to stop a child ever from getting there so that's what we've been testing and that's what we'll pilot when this newly formulated product rolls off in the summertime. So basically, I have to add that early on in the discussions Nancy, you and your team you shared these samples with us and I'm from India so I tasted that and it's perfectly formulated for South Asia I have to say. That's a very familiar taste to me. So the idea is that if you've got a little two or three year old who's off on an actual diet they just open it up and they eat this little mushy stuff, it's sweet so they like it, it's packed with protein and fat and is really enough for a full meal is that about the right portion? Yeah, they're absolute, it's kilocalorie dosages and two or three times a day depending on age group and so forth but yes, doesn't require cooking, no hot water necessary, you can be in the most difficult of the most difficult places and it's safe for consumption right away. Still in all, some places haven't had this and food that shows up in a square packet can seem weird and strange and there's education involved and I think that's one of the things that'll be critical as ready to use foods beyond even this are part of the products used to nourish the world are understanding of nutrition, this is all linked, the diplomacy that will be necessary to engage in the discussions that help people understand what food like that can mean for a child's brain and body. I wanna ask you to go a little bit further on that point and the point you raised earlier about the conversations that you had in Ethiopia because getting people to accept new kinds of food and to take this on board takes sort of a lot of conversation and dialogue and I wanted to ask you to just share some of the types of conversations you had to get the government on board and to get farmers on board to working on this process with you. Well, I'll turn to Tara about the farmers but I would say from our side it was quite interesting actually because Josette and I had traveled to Ethiopia and had had a conversation with Prime Minister Mele's at one point where she was describing for him this chickpea-based product and pulled it out of her bag as I just did here and he said, you know, we grow chickpeas, we would like to produce that here. Now, this was almost like a year before I had met Derek in the lobby but when we had that conversation I was able to say to Derek and I know the Prime Minister is keen on making this stuff here which was part of what allowed us to get excited about this and then we had several subsequent meetings, I can't remember all of them but Josette and I met with the Prime Minister two more times following and then when we went to Addis Ababa I think Tara, you were there with Derek and myself and others we met with the Prime Minister again and with the head of the transition government and who is coincidentally also the Secretary of Agriculture but part of the challenge is really permeating the government all the way down and governments are big places and as we know well here from the US you can be best friends with a best friend of the President's cousin and be missing a critical piece of information one agency over that's fundamental to the decision you're discussing. But I think Tara mentioned it earlier and she's quite right now that the government is seeing already that yields are almost doubling in these pilot projects so they're seeing the fruits of the investment it's really beginning to take root so the conversations in those earliest days on the ground in Addis Ababa weren't so much about how do we break through to the government the Prime Minister had arranged it we had all the meetings and we had the buy-in it's sustaining it over time at the working level and I think positive results and a feedback loop are your best friend when you're doing that. So I just wanted to mention because Nancy mentioned this a couple of times and the other piece of this project has been an agriculture pilot that we undertook in last year and there we work directly with farmers both with commercial farmers as well as with smallholder farmers and we really had the opportunity then to interface with technical experts from the Ministry of Agriculture locally in Ethiopia and we also worked with the Ethiopian Institute of Agricultural Research one commercial farmer in particular and I think Nancy you met him as well but he runs a small farm a small commercial farm in Ethiopia called Omega Farms how big is the small commercial farm? it's only 20 hectares wow that is small and he is one of the smaller commercial farmers there but he was truly dedicated and his name is Daniel Gad he was a former AT&T executive who moved back and sort of set up this business almost as a hobby but partly as a commercial business but partly also to start working with smallholder farmers and have some social impact and bring positive social impact back to his own country and so he in particular really embraced the vision of this project and has been a tremendous resource for PepsiCo in helping to manage the farm demonstrate to his out growers the benefits of adopting the best practices that we have introduced into farming in Ethiopia and one thing that we've always heard from the farmers from the executives that we worked with from the Ministry of Agriculture is that chickpea is really at the heart of Ethiopian culture and so we really you know it was it was fortuitous but we really seem to have hit the nail on the head with this one commodity it's not a big commercial crop for Ethiopia only 20% of it is exported but 80% of it is consumed locally and it's an integral part of the diet and so that really affords us an opportunity to develop a nutritious product that people will immediately take to they will understand the benefits of it because it's very much a part of their culture and that to me also speaks to how wonderful this partnership is because it and the Prime Minister obviously saw this immediately as well that this is you know while the overall goals and objectives are clearly laid out and are obviously aimed to meet the agricultural needs of the country as well as the nutritional needs of the population it also at a very deep cultural level it really meets their objectives so it really was a very nice coming together all these different elements and it's something that you can't discount you know from the perspective of a consumer goods company that's really important you have to get that product right and I think this product is really going to be the right thing for Ethiopian consumers and those were some of the exciting conversations on the ground too now that I'm playing back in my head that as they were saying how cool it would be to produce this in their own country I think that's going to be one of the waves of the future with you know products at all levels is that people want to produce their own and there's a real pride factor there and we were testing that and in fact the product that we produced in Pakistan we called Wawa Mum which was based on the local language and you know it meant it tastes good and it was very well received but of course you wouldn't want you know Pakistan's language in Ethiopia we were playing around with calling it Shimbra Mum which was an Amarik for Chickpea and we tested a couple of things and I had you know our graphics person quickly assemble something and we showed it around and we haven't really concluded those discussions but one thing we sensed right away you know to build on what Tara's saying is that there's such a pride and one the Chickpea it's a known and loved food but two producing your own manufacturing your own you know making your own that's empowering so you know that's part of what's exciting about this partnership too if it really succeeds to its fullest potential it won't just be Ethiopia producing it but you know we've talked about other countries producing their own you know as we would move across Africa so you know quite exciting can I just ask as a point of information you're using this type of product in some of the other emergency situations in the Horn of Africa and in other places currently well we're not using a lot of it and you know yes the answer is yes we do sometimes use it but you have to you know use it what is it as I mentioned there are different formulations for treating and for supplementary one of the critical issues and this is a fascinating discussion for the world in the humanitarian space is to what extent will we use these more nutritious foods that are being developed so we've got two problems right now one you don't have the ability to scale production so when a huge emergency happens like the earthquake in Haiti even if donors were willing to pay for it and it's more expensive than other interventions you can't get it so that's part of what we wanted to do here is let's develop capacity but then second it is more expensive to use this super nutritious food than to use some other things like that we regularly use corn-soya blend is what we often use it's a sort of like a corn meal and that requires water and you cook it and it has protein and it's nutritious not as effectual as this but certainly better than nothing and so there are interesting debates about do you reach more people with something that's somewhat less nutritious or fewer people with something that's much more nutritious these are discussions the world has to engage in we are a 100% voluntarily funded organization so we don't call these shots ourselves the donors call them on our behalf but we decided here in our partnership that PepsiCo is funding the first million dollars worth of this and we'll create the capacity the manufacturing capacity the momentum, the understanding that all the testing and all the requirement for this to roll if there is demand and those were fascinating discussions too because I made clear early on to PepsiCo and of course they're smarter business people than we are so it didn't take a lot of persuading but the price point would be critical that in other words not because I say so but because U.N. rules rightly require that NGOs and the United Nations go to the lowest bidder so if we produced something that was wonderful and cool and everyone loved but it was too expensive it would become irrelevant PepsiCo has really done excellent work to make that come in right at that price point where we will hit that target so again we've created the potential for this to really go and there will be some uncontrolled variables and some controlled variables that determine whether we realize that potential so then it's the idea that you develop manufacturing potential you develop production potential so that you can kind of it may not switch on and off but you can kind of have manufacturers switch back and forth between producing emergency packets and then maybe products for the local market so you've got different products that manufacturers can do and now I understand your question you know some of these things will be determined how many different products will we have we're starting off with one product a supplementary product that will be used yes it certainly could be used across the Horn of Africa and the World Food Program could and would be willing to use it current rules and regulations we can program and would program this in the situation to prevent malnutrition in the case of a drought there are now 13 million hungry people across the Horn of Africa who and many of them are children and in the demographic that would really benefit from this so we would expect to be able to use it but this is interesting from a business perspective so this is what we're talking about it does become a little bit of a chicken and egg situation because PepsiCo has been rightly asking us how much of this stuff are you gonna use and you know we would you know from a programmatic perspective we can give numbers we know how many hungry people are in the Horn we know how many of them are children in the demographic to receive the food and so forth but the piece we don't know is what funding will be like from donors so we haven't been able to give the same kind of promise to PepsiCo that another you know commercial partner would and but we've worked round and round that and I think we've come to a place where we've set up the potential and we know we'll have some demand we'll program this you know we'll pilot this but you know this is one of the reasons the partnership is so cool as I can't tell you exactly how this will unfold and you know there's gonna be demand you cannot possibly predict exactly what your demand will be from year to year that's exactly right and then from the local manufacturer's perspective it then becomes really important to diversify how they use the raw materials that they would use for this product so that in lean times when there is no demand or where there's limited demand for this product they'll still have the opportunity to produce other products that could be chickpea based as well and that could be a commercial product for them so they would sell directly into the market and that's I mean we're hoping that eventually we'll be able to build capacity not perhaps not just of one local manufacturer but multiple and that would really benefit both the world food program and UNICEF and other relief agencies but also those manufacturers right and ultimately the consumers and it's early days so this is all unfolding even as we speak so these are very exciting things I think one thing I wanted to ask you about a little bit more Tara you mentioned that PepsiCo is at its heart an agricultural company you have to have high quality production at the right amount at the right times in order to make all the products that you make but we also know that you can't fix the problem by throwing seeds at it you can't just raise production by having better seeds or a bunch more seeds so I wanted to ask you to talk a little bit about how you're agronomist how your ag folks are actually helping to teach farmers how to farm better to increase production and what that's actually gonna look like when you're working on the ground you've hit the nail on the head again I mean I think that the Ethiopian Institute for Agricultural Research for example has for years done very innovative research together with ICRESAT and other agencies on developing the right hybrid seeds for Ethiopian conditions high yield seeds drought resistant seeds and they've had very limited success in getting farmers to adopt those seeds and grow those seeds and be able to then produce higher yields of chickpeas so the first thing that we did when we went in with our agronomists was work in partnership with the Ministry of Agriculture and the Ethiopian Institute for Agricultural Research identify the right inputs for farmers and then work directly with the farmers to understand both understand from them and learn from them what are the challenges the particular challenges that they face but also then introduce to them new ideas such as you know I was mentioning to you earlier simply instead of broad scattering the seeds growing the crop in rows growing the crop in rows actually allows them to see better how the crop is growing and manage the weeds manage each of the plants and monitor progress as the crop takes root and just that I think the introduction just of that practice has enabled farmers to really appreciate the crop a lot better in normally under Ethiopian conditions chickpea is a secondary crop as I said earlier it's not a major commercial crop and so they planted in between seasons in the secondary season and it's really meant for domestic consumption so you get what you get but in this case they began to see well this is you know it's a better seed it's a larger seed I get better yield if I plant it in such a condition and potentially even then with low cost irrigation systems which we're now exploring we could enable them to not only increase the yield of this particular crop but also plant a second crop so there wouldn't be a fallow season for example so they're beginning to come up with some ideas themselves the farmers themselves are really engaged and starting to introduce new concepts and new ideas for themselves as well as for us and so it's been a real exchange of ideas very exciting and very rewarding to work with these farmers so I think that with this sort of interaction we can really take agricultural production to the next level and that's significant for the Ministry of Agriculture they are very interested in the nutritious product that we will eventually be using from these chickpeas using the chickpeas as well too but they're also very very interested in the opportunities for expanding exports and as you know India is a huge market and as yet an unmet market for chickpeas so that in itself is bringing a lot of interest from USAID, from the Ethiopian government as well as potentially from other partners as well are farmers buying the seeds or do they have a loan program? for the pilot they didn't buy the seeds we actually donated the seeds to them that's an important aspect for the next phase that's a great question because we would like the farmers to have some buy-in so if they're convinced that this is going to work we would like them to be able to provide some financing up front to buy the seeds and that then brings in other commercial partners such as banks that might be interested in providing microloans to the farmers so all of this is still very much in flux we're still having these discussions but I think what's been critical over the last year and it's been a very fast year what's been critical is that the activities that we've undertaken on the ground have really generated a lot of interest from the farmers all the way up to the government and to international NGOs in USAID I should mention is an implementing partner as well on the ground correct? I think one of the issues with Feed the Future and US food security efforts is that ag development takes so long to unfold and in it's really I think a point of concern when you think about sustaining the efforts of the past couple of years in standing up Feed the Future and getting the program started that if we don't see quick results it's really hard to go back and say this program's working we need to keep funding it so I think this is an unusually powerful program because it kind of establishes a right now success story of this type of partnership public-private partnership that actually has some immediate results if you've already seen a one-and-a-half or doubling of production you can see how things are starting to get moving it's really a powerful example of what can happen if you start working on the issue and I wondered if you wanted to comment a little bit on that sort of how this partnership is helping through this bridge phase to demonstrate some results Yeah, well I have to say we have demonstrated a lot of results in a short period of time I was laughing earlier with Tara because we were talking about the challenges and lessons learned and she was saying it's taken longer than we would have liked and it has because we're all impatient people but I think it was November literally, you know a year and a couple of months ago that Derek and I were first talking of this idea in the lobby in the year that's passed since you know, we've had the heads of every organization involved you know, sign an MOU we went to Addis Ababa the next month with our senior teams I went taking my team Derek went, he brought Tara and others including significantly and importantly people from the business arm of PepsiCo we brought in our country director to be for Ethiopia who was currently the country director in the DRC we also brought in our senior liaison with the African Union so we really from the earliest days took that all seriously and now what we see is you've had your first results on the pilot yields which were nearly double that was just weeks ago and we are on track to have I don't have the packet but whoever has it somewhere rolling off the product line this summer and you know, we will and we have chosen the manufacturers so the government is seeing the potential and frankly, we're seeing the potential I mean, I think people lose perspective it's not only the government the public and outsiders who have to remain energized it's the partners themselves as someone who manages all the private sector partnerships for the World Food Program and I will be bold and brazen in saying and I think we are really the UN leader in public-private partnerships you know, part of the trick is keeping yourself energized when the partnerships inevitably hit bumps and challenges and so forth so the results that we're seeing are invigorating to ourselves and our team you know, the people who do the day in day out hard work like Kai Young who's here in the audience I mean, you know, a lot of people are working hard so I do think these successes matter and we haven't done a lot of communications around this but this is the kind of thing I'd like to do is engage in, you know, not launches and you know, but deep down discussions about how these things work and to solicit other incoming ideas to ask the hard questions Kai, you asked a really great question about I think, you know, the fact that this partnership actually encompasses both the immediate term need and impact that we can have with the relief nutrition product but at the same time it sets you up for long term success in terms of agricultural outputs and that's what partners like the Ministry of Agriculture and USAID are also looking for and so I think that's what's wonderful about this that you can see both the immediate impact that you can have with this project but then you can also project out to 10 years from now and see how this could be transformational so ultimately I think Nancy, you and maybe Josette have also mentioned this that ultimately you'd like to create a situation in Ethiopia where this product is not needed anymore and it's a commercial product instead No, I would agree, the World Food Program has been a real leader on partnerships and can you just describe the shift in public and private funding you've had over the past several years? Well, we are an organization so we're entirely, voluntarily fundraised our budget is around 3.7 billion the private contributions are still a very small percentage of our overall contributions when I came we were raising around $20 million last year we raised around $156 million from the private sector so it's grown exponentially it's still a minor part of our total funding but what is so exciting is the nature of a partnership like this goes so far beyond the financial contribution PepsiCo has been generous and the money is important but it isn't the predominant thing here it's a way of thinking and really working with the private sector to take advantage of expertise and create synergy and momentum and bring fresh problem solving because one of the things I love about the job that I have is that philanthropy is really changing now and I think people are appreciating a couple of factors are coming together at the same time one, we all know that the governments have sort of hit their limit on spending it's not just the United States but Europe and others that are at maximum capacity less inclined to just hand money over to others and so at the same time the companies as we discussed are moving into these markets and so where philanthropy used to be the company sort of did the nice thing to get on the front page and get credit for doing some corporate social good now the companies have a complete vested stake in solving these big global social problems because these are their consumers and their suppliers and every other thing so getting it right and some people don't like that they think oh gosh the companies that's in their selfish interest I love it because you want it to be in their selfish interest so yes they're doing good I've engaged with enough of these leaders in these companies to see that they care about the people and the problems as much as any of us do but yes they've got the additional incentive of the dollar there's just to be real that's a powerful incentive and I think that sets up real you know positive momentum and what I'm seeing is that even in the short time I've been at the World Food Program five years you know when I came you had to be very careful how you said what I just said you know this could really freak some people out now people are understanding it and realizing that you know the fact that companies it's in their financial self-interest as well as their humanitarian self-interest and the good of the world to solve these problems you know people are less afraid to talk about this and then it creates the freedom and space to build more dynamic exciting partnerships and I think one thing that we hear over and over from companies that's very clear is that the cash is a very small piece of the actual partnership there's an enormous amount of technical skill in your case you're agronomist you've got food scientist you've got commitment you've got a big name brand that can mobilize a lot of support and interest that writing a check is the tip of the iceberg for what you actually contribute to the partnership but some of the challenges are very very real and I want to just open audience questions after I ask you both just to talk a little bit about what are some of the challenges and bumps of the partnerships that you have encountered and how do you kind of get through those because partnerships can be really hard and we want to one thing we're trying to do is put together some tips and roadmaps for how to manage some partnerships I want to hear from you both what you've learned well the good thing about a partnership and you know this is an African proverb right if you want to go fast go alone if you want to go far go with somebody and in this case we really want to go far we want to have long term far reaching impact and while you know it's we talked about this before as well that you know there's a real cultural difference between the private sector and governments and international NGOs and agencies like the World Food Program we work at a different pace we have different roles and responsibilities we have different expectations and so you know Nancy you're right I mean we've worked tremendously fast given the nature of this partnership but there have been challenges along the way there have been misunderstandings there have been multiple conversations going back and forth and we've worked through all of those challenges and we've worked through dialogue but what's been wonderful about the partnership is that there has been dedication from the top all the way through the ranks and so while we weren't always understanding each other in terms of you know what's the expectation what's the time frame who's responsible we still manage to work through all of those details because we had this open dialogue and this commitment to see the objective and see us through to the objective and see success it's been the same for us in terms of the agricultural work as well we weren't always on the same page with our commercial farmer we weren't always on the same page with the smallholder farmers the Ministry of Agriculture the Agricultural Transformation Agency there were many players involved on all of those fronts but I think what's important is early on in the partnership set out the goals and objectives and then work towards them and identify the right sort of people within the company, within the institution who can take those objectives forward Great, and Nancy? Yeah, well I agree with all that and I have to say relationships are critical I mean one of the reasons because we have good relationships across the organization at a good level when misunderstandings do arise and I can just give one I got one call from I can't even remember who on my staff saying but PepsiCo's telling our country office that we have to buy the chickpeas and I said, well I'm certain that isn't the case you know what I mean but then you realize that meanwhile this has taken root in the country program confirming their worst fear and you just drill right down and clear it up but one of the things we did is we decided to pull all the players to our head corners and bring them together for a conversation and just say, okay let everybody's surface doubts, concerns what isn't working and because we're a far-flung organization working in 74 countries headquartered in Rome PepsiCo's based in the United States Ethiopia clearly is in Africa so you have a lot of players across different time zones in different locations and we pulled everybody in for a conversation I think it's critical to have buy-in from your country office so often what happens in public-private partnerships is you develop them in the public in the private sector space and the country office is viewed as the implementer they then just take orders so you hatch this high-minded business deal and then you superimpose it on people who are feeding hungry people day in, day out and it can be difficult so we established the early on buy-in but sometimes what happens is you move beyond and you forget about that so the communication link with the country office with the country operation is critical and I think our team has been very good of course the country offices usually want more capacity because a partnership like this does put weight on them and the partners very generous PepsiCo's funded three positions and given a cash grant doing all these other interesting things that you hear about none of which are underappreciated from the country office perspective they need more they need more human beings on the ground to implement and so it's always a challenge of how do you create as much capacity as you can and have reasonable expectations so that you're not taking a disproportionate amount of time and energy at the country level that I think is a challenge across any private partnership ever that we've done the one other table that we talked about earlier is sometimes you can be in at two senior level in this partnership not two senior level but so senior that you assume it's gonna be a given the prime minister wants it Inva Nui wants it Josette Sheeran wants it therefore it will happen no you have to communicate effectively at all levels there are many different people involved who may not even understand what these influential important people want so the buy-in at the top level creates a momentum and a synergy and it's a very critical door opener for government no question but you can't stop there and you can't take that seniority for granted you know that it will go down it's a day in, day out week in, week out you know challenge to involve all the players you know to make sure people feel heard understood and listened to we haven't always gotten that right you know you get busy and you take your eye off the ball and suddenly you realize you know misunderstandings you know developing you have to go back but that's just life right you know I mean even across things beyond public, private so communication fundamental so as we talked you really have highlighted I probably three things one is that you have to have strong leadership and strong message from your leadership second is having a clear goal is essential because then you you know what you're driving toward and then third is just constant communication up, down and across the board so I think it's not fair for me to keep asking you questions when I know our audience wants to ask you some questions so I'll open to to the questions what we're gonna do is probably take a two or three at a time ask you just to identify yourself and your affiliation ask a brief question no lectures please okay right here we'll start here and the microphone's gonna come to you good morning my name is Kara George from Humanitas Global Development and I had a question for I guess all three of you you mentioned that taste and knowing the knowing the ingredients in the product are important for for the population to accept it well but given that you know it comes in a package that may not be so familiar how do you involve your educational component to then garner trust thank you let's take there was a hand in the back over here that was a very good short concise question thank you Mazat thank you my name is Bill Jordan with a company called ROI3 this is for Tara and Nancy you mentioned communications is critical to your effort the growth of cell phones in all areas particularly in Sub-Saharan Africa has been enormous how are you using cell phones to communicate with your producers and also with your intended audience as far as the nutritious value of the products the consumers in effect thank you right here in front and then next we'll go to the back morning ladies and gentlemen my name is Rosemary Sekira I'm the president of Hope for Tomorrow we focus on job creation and entrepreneurship through job creation just want to thank you so much for your presentation I'm initially from Kenya how do you work with farmers or how do you fund or support the farmers who are in the rural areas who do more work is it a fair trade fair funding or support to support themselves on long term or how do you do it and are you look the other question is are you looking to extend to other African countries and if so are you going to use the same model into manufacturing or those people could still get manufacturers like me out of other countries and sell to the wild food program so thank you so much great thank you I'm going to stop there and whoever wants to go first do you want to take the education yeah just you know quickly on those three points you know a great question about the taste like you know what do you do you know of course you know when we use this under any circumstance well for one thing in the Pakistan floods when you're in a critical situation you may not have time to do that but in this instance this product will be piloted among 40,000 children in Ethiopia and so you know there will be conversa our program officers are very careful about introducing the product explaining to you know parents about you know how it's used and how it's made that it's made from a local chickpea crop and so forth and that's measured in all part of the pilot and the pilot you know the results of the pilot will be shared of course you know with government and everything you know as we take decisions about the pace and rate with which you know to expand I could say many cool things on cell phones we're not using that we aren't and I think Tara is so she can touch on that but we are using cell phones enormously in our work to deliver vouchers in places where you know there may not be food it's a very exciting space and one that we are working on across Sub-Saharan Africa maybe for another conversation and to your point only to say for you about the rural farmers in Ethiopia but I think it's important to say the World Food Program we have a program called P4P, Purchase for Project Puppress where we are working with small holder rural farmers in 21 countries around the world many of them in Africa and the whole idea is we're trying to use our demand for pulses, rice other products that are grown to you know create and develop best practices so we give farmers a guaranteed contract for purchase we partner with others including FOW and many others to provide the training how do you because a lot of the small holder farmers produce a crop but we can't legally buy it because it's not the right grade so we've been doing the training how do you dry a pulse or a bean how do you sort it and you know separate out the broken ones and so forth and we've had just unbelievable success helping be the demand engine pull to producing grade A commercially purchasable you know foodstuffs from small holder farmers around the world connecting farmers to markets it's a very dynamic exciting project funded by Bill Gates and the Gates Foundation and the Howard Buffett Foundation and we've talked about partnering with that you know through you know with the PepsiCo project P for P we could spend another two hours on definitely it's a fantastic program Tara so just on that yes exactly we've been talking with people P within a workflow program and typically you know across the world when we work with small holder farmers or when we work with any farmers really we work through contracts so we do contract farming you know in the US it's largely with commercial farmers in countries like China India, Brazil we tend to work with small holder farmers and we anticipate pretty much the same approach in Ethiopia as well as in other Sub-Saharan African countries where we set up contracts directly with farmers and and buy their produce so provide market guarantees for them the cell phone usage is an interesting question we do of course communicate with farmers on cell phones in many many parts of the world particularly in developing countries where that's much more than norm than any other form of communication in Ethiopia I think it's a little bit of a challenge yet because I think the telecommunication sector in Ethiopia is not quite open and so it's it's a little bit it's I would say it's a little bit in a different place compared with many other Sub-Saharan African countries but again it's an issue that Prime Minister Milis is very much involved with and dedicated to so we do anticipate a change there and finally on the education component that was a great question we actually so in addition to the learnings that we would gain in partnership with the world food program in Ethiopia we've also piloted other nutritional products for lower income consumers around the world so in the Philippines we have an iron fortified Quaker Oats product in India last year we launched a very successful snack as well as a biscuit a cookie that's iron fortified and it is targeted at adolescent girls and there's a big education component around that as well so there were videos that were generated there were street plays we're working with research institutions and NGOs in India to ensure that that message reaches the appropriate consumers in India so we'd love to bring some of those learnings as well to this partnership and expand upon that great okay for our next round of questions model the questions in the set before those are excellent we're going to start with a man in the back who was raising his hand before nice thank you for the presentation that was fantastic my question was actually very similar to the previous question which is there's obviously a great humanitarian benefit to this increasing local production but the smallholder farmer is also a focus here as well right increasing their income and so I think you actually sort of answered this question that you're setting up a contract price or a guaranteed price for the farmers I'm interested in is that also a goal of this I'm likely for P that you'll improve the income level of the smallholder farmers uh... right in the front here thank you for the presentation I myself from Ethiopia so I know the price of chickpeas used to be like per cunt like 100 kilogram would be like before it's the 90s you know is that there's a hundred Ethiopian which means equivalent to about thirty some dollars back then now the price is soaring because it's almost hitting about seven hundred something it's more than two thousand percent so how this new your innovative product will address that price because if you say like uh... when Nancy mentioned it's in the Horn of Africa on the thirty million uh... people are affected by this malnutrition so the world is a glow the world population is reaching almost seven or almost reached seven billion out of that like more than half of that lives under the poverty line so this will be a big potential business for PepsiCo like I don't know if United Nations involves in the business so how would you think like the future it's a kind of petroleum for me like it kind of it will be a big business so how would you address that global problem so food price is a big question and then if you can just hand your microphone to the woman on the edge not really on the edge just sitting on the edge I think thank you so much my question actually you just say your name in affiliation my name is Megan my question is of a personal nature um... but I'm coming to come on it so I can understand very well the point about humanitarian interests as well as financial interests but I'm more interested in specifically what are PepsiCo is more commercial interest is it sort of tapping into a product that poor people can purchase themselves is it market research for the middle class is it selling this more to donors what is the more commercial aspect of the partnership for you great thanks and then if you pass it right behind you to the woman in the purple stripes hi my name is Susan Borkover I'm with meds and foods for kids and I oh sorry and I am just wondering what you're doing to identify organizations who are sort of maybe already doing something like this but just on a much smaller scale so doing agricultural interventions in order to produce RUTFs, RUSFs and what and what you're doing to sort of see what's already out there Tara do you want to start with that round yeah sure let me talk about improving the income level uh... farmers that Jordan raised um... that's very much the the objective of the agricultural work that we are that we are undertaking and and this is particularly what has increased in intrigued the ministry of agriculture and the prime minister they're interested in improving the lot of smallholder farmers by introducing better hybrid seeds into the community and then and then helping the farmers command better prices on the international market but that raises the question then of food prices and as you as you rightly mentioned the price of chickpeas has actually been increasing uh... over the last two years however in the last few months of last year they actually started to settle down and actually dropped beneath the level of for example soybeans in uh... uh... in Ethiopia so actually the world food programs uh... purchase for progress uh... unit is actually considering the possibility of buying chickpeas from farmers because that price has now stabilized considerably interestingly in uh... in the last couple of weeks we had conversations with the ministry of agriculture particularly on that issue of food prices and uh... and they are keen to see the food prices particularly for chickpeas actually drop a little bit more so that more uh... domestic consumers can have access to chickpeas that's actually great for PepsiCo as well so that brings us to the question of PepsiCo's commercial interests right so part of the interest and i say only part of the interest uh... for PepsiCo in the immediate term is to diversify our source of chickpeas across the world and Ethiopia is a great source of chickpeas so it's the number one producer of chickpeas in Africa so we uh... we are particularly interested in in procuring chickpeas from Ethiopian farmers so so that would set up contract farming in Ethiopia for us uh... and then uh... exporting the raw chickpeas so unprocessed chickpeas to uh... our businesses in North America and in Europe uh... that's where we have immediate needs however in the longer term we're also interested in setting up processing and manufacturing within Ethiopia so that ultimately we will be making products that are appropriate for Ethiopian consumers uh... in Ethiopia using those chickpeas and that's a slightly longer term aspiration compared to what we would want for twenty twelve twenty thirteen but it's very much within our sights Nancy comments from you yeah i would just add on a couple of points hey Jordan good to see you and uh... while PepsiCo has a goal of getting the income of farmers up uh... chickpea farmers up and i think we will see that happen it's not one of the express goals of the partnership you know what we laid out for the partnership is to increase and improve yield so to establish the supply chain with the yield to to develop this nutritious product and to make it available and to develop the manufacturing capacity and then individual players you know have sub goals beyond that and clearly the government is quite keenly interested of course establishing jobs getting the income up and i think that will be an exciting side benefit but the the sort of day job of our partnership is more fundamental to your very good point about you know well what about food prices and what effect will this have i think in the beginning supply we're talking about a sufficiently small that you know just on a mathematical basis you'll see that it won't have any impact on price but it is true absolutely that you know it's it's a force beyond this partnership that people are appreciating the chickpea they're seeing the nutritive value of it it tastes good and everybody likes it more westerners are eating more hummus you know indians have always eaten consumed a lot of chickpeas but you know population is big and growing there so there's more demand for the chickpeas so it's not surprising that prices will rise we've seen a dip but i think the overall trend line you know will be modestly up there you know it's a longer discussion about food prices more broadly uh... but i think you know the goal really is uh... from my perspective this is a personal view not the world food programs view you can't be about price control you can't take these decisions on control there's too many outside factors anyway a drought or an export ban or any other thing can really throw a monkey wrench but i think the goal for the world really should be to increase production of chickpea really worldwide because as you say it's one of the few crops it actually enhances the night you know nutrients in the soil it's super nutritious it's a more efficient way of providing protein to people you know then meats and everything so it's something that would just make sense in the broader macro perspective of how we feed the world and then prices will rise and fall you know in accordance with economic principles and supply and demand we want to make sure for sure that as the world food program we don't distort markets and that's something we've given a huge amount of attention to and looking at purchase for progress we have to be super careful and we are uh... and you know it's hard to be a player as big as we are and never affect markets anywhere you know at the margins but we're super sensitive to that uh... but in the big picture you know i think it's it's beyond that i think i'm going to relabel this session owed to the chickpea okay i want to take one last round of questions and before we close up i i'm gonna scoot over to the side of the room uh... jerry jensen in the front thanks jerry jensen from initiative for global development i want to pick up on i want to pick up on joanna's question about lessons learned and what advice you would give to other companies who are trying very hard to integrate development into their base business on the question of scaling when do you transition from pilot to scaling i think there's a lively debate there in the agriculture sector uh... a number of folks uh... talk about the importance of focusing on the pilot for long periods of time and then others say you have to scale right at the beginning in order to do this right i'm just curious what your thoughts are that's a great question and then there's a woman right behind you hi um... bridget ralje USAID office of food for peace uh... i have a question about your model working with small holder farmers and whether there was any effort to particularly target women small holder farmers with this initiative okay great and then one last question that's the man on the end here little gender diversity thank you uh... my name is Daniel from Haiti and that my question is regarding the planning for to facilitate south to south trading in terms of agricultural products uh... because there are certain countries that are more efficient at producing certain products and others and so that is there sort of a macro planning to uh... help increased uh... the yield and and and and and uh... usage of certain products from particular countries from south to south okay let's uh... take those questions is our last round okay um... uh... when do you scale that's a great question and you know there's no right answer but our intention would be to scale quickly in other words we know we know already that this product you know works and it will be interesting to see the acceptability and if you have verses you know other countries that we've worked in but it's not a brand new first-time experience and again you know what will determine whether we scale are really the resources that become available you know both from private and from government sectors who are you know excited and ready to move to use this in nourishing that population and frankly the local you know the the local governments the national governments who you know will take decisions about you know whether to use this in their own public you know food distributions and other things that's why i say the diplomacy and education around it you know become so important uh... but i think that i would like to scale quickly and we are positioned to scale quickly if those other forces permit uh... uh... to the food for peace about the women uh... you know this partnership doesn't have a goal specifically of targeting women uh... and terrap can discuss maybe pepsico's view on that i'll just say from the world food programs perspective uh... you know women are absolutely fundamental you know they're doing eighty percent of the subsistence farming and one of our frustrations as we've done purchase for progress has been in spite of the fact for example in africa that most smallholder farmers are women when you put together a program that uses trade associations and everything we find disproportionate numbers of men coming in and we've done uh... just an unbelievable amount of work with the gates foundation and others in our own gender unit trying to address that it's difficult for complicated you know social reasons but it's important and i think you know i know that both organizations would like to include you know women but we don't have specific partnership you know goals and incentives you know for that at this point and then and to the question about the macro planning uh... you know one thing that was fascinating and important about this partnership from the beginning is that because meleis was interested in he hooked us up immediately with the head of the transition government who already had as its senior leader someone coming from the gates foundation who was very keenly interested in agriculture and production and all of that there was from the earliest days at the government level macro planning that integrated the thinking of this you know into the government's you know transition program now i haven't followed all of that closely about how it unfolded but i know that in those meetings we did discuss that you might want to pick up there let me go back to the beginning because i think this is what's so exciting about this uh... this partnership right now you ask the question about you know when to scale and i think the time to scale is when all the partners are ready coming around the table and ready to invest and uh... that's exactly where we are right now now i would say that it would have been foolhardy at least from pepsico's perspective to walk into Ethiopia and think that we could go to scale from day one because this was a new geography for us we didn't really understand how to operate in Ethiopia we don't even have physical pepsicoe entity in Ethiopia we have a beverages company that has been there for forty years but we didn't have a foods production entity in Ethiopia so uh... you know this was really new ground for us and secondly from the perspective of the partnership and its focus on under nutrition this was also a relatively new space for us so we really needed to test the waters and understand what's the best way to take this forward and now we have that learning in place i would say and we have such a great deal of enthusiasm and interest from diverse partners now i think we are really poised for pretty big expansion of this effort and really have some positive impact uh... so i think we're ready to to go to scale at this point on smallholder farmers and particularly on targeting women that was a question that was raised right from the beginning and it was it was perplexing in Ethiopia actually we visited many farms right from the beginning and all you would ever see were the men and they uh... even more so than in uh... you know what you would expect to see on the typical farm in in Kenya you would often see the woman and she and she takes charge of the farm and you interact directly with her in in Ethiopia it's very very different the women are sort of hidden away and i have no doubt that they are out there in the fields and working them but uh... and you say no so so perhaps and that that explains it then so we've never really seen any women out in the fields and uh... and so if that has been definitely a challenge for us to interface directly with women and uh... and work with them on this project uh... and on the macro planning i think uh... that's definitely something that's very very much of interest as Nancy was saying with the prime minister all the way through uh... and i think that there is definitely an interest from PepsiCo from uh... you know from the perspective of world food program to see how we can take this type of partnership and expanded out to other regions not just maybe in sub-Saharan Africa but perhaps to other geographies as well i think that there is a tremendous need across the globe and uh... and we did make a pledge a very public pledge in Ranoi made this pledge two years ago where one of our major goals is to address under nutrition and help to reach the uh... you know the two billion people who are really in need both of macro nutrients as well as micronutrients and so we're exploring different ways in which we can do that and uh... and this partnership really affords us uh... a wonderful pilot a wonderful sort of model that we can base those efforts on well i think we're getting to the end of our time so i want to just wrap up with a few comments before we thank uh... everyone for joining us first uh... this issue is ever ever relevant and present we know that we have a great deal of hunger right now in the Horn of Africa we have rising hunger in the Sahel we have situation in North Korea that's undoubtedly going to to be terrible and so hunger is always with us and we appreciate all of the efforts that world food program does and helping the u.s. and other governments to to to reach these places that we may not be otherwise able to reach uh... the second comment i wanted to make is that we're producing a number of reports at csis that i think would be of interest uh... dan runty has authored a specific report on the future of partnerships that is great uh... i'd recommend it to you it's on our website we've just released uh... this week of peace on partnerships to build african scientific capacity around agriculture to get to some of the agronomy questions that we address that's also on our website will have a number of other reports out so please look for those and come back to us will have uh... another session on february february first we're gonna have a celebration of the fiftieth anniversary of the peace corps we've got uh... representative petri representative far and representative uh... garamande joining erin williams the peace corps director truly talk about the legacy of the peace corps and its impact on u.s. smart power so i hope you'll join us for that too but i would say today it uh... like it takes two to tango it takes a great audience to make an event and what a sophisticated group of people we've had here and a couple of great speakers so thank you for joining us and thanks to our speakers today