Since we completed the first trial of the ColaLife concept in Dec-13 (the ColaLife Operational Trial Zambia, or COTZ) we have been seeking ways to fund the market development we think is necessary to move from the lessons of the trial to a self-sustaining market for Kit Yamoyo – the ‘Kit of Life’, as local people named it.
The COTZ trial showed clearly that the Kit Yamoyo design was far superior to more conventionally packaged ORS (Oral Rehydration Salts) and Zinc. Customers like it. It also showed that, provided we could establish demand, and get the cost and the price points right, all along the value chain, the product would get ‘pulled’ into villages, via existing market channels. Innovation means testing and adapting, and we didn’t actually need to use space in Coca-Cola crates, but we did need their market insights.
So, what are the lessons that give us the next steps? In a nutshell, our plans for the Kit Yamoyo Transition to Scale Project (or KYTS for short) combine ten key approaches. Most of these need donor support in the short term, but our aim is that once this investment is made and the market established, distribution of Kit Yamoyo should be self financing in commercial situations and therefore sustainable, by itself, in the long run. Success for ColaLife means walking away.
- a better product – designs revised to better meet customer needs
- cost reduction (costing and pricing)
- embedding responsibility locally
- market preparation, for a long-term, viable market
- building ‘end-to-end’ value chains – especially into remoter areas
- stimulating a range of channels to market
- ensuring customer awareness
- micro-retailer training (para-skilling)
- support for the poorest customers
- monitoring and learning
1. a better product
The key lesson here is simple: ask people what they want. But it seems that before ColaLife began designing a new ORS and Zinc kit in 2009, no-one had asked people in remote African communities about the issues they had obtaining and preparing the decade-old recommendation for childhood diarrhoea. We found that a litre was poorly understood; local people did not have a suitable measure at home; litre sachets of ORS are in any case too big to use up at home within 24 hours (a child usually drinks at most 400ml); and discarding unused medicine after 24 hours, as recommended, was seen as a waste of medicine – but also a waste of precious water, usually carried long distances. So, carers were making up ORS in a haphazard way (sprinkling a little into a vessel) or guessing a litre. Children didn’t like the poor taste of government issue ORS (when it was available within a reasonable distance – rarely!) or home-made ORS. And Zinc was almost unknown.
The Kit Yamoyo design benefits (flavoured and coloured ORS in small, 200ml sachets; packaging that acts as a measure for 200ml; an easy-to-use strip of ten Zinc tablets; clear, graphical instructions, plus the extra incentive of a bar of soap for hand-washing) helped to make it a success with customers quickly. Responses from a large household survey told us that 94% of Kit Yamoyo users mixed their ORS correctly, compared to only 64% who used conventional litre sachets. These design improvements together with the development of the value chain (see below) increased treatment rates, from less than 1% of children to 45% of children in one year.
For our next steps, we’re now working to improve Zinc design, for better adherence to the ten day regimen, and constantly looking at cost reduction.
2. cost reduction
Since the COTZ trial, we’ve worked with our Zambian manufacturing partner, Pharmanova, to reduce costs to the point where a retail price of 5 – 6 Kwacha (just under $1) is both commercially viable and affordable for a sizeable chunk of the population. Cost reductions include the new, cheaper flexi-pack, designed and currently sponsored by our packaging partner, Amcor; a new, locally produced Zinc; fewer ORS sachets per pack, and economies of scale.
COTZ research showed only 4 200ml ORS sachets were sufficient for a bout of diarrhoea in under-five children. Four smaller sachets actually gave a longer treatment time than the two one-litre sachets normally dispensed by health centres (3.55 days versus 2.75 days). This enabled us to halve our original trial contents, of 8 200ml ORS sachets.
We believe that just because some of the poorest will need to rely on ‘free’ supply, or use home-made remedies, that’s no reason to deny an affordable choice to those who prefer to pay a small amount for an easy to use, world-class treatment, that works effectively and quickly, close to home. Academics tell us that no country has managed to supply ORS and Zinc ‘free’ to everyone. In fact, ‘free’ is a misnomer: someone always pays (donors – erratically; governments – if and when they can afford it). So why not add a complementary option – and give the poor ‘the dignity of attention and choices’?
3. embedding responsibility locally
ColaLife works as a catalyst. Our aim from the outset has been to embed learning and designs locally. We are too small to take on responsibility for manufacture or distribution of the product we designed and tested. We think that, in any case, that would be the wrong thing to do: there are already many, well-established agencies in Zambia (and elsewhere) who are active players in under-five child health, for the long term. We want to influence them, and work with and through them.
As examples of this strategy in action: our partner Keepers Zambia Foundation is managing implementation of our latest projects; Pharmanova is taking on the Kit Yamoyo brand and design within Zambia; our training materials have been approved for use in Zambia by the Ministry of Health and others and are freely available to other projects; our findings and product designs are open-source and free to use. Finally, we are talking to a range of manufacturers, NGOs, UNICEF innovation teams, and other agencies in half a dozen countries.
4. market preparation
What do we mean by ‘market preparation’? Depending on the country and context, a range of activities may be needed, including all of the points below, and more. No one agency (whether public or private) is likely to have the skills or power to ‘fix’ everything to make the market work in a particular developing country – even for a simple, over-the-counter product like ORS/Zinc. For COTZ, the network of support we managed to lever in was huge.
We feel that shared risk (for example, donor money supporting longer term public/private responsibility) is a promising model and our next steps will explore that. Complexity means that ‘one size won’t fit all’, but we’re working to simplify, document and share an adaptable process.
5. building value chains
The one question Coca-Cola came back to, in our early discussions, was: “What’s the Value Chain?” We quickly moved from a hazy idea of what this meant for ColaLife and Kit Yamoyo, to the realisation that it is The Key Question. Joining up the market links – from our target customers, through small village retailers and town wholesalers, back to the manufacturer – making sure that an affordable price at customer level can still support profits at every step; creating a desirable, aspirational product that customers demand and will pay for – all of these underpin the mystery of how brown fizzy water makes it out to African villages. So we borrowed as much as we could of that learning for Kit Yamoyo.
How did we build the value chain for Kit Yamoyo? Working back from ‘the customer end’, we first established desirable design benefits, a preferred brand, and affordability among our target groups for the anti-diarrhoea kit. We kick-started the ‘pull’ with vouchers, where we had a lot of learning to do. We asked customers and stakeholders (eg community health workers) which micro-retailers in their community they would recommend, and we trained these in product benefits and basic health knowledge around diarrhoea. We consulted with them on acceptable price points and profit. We linked these retailers to the wholesalers in the district town, which Coca-Cola’s bottler in Zambia (SABMiller) helped to select and also persuaded, on our behalf, to take on the risk of a new, unknown product. We anticipated ‘piggy-backing’ in cola crates here: at the last mile. Ultimately, that was not the key enabler.
Finally, we found a local manufacturer, Pharmanova, willing to share early-stage risk to develop the new product, and we helped Medical Stores Limited (the government para-statal, which traditionally only delivered to clinics) to diversify, becoming our initial distributor between the manufacturer and the wholesaler.
After the COTZ trial, when the product and its value chain were tested and proven, we revisited everything – including all the costings and price points – ‘reverse engineering’ costs to fit affordability for customers.
6. a range of channels to market
ColaLife began wanting to use the same existing small retailers that carry colas and other fast moving consumer goods to villages. The trial showed using these retailers as an access point can cut the distance carers have to travel to get ORS/Zinc by two-thirds (from 7.5 km to 2.4 km). And we’re finding a range of ways to measure improvements in a range of variables that impact on access.
We found that small community-based retailers are able to convey product benefits and simple health messages, and that they liked the product. But training small retailers is expensive – it needs donor money. And although the reach they can provide is crucial, volumes will be low and market growth slow.
So, as next steps, we are developing other, complementary channels, through national supermarkets, through the few retail pharmacies in Zambia, and with the Ministry of Health. They are now procuring for free supply of a government branded version of Kit Yamoyo, through selected health centres, in the poorest areas.
7. customer awareness
Customer awareness is vital to create confidence and ‘pull’ at the end of the value chain. For a new product, it’s not just about marketing the brand and the product benefits – it’s about education: how to use the kit to measure safe water for ORS, the importance of taking Zinc for ten days, the importance of hand-washing, how to avoid diarrhoea and recognise danger signs.
During the trial, we used only community level marketing: drama, demonstrations, promotion through community health workers, and localised radio – to keep awareness from the trial areas from ‘overspilling’ into comparator areas (for monitoring and evaluation purposes).
But our next steps will include a nation-wide marketing launch, broadcast media, and poster campaigns. Although our local manufacturing partner will help, they are too small (and the product price is too low) for them to do this alone: we need donor funding to establish the market for the long-run.
8. micro-retailer training (para-skilling)
ColaLife prefers to work through what already exists on the ground, rather than creating new networks. We remain excited about the potential for para-skilling existing small retailers, and our next steps will fund this – particularly in remote rural areas and within the poor, sprawling compounds of the capital, Lusaka. Training and knowledge convey status, so small retailers have been enthusiastic about training, willing to dedicate time to attend sessions to learn about Kit Yamoyo and health issues around diarrhoea. It’s a slow and relatively expensive process – but we think it will be worth it, because of the reach existing small retailers give us – right into communities.
9. support for the poorest customers
Following our experiences and the results of the trial, we feel strongly that subsidy, if it’s needed, should be at the ‘customer end’ of the value chain – ie giving vouchers to customers to discount the established, advertised retail price. Anything else risks distorting the way the market should work.
Vouchers can be targeted to specific categories of people in need. Depending on funding available, they can be included or withdrawn without disrupting value chain price points, or distorting recognised value and the price people expect to pay. They put value where it is needed to make the market work: at the customer end of the value chain, to ‘pull’ product into underserved areas.
We learnt a lot about discount vouchers during the trial – in particular, what works and what is less successful, pitfalls and ways to minimise fraud. We’re committed to trying new, cost effective systems, with funding ‘crowd-sourced’ from business and supporters as part of our next steps, and to learning more.
10. Monitoring and learning
We are breaking new ground and there is a lot of interest in our work – data collected has to be robust, and lessons properly documented. Our strategy for global impact is to generate credible evidence that others will use to modify their public health strategies to make them more effective. This needs a higher level of monitoring than can be justified from a purely commercial perspective. So we seek donor-funding to provide the rigour needed. Donors are generally interested in supporting this type of activity as it helps them make the programmes they support in the future more effective. But even with the evidence we now have, nailing specific funding, to support learning on ORS and Zinc, in Zambia, right now, is an on-going challenge!