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Procter and Gamble:Fighting Malnutrition
Business Innovation to Combat Malnutrition Case Study Series
Case A
This paper was prepared by Melissa Tritter (Harvard Business School), Michael
Jarvis (World Bank Institute), Bérangère Magarinos
(Global Alliance for Improved Nutrition), and
Djordjija Petkoski (World Bank Institute). It is based on
interviews with executives and scientists at Procter and
Gamble. We would like to express our gratitude to the P&G team for sharing
information with us, participating in numerous meetings, and providing
comments on the draft paper. Our particular thanks go to
Ethel Cormier.
For participation in interviews and follow-up guidancewe would like to thank
Haile Mehansho, Kenneth Smith, Don Compton,
and Mike Jensen of Procter and Gamble.
Copyright © 2007, the World Bank Institute and the Global Alliance for Improved NutritionThe views expressed in this paper are those of the authors only.
Haile Mehansho, a nutrition scientist at Procter
& Gamble (P&G), was working on iron forti-
fication technologies when he learned that the
1990 United Nations World Summit for Chil-
dren would have a special focus on micronutri-
ent malnutrition. Intrigued, he followed the
summit closely and requested a copy of its final
report. Within the summit’s Plan of Action,
Mehansho read the following:
Hunger and malnutrition in their different
forms contribute to about half of the deaths
of young children. More than 20 million chil-
dren suffer from severe malnutrition, 150 mil-
lion are underweight and 350 million women
suffer from nutritional anemia.
Specifically, summit participants agreed on
three challenging micronutrient goals: by the
year 2000 they would eliminate iodine deficien-
cy, eliminate vitamin A deficiency, and reduce
iron deficiencies and nutritional anemia by one
third.
This struck Mehansho as something P&G could
help with. The iron-fortification technology
he was working on could be used for other nu-
trients as well, and where there was an unmet
need there could also be a business opportunity.
The devastating effects of micronutrient deficiency
Micronutrient malnutrition was also known
as “hidden hunger” because its effects were
not readily apparent, but were nevertheless
devastating. Insufficient iron, vitamin A, and
iodine – the three key nutrient deficiencies
highlighted by the UN – had particularly
severe and persistent consequences. They led to
increased morbidity and mortality rates, risks
to both mother and baby during pregnancy,
fatigue, decreased strength, and impaired cog-
nitive development and functioning. (For more
detail, see Exhibit 1).
There were several proven tactics for fight-
ing micronutrient malnutrition, including
increased diet variety, staple-food fortification,
and medical or dietary supplements (Exhibit 2).
By 1990, these tactics had practically eradicated
the problem of micronutrient deficiency in the
developed world, but deficiencies remained
prevalent in developing nations (Exhibit 3),
despite the relatively low cost of solutions
(Exhibit 4).
For those affected, physical and mental symp-
toms not only lowered their quality of life, but
also lowered their productivity – perpetuating a
cycle of poverty and malnutrition.
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P&G: An early innovator in nutritional products
Procter and Gamble, founded in 1837, was a con-
sumer products company with a long history in
the food and beverage business and of seeking to
develop both nutritionally beneficial and profitable
products. It’s first “nutritional” product was Crisco,
introduced in 1911 as the first all-vegetable shorten-
ing. Crisco was marketed it as a healthier alternative
to cooking with animal fats.
P&G opened its first dedicated upstream research
facility, Miami Valley Laboratories, in 1952. Three
years later the company introduced Crest, the first
fluoride-fortified toothpaste clinically shown to
reduce tooth decay.
In the mid-1980s, Procter & Gamble developed
the first calcium-fortified orange juice, selling it
under the brand name Citrus Hill. The technology
involved was considered a breakthrough in nutrient
fortification, but the product was not a commercial
success. Most people, at that time, did not consider
calcium to be important for adult health.
P&G conducted clinical studies that showed other-
wise, but the public was slow to take up the message.
The company discontinued the Citrus Hill brand,
but a few years later it found commercial success in
fortifying Sunny Delight and Hawaiian Punch with
calcium, and also licensed the technology outside
the company, to Tropicana.
Choco Milk and the “Lock/Unlock” fortification system
P&G acquired Richardson-Vicks in 1986, gaining
a diverse portfolio of health and beauty prod-
ucts – including Choco Milk, a “fortified” chocolate-
flavored powder sold in Mexico as a milk modifier.
The product sold mainly based on taste, but was
widely associated with childhood nutrition. It was
particularly popular in low-income market seg-
ments.
With the acquisition of this particular product,
P&G researchers looked for ways they could add
value based on the company’s core strengths. They
consulted thought leaders at Mexico’s National
Institute of Nutrition, who said that iron was the
number one fortification need. Haile Mehansho
studied the iron-fortification technology that had
been used by Richardson-Vicks, and found the iron
had extremely poor bio-availability – and therefore
no real nutritional value.
Mehansho took the lead on finding a better way to
deliver nutrition in this popular product. With a
small team, he studied the way iron was delivered
in nature – particularly in meat, which had highly
bio-available stores of iron. They found that the
iron was “locked” and unavailable until ingested;
then chewing, stomach acids, and other digestive
processes would “unlock” the iron molecules so that
they become bio-available.
To mimic this naturally-occurring process, Mehan-
sho developed a way to bind the iron into complex
molecules that would be broken down by the
digestive system. While bound in this way, the iron
lacked the metallic aftertaste and unappealing color
that bio-available iron tended to produce. After
ingestion, the complex molecules broke down and
the iron became highly bio-available, delivering the
desired nutritional benefit.
Using the new technology, in 1989 P&G introduced
a new version of Choco Milk, now fortified with
iron, vitamin C, and eight other micronutrients.
UNICEF provided a seal of approval that appeared
�
on the packaging. In marketing the product, P&G
used the consumer benefit statement “more en-
ergy” – a simplified way of conveying that iron defi-
ciency led to anemia, which caused chronic fatigue
and decreased strength.
Choco Milk’s potential for global expansion
As sales of Choco Milk skyrocketed in Mexico, P&G
considered whether the product had potential
for other markets worldwide. The company was
organized along geographic lines, so expansion
depended on the overseas managers of a particular
country or region. The Food and Beverage Division
held discussions with the Philippines management,
which Ken Smith, Director of Snacks and Beverages
at the Nutrition Science Center, recalled as follows:
Choco Milk was considered for the Philippines, but
didn’t make the cut. It was the late-80s and there
was political instability and a lack of commercial
interest, so we never commercialized. But [Mehan-
sho’s] conversations with thought leaders included
feedback that not all the world consumes chocolate
as the preferred beverage. They wanted to know:
Could you do the same thing in a drink that’s not
chocolate?
The United Nations Summit for Children
Following the 1990 UN Summit for Children, Me-
hansho became convinced that his team could and
should help by expanding their fortification tech-
nology to include not only iron but also vitamin A
and iodine. He sold the idea internally, focusing on
the huge underserved market of people suffering
from vitamin and mineral deficiencies, and the fact
that governments and NGOs were already directing
attention toward it.
Over the next two years, Mehansho and his team
fortified Choco Milk with additional micronutri-
ents (including vitamin A) and also modified Star
Margarine (a popular shelf-stable brand sold in the
Philippines) to include vitamin A fortification (see
Exhibit 5).
Developing a fortified fruit-flavored beverage
In 1993, the Food and Beverage R&D group invited
Dr. Michael Latham, a professor of International
Nutrition at Cornell University, to give a seminar at
the Miami Valley Innovation Center in Cincinnati.
Latham, a globally-recognized expert in micronutri-
ent malnutrition, was passionate about eradicat-
ing worldwide deficiencies of iron, vitamin A, and
iodine. After the seminar, Mehansho and his team
had a discussion with Latham in which they told
him about Choco Milk and Star Margarine.
Latham was excited. He shared the same objec-
tive as P&G – a commercial vehicle that would
appeal to consumers, convince them of its value,
and encourage efficient production and distribu-
tion by harnessing market forces. He suggested
that Mehansho’s team connect with UNICEF, with
whom Latham was already doing some consulting
work. Mehansho felt that partnering with outside
organizations would be a win-win situation, with
P&G able to benefit from external expertise and
verification of clinical trials, and to potentially se-
cure marketing support from credible organizations.
Teams from P&G, Cornell University and UNICEF
met at the UNICEF office in New York. An agree-
ment was reached by the three institutions to deliver
multiple micronutrients in a simple, affordable
product that was also clinically proven. The project
�
was called “NB3” – a product code based on the idea
of a Nutritious Beverage containing 3 micronutri-
ents (iron, vitamin A, and iodine).
At first, NB3 research was funded by P&G’s Mexican
division, under the Choco Milk umbrella. Managers
had seen how successful the improved Choco Milk
was, and knew that fruit-flavored beverages were
even more popular in Mexico than milk modifi-
ers – so this seemed a natural direction for growth.
In 1994, however, P&G reorganized into “global
brands” – a major strategic change intended to
simplify decision-making and leverage key brands
on a worldwide scale. As a result, Choco Milk was
divested in 1996, leaving NB3 briefly without an
organizational home. At the urging of the R&D
team, senior management decided to fund further
development of NB3 from a special account.
Technology development
Back at the lab, Mehansho was enthusiastic about
the opportunity to build public-private partner-
ships to eradicate micronutrient malnutrition, but
knew that developing the new product wouldn’t be
easy. The “lock/unlock” idea was the same as it had
been for Choco Milk, but the chemistry of a fruit-
flavored drink was very different. Higher acidity
levels meant that several technical challenges had to
be solved all over again, including:
• Bioavailability – As the team had shown with
Choco Milk, nutrients had to be delivered in a
form that the human body could absorb.
• Taste/Smell/Color – Many fortificants tended
to react with a food or beverages to create an
unpleasant taste, strong odor, or discoloration.
When this happened, consumer acceptance
dropped dramatically.
• Stability – Certain nutrients were chemically
reactive when exposed to heat, light, and
changes in acidity – requiring special formula-
tion and/or packaging.
By 1996, Mehansho’s team had succeeded in devel-
oping a fruit-flavored powdered beverage fortified
with iron, vitamin A, iodine, zinc, vitamin C, and
B-vitamins. The nutrient mix was named “Growth-
Plus” and the finished drink mix “Nutri Delight.”
Clinical trials and taste testing
Dr. Latham was able to perform double-blind, pla-
cebo-controlled clinical trials in Tanzania, through
Cornell’s relationship with the Tanzania Nutrition
Center (TNC). UNICEF and the Micronutrient
Initiative1 funded the trials while P&G provided
the test samples. Over six months, children (aged
6–12) who drank Nutri Delight grew 26% more and
gained 80% more weight than the placebo group
(see Exhibit 6).
Another study was carried out in Bangladesh, where
BRAC2 performed the trials. Adolescent girls aged
10–15 were given NutriStar for a year, and showed
significant improvements in micronutrient status
(see Exhibit 7), height, weight, and school tests.
In taste trials, a five-day home-use test in the Philip-
pines showed a powdered fruit-flavored drink forti-
fied with the GrowthPlus technology to have strong
consumer acceptance for taste and appearance.
1. The Micronutrient Initiative was launched as a result of the 1990 UN Summit for Children, with the mission of eliminating micro-nutrient malnutrition; sponsors included UNICEF, the World Bank, the International Development Research Centre, the Canadian International Development Agency, and the US Agency for International Development (USAID).
2. The Bangladesh Rural Advancement Committee, commonly known as BRAC, was founded in 1972 as a donor-funded relief agency.
�
“Nutri Delight” is introduced in the Philippines
Since the Philippines management team had
expressed an earlier interest in a fruit-flavored bev-
erage, and because the Philippines had in the past
been fertile ground for new products, P&G decided
to create a “learning market” there. In 1999 Nutri
Delight was launched as a childhood nutrition
product for families of all income levels, available
in grocery stores and in the sari-sari booths that
poor rural customers patronized. It was distributed
through a P&G sales force, and marketed with
the consumer benefit statement “Taller, Stronger,
Smarter.”
P&G collaborated with several external partners,
including UNICEF, The Nutrition Center of the
Philippines (NCP) and the Philippines Department
of Health. The NCP requested additional clinical
trials using Filipino children as subjects; P&G did
this and the positive results supported those of
earlier trials. UNICEF issued a statement that Nutri
Delight was an excellent source of micronutrients,
and this appeared on the product packaging. P&G
also worked with Dr. Florentino Solon and the De-
partment of Health to create a nutrition curriculum
to be taught in local elementary schools, funded
through donations and government aid.
Early production plans had involved importing
Nutri Delight to the Philippines, despite the high
cost of doing so. Prior to the launch, however, P&G
decided to not only learn about consumer accep-
tance, but also to test the product for financial vi-
ability. Therefore the company hired a local contract
manager to build a plant from scratch to the precise
specifications needed. Local production helped
reduce costs dramatically, though in the long run
P&G did not want to be overly involved in produc-
tion and distribution.
Even with positive clinical results, strong multi-sec-
tor partnerships, and local production, the Filipino
drinks market was not an easy one to enter. As Ken
Smith described it:
There were competitors in the Filipino market.
The number one powdered beverage was the
locally-produced “8 o’clock” brand; it was forti-
fied with Vitamin C, Vitamin A and a host of B
vitamins, but it didn’t have iron. The number two
brand was Tang, which was less fortified. We were
entering the market as number three – with some
fairly strong claims. And we felt we could support
them, but of course there would be a competitive
reaction.
P&G was challenged in court over its claim that
Nutri Delight would make kids “Taller, Stronger,
Smarter.” It won the lawsuit, but still had difficulty
convincing the average consumer that Nutri Delight
offered special benefits over other orange-flavored
drinks. Therefore, the product struggled to gain
market share against the competition.
Other problems in the test market included distri-
bution challenges and pricing structures that made
it difficult to reach the poorest communities. Also,
while educational messaging was working well,
brand awareness was still low. As a result of these
difficulties, in 2000 P&G withdrew Nutri Delight
from the Philippines market, much to the disap-
pointment of Dr. Solon and NCP.
“NutriStar” is introduced in Venezuela
Although the product had been pulled, the R&D
team still had a passionate group of scientists who
believed Nutri Delight could bring important ben-
efits to underserved consumers – and was a business
opportunity for P&G. They wanted to see the prod-
�
uct on the market again, and lobbied for continued
company support.
Mehansho asked Jorge Montoya, head of the Food
& Beverage division, to help.
While Montoya was now based in his native Venezu-
ela, he had previously been in Mexico as president
of P&G operations there – coincidentally, at the
time that the new Choco Milk formula had been in-
troduced. Montoya therefore had a special apprecia-
tion for Mehansho’s work, and agreed to introduce
the fortified fruit drink to the Venezuelan market.
In September of 2001, the product – now branded
as “NutriStar” and available in four flavors – was
launched in Venezuela, with manufacturing in
Mexico.
To promote consumer awareness, P&G partnered
with UNICEF, the Venezuelan Department of
Health, and the Venezuelan Pediatric Society – with
the Pediatric Society granting NutriStar a “seal of
approval.” There were also brand-oriented market-
ing efforts, such as an endorsement by the only
Venezuelan basketball player in the NBA and a deal
with McDonald’s to have orange-flavored NutriStar
available as a fountain beverage. As in the Philip-
pines, a P&G sales force handled distribution from a
centralized warehouse.
Just three months after entry, NutriStar had 90%
brand recognition in the Venezuelan market. Within
a year, it had taken over nearly 15% of the mar-
ket – with twice as many households now buying
fruit-flavored powdered drink mixes. NutriStar was
sold mostly in supermarkets and grocery stores,
with P&G working to reach smaller rural outlets.
Manufacturing
Despite the high degree of consumer acceptance,
NutriStar was still a challenging business proposi-
tion. Production costs in Mexico were high com-
pared to the retail prices the Venezuelan market
could support, and it was expensive to ship the
finished product.
Local manufacturing was not an immediate option
because production was so complex. The Growth-
Plus formula had to be combined with over a dozen
“premix” ingredients and then added to a beverage
matrix of 15 other carefully-measured ingredients.
It was essential to have even mixing, a precise pH-
level, and special light-blocking packaging. Low-
income countries didn’t have such sophisticated
manufacturing methods in place.
P&G had built a special plant in the Philippines, but
to expand the product rapidly it needed manufac-
turing methods that would be easier to start-up
locally. The company developed a simplified process
in which one skilled third-party supplier would
make a nutrient premix, another would combine
the premix with a beverage matrix of flavors and
colors, and this “concentrate” would be sent to the
local manufacturer in pre-measured packaging. At
the local level, the only additions would be sweeten-
ers and citric acid – both readily-available commod-
ity ingredients.
Crisis in Venezuela
In 2002, just as P&G was exploring options for local
manufacturing, crisis hit Venezuela. A failed coup,
violent protests, and a general strike all contributed
to political instability, economic standstill, and a
plummeting currency rate. Around the same time,
P&G decided to divest the company’s few remaining
�
non-coffee beverages and all related technologies,
mirroring an industry-wide consolidation toward
narrower product lines, outsourcing, and globalized
operations (see Exhibits 8, 9 and 10).
With the Venezuelan market collapsing, and all P&G
beverages essentially on the auction block, Nutristar
seemed destined to either fail or to become some-
one else’s success. Nutristar had so recently seemed
to have a real chance of making a significant impact
on worldwide nutrition, but now everything was on
the line.
What should the team do – both for P&G, and for
malnourished populations?
�
Exhibit 1. Consequences of key micronutrient deficiencies
Vitamin A Iodine Iron
Physical • Reduced growth in children• Increased vulnerability to
disease• Visual impairment and
blindness• Night blindness
• Reduced strength• Increased vulnerability to
disease• Goiter (visibly enlarged
thyroid)
• Reduced growth in children• Reduced strength• Increased vulnerability to
disease
Mental • Decreased brain development in children
• Reduced cognitive function• Lower IQ with mild
deficiency• Endemic cretinism
• Decreased brain development in children
• Reduced cognitive function (recall, concentration, etc.)
Reproductive • Increased risk of maternal mortality
• Reproductive failure • Fetal damage• Spontaneous abortion • Stillbirth• Low birth weights
• Increased risk of maternal mortality
Mortality • Increased mortality rates;• Decreased infant survival
rates
• Premature death
Source: Compiled by the authors.
�
Exhibit 2. Tactics for fighting micronutrient deficiency
A variety of tactics had been used to fight micro-
nutrient malnourishment in the developed and
developing worlds. These fell, broadly, under the
categories of: increased diet variety, food fortifica-
tion, medical supplements, and dietary supple-
ments. Each had advantages and disadvantages, as
follows:
1) Diet variety, or eating many different foods
with different nutritional benefits, was gener-
ally considered the ideal solution for micro-
nutrient malnutrition. Often, nutritionists
encouraged greater variety through educa-
tion – for example, in the U.S. the “four food
groups” and later the “food pyramid” encour-
aged a balance of various foods. However, in
the developing world this tactic was difficult
and expensive to implement, since many poor
areas had a limited array of local foods and
little buying power for imports. Encouraging
crop variety could help, but results were slow
to materialize.
2) Medical supplements presented several
problems. As Mehansho noted: “Using a
pill to address micronutrient deficiency
presents a compliance problem, even in the
U.S. – and even if you give it away for free.
People complain of side effects, like cramp-
ing, and they don’t like to take it.” Also, since
young children could not safely swallow pills,
alternatives such as liquid supplements were
necessary, but had a much shorter shelf life
and were expensive to ship. Another issue
was that formulations designed to appeal to
children could increase the risk of overdose.
3) Fortification of staple foods had been highly
successful in Western Europe and North
America, where iodized salt, iron-enriched
flour, and vitamin A and D fortified milk
were the norm. In developing economies,
however, store-bought staples were not as
common, and so this tactic might not reach
the target populations. Another problem was
that manufacturing methods were often crude
and highly varied, so fortification tended to
require centralized production – imposing
negative economic impacts on the local sup-
ply chain. Biofortification, a relatively new
method, held the promise of developing crops
with greater concentrations of nutrients, but
involved the wider controversies of geneti-
cally-modified crops.
4) Dietary supplements were foods dense in nu-
trients that could be bought and consumed in
addition to a normal local diet. At first glance,
this might seem a high-cost way to provide
nutrients – fortifying staples or providing
nutrients in pill form was cheaper – but there
were important advantages. This method
accepted that a diet rich in variety of natu-
ral foods was often unrealistic, avoided the
compliance problems of medical supplements
by providing something that people enjoyed
consuming, and left local supply chains and
home production of staple foods intact. The
key was to find ways of making a product that
was appealing, available, and affordable.
10
Exhibit 3. Cost-effectiveness of micronutrient solutions
Micronutrient provision was widely recognized as
one of the most cost-effective ways to improve lives
worldwide. The expenses were relatively mod-
est, and were more than justified by the resulting
increases in productivity.
Estimated yearly per-person costs of providing key micronutrients (in 1994 US$)
Fortificaton of centrally processed foodsTablet form, administered by
medical professionals
Iodine US$0.0� to US$0.�0 US$1.00 to US$�.00
Iron US$0.0� to US$1.0� US$1.�� to US$�.��
Vitamin A(retinol palmitate) US$0.0� to US$0.�0 US$0.�� to US$1.00
(combined A and E)
Source: Compiled by casewriters based on statistics included in Popkin, Barry M.; “Key Economic Issues”; Food and Nutrition Bulletin; vol. 1�, no. �; © The United Nations University, 1���; accessed online 0�/0�/0� at www.unu.edu/unupress/food/V1��e/ch0�.htm
Exhibit 4. Areas of the world having micronutrient deficiency risk
Source: USAID (as cited in Fischer T et al. (�00�), New Directions for a Diverse Planet: Proceedings of the 4th International Crop Science Congress, Brisbane, Australia, �� Sep–1 Oct �00�.
11
Exhibit 5. The Star Margarine story
Star Margarine had been popular in the Philip-
pines since 1931, particularly among lower-income
households because it did not require refrigeration.
In 1988, a vast majority (94%) of the Filipino popu-
lation consumed Star Margarine, and 89% of those
were considered low-income.
In 1990 the dean of the Johns Hopkins School of
Hygiene and Public Health visited P&G managers in
Manila, and advocated for vitamin A fortification of
Star Margarine. After P&G accepted this challenge,
Mehansho’s team collaborated with the Nutrition
Center of the Philippines (which led the field trials),
the Philippine Department of Health (which for-
mally endorsed the product), and research teams at
several universities (who developed technology for
bio-available and heat-stable fortification).
Marketing began with radio and television cam-
paigns, co-sponsored by the Philippines government
and by NGOs such as Hellen Keller International
and UNICEF, to educate the population about the
need for sufficient vitamin A. Following successful
field trials, P&G began advertising the product itself,
and the newly-fortified Star Margarine was intro-
duced in 1993. At the suggestion of the Nutrition
Center of the Philippines, P&G added single-serving
packets to the product line, making vitamin A avail-
able to those who did not have enough cash to buy
larger quantities.
Within three years, sales had increased 25%, from 4
to 5 million kilograms annually, with fortification
costing less than US$0.07 per kilogram. This made
the project an overwhelming commercial success.
Despite this success in the Philippines, Star Marga-
rine did not show potential for worldwide expan-
sion. As P&G moved toward a “global brands” focus,
and also began questioning the fats and shortenings
business, it became increasingly apparent that Star
Margarine was not a strategic fit. P&G divested Star
Margarine in 1995 and Crisco a few years later. As of
2006, Star Margarine was still sold in the Philippines
but was no longer a P&G brand.
———————
Sources: Florentino S. Solon, “History of fortifica-
tion of margarine with vitamin A in the Philip-
pines”; published by the United Nations University,
accessed 8 September 2006 at www.unu.edu/Unu
press/food/V192e/ch10.htm; divestment informa-
tion from P&G interviews.
1�
Exhibit 6. Tanzania clinical study
Exhibit 7. Bangladesh study
Source: Adapted by casewriters from P&G materials (“NutriStar® Business Overview”)
Source: P&G marketing materials (“NutriStar® Business Overview”)
4.0
3.4
2.7
0.0
1.0
2.0
3.0
2.01.8
1.0
0.0
0.5
1.0
1.5
NutriStar
Height Gain (cm) Weight Gain (kg)
Effect of NutriStar on height and weight of children aged 6–12over a one-year time period
Placebo NutriStar Placebo
14 14
0
4
8
12
16
2
6
10
14
Baseline
2 2
14
6 months
15
12 months
Effect of NutriStar on iron deficiency anemia (%)
Fortified Not fortified
1�
Exhibit 8. Declining diversification of product lines among leading U.S. manufacturers
Note: “Diversification” calculated using the entropy measure of unrelated diversifica-tion DU=Piln(1/Pi), where Pi is the proportion of a firm’s sales made in �-digit industry segment i, as reported on annual 10Ks. Sample is �00 largest manufacturers (by sales) for each year.
Source: Gerald Davis et al.; “The Responsibility Paradox: Multinational Firms and Global Corporate Social Responsibility”; Ross School of Business Working Paper Se-ries; Working Paper No. 10�1; April �00�; downloaded from http://ssrn.com/ab stract=���11�
0
0.1
0.3
0.5
0.7
0.2
0.4
0.6
1980 1985 1990 1995 2000 2005
Exhibit 9. Declining employment concentration
14.0
17.0
20.0
Perc
ent
22.0
15.0
19.0
16.0
18.0
21.0
1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Source: White (�001), Table 1�; as cited in Gerald Davis et al.; “The Responsibil-ity Paradox: Multinational Firms and Global Corporate Social Responsibility”; Ross School of Business Working Paper Series; Working Paper No. 10�1; April �00�; downloaded from http://ssrn.com/abstract=���11�.
1�
Exhibit 10. Increasing international sales of large U.S. firms
Exhibit 11. The PUR water purification strategy
Another Worldwide Crisis; Another P&G Technology
Starting in 1995, scientists at P&G’s Nutrition Sci-
ence Center made a focused effort to find new ways
to purify drinking water. Working with the U.S.
Centers for Disease Control and Prevention (CDC),
they succeeded in developing the PUR water purifi-
cation technology.
Sold in individual sachets, PUR is a powder that,
when added to unclean water, causes contaminants
to adhere to it and form clumps which fall to the
bottom of the vessel. This “floc” is then manually
removed by pouring the water through a simple
filtering material, such as cloth.
The product was not a short-term profit vehicle,
but the company’s corporate social responsibility
team took it over and operated it as a low-margin
business which, in collaboration with governments
and aid agencies, offered the possibility of immense
social returns in both emergency-aid situations and
for daily life.
0
5
20
30
10
15
25
1985 1989 1993 1997 20011987 1991 1995 1999 2003
Note: Mean non-US sales calculated from firm-level geographic segment data for the 1��� Fortune �00 largest manufacturers, as reported on annual 10Ks
Source: Gerald Davis et al.; “The Responsibility Paradox: Multinational Firms and Global Corporate Social Responsibility”; Ross School of Business Working Paper Se-ries; Working Paper No. 10�1; April �00�; downloaded from http://ssrn.com/abstract=���11�
1�
Exhi
bit
12
. Co
llabor
atio
n
Sour
ce: P
&G
inte
rnal
doc
umen
ts.
Dr.
Mic
hael
Lat
ham
Sem
inar
(1993)
Beg
inni
ng o
f part
ners
hip
(1993)
(Gro
wth
plu
s) T
echn
olog
y(1
993–9
5)
Public
-Pri
vate
Part
ners
hip
Clin
ical S
tudie
s(1
995
–pre
sent
)
• p
roduc
tion
• d
istr
ibut
ion
• e
duc
atio
n• P
hilip
pin
es
(1999–2
000)
• V
enez
uela
(2
001–p
rese
nt)
Cor
nell
P&G
UN
ICEF
MI
Cor
nell
P&G
UN
ICEF
MI
Uni
v.C
hile
NC
P
Cor
nell P&
GU
NIC
EF
UN
ICEF
Gov
’tag
enci
esPe
diat
ricA
ssoc
.
Uni
v.C
hile
Cor
nell
P&G
Nut
riSt
ar
TECH
NO
LOG
YCL
INIC
AL
STU
DY
PRO
DU
CT &
ED
UCA
TIO
N
1�
Exhi
bit
13
. Ti
mel
ine
of c
ase
eve
nts
1985
1986
Rich
ards
on V
icks
acqu
ired
by P
&G
Impr
oved
Cho
co M
ilkin
trodu
ced
in M
exic
o
UN
Sum
mit
for C
hild
ren Haw
aiia
n Pu
nch
forti
fied
with
cal
cium
Nut
ri D
elig
htla
unch
ed in
the
Phili
ppin
es
Sunn
y D
elig
ht fo
rtifie
dw
ith c
alci
um
New
ly-fo
rtifie
dSt
ar M
arga
rine
intro
duce
d in
Phi
lippi
nes
Citr
us H
ill fo
rtifie
dw
ith c
alci
umSt
ar M
arga
rine
forti
ficat
ion
prop
osed
Dr.
Lath
amvi
sits
P&G
Cho
co M
ilkdi
veste
d
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
Nut
ri D
elig
htin
trodu
ced
inVe
nezu
ela
Nut
ri D
elig
htw
ithdr
awn
from
the
Phili
ppin
es
Cris
is in
Vene
zuel
a
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