Food for Growth: Why Managing Food Costs is Key to Stronger ECD Businesses

One in five South African households face food insecurity, according to Stats SA, meaning some children don’t get the nourishment they need at home. For many children, the meals they eat at an ECD are the only nutritious food they’ll have all day. Parents expect this service, but for practitioners food is expensive and often the single biggest line item on their budget. It can account for as much as a third of an ECD’s total costs, and prices are rising faster than school fees. Without better support to manage these costs, many ECD businesses suffer and some may be forced to close.

Food is also the service parents value most when choosing an ECD. To stay competitive, owners must provide meals, yet this obligation places significant pressure on their long-term sustainability. Reducing provision isn’t an option, so the most expensive items, including nutritious proteins and fresh produce, are often the first to be scaled back. This is why food is not only about children’s health, but also about the financial viability of women-led ECD businesses, and why IMBE is exploring ways to support better food choices that don’t break the bank.

Testing Solutions to Rising Costs

To better understand practitioners’ realities around food costs, purchasing habits, and nutrition, IMBE launched a small pilot of the Nutriwallet Programme in August. A selected group of ECDs on our Accelerator Programme were included to track behaviour and explore how financial incentives could support better food choices.

Nutriwallet rewards ECD owners for buying nutritious “best-buy” staples such as fortified maize, soya mince, eggs, and peanut butter, with cashback in the form of Nutribucks. These can be withdrawn as cash, helping them stretch their budgets while still serving balanced meals.

Our baseline analysis, based on 353 interviews with practitioners across nine Gauteng townships serving over 10,000 children, revealed the following:

• Rising food costs – Practitioners spend an average of R124 per child per month on food, around 40% higher than our benchmark recommendation of R88, with some spending as much as R500. Smaller ECDs spend significantly more per child (R190) than larger ones (R47) because they lack bulk-buying power.
• Fees don’t always cover costs – Parents pay around R300–R400 per child on average, yet many ECD owners still struggle to balance costs with delivering quality meals.
• Staples over protein-rich foods – Fortified maize and rice are the most common purchases, while protein-rich foods like eggs and chicken are bought less frequently due to cost and storage challenges.
• Structured but inconsistent planning – While most ECDs shop monthly, only 27% use a consistent shopping list, showing room for tools that can support better budgeting and menu planning.

These findings show just how much food costs weigh on practitioners, and why solutions must help reduce expenses while maintaining nutritional quality.

Why Nutrition Matters

For children, good nutrition supports concentration, energy, and healthy growth. Practitioners in the Nutriwallet pilot noted that children who eat well are more alert, engaged, and ready to learn. But for ECD owners, nutrition is also a business issue.

Food is central to parent trust and satisfaction. An ECD that provides consistent, quality meals becomes a centre parents rely on, leading to stronger retention and word-of-mouth referrals. At the same time, how food is planned, budgeted, and delivered reflects the professionalism of the business.

 Practical Ways to Manage Food

Through our work with practitioners, we’ve seen that rising food costs are one of the biggest challenges for small ECD businesses. That’s why we encourage ECDs in our network to adopt practical, sustainable strategies that keep food affordable without compromising quality:

• Plan smart menus – Tools like IMBE’s My Healthy Plate guide help practitioners design balanced, cost-effective meals that combine staples with proteins and vegetables. Sticking to a set weekly menu not only reduces waste and keeps meals varied, but also makes costs more predictable, smoothing cash flow. For instance, when parents arrive late, children are often given extra snacks, which depletes supplies and creates unplanned costs. Better portioning and planning can stretch supplies further without compromising nutrition.
• Track costs – We encourage ECD owners to monitor monthly food spending against income. Even simple notebooks or spreadsheets can provide the visibility needed to adjust fees and keep meals consistent.
• Communicate value – Sharing menus with parents helps practitioners highlight nutrition as part of their ECD’s offering. This builds trust and can justify fees, even in cost-sensitive communities.
• Position nutrition as a differentiator – ECDs known for providing quality meals often enjoy stronger loyalty and enrolment, turning food into a long-term business advantage.

Learning to Support Better

At IMBE, we know that food is both a non-negotiable cost and a critical service for ECDs. Through the Nutriwallet pilot, we are learning more about how practitioners spend, where they struggle, and what support they need to deliver better meals at lower cost.

Nutriwallet is not just about cashback. It’s a tool for testing new ways to nudge better purchasing habits, stretch tight budgets, and encourage protein-rich, nutritious meals where possible.

Our aim is simple: to help build stronger, more resilient ECD businesses that can withstand rising food prices while continuing to deliver the care, learning, and nutrition that children need most.