Market Opportunities for Shea - Gassel Consult Opportunities for Shea... · Market Opportunities...

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

Market Opportunitiesfor Shea

Dr. Peter Lovett

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

Lessons to be Learnt:• Overview of What the World Wants• Multiple markets exist

– Uses (edible, medicinal & cosmetic)– Locations (local, regional & international)

• Complex African Supply Chain• Products exported from Africa (nuts,

butter & finished products)• Choose your market(s) carefully & know

their demands• US growing demand for shea butter

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

Multiple markets exist –uses

• Cosmetics– Creams, lotions utilise moisturising properties– Pure or refined depending on market demand

• Soap-making– Up to 80% shea butter possible– Super-fatting replaces lost ‘unsaponifiables’

• Stearin– Confectionary: high melting point veg. fats– Cocoa Butter equivalents or improvers (CBIs)– Chocolate (different regulations around world)

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

Natural Cosmetics Market

• L’Oréal: No. 1 ranked cosmetics company purchased The Body Shop but competition!

• $3.9 billion global natural cosmetics– Euromonitor International predicts 9% annual

growth thru 2008 to $5.8 billion– Only 1% for conventional cosmetics

• L’Occitane occupies “higher ground”– best-selling shea butter hand cream – $22.27 / 150 ml– The battle is not so much over price as

perceived “quality”

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

Multiple markets - locations

• Local– Village level trade for household consumption

• National– Urban centres for household /cosmetics

• Regional– Across borders to where limited availability

• International– Extraction & refining in EU & India for edible– US: mainly for use in cosmetics & soaps

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

Current Total Use

• Three markets– Traditional use (50%)– Refined for edible products, e.g. cocoa

butter improvers (45%)– Personal care products (refined or not)

(5% =10% of total exported)• Estimate 300,000 t dry kernel collected

– ~150,000 t shea kernel exported

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

Sources in West Africa

• Ghana (33%) – 50,000 t• Burkina Faso (33%) – 50,000 t• Cote d’Ivoire (14%) – 20,000 t• Benin & Togo (14%) – 20,000 t• Mali (7%) – 10,000 t• Nigeria – official less than 1,000 t

– 10,000 t illegally Benin (FFA traceable!)

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

Products from Africa

• Dried shea kernels– Stearin, boiled, dry, no impurities

• Unrefined shea butter– Traditionally or mechanically extracted

• Refined or modified shea butter– Washed, yellow dye, neutralised

• Finished or packaged products– Pure, soaps, lotions

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

Sheanuts & Butter Supply Chain

• Picking & post-harvest processing in rural villages

• Traditional ‘manual’ extraction of shea butter

• Local trade in sheanuts & butter• National traders in sheanuts & butter• Mechanical extraction of shea butter• Exporters of sheanuts & shea butter

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

International “Bulk” Buyers

• AarhusKarlshamns- in Denmark / Sweden• IOM group (Loders-Croklaan in Holland)• Feeds, Fats & Fertilisers in India• ADM-Wilmar, Ghana Nuts, Pure Company• Demand high butter content, stearin rich,

boiled, sun-dried, low free fatty acid & no foreign bodies

• Others in EU/US market cosmetics/edible

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

Choose market carefully

• Identify your market place!– Been contacted, found buyer, new opening?

• Willing to invest sourcing shea butter?– Rural produced versus factory facilities

• Willing to invest in marketing?– Local markets may prefer low-cost packaging– US markets need high-tech designs

• Can you guarantee “Quality @ Quantity”?– Buyers of bulk butter demand low FFA– Buyers for cosmetics want high unsaps.

Empowering Communities to Participate in the Shea Value Chain

11th Nov. 06, Catholic Guest House, Tamale

Thank-you and good luck!Merci et bonne chance !www.watradehub.complovett@watradehub.com