Market Opportunities for Shea

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1 Market Opportunities for Shea Dr. Peter Lovett

2 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

3 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) th 11 Nov. 06, Catholic Guest House, Tamale

4 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

5 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

6 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

7 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!)

8 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 th 11 Nov. 06, Catholic Guest House, Tamale

9 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

10 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

11 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 Quantity? Buyers of bulk butter demand low FFA Buyers for cosmetics want high unsaps.

12 Thank-you and good luck! Merci et bonne chance!

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