The Shea Industry in a Nutshell

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  • As am no longer working at the Trade Hub, I can be contacted at plovett @ savannahfruits.com
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The Shea Industry in a Nutshell

  1. 1. Shea TodayThe Industry in a NutshellDr. Peter LovettThe USAID West Africa Trade Hub / The Global Shea Alliance
  2. 2. Let’s Learn About Shea Butter• Amazing ingredient – body care & confectionary • Oil rich tree seed from traditionally managed parklands • African women pick & extract edible vegetable fat • Utilized for millennia – by ancient Egyptians?• International trade transforms invisible lives• Industry at crossroads as NEW alliance formed Looking after People, Planet & Profit Shea does it all - Sustainably
  3. 3. Stats from the Thin Green Line• Parklands in 3.7 million km2 semi-arid zone• 21 sub-Saharan African countries – only!• 8 export 250-350,000+ tons p.a. dry kernel – Bénin, Burkina Faso, Côte dIvoire, Ghana, Guinée, Mali, Nigeria & Togo• 9 ton fresh nuts : 3 ton dry kernel : 1 ton butter• 6-7 ton kernel : 1 ton stearin [or conc. bioactives]• Women av. harvest 1 x 85 kg bag per season• 4 million+ women harvest export crop
  4. 4. Multiple International Use• Beneficial properties helps chocolate industry – Smoothes economics & allows market expansion – Improved bloom resistance, mouth feel, etc • Fillings, ice creams, coatings, etc• Natural cosmetics – Functional ingredient • Emollient & moisturiser • Thickener & gelling agent – Bioactive efficacy
  5. 5. Recent developments in West AfricaDid you know ……?• That there are 12 major industrial processing plants in the region(8 of them very active)
  6. 6. • Traditional crop• Millions rural women• Weeks of work Production to Market• April to September• Kernel quality defined DISCONNECTED…• Price takers Limited transparency!• Commence selling @ < $150 per ton kernel• 1,000s of nut traders • < 10 major buyers• Consolidate & finance • Export, process &• Commence selling @ formulate > $250 per ton kernel • Erratic price @ $250 -• Quality deteriorates $800 per ton kernel• Limited value added • Quality variation high • Zero traceability
  7. 7. Export Shea Butter Value Chain Legend West African International Kernel Butter Final Product 90% 45% 15% Edible Collectors Traders Processors Fractionators Brands 85% 30% 10% 70% Fractionators Cosmetic Village-based Brands Processors Processors 45% 15% Refiners 5% Traditional 10% Distribution/ Uses Ɨ FormulationRepresentative Organizations: Village-based processing – by co-ops & firms,  WA Fractionators – Ghananuts, Wilmar e.g. Burkarina, Songtaaba, SEKAF, Naasakle  Int’l Refiners – AAK, Loders, SRC, Cargill WA Processors – Fludor, Nioto, Ghananuts  Int’l Fractionators – AAK, Loders, 3Fs Int’l Processors – AAK  Brands – Body Shop, L’Oreal * Note, %’s represent volume of SETs in the shea industry as of 2011; figures do not reflect unrefined shea butter * At present, ~5% of industrially processed total (fractionated/refined) gets used by the cosmetic industry Ɨ 65-75% of harvested shea does not enter the export market and is retained for traditional uses
  8. 8. Paradox of paradoxa• 90% of knowledge available to market is about hand-crafted shea butterBut…• 90% of actual trade in nuts• Whether in chocolate or body butters• Source invisible to consumers• Offers opportunity for an industry alliance
  9. 9. Women per Chocolate Bar!• Typical 100g bar of milk-chocolate• Contains 5 % non-cocoa fats• 20% of these fats are shea stearin (1% of bar)• = 7g dry shea kernel per bar• 300 million bars sold in UK annually• 2,100 tons dry shea kernel• 25,200 bags harvested by how many women?
  10. 10. T raditional Process – Kernel1. H arvest (from farm, rarely bush)2. Accumulate (in piles or pits)3. H eat? (boil, roasted or left raw)4. Dry whole nuts5. De-husk (cracked by-hand!)6. Dry kernels & store
  11. 11. Quality Defined by Kernel Processing & Storage• FFA determined by heating• Peroxides during boiling• Smoking: poly-cyclic aromatic hydrocarbons (PAH s)• Fungal infections during drying & storage• Insect infestations
  12. 12. First Critical Bottleneck! Low Women harvest quality kernel Post-harvest process Dry kernels Exported & Processed to butter for Shea butter processed for for home consumption for cosmetics, etcconfectionary & cosmetics & local markets export & regional
  13. 13. T raditional Process - Butter7. Crush kernels (or left whole)8. Dry-roast (or heated in ash or sand)9. Milled (or pounded & stone grind)10. Kneaded (or water-boiled or pressed)11. Boil oil/fat to dry & clean (filter!)12. Prepare for use, sale or storage
  14. 14. W ork Closely with Producers• Discuss supplies early• T rain on key quality issues• Supply packaging materials early• Share financial risk• Producer most important part of supply chain = to your market!
  15. 15. Social Benefits of Shea Income• More jobs & higher incomes, e.g. – School fees paid – Improved family nutrition – Better housing• Higher incomes to coops & communities – Access to potable water improved – Schools & medical centres constructed• Fiscal returns of transparent business
  16. 16. Environmental Benefits of Sustainable Shea• Biodiversity maintenance• Trees provide carbon sinks & storage• Nutrient cycling & soil fertility improved• Better yields from agroforestry system• Tree roots protect against rain/wind erosion• Sustainable supply-chain benefits, e.g. – Reduced petrolatum use – Sustainable packaging
  17. 17. Global Shea Alliance – How Far?• Impetus, capacity & willingness for change• Ambition to connect the disconnect• National networks & associations developed• Founders meet Oct. 2010, Accra• Shea 2011: Sustainable Solutions• Shea 2012: Shared value• Shea 2013: Global Perspectives – 240+ members, EC committee up for re-election
  18. 18. What if……the U.S. removedlimitations on use ofCBEs in chocolate? U.S. Chocolate market - 2006 sales: $16 billion - 2011 forecasted sales: $18 billion - Average consumption: 12.31 lbs, per household; $50 / year 20
  19. 19. What if…• …traders in West Africa assured international buyers their material had highest oil yields? Bad seeds generate 25% – good seeds generate 50%.• …the quality of the fat generated was always good? Bad seeds have up to 20% FFA 1% stearin lost per FFA – 40$ per ton!Improving shea quality cuts costs & increase margins. 21
  20. 20. What happens… …when a new use for shea is discovered? Demand increases… Studies show shea has anti-arthritic effect. Potential for others, e.g. anti-malaria, lowering cholesterol, reduces tumor formation, etcAn alliance helps the global shea industry manage change 22
  21. 21. Thank you!More information is available at www.watradehub.comPresenter’s contact information: plovett@watradehub.com

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