Shea Today The Industry in a Nutshell

Dr. Peter Lovett

The USAID West Africa Trade Hub / The Global Shea Alliance

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

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 d'Ivoire, 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

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

Recent developments in West Africa

Did you know ……? • That there are 12

major industrial processing plants in the region

(8 of them very active)

• Traditional crop • Millions rural women • Weeks of work • April to September • Kernel quality defined • Price takers • Commence selling @

< $150 per ton kernel

• 1,000s of nut traders • Consolidate & finance • Commence selling @

> $250 per ton kernel • Quality deteriorates • Limited value added

• < 10 major buyers • Export, process &

formulate • Erratic price @ $250 -

$800 per ton kernel • Quality variation high • Zero traceability

Production to Market DISCONNECTED…

Limited transparency!

Export Shea Butter Value Chain

Collectors Traders Processors Fractionators Edible Brands

Processors

Fractionators Village-based Processors

90%

10%

10%

45%

45%

Representative Organizations: Village-based processing – by co-ops & firms,

e.g. Burkarina, Songtaaba, SEKAF, Naasakle WA Processors – Fludor, Nioto, Ghananuts Int’l Processors – AAK

WA Fractionators – Ghananuts, Wilmar Int’l Refiners – AAK, Loders, SRC, Cargill Int’l Fractionators – AAK, Loders, 3Fs Brands – Body Shop, L’Oreal

15%

70%

Refiners 5%

West African International Kernel Butter Final Product

Legend

* 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

85% 30%

Cosmetic Brands

15%

Traditional Uses Ɨ Distribution/

Formulation

Paradox of paradoxa

• 90% of knowledge available to market is about hand-crafted shea butter

But… • 90% of actual trade in nuts • Whether in chocolate or body butters • Source invisible to consumers • Offers opportunity for an industry alliance

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?

Traditional Process – Kernel

1. Harvest (from farm, rarely bush) 2. Accumulate (in piles or pits) 3. Heat? (boil, roasted or left raw) 4. Dry whole nuts 5. De-husk (cracked by-hand!) 6. Dry kernels & store

Quality Defined by Kernel Processing & Storage

• FFA determined by heating • Peroxides during boiling • Smoking: poly-cyclic aromatic hydrocarbons (PAHs) • Fungal infections during drying & storage • Insect infestations

Exported &processed for

confectionary & cosmetics

Processed to butter forfor home consumption

& local markets

Shea butterfor cosmetics, etcexport & regional

Dry kernels

Post-harvest process

Women harvest

First Critical Bottleneck!

Low quality kernel

Traditional Process - Butter

7. 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

W ork Closely with Producers

• Discuss supplies early • Train on key quality issues • Supply packaging materials early • Share financial risk • Producer most important part of

supply chain = to your market!

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

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

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

What if… …the U.S. removed limitations on use of CBEs in chocolate?

U.S. Chocolate market - 2006 sales: $16 billion

- 2011 forecasted sales: $18 billion

- Average consumption: 12.31 lbs, per

household; $50 / year

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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.

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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, etc

An alliance helps the global shea industry manage change

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Thank you! More information is available at www.watradehub.com Presenter’s contact information: plovett@watradehub.com