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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            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
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
                                                                                                                       Formulation
Representative 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
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?
T raditional Process – Kernel

1.   H arvest (from farm, rarely bush)
2.   Accumulate (in piles or pits)
3.   H eat? (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 (PAH s)
•   Fungal infections during drying & storage
•   Insect infestations
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, etc
confectionary & cosmetics       & local markets       export & regional
T raditional 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
•   T rain 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




                                             20
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
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




                                                               22
Thank you!
More information is available at www.watradehub.com

Presenter’s contact information: plovett@watradehub.com

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The Shea Industry in a Nutshell

  • 1. Shea Today The Industry in a Nutshell Dr. Peter Lovett The USAID West Africa Trade Hub / The Global Shea Alliance
  • 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. 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
  • 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. Recent developments in West Africa Did you know ……? • That there are 12 major industrial processing plants in the region (8 of them very active)
  • 6.
  • 7. 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
  • 8. 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 Formulation Representative 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
  • 9. 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
  • 10. 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?
  • 11. T raditional Process – Kernel 1. H arvest (from farm, rarely bush) 2. Accumulate (in piles or pits) 3. H eat? (boil, roasted or left raw) 4. Dry whole nuts 5. De-husk (cracked by-hand!) 6. Dry kernels & store
  • 12. 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
  • 13. 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, etc confectionary & cosmetics & local markets export & regional
  • 14. T raditional 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
  • 15. 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!
  • 16.
  • 17. 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
  • 18. 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
  • 19. 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
  • 20. 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; $50 / year 20
  • 21. What if… • …traders in West Africa assured international buyers their material had highest oil yields? Bad seeds generate 25% – good seeds generate 50%. • …the quality of the fat generated was always good? Bad seeds have up to 20% FFA 1% stearin lost per FFA – 40$ per ton! Improving shea quality cuts costs & increase margins. 21
  • 22. 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 22
  • 23. Thank you! More information is available at www.watradehub.com Presenter’s contact information: plovett@watradehub.com