value chain of shea butter: from shea belt to shelf

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This presentation discusses the the first few upstream links in the supply chain of shea butter based on research in Burkina Faso, West Africa. This study was part of a larger project sponsored by the West Africa Trade Hub.

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  • VALUE CHAIN OF SHEA BUTTER: FROM SHEA BELT TO SHELF

    Research Findings in Burkina Faso: Sheanut Pickers, Market Traders, Shea Butter Producers

    Bill Reinecke, Fulbright Researcher www.fourthroad.com [email protected] Leo, Burkina Faso 23 April 2012

  • Scope of Research To Date

    Interviewed:

    Over 90 women in 8 villages

    9 market traders in 5 markets

    8 producers in cities, towns or villages

  • Areas Covered

    Central, South and Southwest including:

    Ouagadougou

    Leo

    Po

    Diebougou

    Banfora

    Bobo-Dioulasso

    Boromo

  • Sheanut Processing: Effort and Expense

    After picking and processing for six days, the

    shoulders and chest become sore. Then we rest for a day before beginning again.

    ~The women of Mouna village near Leo, Burkina Faso

  • Sheanut Processing: The Process

    Collect ripe fruit

    Store

    Clean

    Boil

    Dry

    Crack

    Dry

    Store processed sheanuts or make into butter

  • TASK RESOURCE COST

    Collecting Labor @ 6 Days $19.68

    De-pulping Labor @ 2 Hours $0.82

    Boiling Water, Wood, Labor @ 2 Hours

    $.20 + $1.50 + $0.82

    Drying Labor @ 2 Hours $0.82

    Cracking Labor @ 2 Hours $0.82

    Drying Labor @ 1.5 Hours $1.23

    Storage Labor @ 1 Hour, Bag $0.41 + $0.50

    TOTAL $26.80 , 13,500 CFA, 44 Gh Cedi

    Sheanut Processing: Value Chain Costing

    Estimated Cost to Process an 85 kg (170 lbs) Cocoa sack of ethically traded sheanuts

  • Labor cost is significant portion of the cost

    Making collecting faster and easier?

    Donkey cart, motorcycle truck, other?

    Sheanut Collecting:

    Issues & Opportunities

  • Sheanut Acquisition:

    Scenarios

    Collection is part of production

    Collectors sell directly to producers

    Processor is also sheanut aggregator - employing collectors

    Sheanuts purchased in market from market traders

  • Sheanut Acquisition:

    Value Chain Costing

    Question do traders and middlemen add additional cost to HCSB?

    Its arguably a wash.

  • Sheanut Acquisition:

    Issues & Opportunities

    Do too many middlemen take profits away from pickers?

    Perform the hard work of aggregating nuts from distant villages

    Provide reliable sales for pickers

    Have long standing relationship with pickers

  • Shea Butter Processing:

    Four Basic Categories

    Semi-Mechanized Village Crafted

    Fully Mechanized

    Traditional Hand Crafted

    Modernized Hand Crafted

  • Crush sheanuts using machine

    Roast in hand cranked metal barrel

    Mill into paste

    Whip by hand

    Boil in pot

    Crude filtering by decanting

    Package and store or sell

    Shea Butter Processing: Modernized Hand Crafted Shea Butter

  • Shea Butter Processing: Issues & Opportunities

    Very physical labor required

    Large amounts of water, firewood required

    Mechanization based on village processing:

    Economies of scale, consistent quality, timeliness of delivery

    Alternative energy sources & water reclamation

  • Shea Butter Processing: Value Chain Costing

    TASK RESOURCE COST

    Nut Costs Purchase $0.90

    Grinding

    Mill $.14

    Roasting Wood, Labor @ 2.25 hr $.11 + $.02

    Paste Mill $.27

    Whipping Water, Labor $.02 + $.04

    Boiling, Filtering Wood, Labor $.03 +$.09

    Packaging Materials $.05

    Profit Operations, Admin, Social projects, etc.

    $.33

    TOTAL $2.00, 1,000 CFA, 3 Gh C

    Based on 1 kilogram of Modernized Processing of Hand Crafted Shea Butter

  • Cost Breakdown: Butter vs. Nuts

    45%

    38%

    17%

    Profit

    Sheanut Processing Costs

    Other Processing Costs

    Hand Crafted Shea Butter From An African Processor

  • Cost Breakdown: Butter vs. Nuts

    30%

    40%

    30%

    Sheanut Processing Cost

    Profit

    Other Processing Costs

    What if the time to collect sheanuts is cut in half?

    Lower sheanut costs = Higher wages for the women processors and more money for

    social and environmental projects.

  • Thank you.

    Special thanks to West Africa Trade Hub, especially Dr. Peter Lovett. Additional thanks to Senyo Kpelly of Sekaf Ghana Ltd, and

    Hugo Ortiz of Peace Corps Burkina Faso

    Bill Reinecke