value chain of shea butter: from shea belt to shelf

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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

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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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Page 1: Value Chain of Shea Butter: From Shea Belt to Shelf

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

Page 2: Value Chain of Shea Butter: From Shea Belt to Shelf

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

Page 3: Value Chain of Shea Butter: From Shea Belt to Shelf

Areas Covered

Central, South and Southwest including:

Ouagadougou

Leo

Po

Diebougou

Banfora

Bobo-Dioulasso

Boromo

Page 4: Value Chain of Shea Butter: From Shea Belt to Shelf
Page 5: Value Chain of Shea Butter: From Shea Belt to Shelf

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

Page 6: Value Chain of Shea Butter: From Shea Belt to Shelf

Sheanut Processing: The Process

Collect ripe fruit

Store

Clean

Boil

Dry

Crack

Dry

Store processed sheanuts or make into butter

Page 7: Value Chain of Shea Butter: From Shea Belt to Shelf

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

Page 8: Value Chain of Shea Butter: From Shea Belt to Shelf

Labor cost is significant portion of the cost

Making collecting faster and easier?

Donkey cart, motorcycle truck, other?

Sheanut Collecting:

Issues & Opportunities

Page 9: Value Chain of Shea Butter: From Shea Belt to Shelf

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

Page 10: Value Chain of Shea Butter: From Shea Belt to Shelf

Sheanut Acquisition:

Value Chain Costing

Question do traders and middlemen add additional cost to HCSB?

It’s arguably a wash.

Page 11: Value Chain of Shea Butter: From Shea Belt to Shelf

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

Page 12: Value Chain of Shea Butter: From Shea Belt to Shelf

Shea Butter Processing:

Four Basic Categories

Semi-Mechanized Village Crafted

Fully Mechanized

Traditional Hand Crafted

Modernized Hand Crafted

Page 13: Value Chain of Shea Butter: From Shea Belt to Shelf

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

Page 14: Value Chain of Shea Butter: From Shea Belt to Shelf

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

Page 15: Value Chain of Shea Butter: From Shea Belt to Shelf

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

Page 16: Value Chain of Shea Butter: From Shea Belt to Shelf

Cost Breakdown: Butter vs. Nuts

45%

38%

17%

Profit

Sheanut Processing Costs

Other Processing Costs

Hand Crafted Shea Butter From An African Processor

Page 17: Value Chain of Shea Butter: From Shea Belt to Shelf

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.

Page 18: Value Chain of Shea Butter: From Shea Belt to Shelf

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