Entrepreneurship Zone: 18 February 2022 :: Ghana: Company sells homegrown shea butter to Unilever and L’Occitane

Fri Feb 18 08:54:15 CAT 2022

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Entrepreneurship Zone: 18 February 2022 ::  Ghana: Company sells homegrown shea butter to Unilever and L’Occitane

 <http://www.zitf.co.zw/> 

While working in the essential oils industry during the early 2000s in Ghana, Raphael Gonzalez, co-founder and managing director of Savannah Fruits Company, noticed a growing demand for shea butter in Europe. Around that time, the European Union changed legislation to allow 5% of chocolate products to contain various other substitutes that are not from cocoa, while still allowing the product to be called chocolate.

As a result, large chocolatiers began replacing cocoa butter and powder with cheaper equivalents like shea butter. Sensing the rising demand, Gonzalez and two other co-founders of the company, who were all working on separate projects at the time, traveled to the north of the Ghana to search for shea trees and learn from the women producing shea butter.

“At that time, the demand was there but we didn’t have that much information. We went to see the people who were producing shea and when we arrived we noticed that the people who know about shea are women, they are the ones who are collecting the nuts and process it,” says Gonzalez.

Setting up the company

The three founders decided to start working with the local women, buying the shea nuts and setting up cooperatives in the region’s main town of Tamale to handcraft the butter using traditional techniques. However, rather than supplying European chocolate makers with cocoa substitutes, Savannah Fruits Company decided to focus instead on selling shea butter as an ingredient for products such as cosmetics and margarine.

This is because shea butter for the chocolate industry requires an extra level of processing and Gonzalez and the team wanted to stick to the traditional processing method practiced by Ghanaian women.

“We wanted to modernise the methods slightly to increase standards and quality but we didn’t want to move away from the traditional methods too much because the high-level of processing is what our competitors do and that is not what we are about. Our DNA is about traditional and woman-led processes,” says Gonzalez.

Worldwide business

The executive says that Savannah Fruits Company is one of the largest producers of organic shea butter in the world. The company has moved from exporting only one container every four months, to 10 to 12 containers every month.

The shea butter is handcrafted using traditional techniques practiced by Ghanaian women.

It sells shea butter to big European cosmetics producers like French label L’Occitane and British conglomerate Unilever, as well as exporting to South America, the US, Asia and South Africa. Gonzalez says demand for shea butter is still growing as it is increasingly used in beauty and food products. He adds that he expects the US to soon allow shea butter to be used as a substitute for other ingredients, which should offer huge growth opportunities for shea businesses.

Sourcing raw materials

The main challenge for the company, however, is being able to source enough organic raw material to meet the growing demand. “Shea butter is 100% African. You don’t find shea anywhere else,” explains Gonzalez.

In fact, the main markets are in West Africa – Ghana and Burkina Faso – with some rising producers like Nigeria, Mali and Côte d’Ivoire. Running a shea business in Ghana for many years, Gonzalez says that almost all the accessible and available shea trees are now being utilised.

The problem of finding more raw materials is made more difficult as Savannah Fruits Company has made a point of only using naturally occurring shea trees in local communities and not clearing land for large shea plantations. Land clearing, Gonzalez says, is common in other cash crops like soya and oil palm but the practice is generally harmful to the environment.

“We can only get the organic shea from a protected area where there is no farming so our challenge is finding those areas; in Ghana we are everywhere, so for additional organic shea we have to move to Burkina Faso, Côte d’Ivoire and Mali.”

However, countries like Mali and Burkina Faso face huge security issues due to widespread jihadist threats and weak governments – further threatening the supply. Gonzalez also says that there is a “lot of pressure on the resource” as people often cut the trees down for other cash crops or to use the bark as firewood.

Savannah Fruits Company is trying to address the problem by educating local shea farmers about the importance of preserving the trees and reduce firewood usage. Shea butter is traditionally used as a beauty product and the fat is used as a replacement for cooking oil.

Despite the resource issues, Gonzalez says that it is a “booming industry” which is not yet oversaturated by too many players. Most of the competitors in the local market focus on large scale industrial production, leaving plenty of room for smallholder-based organic producers.-Howwemadeitinafrica

Savannah Fruit Company buys shea nuts from women in northern Ghana.

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