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LWF Aloe Bio-Enterprise Development V7

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LWF Aloe Bio-Enterprise Development V7 Development of New and/or Scale-up of Existing. Aloe-based Business in Laikipia Laikipia Wildlife Foundation Development of New and/or Scale-up of Existing Aloe-based Business in Laikipia Submitted to: The Laikipia Wildlife Forum (LWF) Submitted by: Susan Wren, Technical Organic & Natural Products Advisor. Bio-enterprise Consultant Product and Market Development Email: [email protected] Date: April 2008 Susan Wren. April 08 1 Development of New and/or Scale-up of Existing. Aloe-based Business in Laikipia CONTENTS Executive Summary 1. Work Plan 1.1 Goals/objectives 1.2 Outputs 1.3 Methodology 2. Desk Review Summary 2.1 Background to Aloe Enterprise Development in Laikipia 2.1.1 Laikipia District 2.1.2 The Laikipia Wildlife Forum 2.1.3 Laikipia Aloe Bio-Enterprise Project (LAB): 2.1.4 CITES and the Kenyan Government 2.1.5 Kenya Aloe Working Group (KAWG): 2.1.6 SNV Sustainable Utilization of Aloe Resources in the Drylands Study 2.1.7 Summary of the main actors 2.1.8 Summary of the Supply Chain Actors and Functions 2.2 International Aloe Commercialisation 2.2.1 Description 2.2.2 Chemistry: 2.2.3 Historical context 2.2.4 Health benefits/claims: 2.2.5 Commercial cultivation 2.2.6 Commercial processing and manufacturing 2.3 International Market Characteristics 2.3.1 Natural products market trend 2.3.2 Retailed aloe products 2.3.3 Main commercial extracts 2.3.4 Retail Product Forms 2.3.5 Global distribution of commercial aloe 2.3.6 Quality standards and regulation 2.3 Commercialisation of Aloe species in Africa 2.3.1 Background 2.3.2 Eastern Africa 2.3.3 South Africa 2.4 Commercialisation of Aloe sps in Kenya 2.4.1 Description of the main species and distribution 2.4.2 Exploitation crisis 2.4.3 Regulation and Licensing 2.4.4 Organisations of the Aloe Producers and Processors 2.4.5 Aloe Supply Chain 2.4.6 Schematic of the Aloe Supply Chain in Kenya: 3. Laikipia Aloe Enterprise Review and Impact Assessment 3.1 Existing Aloe-based business in Laikipia 3.2 Ecological/conservation impact assessment 3.2.1 Background: 3.2.2 Laikipia Environment: 3.2.3 Laikipia vegetation: 3.2.4 Land use: 3.2.5 Aloe species, distribution and status in Laikipia 3.3 Socio-economic impact 3.3.1 Traditional uses of Aloe species in the Laikipia area 3.3.2 Traditional NTFP enterprise 3.3.3 Status of the aloe collectors/harvesters: 3.3.4 Management issues 3.4 Challenges, Threats, Strengths and Opportunities of Aloe Enterprise in Laikipia 3.4.1 Challenges 3.4.2 Threats: 3.4.3 Strengths 3.5.4 Opportunities Susan Wren. April 08 2 Development of New and/or Scale-up of Existing. Aloe-based Business in Laikipia 4. Market Demand and Business Opportunities 4.1 Kenyan Market 4.1.1 Status 4.1.2 Existing products and prices 4.1.3 Case Study. BIOP 4.5.6 Learning points: 4.2 African Market 4.3 International Export 4.4 Summary of Market Characteristics 4.5 Legal hurdles 4.6 Quality Endorsement 5. Aloe Material Supply 5.1 Sustainable Wild Harvesting Protocols 5.2 Domestication Protocols and Standardised Techniques 5.3 Research and Development 6. Value addition 6.1 Physical value addition 6.1.1 Critical points for value addition of aloe products 6.1.2 Processing Protocols and Standardised Techniques 6.1.3 Established Quality Standards and Labelling (GMP) 6.2 Certification - Non-physical value addition 6.2.1 Organic 6.2.2 Fair trade: 6.2.3 Wild Harvest Standards. 6.2.4 Developing the Internal Control Systems for Producer Group Certification 6.3 Product Design 6.3.1 Taking aloe raw materials to a commercial retail product 6.3.2 Formulation and processing quality protocols: 6.3.3 Product Branding 6.3.4 Packaging 6.3.5 Service Providers 7. Business Development 7.1 Basic criteria for commercial bio-enterprise development 7.1.1 Competitive advantage: 7.1.2 Economies of scale 7.1.3 Sustaining the market position 7.1.4 Producer group capacity 7.2 Infrastructure and Equipment 7.2.1 Depot centres 7.2.2 Construction of the Bio-enterprise Central Processing Centre 7.2.3 Harvesting and Processing Equipment 7.3 Production and running costs 7.3.1 Product materials 7.3.2 Processing 7.3.3 Packaging and promotional materials. 7.3.4 Trade finance 7.4. Value Chain Development 7.4.1 Management and organisation 7.4.2 Product flow 7.4.3 Developing producer group capacity 7.4.4 Technical training of the trainers, extension and central processing staff 7.4.5 Business capacity building 7.4.6 Supply chain development 7.5. Marketing 7.5.1 Core product attributes 7.5.2 Pricing policy 7.5.3 ‘Marketing the Story’ 7.5.4 Marketing pitches for possible product for the national and regional market: 7.5.5 Promotional tools: Susan Wren. April 08 3 Development of New and/or Scale-up of Existing. Aloe-based Business in Laikipia 7.5.6 Example of potential commercial partners: 7.5.7 Market research 7.5.8 Relevant international trade fairs. 8. Developing environmentally supportive bio-enterprise 8.1 Potential ecological impacts of developing bio-enterprises in Laikipia 8.2 Sustainable production/wild harvest 8.4 Summary of the rational based on environmental and economic consideration 9. Business operating structures and management capacity 9.1 Structure of the business and financial management entity 9.1.1 Commercial bio-enterprise trade association 9.1.2 Stakeholder owned bio-enterprise company 9.1.3 NGO with service providing facility 9.1.4 Trust with separate commercial trading and charitable status 9.1.5 Legal framework 9.1.6 Role of the Laikipia Wildlife Forum 9.2 Producer group structures and business operating capacity 9.2.1 Justification for Producer groups: 9.2.2 Producer group selection 9.2.3 Basic requirements for producer group development 9.3 Commercial partners 9.3.1 Existing Commercial Enterprises 9.3.2 New Commercial partners 9.3.3 Kenyan based companies 9.3.4 Externally based companies 9.3.5 Commercial relationship with co-operatives/producers associations 9.4 Development partners 9.4.1 NGOs operating in Laikipia 9.4.2 Co-operation and linkages with other national or regional initiatives 9.4.3 International trade support schemes 9.5 Research partners 9.6 Corporate sponsorship 9.7 Investors / Joint Venture Partners 9.7.1 Business plan and feasibility study 9.7.2 Technical assistance services 9.7.3 Commercial services. 9.7.4 Marketing and sales 9.7.5 Trade Finance and Micro-credit 10. Basic Business Analysis 10.1 Product profiles for national and regional markets 10.2 Three scale-up approaches 11. Conclusions 11.1 Opportunities 11.2 Lessons Learnt 11.2.1 Poor returns and little incentive 11.2.2 Insufficient scale and poor product quality 11.2.3 Inadequate market knowledge and orientation 11.2.4 Certification and licensing 11.2.5 Business management strategy and ownership 11.3 Focal areas to address 11.3.1 Education and awareness 11.3.2 Environmental degradation – Destructive harvesting / not meeting conservation goals 11.3.3 Suppy chain development – Low organisational and management capacity 11.3.4 Lack of business capacity – Low economies of scale and profitability of existing aloe trade 11.3.5 Certification - Lack of traceability and quality systems/endorsement 11.3.6 Policy, Legal and Institutional Framework 11.3.7 Land tenure 11.3.8 Marketing Susan Wren. April 08 4 Development of New and/or Scale-up of Existing. Aloe-based Business in Laikipia 12. Recommendations for Aloe Enterprise Development 12.1 Practical scale up priorities 12.1.1 Sensitization and group selection 12.1.2 Developing stakeholder responsibility 12.1.3 Organisational Capacity. 12.1.4 Extension and training - TOT 12.1.5 Expanding domestication/plantations 12.1.6 Develop sustainable guidelines and protocols 12.1.7 Phased development of the operational framework 12.1.8 Processing 12.1.9 Non physical value addition – Certification 12.1.10 Product development 12.1.11 Market development 12.1.12 Trading structure 12.1.13 Commercial partnerships 12.1.14 Legislation and standards 12.2 Regulating the industry 12.2.1 Harnessing national statutory requirements 12.2.2 Developing sustainable harvest levels and protocols for the aloe species 12.2.3 Quality protocols and marketing standard 12.3 Increasing empowerment of stakeholders 12.3.1 Laikipia communities 12.3.2 Maximising benefits to women at each stage of the value chains 12,3,3 Accessing finance 12.3.4 Market development 12.4 LWF potential role in the scaling up/development of new aloe based businesses Annex Section Annex 1. The International Aloe Science Council Annex 2. Aloe products retailed in Kenya Annex 3. Formulation of Aloe-based Products Suitable for Rural Processing Annex 4. Commercial Harvesting & Processing Technique Annex 5. Aloe Vera, the Health Branded Aloe Annex 6. Commercial Proposal from AloeTrade America Annex 7. Baringo Aloe Development Programme Annex 8. Commercial Aloe Species and varieties Annex 9. Appraisal of Aloe Domestication in Laikipia, Case Studies Conducted by Kenya Aloe Working Group Secretariat. Annex 10. The HACCP Seven Principles Annex 11. Sustainable Wild Harvesting Protocols Annex 12. Status Report of Aloe Commercialisation in the Coastal Region ACKNOWLEDGEMENTS AND DISCLAIMER This assignment was completed with the specialist input of Anne Powys, Ethnobotanist, landowner and resident in Laikipia; and the detective work of Maxwell Lumbasi, Bio-prospecting, ICIPE and Alex Kubi of Wild Living East Africa.
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