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High-value products bring good returns

For immediate release. Wageningen, the Netherlands, 19 march 2015

March 19, 2015

A handbook published by the Technical Centre for Agricultural and Rural Cooperation (CTA) explores some of the most promising options for setting up a small-scale business based on high-value foods, offering practical advice on accessing markets and negotiating complex areas such as quality assurance and legislation.

Cover copyMany ACP countries are a source of raw materials that, if handled and marketed carefully, can generate good incomes for local communities. Small-scale processing of high-value foods and ingredients can lead to job creation, increased food security and agricultural and economic development. High-added value means that processors can earn a reasonable income from relatively small scales of production. Processing of such products is particularly suited to women. 

High-value foods and ingredients can fetch retail prices that are up to five times those of equivalent products. This may be due to the characteristics of the product itself, such as unusual mushrooms, unifloral honeys and gourmet coffees. Value may be added during the preparation or packaging stages, through the use of organic or fair trade ingredients or by targeting niche or specialist markets, such as healthcare, beauty and sports sectors.

A Handbook for Setting Up and Running a Small-Scale Business Producing High-Value Foods sets out to raise awareness of the opportunities for producing these products in ACP countries and routes for accessing the different types of value chains. Despite the strong potential for generating income from high-value foods, information on how to go about launching and operating such an enterprise has previously been difficult to come by. The seventh and final volume in the Opportunities in Food Processing series, the book is the result of a collaborative effort by small business owners and advisers of small-scale food processors in ACP countries, with support from CTA. 

The wide range of processed foods discussed here – or ingredients for cosmetic or medicinal products – have one thing in common: a high value, or the potential to have one, due to a premium sale price as a result of processing.

High-value raw materials from ACP countries include cloves from Madagascar and Zanzibar, mace, nutmeg and cardamom from the Caribbean and vanilla and ginger from the Pacific. Marula and baobab fruits, moringa and specialist coffees, such as Rwandan Bourbon, are all products that can command a premium price if astutely processed and marketed, and the handbook explores the income generating potential for these and many more. Further value can be added by creating new products, such as essential oils, spice mixes, flavoured vinegar, tree nuts, herbal teas and non-food products, including herbal massage oils, creams, soaps, ointments and lotions.

Two key lessons that emerge from the guide are that access to the right markets is crucial to obtaining high prices, as is making adequate investment in equipment and staff skills to meet quality standards and produce sufficient volumes.  

National markets should not be overlooked, especially in ACP countries where the demand for high added-value, luxury products such as liqueurs, chocolate and speciality coffees is growing, due to tourist or domestic development. Expanding into regional markets requires additional business skills. Examples of high-value processing opportunities analysed here include spices, cashew nuts and aloe vera.

International retail markets, once almost impenetrable due to exacting quality standards, tariff and non-tariff barriers, market domination by larger processors and the need for certain minimum volumes, can now be accessible to small-scale producers, due to the advent of fair trade, organic certification and direct sales via the internet.  

Obtaining quality raw materials and processing equipment are common hurdles for which solutions are discussed in the book. So too are options for overcoming the challenge of providing good packaging, supplying quality management and traceability and, one of the most daunting hurdles for ACP entrepreneurs, accessing finance to launch and develop their business.

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A handbook for setting up and running a small-scale business producing high-value foods
By Y Ademe, B Axtell, P Fellows, L Gedi, D Harcourt, C La Grenade, M Lubowa & J Hounhouigan Edited by P Fellows & B Axtell
CTA, 2015

For more information, please contact:
Stéphane Gambier
gambier@cta.int
Tel.: +31 (0)317 46 71 79

Read online or download the publication: http://publications.cta.int/en/publications/publication/1808