Are you interested in building a venture based on an African export niche opportunity? By the way, yes, that’s EXPORT – in capital letters! I strongly promote export as a long-term viable business model for Africa, while I usually stay away from encouraging business models purely built on imports. And here is why:
African countries are relying heavily on imports, and that’s exactly the problem: it creates dependencies and serious trade deficits. You will come across ridiculous financial expenditures, such as Nigeria’s annual 1 billion Dollar bill for tomato paste imports (2016), while it sits on huge wasted tomato harvests. Such facts hurt us as Africans – not only could we save 1 billion Dollar in Nigeria that could potentially be spent on public services, but the country would also be able to create jobs and make money selling and exporting the tomato paste instead.
Luckily governments in Africa’s emerging markets at large have finally realised the many negative consequences that are arising as a result of these kinds of imports.
Now they start to widely promote local manufacturing, buying local (African!) food and consumer products, and exports as avenues that empower African markets and their economic growth. We as Africans and those who are friends of Africa need to be aware of that – and help driving this forward. Be it as producers, shoppers on the continent, entrepreneurs, traders, or publishers.
As a result, you will find that importing into Africa is becoming more expensive and complex, while exporting goods from Africa will in general provide a more enabling policy environment for your business venture. You will also more easily win the interest and support of local government stakeholders.
So, be informed of that if you are thinking to engage in import-export activities – and position yourself strategically for the long-term. EXPORT – in capital letters! – is the way forward. No question about that.
African export niche opportunity: What I found in my local supermarket
Since I am blogging about African business, so more of us can become empowered to make smarter and more informed decisions in this regard, my perceptions have changed when I do my shopping at our local supermarket in Frankfurt or London.
Last time I was exhilarated when I found Kenyan roses in our little local shop, which I bought. Well, until I researched the company that is – which lead me to write the blog article Africa Entrepreneurs – Ready To Hear Some Harsh Truth They Don’t Talk About?
Then a few weeks ago, when I went to one of my favourite supermarket section….the one that shelves a big range of teas….I quickly spotted that there was a new product. A new tea on our shelves? – Got to check that one out! I took the package off the shelve and my interest grew instantly when I recognized the image of an African landscape printed on it.
Rooibos Tea – I read.
I apologise to all South Africans…and those more advanced tea experts among us….but I was like: What?! Never heard of it. How on earth do you even pronounce it? It did not matter – It was a new tea at my local supermarket, I love tea, and it came straight from Africa. It was a clear case: I bought three packs and then hurried home to google it all.
Since that day and following my research about the origins of Rooibos tea, and its amazing health benefits, I am hooked. The Cancer Association of South Africa for example, after eight years of research, has officially recognized it as a leading source of natural anti-cancer chemicals due to the very powerful amount of antioxidants in the tea that prevent cell damage. Amazing! I now drink my healthy green tea and the red miracle tea in intervals – just in case.
But here is the thing: If my local supermarket has started stocking this new tea – we can assume that the demand for teas with great health benefits is visibly growing in the West. Oh yes, it is! In fact supply can currently not meet demand: Rooibos teas, honeybush, moringa, and even purple tea (the latest new hot thing in Kenya fetching up to 10 times the price of ‘normal’ tea on Eastern markets).
Export benefits for you
Exporting this kind of tea has a lot of benefits for you – here are a few.
> Demand is much higher than supply
> You tap into a rare, but increasingly popular niche market with less competition
> Light export weight
> Tea – if processed and packaged well, has a long shelve life, making it the perfect food product for export
> You have the opportunity to support African farmers if you partner with them directly on fair terms
> Great opportunity to expand your export activity into a full-blown business where you brand and market the product in Western or Eastern wealth & alternative health industries (it is for example said to be excellent for people with diabetes !)
Well, today I was inspired to share these insights,, because a South African member of our Africa Business Jumpstart community here was so very kind to e-mail a related article by bdlive.co.za to me, which I am sharing below. Thank you!
“Growing up in Namibia and South Africa Rooibos was part of our upbringing” – he writes me in the e-mail. I think this is wonderful. In Eritrea, children grow up drinking black tea with 2 spoons of sugar. Sugar with tea – as I like to call it. Surely, we can all learn from each other to become better versions of ourselves, which is wonderful and health awareness is surely a big part of that. My children now love the healthy Rooibos tea, too. I put a little bit of pure honey into their ‘red tea’ 🙂
Enjoy some amazing facts about trading tea for your African export business!
An African niche export opportunity ripe for picking
THE herbal tea market is escalating worldwide, and SA’s indigenous rooibos and honeybush teas are increasingly prized, not only in the traditional European market, but also in new markets in the US, Canada and China.
The current demand is primarily for export. Annual honeybush production has increased from 200 tonnes in 2011 to more than 300 tonnes today, at a price of about R58–R76 per export kilogram. Demand considerably outstrips the supply.
“Honeybush tea, like Rooibos tea, is regarded as the healthy alternative, because they are both caffeine-free and high in antioxidants,” says ecologist Shirley Pierce Cowling.
“Honeybush, which is a naturally sweet tea, has additional appeal, because of the growing global awareness of the dangers of excess sugar consumption.
“There is also evidence that it may be effective in the treatment of diabetes.”
She led a one-year research project funded by the WWF Nedbank Green Trust on honeybush harvest and cultivation in the Eastern Cape that she completed last year.
“A key problem is that cultivation only accounts for 30% of production today, while 70% of honeybush production is still largely collected in the wild,” Pierce Cowling says.
Of the 23 honeybush or Cyclopia species that occur across the fynbos region of the Eastern and Western Cape, six species are of commercial interest.
The most heavily wild-harvested honeybush species is bergtee or mountain tea (Cyclopia intermedia). Its distribution extends from the eastern Kouga Mountains in the Eastern Cape into the Western Cape along the Langeberg and inland mountains.
Given the rising demand, there is a need for rigorous monitoring, regulation, and enforcement of the wild harvesting of honeybush to ensure wild stocks are not depleted.
“A model of sustainable wild-harvesting and production is a farm called Melmont in the eastern Kouga Mountains, owned by the Nortje family,” says Pierce Cowling. “They have been harvesting and processing honeybush for three generations. Their pure, organic bergtee is considered among the best by honeybush connoisseurs, and they supply overseas markets.”
Another popular commercial honeybush species is Cyclopia subternata, commonly known as vleitee or marsh/wetland tea. Its natural distribution spans the Langkloof and Tsitsikamma areas, and it is more favoured for cultivation due to its faster growth.
Pierce Cowling’s project included co-ordinating training courses in the propagation of vleitee for previously disadvantaged people and communal landowners.
A third commercial species, Cyclopia genistoides, or kustee, is cultivated in the Overberg region of the Western Cape.
To meet the rising demand and, simultaneously, to reduce pressures on wild populations of the plant, scientists at the Agricultural Research Council (ARC) who have researched the honeybush, are supporting its cultivation.
Considering that 2.5-8tonnes of cultivated honeybush can be harvested per hectare of land, it has considerable potential for commercial as well as communal farmers.
“There is a slow but growing increase in honeybush-cultivation on disused, old lands by farmers in the Langkloof and Elands River valley of the Eastern Cape,” Pierce Cowling says.
Assisted by geographer Gillian McGregor, who is doing her PhD on honeybush at Rhodes University, they used geographic information systems to estimate that there are more than 8,000ha of old land that would be suitable for growing honeybush.
A cultivated stretch of communal land known as Guava Juice, which falls under the Fingo people’s Tsitsikamma Development Trust, is the site of a vleitee project near Kareedouw.
Marlise Joubert, of the ARC’s Infruitec-Nietvoorbij Research Institute in Stellenbosch, has guided the community in establishing a plantation of vleitee.
Last year, only 18 months after planting about a quarter of a hectare, the community harvested its first crop of 650kg of honeybush. They are now working on increased production.
Researchers at ARC Infruitec-Nietvoorbij, led by Cecilia Bester, are working on improving the genetic material of Cyclopia subternata and Cycolopia genistoides, with the aim of increasing yields. They are also evaluating the quality of the improved plant material.
“In the first instance, it is important to confirm that the aroma and flavour of the tea, produced from the improved plant material, remain on par or are even superior to original plants,” explains the ARC Infruitec-Nietvoorbij’s Lizette Joubert.
“Secondly, we want to retain the high levels of the bioactive compounds in the plants, which are responsible for their health properties,” she says.
Her research includes optimising processing conditions to maximise the sought after aroma and flavour of honeybush tea.
Pierce Cowling says there are five processing plants in the Eastern Cape that require permits and are subject to several compliance audits.
‘The department of economic development, environmental affairs and tourism in the Eastern Cape is working towards this, and they have classified the two major commercials species — bergtee and vleitee — as protected species.
“Another of my priority recommendations is that the South African National Biodiversity Institute initiates a programme of collecting seeds and samples of Cyclopia species from across their range, and storing them in the Millennium Seed Bank,” she says.
“Furthermore, it would be helpful if exporters were made to distinguish between rooibos tea, honeybush tea, and other teas, because at the moment, they are all listed under ‘tea’, which is far too generic in a market that needs to be monitored.”
You may also like the success story by Emily from the US who walked the talk. She shares her story in: How To Start A Profitable Business In Africa With This Plant
Dear Africa Business Jumpstarters, we would love to hear your thoughts and experiences! Feel free to share your comments below!
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Really in Africa we have opportunities but to recognise them sometimes demand too much research or to get information it is tough beside the fact that Africans who have ideas also find themselves in lack of capital in most of the cases….
For example this is a big opportunity.
but I hope that with your journals there shall be a change.
Big up madam!