Enabling growth - Creating jobs

15 April 2013
ITC News

Branding strategies for Zanzibar clove; moving mangoes from Senegal to European markets; and realising the pineapple potential of West Africa

The International Trade Centre’s mission is to enable small- and medium-sized enterprise (SME) growth in developing and transition-economy countries. The organization works with local and international partners to provide sustainable and inclusive development solutions designed to help SMEs not only build capacity, but also create jobs and wealth while reducing poverty. Recent ITC projects have supported the development of Zanzibar’s clove business and the export growth of Senegalese mangoes, and increased the participation of SMEs in West Africa’s pineapple supply chain.

Branding Zanzibar cloves

ITC has been working with partners in Zanzibar to develop a branding strategy for the island’s cloves. The strategy builds on the characteristics of Zanzibar’s people and environment, and the history of its cloves and spices.

The project started in November 2012 when a memorandum of understanding to develop intellectual property and a branding strategy for Zanzibar cloves was signed by the United Republic of Tanzania, the World Intellectual Property Organization and ITC. Since then a series of creative branding workshops including more than 100 public and private sector stakeholders has been held and a competitive analysis of global branded packaging trends has helped to show how branding works at its best.

As you walk through a small clove plantation near a village on the island of Pemba, you get an immediate sense of the potential of Zanzibar’s signature crop. With people working together in local communities to grow, harvest, dry and collect cloves, it’s easy to see how the ‘Spice Tour’ concept works for tourists – it is a total sensory experience. A women entrepreneurs group in Stonetown producing spice soap from cloves demonstrates how small investments could make a big difference. Currently, everything used to make the soap is processed by hand and packaging is below international standards. The group has acquired machinery to speed up production and improve efficiency and profitability, but it has no electricity to work the machinery. This requires investment, and unsecured capital is almost impossible to source. Despite such problems, there is great potential to involve more people in well-managed downstream processing.

Zanzibar currently sells cloves in bulk for US$ 8,000 to US$ 10,000 per tonne, which leaves approximately 1.6 cents per 20 gram jar on the island. With premium product branding and packaging, the return could be approximately US$ 8 per 20 gram jar. Sales targeted at the tourist market could result in the value of cloves, after packaging and distribution costs, being about 30 times the value at the place of origin and equating to about US$ 300,000 per tonne.

The ITC project demonstrates how substantial value can be added to cloves and better financial returns can be achieved across the value chain in Zanzibar by developing a brand strategy that includes a creative premium packaging solution. The result not only returns better value to producers, but also helps create new jobs and more investment in packaging and added-value processing.

Ali Mohamed Shein, President of Zanzibar, is among the stakeholders supporting the project. He met ITC officials in February 2013 and expressed satisfaction with the project and the opportunity it provides for Zanzibar to protect and strengthen the position of its cloves in the world market. He noted the creation of better value for farmers and others involved in packaging and distribution, as well as the development of a stronger brand proposition for tourism and the ability to increase investment.

The project has given Zanzibar a stable platform and effective brand strategy to develop a sustainable clove business. Moving forward, the critical element will be adequate support on the ground in terms of human and financial resources. With these resources in place, the project will make a significant impact on the livelihoods of local people and Zanzibar’s economy.

Moving Senegalese mangoes into the European market

Last year, ITC, supported by the Netherlands Trust Fund II Programme, ran a project aimed at aiding the Senegalese mango industry in developing a strong presence in Europe during the summer season when large producers such as Brazil and Peru are unable to supply the market. Initial efforts concentrated on gaining a deeper understanding of the European market, the structure of the trade and the emerging needs of players, from generalist importers to specialized exotic fruits ripeners. A comprehensive market-segmentation ex- ercise revealed a number of newly emerged, fast-growing segments, including organic, ripening, air, ready-to-eat and food service. Building capacity to compete in these segments was seen to offer unparalleled possibilities for differentiation, while capturing increased economic value.

Beyond the supply side, emphasis was put on the European consumer’s purchasing and consumption habits across markets, and on emerging opportunities. Seizing those opportunities required a dedicated effort to develop exporter capacities to meet market requirements through upgrades to the value chain. Senegalese exporters also faced other challenges, such as the fact that mangoes had traditionally been exported mostly to French-speaking European countries. So efforts were needed to develop their presence and reputation elsewhere in Europe. Further research also showed a low level of trade awareness of the Senegalese product versus that from other West African countries.

As a result, the project focused on initiatives aimed at addressing these challenges while pursuing entry into attractive market spaces. Two areas were defined: raising the visibility of Senegalese mangoes among European traders and connecting exporters to importers operating in high-growth segments. The participation of a group of exporters in the international trade fair Fruitlogistica helped raise the profile of Senegalese mangoes and generated business leads, while a 'development partnerships' model matched exporters and importers and coached them on collaboration.

The results of the 2012 mango sales campaign show an increase of approximately 20% in the total volume exported, together with a perceived hike in prices. While these results are encouraging, the full potential of Senegalese mango exports is yet to be realized, with SME exporters at an early stage in export development expected to play a primary role in boosting mango exports over the coming years.

Supporting the West African pineapple sector

The AGON project conducted by ITC from mid-2010 to mid-2012 aimed to increase the participation of SMEs from a selection of African countries in South-South trade and cooperation, with a focus on the pineapple sector. It provided an opportunity to evaluate trade potential between West African and Maghreb countries in both pineapple and related products.

Experimenting with a highly focused, market-driven approach, the project concentrated on strengthening the pineapple supply chain. In Benin, for example, it did this by increasing cooperative and SME access to finance and innovative information and communication technologies. The project put special emphasis on supporting women business enterprises.

The AGON project resulted in the identification of 200 SMEs in the pineapple export value chain and a consolidated demand in financing of more than 4 billion CFA francs (US$ 8 million), mostly from enterprises with little access to financing solutions. The ITC project component focused on establishing a voice and web-based business matching system, with the objective of linking pineapple sector actors – especially women pineapple processors – with new buyers and markets. The Access to Finance for SME programme aided 70 selected pineapple businesses in improving their skills in financial management and business plan development, as well as in international trade finance by partnering with trade support institutions.

The AGON project created jobs and wealth, supporting the regression of poverty, and had a positive indirect effect on more than 10,000 people, about 80% of whom were women.