How much do you know about the volume and huge potentials of the spice business in Africa?
Africans have valued and used spices for centuries.
Spices are a common ingredient in many dishes across our continent and we love them for the rich flavor, colour and taste they give our food. They play such an important role in our daily lives that it’s difficult to imagine our world without spices.
The spice business is a multi-billion dollar global industry and a significant source of revenue for several countries in Africa. In 2012 for example, Ethiopia [earned over $700 million from spices and related exports.
Almost every country in Africa produces spices but most of it is consumed locally.
This article features Senai Wolderufael, a successful African spice entrepreneur who was recently featured in Forbes Magazine.
The rest of this article explores the spice industry and opportunities that entrepreneurs like you can exploit in this lucrative but often overlooked business.
What exactly are spices?
Spices are dried parts of plants that usually have strong and special smells/flavours. They can come from different parts of a plant including: the seeds, fruit, roots, bark, stems, rhizomes or flowers (like saffron).
There are about 50 spices of international importance and thousands of other lesser known local spices used for traditional cooking. Pepper, cinnamon, nutmeg, ginger, cloves, turmeric and thyme are some of the biggest selling spices around the world.
Although many of these spices originated from Latin America, the Caribbean and Asia (especially India, China and Indonesia), many of them are now successfully grown across Africa.
Unknown to many people, the global trade in spices is worth billions of dollars every year.
An African Success story: Meet the Ethiopian Spice King
Photo credit: allethiopianews.com
In 2012, Senai Wolderufael started Feed Green Ethiopia Exports Company. Now 27 years old, his company produces and exports popular Ethiopian spice blends to satisfy the needs of his countrymen living abroad, especially in the United States and Europe.
Fortunately, his spice blends have become quite popular with a growing number of non-Ethiopians within Africa and abroad.
His company’s top selling spice blends are Shiro, Mitmita, Korarima and Berbere. All of these are mixtures of common spices like peppers, ginger and several other local herbs and spices.
A 2009 Business Administration graduate from the University of Addis Ababa, Senai’s entrepreneurial success has caught the world’s attention.
In February 2014, Senai, along with 29 other African entrepreneurs, was listed by Forbes Magazine as one of the 30 Most Promising Young Entrepreneurs in Africa 2014
As you will discover in the rest of this article, there are hundreds of different spices on our beautiful planet. It’s easy for us to take our local spices for granted without considering the lucrative potentials they may have in other countries and cultures.
By exporting spice blends that are popular in his country, Senai was able to attract the attention (and money) of foreigners who like his product.
Spices have existed long before this young man was born. He simply thought outside the box and presented his country’s local spices to potential customers in different parts of the world.
In the remaining part of this article, we shall explore the spice business, the common and popularly traded spices and how you too can become part of this interesting but often overlooked business opportunity.
A Quick Introduction To The Spice Business…
The spice business has a rich and interesting history that dates back several hundred years. The demand for spices and herbs is almost as old as mankind itself.
Spices and herbs were among the most expensive and highly sought after products of the Middle Ages. Spice merchants (traders) were some of the richest and most influential people of that era and great ancient cities like Babylon were built on the back of the lucrative spice trade.
In search of spices, Europeans sailed across the oceans to the Carribean, Africa and Asia, and in the process, discovered many parts of the world. The trade and business of spices can be linked to many historical events, discoveries, inventions and wars.
Throughout human civilization, spices have remained special and valuable. In fact, during the Roman empire, spices were considered to be as valuable as gold.
In 1780, England went to a bitter war against the Dutch for control of the spice routes of Asia. Today, spices remain significant in human life as they are widely used in flavouring, colouring and preserving food. They also have important uses in cosmetics, perfumes, medicine and religious rituals.
Photo credit: doscadesa.com
Today, the international trade in spices is still worth a lot of money. Spices like saffron are still more expensive (per ounce) than gold. South Asia (India, Pakistan and Nepal) is by far the world’s largest spice producing region and produces more than 55 percent of spices worldwide.
East Asia (China) and South-East Asia (Indonesia, Vietnam and Thailand) are the second largest spice producing region in the world.
For centuries, Africa has been an important player in the global spice trade. Currently, the African continent produces less than 10 percent of the spices produced worldwide.
According to the FAO, some of the leading producers of spices in Africa include Nigeria, Madagascar, Tanzania, Uganda, Kenya and Ghana. Although the soil and climate in many parts of Africa are favourable to growing spices, we are yet to fully exploit the huge opportunities in these widely traded commodities.
As I already mentioned, there are over 500 different spice varieties but only about fifty of these have worldwide appeal and are traded in large quantities on the international market.
It will be a difficult task to choose the top selling spices given that preferences and tastes differ around the world. However, in this section, we will look at five of the most common spices that can be grown and traded both locally and internationally across Africa.
If you’re like me, it would be very difficult to imagine some of your favourite meals without pepper. If you don’t like pepper, you’re definitely in the minority!
Pepper is the most widely consumed of all spices in the world and is often referred to as the King of Spices.
There are different varieties of pepper on the market; black, white, green and red are just a few of the popular varieties. Whether in its fresh, dried or ground forms, pepper can be found (often with table salt) in almost every kitchen and on nearly every dinner table in today’s world.
Due to its strong and aromatic flavour, pepper is commonly used to give a rich seasoning and colour to food and is also used for medicinal purposes.
Pepper grows well in tropical regions and is abundant in many parts of Africa. However, very little is exported from our continent because most of it is consumed locally.
Currently, Vietnam (an Asian country) produces and exports over 30 percent of the world’s pepper. Other major producers include India, Brazil, Indonesia, Malaysia, Sri Lanka, China and Thailand.
Yes, I too was surprised to find that vanilla is a spice! Vanilla is the world’s most popular sweet spice.
It’s a common ingredient in perfumes, aromatherapy and sweet foods where it is highly valued as a flavouring agent. Cakes, biscuits, desserts and lots of other baked stuff contain vanilla.
And of course, ice cream! Everybody loves vanilla ice cream!
Due to its worldwide appeal and rich, delicate taste, vanilla remains one of the world’s top selling spices and one of the most expensive too.
Although vanilla is native to Mexico, Madagascar and Uganda are the only African countries in the top ten vanilla producing countries in the world!
In fact, as of 2012, Madagascar overtook Indonesia to become the world’s top vanilla producer.
As Africa’s population continues to grow and more people adopt Western diets, the demand for vanilla will explode to support the processed food and cosmetics industries.
Although widely used in several foods and delicacies, ginger appears to have more medicinal applications. It is regarded as an ancient traditional herb and one of the best natural anti-inflammatory remedies in the world.
Although India and China dominate global ginger production and export, Nigeria and Cameroon are part of the top ten world producers of this highly important spice.
Ginger is indeed a very versatile product. It is commonly used as a flavouring agent in sweet foods and beverages such as tea, beer, ginger ale, gingerbread, biscuits and several other products.
In manufacturing industries, ginger is highly valued for its fragrance in soaps and cosmetics. As a medicine, ginger is used to treat arthritis, cold, cough, burns and various types of ‘stomach problems’ including motion sickness, morning sickness, colic and stomach upsets. (photo credit: thegingertea.com)
Although onions are technically classified as “aromatic vegetables,” they remain one of the most popular spices in the world. Onions appear on the market in various colours, shapes and sizes. Typical colours are white, red and purple.
Onions are commonly used in its raw form or in other processed forms such as dried flakes, powder or liquid. Onion powder is a versatile spice used to flavor meats, soups, sauces and dressings.
If I had to explore all the spices, this article could become a huge and heavy book. Some spices, like peppers, are more widely consumed than others. Some other spices are more popular among certain cultures and ethnicities because of their use in local foods, delicacies and medicines.
To ensure that you get a broader view of the spice families, I’d like to share more popular spices with you under their broad classifications. They are:
Hot spices: Capsicum (chilly peppers), cayenne pepper, black and white peppers, ginger and mustard.
Mild spices: Paprika, coriander
Aromatic spices: Allspice (pimento), cardamom, cassia, cinnamon, clove, cumin, dill, fennel, fenugreek, mace, nutmeg
Herbs: Basil, bay leaves, dill leaves, marjoram, tarragon, thyme
Aromatic vegetables: Onion, garlic, shallot, celery
Photo credit: Merriam-webster.com
Opportunities for African Entrepreneurs in the Spice business
Now that we have explored the spice business, it’s time to look at the various opportunities that exist for entrepreneurs who are willing to exploit this market.
The interesting thing I found about the opportunity in spices is that you can introduce foreign spices to local consumers or, like Senai the Ethiopian spice entrepreneur, introduce local spices to foreign consumers.
Let’s look at the broad areas through which entrepreneurs can enter the spice business.
Most of the world’s spices are grown in tropical regions of the world where sunlight and rainfall are abundant all year round.
Spices like vanilla, black pepper and nutmeg which are native to other countries are cultivated successfully in Africa because of the similar climate we share with those regions. Despite this advantage, a lot of these spices are still imported into Africa every year.
However, countries like Ethiopia, Madagascar and Tanzania earn significant foreign exchange earnings by exporting spices and herbs to Europe and The United States.
Most spices are easy to cultivate and usually don’t require a lot of land, advanced technology or machines. However, to enjoy commercial success, you may need to acquire a sizeable piece of land for cultivation. Depending on the type of spice, the farming techniques and requirements may differ.
Whether you plan to focus on cultivating foreign or local spices, the demand for these commodities will make such a venture worthwhile.
2. Trading & Processing
If you don’t have the land, skill or time to cultivate spices, you could buy the fresh and half-processed spices from farmers and sell them to processing facilities or process them yourself for export.
When spices are processed (usually dried), they last longer and retain their value. As a result, most spices can be stored for longer periods without any need for advanced or expensive storage facilities.
Look in your kitchen and you’ll likely find some of these ‘ordinary’ spices that have been branded in attractive packaging and sold under popular brand names.
The beautiful thing about brand names is that you earn the right to charge customers more for the same product.
Are there local spices in your area that are sold ‘naked’ in the open market?
Are there popular spice blends around you that everybody loves but still have to buy the spices individually to blend them? That may be a good opportunity for you to produce a branded spice product.
Package the spices in an attractive bottle, sachet or anything that works for you. Give your product a name to set it apart from the ‘ordinary’ and ‘naked’ spices in the open market. The best part is, you will be creating a recognizable product locally and internationally (that’s if you plan to export) and of course, you can sell at a higher price.
This is exactly the same strategy that has worked for Senai Wolderufael, the successful Ethiopian spice entrepreneur!
Source: Smallstarter Africa