KENYA ROAD MAP FOR DEVELOPING & STRENGTHENING THE PROCESSED MANGO SECTOR DECEMBER 2014 TRADE IMPACT FOR GOOD

Transcription

1 KENYA ROAD MAP FOR DEVELOPING & STRENGTHENING THE PROCESSED MANGO SECTOR DECEMBER 2014 TRADE IMPACT FOR GOOD

2 The designations employed and the presentation of material in this document do not imply the expression of any opinion whatsoever on the part of the International Trade Centre concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. This document has not formally been edited by the International Trade Centre.

3 ROAD MAP FOR DEVELOPING & STRENGTHENING THE KENYAN PROCESSED MANGO SECTOR Prepared for International Trade Centre Geneva, december 2014

4 ii This value chain roadmap was developed on the basis of technical assistance of the International Trade Centre ( ITC ). Views expressed herein are those of consultants and do not necessarily coincide with those of ITC, UN or WTO. Mention of firms, products and product brands does not imply the endorsement of ITC. This document has not been formally edited my ITC. The International Trade Centre ( ITC ) is the joint agency of the World Trade Organisation and the United Nations. Digital images on cover : shutterstock Street address : ITC, 54-56, rue de Montbrillant, 1202 Geneva, Switzerland Postal address : ITC Palais des Nations 1211 Geneva, Switzerland Telephone : Postal address : ITC, Palais des Nations, 1211 Geneva, Switzerland [email protected] Internet : http ://

5 iii ACRONYMS AND ABBREVIATIONS Unless otherwise specified, all references to dollars ( $ ) are to United States dollars, and all references to tons are to metric tons. The following abbreviations are used : AIJN BRC CPB DC EFTA EPC EU FPEAK FT G.A.P. GMP HACCP European Fruit Juice Association British Retail Consortium Community Business Plan Developing countries European Free Trade Association Export Promotion Council European Union Fresh Produce Exporters Association of Kenya Fairtrade Good Agricultural Practices Good manufacturing practices Hazard Analysis and Critical Control Points HCDA / HCD Horticultural Crops Development Authority, newly HCD ( Horticultural Crops Directorate ) HS code IQF ISO ITC KAM KARI KEBS Harmonized system code Individually Quick Frozen International Organisation for Standardisation International Trade Centre Kenya Association of Manufacturers Kenya Agricultural Research Institute Kenya Bureau of Standards KENAFF Kenya National Farmers Federation ( KENAFF ) KEPHIS KHCP KIRDI KOAN NaHMIS PCPB PMO PSDA RA SME TSI T SACCO SPS USA USAID USD VC Kenya Plant health inspectorate Service The Kenya Horticulture Competitiveness Project Kenya Industrial Research and Development Institute Kenya Organic Agriculture Network National Horticulture Market Information system Pest Control Products Board Production and Marketing Organization Private Sector Development in Agriculture Rainforest Alliance Small and medium enterprises Trade Support Institutions Ton / tons Savings and Credit Co-operative Sanitary and Phytosanitary United States of America United States Agency for International Development United States Dollar Value Chain

6 iv DEFINITIONS EPC FPEAK GIZ HCDA / HCD IFDC ITC KAM KARI KEBS KEPHIS KHCP KIRDI NaHMIS PCPB SCOPE Insight SNV Export Promotion Council : Kenya s premier institution in the development and promotion of export trade. Fresh Produce Exporters Association of Kenya : The Fresh Produce Exporters Association of Kenya ( FPEAK ) is Kenya s premier trade Association representing growers, exporters and service providers in the horticulture industry. German Federal Ministry for Economic Cooperation and Development : past project on private sector development in Agriculture ( PSDA ) on potato, meat and mango Horticultural Crops Development Authority : The Horticultural Crops Directorate is mandated to regulate the horticulture industry through registration of produce dealers as prescribed under the Agriculture, Fisheries and Food Authority Act of HCD also provides specialized advisory and marketing services to the stakeholders in the industry for planning purposes. International Fertilizer Development Centre International Trade Centre Kenya Association of Manufacturers : is the representative organization for manufacturing valueadd industries in Kenya. Kenya Agricultural Research Institute : is a premier national institution bringing together research programmes in food crops, horticultural and industrial crops, livestock and range management, land and water management, and socio-economics. Kenya Bureau of Standards : is a government agency responsible for governing and maintaining the standards and practices of metrology in Kenya. Kenya Plant health inspectorate Service : is the government parastatal whose responsibility is to assure the quality of agricultural inputs and produce to prevent adverse impact on the economy, the environment and human health. The Kenya Horticulture Competitiveness Project : will increase incomes for 200,000 small farmers and strengthen the businesses network around them by improving and creating local, regional and global market opportunities. This project will help Kenyans feed themselves by building a countrywide horticulture distribution network that provides a year-round supply of high-quality, nutritious products grown by Kenyan farmers. Kenya Industrial Research and Development Institute : is a national research institute established in 1979 under the Ministry of Trade and Industry and mandated to undertake multidisciplinary research and development in industrial and allied technologies. National Horticulture Market Information system : a proposed national Platform for providing production and marketing information on horticulture ( HCD and USAID-KHCP Pest Control Products Board : provide an efficient and effective regulatory service for importation, exportation, manufacture, distribution, transportation, sale, disposal and safe use of pest control products and mitigate potential harmful effects to the environment. PM Production and Marketing Organisation Dutch organisation with a methodology to assess and train farmer organisations on access to Insight finance Netherlands Development Organization / long track record of support to farmer organizations and horticulture.

7 v FOREWORD Agriculture is the leading economic sector, accounting for 25 % of the gross domestic product ( GDP ) directly and 27 % indirectly. The sector also accounts for 65 per cent of Kenya s total exports and provides more than 18 per cent of formal employment. The horticulture sub sector in Kenya is among the most vibrant in the Agriculture sector after Tea and Coffee contributing to the Agriculture GDP at 33 % and has had an annual average growth of between 15 and 20 % per year. In 2013, the sector excluding flowers contributed KES 177 Billion to the economy while the export earned the Country KES 94 Billion during the same year. The sector has been key to creating employment directly to the rural folk, earning foreign exchange and source of raw material to local industries among others. In order to grow the sector further, the government has identified the sector among the economic pillars as a means of spurring growth in the Kenya Vision 2030 document, Agriculture Sector Development Strategy and the National Horticulture Policy. Therefore, products that have the potential for investment into value addition and hence create employment have been given attention and support. It is for this reason that the government is collaborating with development partners, private sector players and other stakeholders in realising this potential. ITC has been a key collaborative partner in enhancing market access for Kenyan Horticultural products through capacity building of trade support institutions and providing market intelligence. Under this project, ITC is collaborating with HCD ( formerly HCDA ), Export Promotion Council, Mace Foods and relevant county governments with two commodities ( processed mango and ABE Chillies ). The processed Mango value chain has been identified to create employment among the Kenyan youth by providing a key service of produce aggregation, ensuring food safety and will form an important link between processors and farmers. In addition, the project will enhance the access of this product to the regional and international markets as well all attracting investment into the business. The rise in middle class population in the country has created demand for healthy and nutritious products. Already, a large portion of the Mango consumed locally is fresh and there is a rise in the population that is consuming processed Mango products. However, we recognise the challenges facing the production and marketing aspects of mangoes that need to be addressed. The quality of the crop is poor due to poor production practises making them unsuitable for processing. In addition, the bulk of the varieties available are not suitable for processing. Over a long time, the Country has relied on the traditional fresh market domestically and internationally with little attention given to processed products. Processing offers a solution to the high post-harvest losses experienced in the main production areas and a market for the second grade fruits. In this regard, it is project has ensured direct linkages between the farmers and the processors to reduce the supply chain thereby ensuring farmers benefit from price incentive and market and product diversification.

8 vi EXECUTIVE SUMMARY The purpose of this road map is to outline the opportunities for expanding trade of the Kenyan horticulture products and to provide a strategy for expansion. The road map has been developed in cooperation with the HCD, and representatives of the Kenyan horticulture industry including producers, processors, traders and exporters. As a first step the project funded by the Government of Finland aims to contribute to inclusive and sustainable export-led growth in Kenya, Tanzania and Zambia by improving the competitiveness of their producers, SMEs ( Small Medium Enterprises ) and TSIs ( Trade Support Institutions ) this supply and demand survey was conducted for processed mango. The aim of the project is also to promote the participation of SMEs in selected agri-food sectors in regional and global value chains. It will address value chain inefficiencies combined with measures to strengthen TSIs in all three countries. The intervention should result in increased income and employment for stakeholders along the entire export value chain. Interest in tropical products including fresh mango and processed products has been growing for the past few years. Mango is traditionally grown in Asia, Latin America and Africa where it is also consumed in large volumes ; European markets and American markets are now growing for mango products. India is by far the biggest supplier of mango products to the world, but countries like Peru, Mexico, the Philippines, and Thailand are increasingly known for their products internationally. The United States predominantly import their products from Asia and Latin America while Asia is basically self-sufficient. Europe imports products from all over the world, including Africa. African countries also produce for the local and export markets. Kenya, South Africa, Côte d Ivoire, Mali and Burkina Faso are some of these countries. Varieties, processing techniques and products exported vary greatly from one country to the other. Nevertheless, the African continent still imports large volumes of mango puree and juice to satisfy local demand mainly from India. Kenya produces mango during 7 months a year of well-known and appreciated cultivars such as Keith and Kent, but the bulk of the production is of Ngowe cultivar, a less well known variety which is suitable for pulp and juice. First grade fruits are exported fresh and second grade fruits are sold on local markets. Third grade fruits are processed in pulp or dried pieces. Kenya imports large amount of mango juice to satisfy consumers demand. Fresh juice and quality products are increasingly requested by Kenya s middle class. A number of initiatives, including USAID projects have attempted to stimulate and develop the sector. The ongoing Coca-Cola, BMGF and Technoserve private public partnership is currently working on issues of production, post-harvest handling and production to provide a locally source mango juice product. The initiative has created a lot of interest and momentum for the sector. Nevertheless, there is room to further improve on post-harvest losses, efficiency in the chain and logistics to increase volumes and improve the quality of the products. Adequate processing equipment with rigorous quality and food safety protocols are also keen in supporting the sector to achieve scale and quality. With the high volumes of Ngowe mango, a cultivar already appreciated on local markets and suitable to processing, there is important potential for Kenya to go through a process of import substitution and source locally the required amount of mango juice and pure. Kenya could also supply regional markets such as Sudan also an important importer of mango juice from India. Synergies between initiatives as well as strong market development, branding and promotion will be necessary to bring the sector to its full potential.

9 vii Photo: (CC BY-SA 2.0) Mango, Reji _6bf4ae3dc8_o.jpg Dry fruits are also increasingly consumed local and internationally, yet they represent a smaller segment of the processed mango sector. Mango has to compete with a number of traditional fruits such as raisins, prunes, apricots and figs which are appreciated and much cheaper than mango. They are consumed as snacks or part of mixes and muesli mostly in Europe and in the United States. The American market is mostly supplied by Asia with a sweetened product. Europe imports from West Africa and South Africa volumes of natural dried mango, a product better appreciated then sweetened mango because healthier. Processors can be supported by improving their processing efficiency, traceability and food safety protocols to export to the European market. Increasingly the requirements to export to the EU are becoming more stringent and difficult to comply by small processors. Developing soft and technical skills of entrepreneurs are therefore key to be successful but represent a smaller opportunity for Kenyan processors.

10 viii CONTENTS Acronyms and Abbreviations Definitions FOREWORD Executive summary iii iv v vi 1. THE PROJECT Project introduction Background and Context Needs Assessment Project Objectives 3 2. PURPOSE OF THE ROAD MAP Background and Context Road map key audience & use 4 3. SITUATION ANALYSIS 4 4. MANGO PRODUCTION 6 5. MANGO MARKETING Market channels of Mangoes Local, regional and international distribution channels 8 6. MANGO PROCESSING Processed mango production Mango juice processors Milly fruit processors Kevian industries Small scale mango juice processors ( farmer owned ) Dry Mango Processors Gikindu quality mangoes Azuri health Ltd Individual farmer ; Margaret Kung u Individual farmer ; Ferdinand Njiru MANGO VALUE CHAIN Value chain actors Producers / farmers Traders Exporters Processors Value chain Service providers Input suppliers Service providers Credit facilities Fruit tree nursery quality control institutes Sector support and enabling environment Governmental bodies 14

11 ix Quality Standards ORGANIC MANGO FARMING PRICES AND COSTING THE IN MANGO VALUE CHAIN MANGO SECTOR ASSESSMENT Kenya s LAPSETT corridor, Mango Production Investment Opportunity Value chain analysis : A case study of mangoes in Kenya ( FAO, 2003 ) Enhancing small scale farmers income in mango production through agroprocessing and improved access to markets Project nurture Promoting mango sub-sector in Kenya through value chain development Mango Commodity Business Plan CHALLENGES OF MANGO PROCESSING INDUSTRY IN KENYA GAPS STRENGTHS OF THE MANGO PROCESSING SECTOR WEAKNESSES OF THE MANGO PROCESSING SECTOR DEMAND AND SUPPLY ON A GLOBAL SCALE Production and export of mangoes, mangosteens, guava ( both fresh and dried ) worldwide Global production Global trade Global demand of mangoes, mangosteens, guavas PRODUCTION AND EXPORT KENYAN MANGOES, MANGOSTEENS, GUAVAS Mango production in Kenya Existing export market for Kenyan mango MANGO EXPORTERS IN AFRICA Côte d Ivoire South Africa Burkina Faso & Mali Ghana INDIA Dried mango sliced Indian mango pulp MANGO PROCESSING SECTOR IN KENYA Introduction fruit processing in Africa Mango processing in Kenya DEMAND EVALUATION OF MANGO PULP AND JUICE Mango pulp and juice processing for the local market Worldwide demand mango puree / juices Demand evaluation of mango pulp and juice the East African market Demand evaluation of mango pulp and juice from the Middle-East 36

12 x Demand evaluation of mango pulp and juice in the United States Demand evaluation of mango pulp and juice in Europe Purchasing requirements Organic Fruit juices Trend towards quality EU market as compared to the World DEMAND EVALUATION OF DRIED MANGO Introduction dried mango Osmotic dehydration Hot air Demand analysis for dried mango in the Middle-East Demand analysis for dried mango in the United States Demand analysis for dried mango in Europe DEMAND EVALUATION OF IQF MANGO FRUIT SNACKS CERTIFIED MARKETS Organic processed fruits Rainforest Alliance Fairtrade market MARKET ACCESS REQUIREMENTS ( EU ) Buyer requirements Legal requirements Common requirements Delivery terms PRIORITIES FOR THE IMPLEMENTATION OF THE ROADMAP Quality and quantity Access to market and market diversification Sector organization and communication Access to financial services QUALITY AND QUANTITY COMPLYING WITH INTERNATIONAL STANDARDS Quality management Production and volumes Processing Quality standards and accreditation Storage, logistics Packaging Export procedures CREATE ACCESS TO RELEVANT MARKETS, DISSEMINATE MARKET INFORMATION & MAKE THE KENYAN MANGO SECTOR VISIBLE AT INTERNATIONAL MARKETS Market and Product diversification Market information Trade promotion, marketing and new distribution channels 60

13 xi Recommendations IMPROVE & STRENGTHENING THE KENYAN MANGO SECTOR ORGANIZATION AND INTER-PROFESSIONAL COMMUNICATION Make the Kenya Mango Producers and Marketing Association ( KEMPMA ) an effective apex body Strengthening the local mango associations Recommendations PROVIDE ADAPTED FINANCIAL SERVICES TO SUPPORT PRODUCERS AND EXPORTER CAPACITIES Recommendations FOR KENYAN PRODUCTS TO BE COMPETITIVE PROCESSED FRUITS AND MANGO GLOBAL EXPORT : DIFFERENTIATION THROUGH QUALITY TRENDS REGIONAL MARKET OPPORTUNITIES 71 ANNEX DOCUMENT 73 List of Abbreviations 141 Background 142 Executive Summary WHY THE MANGO COMMODITY BUSINESS PLAN? WHAT THIS PLAN INCLUDES AND WHAT IT DOES NOT REVIEW OF THE GLOBAL MANGO INDUSTRY ; TRADE AND OPPORTUNITIES REVIEW OF THE MANGO INDUSTRY IN KENYA CHALLENGES FACING THE MANGO INDUSTRY IN KENYA DEVELOPMENT ISSUES AND IMPLEMENTATION STRATEGIES IMPLEMENTATION FRAMEWORK : KEY PLAYERS AND ROLES RISK ASSESSMENT ANNEXES Annex I : Budget Kshs Annex 2 Underlying Assumptions Annex 3 Cash Flow Analysis 157 References 158

14 xii TABLES Table 0 : Products and objectives to be supported by the project 2 Table 1: Mango production in Kenya 6 Table 2: Schedule for Mango production in Kenya 7 Table 3: Kenya Mango Variety availability chart 7 Table 4: World s major mango producing countries Faostat database (FAO) United Nations 20 Table 5: Evolution of world s export of mango ITC Trade map : The world aggregation represents the sum of reporting and non-reporting countries. Product : Guavas, mangoes and mangosteens, fresh or dried. 20 Table 6: Main exporters Exported quantity ITC trademap: Product: Guavas, mangoes and mangosteens, fresh or dried. 21 Table 7: Main exporters Exported value 2013 USD1000 ). ITC trademap : Product : Guavas, mangoes and mangosteens, fresh or dried. 21 Table 8: List of the ten main mango importers. ( 1000 USD ) ITC trademap : Product : Guavas, mangoes and mangosteens, fresh or dried. 21 Table 9: Production ( tons ) 22 Table 10: Top 10 importing countries that buy guavas, mangoes, mangosteens, both fresh and dried from Kenya. Source : ITC trade map. Product : Guavas, mangoes and mangosteens, fresh or dried. 24 Table 11: List of importing markets for the product exported by Côte d Ivoire in ITC trademap. 25 Table 12: Mango production in South Africa between 2007 and 2012 FAOSTAT Table 13: Mango export from South Africa between FAOSTAT Table 14: List of importing markets for the product exported by South-Africa in ITC trademap. 26 Table 15: List of importing markets for the product exported by Burkina Faso in ITC trademap. Product : Guavas, mangoes and mangosteens, fresh or dried 27 Table 16: List of importing markets for the product exported by Ghana in Product : Guavas, mangoes and mangosteens, fresh or dried. ITC trademap 27 Table 17: Mango production in India between 2008 and 2012 FAOSTAT Table 18: List of importing markets for a product exported by India. ITC trademap. 28 Table 19: List of importing markets for a product exported by India ( value in USD 1000, vol T ). ITC trademap. 29 Table 20: List of importing markets for a product exported by India. ITC Trademap. Product : Fresh or dried guavas, mangoes and mangosteens : Mango pulp. 30 Table 21: Volume and value of mangoes that has been imported by East African countries / Imported mangoes, mangosteens and guavas by Eastern Africa. Item 571, element 5622, FAOSTAT Table 22: Imported juices by Eastern African countries. Item 622, element 5610, FAOSTAT Table 23: Exports of mango pulp from India to Africa ( Source ITC trademap and own calculations ) 35 Table 24: Imported fruit juices by Saudi Arabia. FAOSTAT Table 25: List of supplying markets for a product imported by Saudi Arabia. Product : Fruit juices ( including grape must ) and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter. 37 Table 26: Top three exporting markets from which Saudi Arabia sources unconcentrated mango juice 37 Table 27: UN-Comtrade Fruit and vegetable juices, not fermented or spirited ( HS as reported 2009 ) 37 Table 28: List of importing markets for a product exported by United States of America. Product : 2009 Fruit & vegetable juices, unfermented. ITC trademap. 38 Table 29: List of supplying markets for a product imported by United States of America. Product : Mango juice, not fortified, unfermented, ITC trademap. 38 Table 30: Fruit and vegetable juices, not fermented or spirited ( HS as reported 2009 ) UN-Comtrade 40 Table 31: Organic fruit juice market ( source Fair Trade by the numbers ) 40

15 xiii Table 32: Millions of litres of juice on European market 41 Table 33: Global Demand for Mango Pulp / Concentrate, 2003 and 2008 PAMCO 2008, Pakistan *Estimated 41 Table 34: Top ten importing countries of mango pulp from India in , APEDA ( exchange rate USD1 = 60.3 rupee ) 42 Table 35: Imports of dried fruits in Saudi Arabia and United Arab Emirates in 2010 ( source FAOSTAT and ITC trademap, data for mango exported from India ) 43 Table 36: List of supplying markets for the product imported by United Arab Emirates in Product : 0804 Dates, figs, pineapples, mangoes, avocadoes, guavas. ITC trademap. 43 Table 37: Imports for dried fruits in Europe in 2010 ( Source FAOSTAT and ITC trade map ) 45 Table 38: Share of all foreign residents in UK Table 39: Dried mango market in Europe ( Arnoldus 2011 :29 ). 47 Table 40: Estimated UK retail sales by value ( million ) : Fairtrade certified fruit juices. Max Havelaar statistics, unpublished. 49 Table 41: FT Fruit juice estimated volume breakdown Max Havelaar statistics, unpublished. 49 Table 42: Estimated volume of FT fruit juice Max Havelaar statistics, unpublished. 49 Table 43: Concluding table 68 Table 44 : Mango production and value statistics per province for period

16 xiv FIGURES Figure 1: Market share of mangoes 8 Figure 2: Local, regional and international distribution channels 9 Figure 3: Mango processed products 10 Figure 4: Mango production by Province. USAID. National Mango Conference Kenya Horticulture development program Figure 5: Global Comparison of Mango production ( Grow Africa 2012b ). 23 Figure 6: Global Comparison of Mango yields ( Grow Africa 2012b ). 23 Figure 7: Export quantity and volumes Mangoes, mangosteens, guavas FAOSTAT. 24 Figure 8: Share of processed fruit production in Sub-Saharan Africa by country (ACET 2013: 32) 30 Figure 9: Left figure : Intra and extra EU imports of processed fruits and vegetables, ( in million Euros ). 39 Figure 10 Total fruit juice and nectar consumption within Europe ( million people ) AIJN report Figure 11: Dried mango specification in the British market ( CBI 2012 ). 45 Figure 12: Price indicators dried mango. Be aware that these figures are just indications. Price depends on the quality, brand, and retail outlet ( CBI 2012 ). 45 Figure 13: Consumption, imports and exports of mangoes, guavas, and mangosteens ( dried and fresh ) for the British market ( Souce CBI factsheet 2012 ) 46 Figure 14: Estimated volume of FT fruit juice Max Havelaar statistics, unpublished. 50 Figure 15: Market requirements (CBI / /buyerrequirements) 50 Figure 16: Product opportunities 70

17 Introduction 1 INTRODUCTION 1. THE PROJECT 1.1. PROJECT INTRODUCTION The Promoting Intra-regional Trade in Eastern and Southern Africa project funded by the Ministry for Foreign Affairs of Finland and implemented by the ITC ; aims to contribute to inclusive and sustainable export-led growth in Kenya, Tanzania and Zambia by improving the competitiveness of their producers, SMEs ( Small Medium Enterprises ) and TSIs ( Trade Support Institutions ). The three year project ( ) promotes participation of SMEs in selected agri-food sectors in regional and global value chains. It will address value chain inefficiencies combined with measures to strengthen TSIs in all three countries. The intervention will result in increased income and employment for stakeholders along the entire export value chain. Project Title : East & Southern Africa : Promoting Regional Trade Country : The Republic of Kenya, United Republic of Tanzania and The Republic of Zambia Development Objective To contribute to inclusive and sustainable export-led growth in Kenya, Tanzania and Zambia by improving the competitiveness of their producers, SMEs and TSIs. The project promotes participation of SMEs in selected agri-food sectors in regional and global value chains. It will address value chain inefficiencies combined with measures to strengthen TSIs in all three countries. The intervention will result in increased income and employment for stakeholders along the entire export value chain. Women and youth in rural communities are among the prime beneficiaries targeted by project. Special emphasis is put on sustainable and environment-friendly production. Expected outcomes : Outcome 1: Increased export competitiveness of SMEs in selected agri-food value chains in Kenya, Tanzania and Zambia Outcome 2: Enhanced performance for trade and business support service providers in selected agri-food value chains at national and regional levels. Duration 36 months Counterpart( s ) and key partners Kenya : Export Promotion Council ( EPC ) ; Horticultural Crops Directorate ( HCD ) 1.2. BACKGROUND AND CONTEXT One of the main priorities of intra-africa trade development ( ) is to improve market-led participation of African businesses in value chains. According to the Organisation for Economic Co-operation and Development ( OECD ) s Global Review of Aid for Trade ( 2013 ) the most important issue to be addressed by aid-for-trade solutions is the development of effective forms of public-private partnerships ( PPP ), which offer technical assistance in line with the three tenets of value-chain capacity building : To develop vertical linkages in the value chain ; To enable multi-sector participation in the value chain in order to include support services to value chain operators ; and To enable connectivity among participants in the value chain for a given sector or product, at both national and international levels.

18 2 In all three countries targeted by this project, the development of the agri-business sector has been defined as a priority area for national economic growth planning due to its impact on poverty reduction. Consequently, all three countries are eager to improve the capacity of SMEs to participate competitively in local and regional markets. The African Union s ( AU ) Boosting Intra-Africa Trade agenda aims to promote intra-regional trade by strengthening sectoral or product-based institutions and building the competitiveness of enterprises, amongst others, in agri-food value chains. In addition to country-specific recommendations, this agenda includes an aid-for-trade component, which aims to prioritize value-chain connectivity within regions. The main hurdle for these smallholder producers, however, is an inability to meet the requirements of buyers such as retailers, intermediaries, or food processing companies. Another major obstacle identified in all three countries is the lack of integration of SMEs from the informal sector into existing, cross-border value chains NEEDS ASSESSMENT Studies show that any gains to SMEs from the development of sustainable value chains such as this project aims to promote stem either from endogenous assets ( technology, market access, relationships with downstream players ) or from exogenous and developmental solutions ( policy, infrastructure, and financial support ). Consequently, the needs assessment carried out by ITC was, in part, a validation exercise aiming to determine these factors at product and sector level and to identify the priorities of the partner organizations. Working with the TSIs during the needs assessment stage allowed identification of existing, locally managed supply-and value-chain initiatives and pinpoint the gaps hampering efficiency and competitiveness at product, service, and institutional levels. This also provided a better understanding of the role of TSIs in achieving greater exports at the regional level and their possible function in trade integration. The table below presents the sector / products selected and the objectives to be supported by the project according to the identified gaps and needs. Table 0 : Products and objectives to be supported by the project Country Sector / products Objectives Gaps / needs KENYA Sectors and products: chilies, mango, avocado, passion fruit Increase exports and diversify markets Post-harvest management Quality management grading, handling, etc. Compliance with quality and SPS standards Creating a business infrastructure involving unemployed youth in intermediating goods for export Market research The major cross-cutting issue affecting all three countries in this project and subsectors is the inclusion of youth and women in value chains. There is already a limited number of youth who are both active in production and keen to climb the value chain and become involved in the intermediation of products between farm gate and exporters. Women and to a lesser extent, youth, also account for a significant proportion of those employed in the selected sectors ; the objective is to build capacity either in services or the processing stages of value chains to ensure greater involvement of both. In addition to the objectives listed above, the needs validation exercise also revealed the following existing challenges :

19 Introduction 3 Supply-side constraints due to sub-optimal access to agricultural inputs ; Lack of economies of scale and weak organizational capacity of producers, as well as a lack of innovative and productivity-enhancing technologies ; Limited access to finance ( working capital ) and financial services ( including insurance and pre-shipment finance ) and insufficient knowledge of how to access these instruments ; Insufficient product differentiation and value addition by SME processors ; Poor compliance with safety, SPS, quality, and environmental standards, exacerbated by insufficient certification facilities ; Limited availability of organized access to commercial and institutional services supporting supply chain performance ( e.g. storage, transport, distribution ) ; Poor access to updated and reliable market information for producers and traders ( both formal and informal ) ; Limited access to commodity exchanges and lack of understanding of their role in connecting buyers and sellers via ICT platforms ; Impediments to cross-border trade and lack of harmonized business systems PROJECT OBJECTIVES During a planning session in December 2013 ITC met with stakeholders from the Kenyan horticulture industry and the following list of project objectives was developed : Project outcomes & outputs Outcome 1 : Increased export competitiveness of SMEs in selected agri-food value chains in Kenya Output 1.1 Output 1.2 Output 1.3 Output 1.4 Output 1.5 Roadmaps for selected agri-food value chains developed Managerial and trade capacities of selected agri-food producers, processors and traders improved Capacities of selected service providers along the value chains strengthened. Regional business contacts and networks strengthened / established in the selected agri-food value chains Market opportunities activated Outcome 2 : Enhanced performance for trade and business support service providers in selected agri-food value chains at national and regional levels Output 2.1 Output 2.2 Output 2.3 Output 2.4 Managerial and operational capacities of TPOs and selected sectoral TSIs strengthened TSI service portfolio and technical capacities enhanced Formal and informal TSI networks, including women-owned and ICBT organizations enhanced National apex trade promotion bodies and business associations enabled to advocate business interests and to influence business and trade policies affecting regional trade This roadmap is covered by output 1.1 in the project document.

20 4 Introduction 2. PURPOSE OF THE ROAD MAP 2.1. BACKGROUND AND CONTEXT The purpose of this road map is to outline the opportunities for expanding trade of the Kenyan horticulture products and to provide a strategy for expansion. The road map has been developed in cooperation with the HCD, and representatives of the Kenyan horticulture industry including producers, processors, traders and exporters. This report provides a roadmap with specific actionable events and a time frame to attempt to move the industry beyond strategic planning to profitable long-term business and success for the Kenyan horticulture sector. It can be seen as a tool to assist and lead the sector towards the outcomes and outputs of the project, along with the overall strengthening of the sector and of its actors. The road map is based on existing documentations, and has been complemented by different studies and reports carried out for the purpose of the value chain analysis of the sector. The value chain analysis of the sector has been carried out by a local consultant. The purpose of this sub-report is to distribute and make available information on the processing and marketing of value added products. It is directed at producers as well as small entrepreneurs, extension officers and those involved in small business development. It is hoped that the information provided can lead to more diversified and increased income for the sector s key stakeholders. It is hoped also that this report will enable the stakeholders to create more opportunities to improve the health, nutrition and the economic situation within Kenya. An international demand analysis has been carried out to assess the current international markets for mango, along with current and future opportunities for Kenya in foreign markets, being regional and also international. The international survey also focused on identifying gaps that prompt implementation activities needs to enable greater competitiveness of the sector and greater export sales, regionally and internationally. An implementation plan with corresponding activities has been created from findings from the previously mentioned studies along with the key contributions of the sector s key actors during the Kenya mango roundtable that took place in Nairobi, Kenya, in August ROAD MAP KEY AUDIENCE & USE The key audience of the work carried out is the mango producers and exporters as this value chain analysis would support them in understanding the local, regional and international market dynamic and also support those interested in value chain of the mango sector. However, the value chain analysis and mapping will also be aimed primarily at multiple stakeholders like decision makers, public policy makers and important stakeholders. 3. SITUATION ANALYSIS International trade in Africa has outperformed the global average over the past decade, yet intra-regional trade remains low by international standards, at around 12 % of total trade, i.e. considerably less than levels reached in Latin America ( 22 % ), Asia ( 50 % ), or the EU ( 73 % ). However, a recent surge in efforts to integrate markets across the continent by reducing tariff and non-tariff barriers has led to some progress and encouraged countries to look for untapped export opportunities.

21 Introduction 5 Photo: (CC BY-SA 2.0) Mango, supermarketscholar.jpg In January 2012, the African Heads of State and Government adopted the African Union Action Plan for Boosting Intra-African Trade and the Establishment of a Continental Free Trade Area, which defines projects, activities, outputs, timeframes and key lines of responsibility. The African Union Commission ( AUC ) has recommended the tripartite agenda ( COMESA, EAC and SADC ) be used as the roadmap for aid-for-trade and as an instrument for implementing the AUC policy to create a larger regional market and free trade area. The debate around food security issues, fuelled by rapid growth in demand for food in the region, underlines the critical importance of intra-regional cooperation and trade in agriculture. Accordingly, regional trade in agricultural goods is also a primary objective for the regional economic groupings ( i.e. COMESA, EAC and SADC ) in the context of efforts to encourage regional economic integration and promote a pan-african development agenda. All African countries thus see the agriculture sector as a high-impact area in which they can build value chains that will contribute to boosting trade within the region as compatibilities in agricultural production between countries offer significant, unrealized potential for intra-regional trade. Variations in climatic conditions within countries and across the region offer substantial opportunities for trade expansion in terms of trading more with existing markets as well as opening up new ones. A growing middle class, mainly concentrated in urban areas, is boosting domestic demand for both staples and products with higher added value. At the same time, the retail sector is evolving from an informal and fragmented environment to a more formal and modern one which in turn requires reliable supply chains. The latter transformation is being driven mainly by investment from larger supermarket chains, which has led to the adoption of more stringent sanitary and phytosanitary ( SPS ) and quality standards for agricultural products. Prioritizing needs and devising appropriate solutions to the above challenges requires a collaborative approach with the private sector. A major capacity building priority for Kenya from 2013 is to also develop support services for agri-food export supply and value chains. The service sector remains relatively undeveloped despite strong economic growth, leading to a rising trade-in-services deficit and strong demand for greater capacity-building in high-value service activities. Improving the quantity and quality of services would also allow these economies to diversify away from commodity exports.

22 6 Chapter 1. The Kenyan mango sector CHAPTER 1. THE KENYAN MANGO SECTOR 4. MANGO PRODUCTION The major fruits grown in Kenya in order of importance are ; Banana ( 37.6 % ), Mangoes ( 19.6 % ), pineapples ( 12.1 % ), Avocado ( 9.8 % ), pawpaw ( 5.4 % ), oranges ( 4.6 % ), water melon ( 4.2 % ) and Passion fruit ( 3.7 % ). Mango production in Kenya in 2013 was under an area of 46,980 ha which produced 581,290 tonnes valued at Ksh 7.4 billion ( HCD, 2013 ). There was a steady increase in production compared to 2011 and Production is mainly in the Coastal and Eastern regions of the country and also some parts of central region. The main mango production counties ranked by % share in quantities produced include Kilifi ( 18 % ), Kwale ( 16 % ), and Machakos ( 8 % ) Meru ( 8 % ), Makueni ( 8 % ), Embu ( 7 % ), Migori ( 5 % ), Bungoma ( 4 % ), Tana River( 4 % ), and Lamu ( 4 % ). Mango production in Kenya is as shown in table 1 Table 1: Mango production in Kenya County Area ( Ha ) Quantity ( MT ) Value ( Kshsmillion ) Area ( Ha ) Quantity ( MT ) Value ( Kshsmillion ) Area ( Ha ) Quantity ( MT ) Value ( Kshsmillion ) Kwale 2,136 43, ,636 52, ,135 91,390 1, Kilifi 5,727 98, , ,655 1,017 5, ,269 1, Migori 1,722 23, ,874 26, ,061 28, Machakos 4,520 41, ,825 54, ,133 51, Meru 4,097 45, ,176 46, ,135 48, Makueni 9,224 40, ,237 44, ,632 48, Bungoma , ,155 22, ,258 24, Embu 1,857 9, ,290 27, ,605 39, Tana river 1,133 18, ,211 22, ,276 23, Lamu 2,158 31, ,187 32, ,189 24, Others 5,874 83,308 1,205 6,457 91,049 1,414 6,764 94,638 1, Total 39, ,944 5,298 43, ,432 6,177 46, ,290 7, Source : ( HCD, 2013 ) % share by value Several mango varieties are under production and include both local and improved varieties. The local varieties include Ngowe, Boribo, Batawi, Sabre, Dodo, while the improved varieties include Tommy Atkins, Kent, Van Dyke, Apple, Sabine and Haden. Mangoes mature at different times depending on the variety and the region as shown in table 2.

23 Chapter 1. The Kenyan mango sector 7 Table 2: Schedule for Mango production in Kenya Province Location Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Coast Lamu xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx xxxx Malindi xxxx xxxx xxxx xxxx xxxx xxxx Kilifi xx xxxx xxxx xxxx xxxx xxxx xxxx xxxx Shimo La Tewa xx xxxx xx xxxx xxxx Kwale xxx xxxx xxxx xxxx xxxx Manyani xxxx xxxx Wundanyi xxxx xxxx N. East Garissa xxxx xxxx xxx Eastern Isiolo xxxx xxxx xxxx xxxx Machakos xxxx xxxx xxxx xxxx xxx Kitui xxxx xxxx xxxx xxxx Embu xxxx xxxx xxxx xxx Meru xxxx xxxx xxxx Central Mwea xxx xxxx xxxx xxxx xxx Maranjau xxx xxxx xxxx xxxx xxx Nyeri xxxx xxxx xxxx xxx Kerugoya xxxx xxxx xxxx xxxx Muranga xxxx xxxx xxxx xxx Nairobi Kamiti xxxx xxxx xxxx xxxx Ruiru xx xxxx xxxx xxxx xxx Nyanza Kisumu xx xxxx xxxx xxxx xxxx xxxx Homabay xxxx xxxx xxxx Each x represents 1 week of the month Table 3: Kenya Mango Variety availability chart SEASONS Nov Dec Jan Feb Mar Apr May June July Ngowe xxxx xxxx xxxx xx xxxx xxxx xxxx xxxx Apple xxxx xxxx xxxx xx xxxx Tommy Atkins xxxx xxxx Van Dyke xxxx xxxx Haden xxxx xxxx Sabine xxxx xxxx Kent xxxx xxxx Each x represents 1 week of the month

24 8 Chapter 1. The Kenyan mango sector 5. MANGO MARKETING A high percentage of the mangoes produced in Kenya are for the local market ( 96 % ), while 4 % are exported to international markets. Export volume for Kenyan mangoes in 2013 was 6,430,055 Kg which earned the country Ksh 1,039,915,729. This was an increase as compared to 2012 where the production was 4,939,060 Kg ( HCD, 2013 ; HCD, 2012 ). These are mainly for the fresh mango. The international markets include the United Kingdom, Germany, Holland, France, Japan and the United Arab emirates. There are specific varieties that are suitable for export and the main ones include Kent, Vandyke, Tommy Atkins, Haden, Ngwee, Apple MARKET CHANNELS OF MANGOES Figure 1: Market share of mangoes Mango Production 581,290,000 Kg ( 100 % ) Local / domestic market 95 % Export Market fresh mango 4 % Processed mango (Juice,dry) 1 % 5.2. LOCAL, REGIONAL AND INTERNATIONAL DISTRIBUTION CHANNELS Mango producers can be divided into four categories, which include Independent small holder farmers, contracted small holder farmers, commercial farmers and large company farms ( Figure 2 ). Independent small holder farmers are those that are not on contract farming. Contracted farmers have an agreement with exporters to supply mangoes. Commercial farmers are the individuals who own large scale farms of more than 1000 mango trees. The large company farms are owned by exporters / processors in the sector. The wholesalers, marketing agents / middlemen buy from the producers, bulk and sell to the retailers who include the green grocers and supermarkets and the produce ends with the local consumers. For the export market, farmers are contracted by the exporters and hence sell to them directly. On the other hand, the middle men can collect and bulk for the exporters. Some exporters own farms from which they export directly.

25 Chapter 1. The Kenyan mango sector 9 Figure 2: Local, regional and international distribution channels Independent small holder farmers/ Commercial farmers Contracted small holder farmers Company farms Wholesalers Marketing agents middlemen / brokers Exporters of fresh mangoes Local processors mango juice Local processors dry mango Open air Retail markets Green grocers Supermarkets Wholesalers International markets Local Consumers International consumers 6. MANGO PROCESSING Majority of the processing companies are located in the industrial area of the capital Nairobi, central and the coastal parts of Kenya. There are farmer groups that own miniprocessing factory which are located within the farming areas / production areas. The main processing equipment used includes the fruit pulper, pasteurizer, blender and the electric drier, for juice making. For Mango drying, individual farmers utilize the solar energy to dry the mangoes on an average capacity or 40kg / day of dry mango. Production of mangoes is mainly by small scale farmers, under rain-fed conditions. There are no industrial-scale mango producers whose production is specifically for processing PROCESSED MANGO PRODUCTION There are no specific varieties that are produced only for processing. All the varieties can be used for processing to mango juice, though there are preferences depending on taste and colour. For example, the large scale processors prefer the Ngowe variety due to its large size, high quality, high brix content hence high quality and quantity pulp. Farmers, who do not have ready market for fresh mango sales, especially during the high season, opt to sell the ripening mangoes to processors often at throw away prices. Mango processing into juice is mainly by large processors who include Premier processors, SunMango processors, Kevian Ltd and Milly processors. These companies purchase mangoes from small scale farmers and middlemen / brokers. There are organized farmer groups and farmer marketing groups that have started processing mango

26 10 Chapter 1. The Kenyan mango sector juice. They include Chuluni horticultural enterprise, Kitui county fruit processors, Gikindu quality mangoes, and Malindi farmers cooperative society. They buy the mangoes from members of the groups and from neighbouring farmers. Figure 3: Mango processed products Mango Production Fresh mango Processed mango ( Juice, jam, pulp ) Processed mango ( dry ) 6.2. MANGO JUICE PROCESSORS Commercial processing companies include Premier processors, SunMango processors, Kevian Ltd and Milly processors Milly fruit processors Milly fruit processors are located in Mombasa and process mango for pulp and juice. The main mango variety used in processing is the Ngowe which is also largely under production at the coast. The processor had branded the fresh mango juice as Picana and it is retailed in the major supermarkets in the country. The processing plant capacity is 5 tonnes per hour. However this capacity is not always met due to the seasonality of the mango and the low supply Kevian industries Kevian industries are a large scale processor of mango juice and pulp, with two processing plants, one located in Thika and the other in Ngong. The juice is sold in all the major supermarkets in Kenya and in East Africa under the brands Pick n Peel and Afia. The processing capacity is 10 tonnes per hour. The Ngowe and Apple mango varieties are used in the processing of mango juice and pulp Small scale mango juice processors ( farmer owned ) Small scale farmers are organized into groups and some have invested in processing of their mango fruits, though on small scale. These include Chuluni horticultural enterprise, Kitui county fruit processors, Gikindu quality mangoes, and Malindi farmers cooperative society Chuluni horticultural enterprise Chuluni horticultural enterprise is owned by 52 small scale farmers in Kitui. They process mango, lemon, passion and orange juice as well as pawpaw jam. The enterprise sources their mangoes from the members. The capacity of the processing plant is 120 liters / hour and the processing of fruits is done when the mango fruits are on season. To keep the plant busy, other on-season fruits such as lemons and oranges are processed. The enterprise sells the juice to the local supermarkets, shops, schools and social gatherings.

27 Chapter 1. The Kenyan mango sector Malindi farmers cooperative society The Malindi farmers cooperative started in 1950 by selling mangoes to the UK. They experienced export challenges due to low quality and competition from other exporters with proximity to the airport in Nairobi and hence went dormant from 1990 to The cooperative has 138 members, and have a subsidiary company, the Malindi natural juice processors. The processing company buys mangoes from the members at between ksh11-13 per kg. The plant has a capacity of processing 40tonnes of mangoes per 24 hours. However the plant is idle when the mangoes are off season. The processing stages include, sorting, pre-cleaning, conveyance cleaning, crushing / pulping, sterilization / pasteurization, concentration, packaging, storage and marketing. The pulp is stored in septic bags and loaded into drums that have a poly-lining. The pulp can be stored this way with a shelf life of months. The cooperative sells the pulp to other small and medium processing companies such as Milly fruit processors ltd. They are not yet making juice from the mangoes Kitui county fruit processors The Kitui county fruit processors is also known as the mutunguni ecosystem environmental management alliance, and it is a community based organization, with 96 members. The processing plant has the capacity to process fruits which include mangoes, passion fruit, oranges, tomatoes, berries, pawpaws and bananas. The processing capacity is 160kg / hr, though the plant is idle during the time that mangoes are off-season. The processing line includes sorting, cleaning, inspection, pulping, pasteurization, packaging, cooling, storage and marketing. They produce juice in 500ml bottles and mango pulp which is pasteurized and stored in cold stores. The main market for the organization is the local supermarkets, and retail shops DRY MANGO PROCESSORS Gikindu quality mangoes Azuri health Ltd Gikindu quality mangoes comprises of 60 members who are mango farmers. The farmers use a solar energy technology to dry mangoes. The plant only deals with mangoes. The processing stages include sorting, pre-cleaning, cleaning, peeling using a super slicer, rinsing using citric acid / lemon, loading in trays, drying in the solar drier after which they are packed, stored and markets. The dried mangoes are sold locally at ksh per kg. This is a private company that has contracted farmers in Murang a to supply dried mangoes among other fruits such as the pineapple. The farmers use locally made solar driers to make high quality products. The company also trains the farmers on processing of the mangoes. The company also dry s mangoes supplied by farmers, specifically the tommy and Vandyke varieties. They use an electric drier in addition to solar drying when the weather conditions are conducive. The electric drier gives about 10kg / day ( from 100kg fresh mango ) while the solar drier gives 22kg / day ( 220kg fresh ). The company sells to the local supermarkets ( nakumatt and chadarana ) packed dried mangoes.

28 12 Chapter 1. The Kenyan mango sector For the wholesale market they sell 1700 / kg and buy from the farmers at 800 / kg. They also export only once a year to a client in Juba and Saudi Arabia, 1 ton of dried mangoes to each of the markets Individual farmer ; Margaret Kung u The farmer has 2000 mango trees and uses fruits from the farm to make dried mango using solar drier. The capacity is 60 kg per day. She sells the dried mangoes to finders in Africa ( yaya center ) at ksh 650 / kg. All varieties are used for drying except Ngwee since it doesn t have adequate fibre Individual farmer ; Ferdinand Njiru The farmer solar dries mangoes and can produce 20kg / day of dry mango, and sells at wholesale to finders in Africa. 7. MANGO VALUE CHAIN Input supply production/postharvest distribution consumer Agro-input suppliers Producers/ farmers Marketing agents/ middlemen Transport by road to local markets Certified mango seedlings Packhouses Packaging material suppliers Exporters Phytosanitary certification Transport to International markets EU and UAE Mango processing equipment suppliers Processing companies Bureau of standard checks Traders Transport by road to local markets

29 Chapter 1. The Kenyan mango sector VALUE CHAIN ACTORS Producers / farmers Traders a. Individual Farmers with large farms of more than half an acre b. Farmers organized in groups with farms less than half an acre ( there are approximately 800,000 small scale farmers in the horticulture industry ). Farmers, marketing agents / middlemen in the domestic market, who buy and bulk the produce at the farm level and sell to the exporters, wholesalers, retailers and to the open air markets Exporters All horticultural exporters including fruits are registered with HCD for export to international markets. They contract farmers who produce the mangoes and sell to them for the export market Processors The large and commercial processors include Kevian, Milly fruit processors, SunMango and Premier foods that process mangoes for juice and pulp. They contract the marketing agents to collect and bulk the mangoes after which they supply to the processing plants. The processors also source fresh mango for processing directly from the farmers VALUE CHAIN SERVICE PROVIDERS Input suppliers Service providers Credit facilities a. Fruit tree nursery operators ( certified and registered by KEPHIS and HCD ) and Kenya Agricultural Research Institute who supply certified mango seedlings. b. Agro-chemical dealers who supply pesticides, fertilizers to the farmers / producers c. Agro-dealers who supply farm equipment d. Processing equipment suppliers who include, Kenya Industrial Research & Development Institute ( KIRDI ), Jomo Kenyatta University of Agriculture and Technology ( JKUAT ), and DK engineering. a. Extension services provided by Ministry of agriculture, local and international NGO s, b. Ministry of Cooperatives who assist farmers in the formation of savings and credit cooperatives ( SACCO s ) which they use to access credit facilities and purchasing of equipment / inputs in bulk hence cheaper than individual purchases. c. Kenya national farmers federation ( KENAFF ) d. Kenya Mango growers and Marketing association which represents mango farmers at KENAFF. The government of Kenya has established government institutions that offer affordable credit facilities to the youth and women. These include the a. Youth Enterprise Development Fund which was established in 2006 for the youth. There are several programs especially in agriculture development that support the youth in agri-business projects, in form of training on business proposals, management, marketing after which they are awarded the agri-loans. b. Uwezo fund was established in 2013 under the Ministry of devolution and Planning and gives loans to the youth and women. ( Please note the men are not left out.

30 14 Chapter 1. The Kenyan mango sector They can be members of a group that is composed of women and / or youth as long as the group committee comprises of youth and / women ) There are micro-finance institutions that include a. Faulu Kenya that has branches across the country. b. Kenya Women Microfinance Bank Ltd., which works almost exclusively with women and has offices across the country and mostly in the rural areas. It offers credit facilities to individuals or groups. Other mainstream banking institutions such as Kenya Commercial Bank, Equity Bank, Cooperative Bank, National Bank of Kenya, Family Bank, among others have set programs for financing projects in agriculture. The mango farmers and farmer groups can be awarded loans through such institutions to expand their processing capacities Fruit tree nursery quality control institutes a. HCD deals with fruit tree nursery registration and inspection of all fruit trees b. KEPHIS deals with fruit tree seedling plant health inspection and certification at the nursery SECTOR SUPPORT AND ENABLING ENVIRONMENT Governmental bodies Quality Standards a. Agriculture Fisheries and Food Authority : This is now the main Authority and has the following directorates ; Tea Directorate, Coffee Directorate, Horticulture Crops Directorate ( former HCD ), Fiber Directorate, Nuts and Oils Directorate, Sugar Directorate, Pyrethrum Directorate, Fisheries, Food Crops Directorate. b. As a Directorate, the Horticulture Crops will still continue with its mandate and activities will be maintained. The only difference will be the reporting channels which will be through the Head of the Directorate to the Director General in-charge of the AFFA. c. Devolved Sectors : Agriculture sector is one of the sectors that have been devolved in Kenya and most of the activities that were being controlled from the national level are now controlled at the County level. This will mean more collaboration with the County governments. This will not be a challenge since HCD has county offices and has been collaborating with the counties in all the activities. The Kenya Bureau of Standards ( KEBS ) is the government institution tasked with governing and maintaining standards of locally manufactured products in Kenya. It also checks imported products. The mandatory quality mark for locally manufactured products which include the processed mango is the standardization mark. The KS standards for each product have to be met for the mark to be awarded and hence added to the labels on the product which gives them a positive edge in the market.

31 Chapter 1. The Kenyan mango sector ORGANIC MANGO FARMING Mango farming in Kenya is mainly conventional with few farms being organic. There is a national body for organic producers known as the Kenya Agricultural Organic Network ( KOAN ). It is a non-governmental not-for-profit membership organization that is mandated to co-ordinate, facilitate and provide leadership and advisory services to its members and stakeholders in organic production, technical training, and marketing, certification and policy issues. There are two organic certifying bodies ; Encert Limited and Nesvax Control. They both certifying organic producers, using the East African Organic standards. However these standards are not recognized in the EU or Japan. The Encert Ltd has certified two mango farms as organic, which include Nyumbani Village farm in Kitui and Spoonderift Organic farm. The SGS Kenya Company certifies organic grown farms for the EU and USA Markets. One company, Organic growers and packers ( EPZ ) Ltd, are in the process of certification. They buy produce from farmers in Taveta and Tana Delta, mainly the Ngwee and Apple varieties. They have a capacity of 10000Tonnes of mango juice and 5000 tonnes of mango concentrate per year. 9. PRICES AND COSTING THE IN MANGO VALUE CHAIN The price for mangoes is not fixed at any point along the value chain. It fluctuates depending on the timing of the season ( early, mid and late ). Regions where mangoes mature early get very high prices early in the season etc. The average prices along the value chain are : a. Farmer to exporter / middleman ksh 5-7 per piece b. Farmer to processor ( 3 rd grade ) Ksh 1-5 per piece c. Processed packed Mango Juice ( 500 ml ) at the retail market Ksh d. Processed dried mango ; farmer to wholesaler per kg e. Processed dried mango ; at the retail market Ksh per 100 grams 10. MANGO SECTOR ASSESSMENT KENYA S LAPSETT CORRIDOR, MANGO PRODUCTION INVESTMENT OPPORTUNITY The Kenyan Government has provided for an investment opportunity in Mombasa, for the production and processing of Mangoes under production in the Tana River Delta region around the Lamu-South Sudan-Ethiopia ( LAPSSET ) corridor. This will entail seven ( 7 ) fifty ( 50 ) hectare nucleus farms ( in Garissa, Hola, Garsen, Kipini ), totalling to 350 hectares of mango production along the Tana River. The supply will be increased through contract farming with more than 6,000 farmers. The project targets the fresh domestic and international markets as well as semi-processing of the mangoes ( i.e. freeze-drying ) which will then be sold to processors for pulp and juice production. This project has not yet started.

32 16 Chapter 1. The Kenyan mango sector VALUE CHAIN ANALYSIS : A CASE STUDY OF MANGOES IN KENYA ( FAO, 2003 ) The study looked into the mango production, marketing and processing. Factors affecting the development of the mango supply chain were also assessed and categorized as factors at farm level, marketing level, processing level and the export level. The study revealed that the Kenyan mango supply chain had been hindered by several structural hindrances at the different levels in the value chain. Constraints at the processing stage include insufficient plant capacity and organization of supplies ; high quality fruits are exported and the lowest quality left for processors. At consumption, the findings were ; the price of natural mango juice is too high for domestic consumers, compared to cheaper imported juice from Mauritius, South Africa and Egypt. They concluded that since a high percent of fruit are sold at local market other than export market, other means of utilization should be introduced, including processed mango products ENHANCING SMALL SCALE FARMERS INCOME IN MANGO PRODUCTION THROUGH AGROPROCESSING AND IMPROVED ACCESS TO MARKETS The study was carried out with mango farmers in Central, Eastern and Coast provinces of Kenya. The results showed that there is a high potential in agro-processing of mangoes. Farmers also need training on processing of mangoes to ensure value addition and thus better incomes. ( Gitonga et al., ) PROJECT NURTURE One of them is project Nurture in Kenya, a partnership between the Coca Cola Company, the Gates Foundation and Technoserve started in The of the four-year, $11.5 million partnership program is designed to enable more than 50,000 smallholder fruit farmers in Kenya and Uganda to double their income derived from fruits by The programme trains smallholder mango and passion fruit farmers on improved agronomic practices. There is also work done with financial institutions to improved farmers access to credit, and creating market linkages. The project aims at securing and increased fruit volumes while generating positive social, economic, and environmental impacts in fruit-growing communities. ( SAI platform ). Minute Maid Mango Nectar processors are using locally sourced puree in processing. The project ends The project has certainly faced some challenges in establishing its sourcing mechanisms, chain efficiency, governance and reaching targets. Some varieties have proven not to be optimal for processing into juice and puree. Working across the value chain, with various stakeholders proves to be imperative for a successful intervention, while also working on services and the chain s environment. Sustainable business models and local sourcing by large companies can offer an important pull factor for chain actors to supply volumes and quality products. ( Jenkins and Fries 2012 ) While Coca Cola has engaged with 1300 farmer groups over the time period of the project, some activities have been financed by Gates foundation. As the project comes to an end, it will be interesting to see how the linkages created will be sustained PROMOTING MANGO SUB-SECTOR IN KENYA THROUGH VALUE CHAIN DEVELOPMENT The key intervention areas in the mango value chain were to have a public-private partnership with KEVIAN Ltd ( fruit processing company ), with the objective of reducing mango postharvest losses, by linking the small scale mango farmers with processors. In addition, training of farmers and other stakeholders on mango nursery establishment,

33 Chapter 1. The Kenyan mango sector 17 production, post-harvest management and marketing. The project focus was also on market linkages and business to business meetings, set-up of collection centres, handling to collective marketing. Achievements by the project ; Establishment of two collection centres for bulking of produce by farmers ; training of farmers on production, processing, and packaging technologies MANGO COMMODITY BUSINESS PLAN Under the NFTII project in Kenya implemented by ITC, the work focused on the tree fruit sectors, looking at Mango, Avocado and Passion Fruit. Commodity Business Plans ( CBP ) were created for each of them. This commodity business plan assessed the business logic for boosting exports for the mango sector. It was developed from targeted market analysis, mapping of production capabilities, financial instruments, and institutional infrastructure. The aim of the CBP was that with effective CPB, the various interventions in the tree-fruit sector can be harmonised and coordinated to achieve goals along the value chain, such as increasing the value or volume of exports or reducing waste at pre- or post-harvest. Please refer to Annex document for full Mango Commodity Business Plan. 11. CHALLENGES OF MANGO PROCESSING INDUSTRY IN KENYA 1. Mango production and harvest ; the mango trees in Kenya are alternate bearing and the fruit is only available for seven months in a year, between October and April the following year. Hence most of the processing plants remain idle since there is no supply of the mango all year round. Unless the processors engage in other fruit processing and also process mango pulp during the peak season for use during the off-season. 2. Pests and disease particularly mango weevil and fruit fly in addition to poor harvesting techniques lower the quality of mangoes. Harvesting of immature mangoes leads to lower quality pulp. 3. For the dried mango, drastic change of weather patterns result to losses and low quality dry mangoes since the farmers use solar driers. 4. Lack of collection centers and inability to mobilize farmers into processing marketing groups leads to the exploitation of the farmers by middlemen, through poor prices of as low as ksh 5 / kg. 5. The mango fruit is bulky and has a short shelf life hence difficult to process the fruit all year round unless stored in a cold room. 6. Lack of cold storage facility especially by the small processors to enable them buy in bulk and process even when the fruit is out of season. 7. Lack of adequate and affordable processing equipment especially for the small scale farmer processors. There is insufficient venture capital. Most of the processing by small scale farmers is through funding, after which maintenance of the equipment becomes difficult and hence the project stalls. 8. Another challenge is high cost of repayment of loans ( acquired when establishing the processing plant ) e.g. for the Malindi farmers cooperative society, thus minimizing re-investments 9. Lack of qualified personnel / training of the farmers on processing. Hiring of personnel for managing the processing is expensive 10. There is competition of the mango fruit juice processed in Kenya by imports of concentrates from South Africa and Brazil ( due to lack of enough supply of fresh fruit since most of it is consumed fresh in the local market ), and imported fruit juices. 1. by PSDA / GTZ ( National Mango Conference, KICC, Nairobi, 12th February 2010 )

34 18 Chapter 1. The Kenyan mango sector 11. Lack of knowledge on importance / nutritional benefits of consuming juice from fresh mango as opposed to juice made from concentrates. There are also imitations in the market parading as made from fresh fruit while they are from concentrates. 12. Poor infrastructure in form of roads delays the transportation of produce from farm to the processing plant hence causing deterioration, increased rejection rates and may lead to total loss. Long distance transporting for example of the Ngowe variety of mango from Mombasa to Nairobi by road a 6-8hr drive, may affect the quality. 13. High quality fresh mangoes are exported, and also used in the local fresh market. Whatever does not make it for export and local fresh market and left on the farmers farm, it is then sold at a throw-away price to the processors. 14. Locally produced natural mango juices are expensive to purchase and face competition from mango juice made from concentrates. 15. Low efficiency of solar drier since it is small in size, ( Gikindu quality mangoes ) 16. For the large scale processors, they cited lack of local expertise to repair, maintain and service the processing plant. 17. Electric power fluctuations / surges lead to increased costs of production ( 15 % of total costs ) due to the use of generators. 12. GAPS 1. Need for improved transport system i.e. roads for mangoes from the farm to market 2. Need for capacity building on drying and juicing of mangoes to ensure high quality processed products 3. Need for appropriate and affordable packaging materials for to ensure appropriate storage and longer shelf life 4. Lack of affordable mango processing equipment for various mango processed end-products ( Juice, Dried, Chutney ) 5. Weak farmer Group Dynamics hence the processing plant is not well managed and with time the processing stalls. It is important to have different ( not group members ) management personnel for the processing plant to ensure continuity. 6. Need for more farmer groups to increase acreage for mango production to ensure adequate supply to the markets 7. Need for alternative use of the processing equipment when the mangoes are in low season / supply is low. 8. Need for identification of an appropriate and specific source of rootstocks to enhance mango grafting with improved varieties 9. Need for a cold storage facility to store the mangoes during the high season 13. STRENGTHS OF THE MANGO PROCESSING SECTOR 1. Most of the agro-ecological zones in Kenya can be used for mango production of high quality mangoes. 2. There is a high demand all year round for processed mango both for the local and international markets 3. Rising number of middle class citizens hence provide domestic demand for natural products 4. Several varieties both local and exotic give adequate yield under rain-fed conditions and also they mature at different times of the year within a seven month window and hence consistent supply for the seven months. 14. WEAKNESSES OF THE MANGO PROCESSING SECTOR 1. Inadequate supply of fresh mangoes for processing throughout the year due to the seasonality in production 2. Lack of contractual farming between processors and farmers to ensure sale of high quality mangoes in the processing industry.

35 Chapter 2. International demand of processed mango 19 CHAPTER 2. INTERNATIONAL DEMAND OF PROCESSED MANGO The mango is the tropical fruit of the mango tree belonging to the Anacardiaceae family. Native to eastern India and Burma, several hundred cultivars of mango exist, but only a few are commercialized. The main cultivars are Tommy Atkins, Keitt, Kent, Osteen, Haden, and Valencia Pride. Mangoes are produced in over 90 countries worldwide. Asia accounts for approximately 77 % of global mango production, and the Americas and Africa account for approximately 13 % and 9 %, respectively ( FAOSTAT 2007 ). However, only a small proportion of total mango production enters international trade ( less than 4 % ), the volume traded has risen substantially over the last decade. Among the factors responsible for increased mango production, trade, and consumption are lower prices, year-round availability, and fewer trade barriers ( Evans 2008 ). Worldwide, the mango cultivars that are mostly in favour are Kent, Tommy Atkins, Haden, and Keitt. These cultivars have fruit with a red blush, and are less fibrous, firmer, and more suited for long-distance transportation than other types of cultivars ( Sauco 2004 ). The green cultivars, such as Ataulfo and Amelie, are only now being widely accepted in the international market. Other cultivars gaining popularity in the international market include Alphona, Dudhpeda, Kesar, Sindhu, Pairi, Desi, Chaunsa, Langra, and Katchamitag. Most of the newer cultivars are coming from India and Pakistan ( Evans 2008 ). 15. DEMAND AND SUPPLY ON A GLOBAL SCALE PRODUCTION AND EXPORT OF MANGOES, MANGOSTEENS, GUAVA ( BOTH FRESH AND DRIED ) WORLDWIDE Global production In terms of total production in tons, India with more than 15,000,000 tons is foremost the biggest producer of mangoes, mangosteens, guavas ( both fresh and dried ) worldwide. The figure below shows the top ten mango producing countries in the world in 2011.

36 20 Chapter 2.International demand of processed mango World s major mango producing countries Table 4: World s major mango producing countries Faostat database (FAO) United Nations Rank Country Production ( tons ) 1 India 15,188,000 2 China, mainland 4,350,000 3 Thailand 2,600,000 4 Indonesia 2,131,139 5 Pakistan 1,888,449 6 Mexico 1,827,314 7 Brazil 1,249,521 8 Bangladesh 889,176 9 Nigeria 850, Philippines 800, Global trade The international mango market has grown considerably over the last 30 years. The trade mainly revolves around three regional areas : Asia, which trades mainly with the Middle East ; Africa, which exports to the European market ; and Latin America, which supplies the American and European markets ( Unctad 2014 ). Slowly the American and European markets have got accustomed to mango and demand as grown over the years. A specific product code for processed mango ( juice, pulp, dried ) does not exist. Mangoes, mangosteens and guavas, both fresh and dried are categorized under the following HS code : In 2013 the global export value of these products was $ 1,927,061,000 USD. Between 2009 and 2013 the global annual growth in value was 14 % on average. The annual growth in value between 2012 and 2013, however, was even 20 %. On average, the annual growth in quantity between 2009 and 2012 was 7 % ( ITC trademap 2014 ) Worldwide mango export between 2009 and 2013 Table 5: Evolution of world s export of mango ITC Trade map : The world aggregation represents the sum of reporting and non-reporting countries. Product : Guavas, mangoes and mangosteens, fresh or dried. Year Tons USD ( 1000 ) ,452,021 1,158, ,451,420 1,294, ,631,569 1,522, unknown 1,609, ,731,953 1,927,061 Both in terms of quantity exported and value exported, Mexico, India and Thailand were world s biggest exporters in 2013.

37 Chapter 2.International demand of processed mango 21 Main exporters ( quantity ) Table 6: Main exporters Exported quantity ITC trademap: Product: Guavas, mangoes and mangosteens, fresh or dried. Country Item Element Year Volume Mexico Mangoes, mangosteens, guavas Exported quantity ( tons ) ,169 India Mangoes, mangosteens, guavas Exported quantity ( tons ) ,918 Thailand Mangoes, mangosteens, guavas Exported quantity ( tons ) ,904 Main exporters ( USD dollars ) Table 7: Main exporters Exported value 2013 USD1000 ). ITC trademap : Product : Guavas, mangoes and mangosteens, fresh or dried. Country Item Element Year Value Mexico Mangoes, mangosteens, guavas Exported Value ( USD thousand ) ,678 India Mangoes, mangosteens, guavas Exported Value ( USD thousand ) ,419 Thailand Mangoes, mangosteens, guavas Exported Value ( USD thousand ) , GLOBAL DEMAND OF MANGOES, MANGOSTEENS, GUAVAS Global imports of mangoes stood at 1,37 million tons in 2010 and increased more than 50 % between 2006 and The USA has been the most important mango importer worldwide, followed by China ( including Hong Kong ) and the Netherlands. The United States and European Union together accounted for 75 percent of world mango imports. Close to 90 % of Dutch imports are re-exported to Northern European destinations ( Germany being the most notable market ) as fresh or processed and mixed into products ( USAID 2010 ). The following table shows the trend in the global demand for mangoes. Top ten global mango importing countries ( in tons ) fresh and dried Table 8: List of the ten main mango importers. ( 1000 USD ) ITC trademap : Product : Guavas, mangoes and mangosteens, fresh or dried. Importing country United States of America Exported value 2009 Exported value 2010 Exported value 2011 Exported value 2012 Exported value , , , , ,254 China 152, , , , ,071 Netherlands 159, , , , ,000 Germany 70,734 88, , , ,895 United Kingdom 77,854 74,635 89,731 96, ,161 Canada 55,887 62,875 69,624 82,698 92,486 Vietnam 22,578 20,643 15,414 30,575 83,537 France 55,557 60,296 72,286 75,684 80,604 U.A.E 51,193 62,152 63,564 58,427 68,105 Saudi Arabia 26,856 48,766 51, ,716

38 22 Chapter 2.International demand of processed mango 16. PRODUCTION AND EXPORT KENYAN MANGOES, MANGOSTEENS, GUAVAS MANGO PRODUCTION IN KENYA With almost 35,000 hectares under cultivation, Kenya produced 553,710 tons of mangoes in the year In 2005, the country was only producing 180,000 tons. Since then, the annual mango production increased on average 26 % per year. In 2005, the value of the domestic market was 23 million USD and has increased to 70 million USD in This makes mango, after bananas and plantains, the most important fruit in terms of production and earnings in Kenya. The mango subsector contributes directly and indirectly to the livelihoods of an estimated 2 million Kenyans. The subsector is important for smallholder farmers, as they supply 60 % of the national mango production per year ( Grow Africa 2012a ). The figure below shows the production for guavas, mangoes and mangosteens, both fresh and dried between 2007 and 2011 ( HS product code ). The production volumes show that the production between 2007 and 2011 has increased significantly. Mango, mangosteens and guavas production in Kenya ( fresh ) Table 9: Production ( tons ) Year Volume ( T ) , , , , ,461 Mangoes, mangosteens, guavas FAOSTAT. Figure 4: Mango production by Province. USAID. National Mango Conference Kenya Horticulture development program

39 Chapter 2.International demand of processed mango 23 Although Kenya does not get close in terms of volume to the biggest mango producers in Asia and Latin America, it is the biggest producer of the East-African region ( about 50 % of the production in this region ). Moreover, it has among the highest productivity in the world. Kenya s average mango yield in 2010 was 153 % higher than India s yield and 71 % more than Mexico s yield. Figure 5: Global Comparison of Mango production ( Grow Africa 2012b ). Figure 6: Global Comparison of Mango yields ( Grow Africa 2012b ). Although Kenya has the conditions for year-round mango production, the production is especially high between November and January, whereas in other producing countries the production is considerably lower during this period. It is during these months of the year that Kenya s competitiveness for the fresh mango export market increases considerably, but this also means that lower grades of mango can be processed and exported with an advantage ( Grow Africa 2012ab ) EXISTING EXPORT MARKET FOR KENYAN MANGO In 2013, Kenya exported 7,965 tons of guavas, mangoes and mangosteens ( fresh and dried ). The total export value of this product group was $1,117,000 USD. That year, Kenya s exports represented 0.06 % of world exports for this product ; its ranking in world exports is 48. The figure shows that the export of mango, mangosteens, and guavas in Kenya in 2011 was more than twice as much compared to 2007.

40 24 Chapter 2.International demand of processed mango Mangoes, mangosteens and guavas exported by Kenya ( fresh and dried ) Figure 7: Export quantity and volumes Mangoes, mangosteens, guavas FAOSTAT. Year Exported Volume ( T ) Share of exported volumes on production volume Exported Value ( USD 1000 ) ,715 1 % 3, ,386 1 % 10, ,977 2 % 8, ,949 1 % 5, ,160 1 % 4,692 Kenya s mangoes, mangosteens and guavas export volume ( fresh and dried and value to its top ten buying / importing countries Table 10: Top 10 importing countries that buy guavas, mangoes, mangosteens, both fresh and dried from Kenya. Source : ITC trade map. Product : Guavas, mangoes and mangosteens, fresh or dried. Importing country Exported value 2013 ( USD thousand ) Share in Kenya s exports Export quantity ( T ) Qatar % 395 Tanzania % 5,95 Uganda % 1,537 United Kingdom % 18 Oman % 31 Germany % 5 France % 3 Norway % 3 Luxembourg % 4 Singapore % 3 Exports increased in value between 2012 and 2013 to United Kingdom have increased substantially with 153 %. Export growth in value between to Germany has increased with 91 %, with 67 % increase for export value to Qatar. It is unclear whether the exports to Qatar are fresh or processed mango ; exports to Oman are fresh mango. ( ITC trade map 2014 ). 17. MANGO EXPORTERS IN AFRICA CÔTE D IVOIRE Côte d Ivoire exported 14,020 MTs of mangoes to the EU valued at $11.8 million in In 2008, its exports volumes to the EU decreased to 10,887 MTs, while value increased to $18.2 million ( ITC trademap 2014 ).

41 Chapter 2.International demand of processed mango 25 Top ten importing markets that source mangoes ( fresh and dried ) from Côte d Ivoire Table 11: List of importing markets for the product exported by Côte d Ivoire in ITC trademap. Importers Exported value 2013 ( USD thousand ) Exported quantity 2013 ( t ) Share in Côte d Ivoire s exports ( % ) Unit value ( USD / unit ) Export growth in value between ( %, p.a. ) Export growth in quantity between ( %, p.a. ) Total 34,876 23, , Netherlands 11,804 7, , Germany 7,013 3, , France 6,084 4, , Belgium 5,472 5, Switzerland 1, , Norway 1, , Spain , United Kingdom Russian Federation , Morocco , SOUTH AFRICA South Africa has a well-established production of both fresh and processed mango. The local market is keen on processed mango products ( chips, chunks, rolls and juices ) as well as a large consumer of fresh mango. Mango production is well established as a commercial activity. Both fresh and processed products are exported to the African regional market and to Europe. South Africa produces both organic and conventional products. Production season is short and in the past 2 years have been difficult for production with unfavourable climatic conditions. Mango production in South Africa between 2007 and 2012 Table 12: Mango production in South Africa between 2007 and 2012 FAOSTAT 2014 Domain Country Item Element Year Volume Crops South Africa Mangoes, mangosteens, guavas Production ( tons ) ,135 Crops South Africa Mangoes, mangosteens, guavas Production ( tons ) ,293 Crops South Africa Mangoes, mangosteens, guavas Production ( tons ) ,186 Crops South Africa Mangoes, mangosteens, guavas Production ( tons ) ,861 Crops South Africa Mangoes, mangosteens, guavas Production ( tons ) ,388 Crops South Africa Mangoes, mangosteens, guavas Production ( tons ) ,885

42 26 Chapter 2.International demand of processed mango Mango export from South Africa between Table 13: Mango export from South Africa between FAOSTAT 2014 Year Exported Value ( USD 1000 ) Volume ( t ) 2011 X X 2010 X X ,316 2, ,793 4, ,905 9,056 Top ten importing markets that source mangoes from South Africa Table 14: List of importing markets for the product exported by South-Africa in ITC trademap. Importers Exported value 2013 ( USD thousand ) Exported quantity 2013 ( T ) Share in South Africa s exports ( % ) Unit value ( USD / unit ) Export growth in value between ( %, p.a. ) Export growth in quantity between ( %, p.a. ) World 6,068 3, , Switzerland 1, , United Kingdom 1, , Ghana 985 1, Germany Botswana France , Namibia Italy , Netherlands , BURKINA FASO & MALI Production in Burkina Faso is mostly organic, but a share of the mango fresh and processed is marketed and exported as conventional product. Most of the Bukinabé cultivars are unknown to the European market : Amélie, Lippens and Brooks. Amélie is the early variety and is pretty sour. Lippens is the intermediate variety and has a sweet, honey like taste. It is not very appreciated on the international market because it is sometimes powdery and lacks the strong mango taste. Brooks is a late variety and is very much subject to fruit flies. Artisanal processing is popular with a number of small entrepreneurs with a few Atesta ovens producing for the local market as well as the international market. In the past few years, exports to EU have been difficult due to high market requirements and the inability of processors to meet these standards. Hot air drying has been introduced in the past few years in Burkina Faso and Mali ( South African technology ) and about 100T of dried products ( incl. Mali ) were exported from this technology in 2013 to Europe. Much work has been accomplished on improving the quality of the products, packaging and food safety, but more remains to sustain market relations with the EU. Local production of nectar is done by DAFANI. Originally 4 products were available but the company faced difficulties in selling their product, now only the mango nectar is available to the local market. The taste of mango is very much appreciated by the local consumers but the processed products cannot be sold at high prices. Mali s production is partly traded via Burkina Faso. Varieties are slightly different in Mali with a greater share of Kent and Keith cultivars well known and appreciated on the international market. The PLAZA in Bamako a CBI funded project serves for exports of fresh mango to the EU.

43 Chapter 2.International demand of processed mango 27 Top ten importing markets that source mangoes from Burkina Faso Table 15: List of importing markets for the product exported by Burkina Faso in ITC trademap. Product : Guavas, mangoes and mangosteens, fresh or dried Importers Exported value 2013 ( USD thousand ) Exported quantity 2013 Share in Burkina Faso s exports ( % ) Unit value ( USD / unit ) Export growth value ( %, p.a. ) Export growth quantity ( %, p.a. ) Total 11,661 6, , Belgium 2, , Netherlands 2,730 1, , Germany 2, , France 1, , Switzerland , Italy ,387 Niger 302 2, Spain , United Kingdom , Canada , GHANA Ghana also processes mango with a South African Technology of hot air drying. They have a competitive advantage with the port transport is easier and cheaper than for landlocked countries such as Burkina and Mali. Main importers are Europe. Top ten importing markets that source mangoes from Ghana Table 16: List of importing markets for the product exported by Ghana in Product : Guavas, mangoes and mangosteens, fresh or dried. ITC trademap Importers Exported value 2013 ( USD thousand ) Exported quantity 2013 Share in Ghana s exports ( % ) Unit value ( USD / unit ) Export growth in value between ( %, p.a. ) Export growth in quantity between ( %, p.a. ) Total United Kingdom Netherlands Switzerland Lebanon Italy Germany Belgium France Norway Finland

44 28 Chapter 2.International demand of processed mango 18. INDIA India is by far the largest producer of mango worldwide. While large quantities are consumed locally, India supplies the European, middle-eastern and American markets. Its geographic location is advantageous to supply the Middle East. India does not only supply fresh products to its buyers but also processes mango in various products such as puree, juices, dried and individually quickly frozen cubes. The Totapuri mango is cheap and widely produced it is perfect for juice, blends and puree. The Indian mango season influences other production areas and sourcing patterns. If India suffers a bad season, buyers will seek new suppliers in Latin America but also in Africa. Mango production in India between 2008 and 2012 Table 17: Mango production in India between 2008 and 2012 FAOSTAT 2014 Domain Country Item Element Year Volume Crops India Mangoes, mangosteens, guavas Production ( tons ) ,250,000 Crops India Mangoes, mangosteens, guavas Production ( tons ) ,188,000 Crops India Mangoes, mangosteens, guavas Production ( tons ) ,026,700 Crops India Mangoes, mangosteens, guavas Production ( tons ) ,750,000 Crops India Mangoes, mangosteens, guavas Production ( tons ) ,997,000 Top ten importing markets that source mangoes from India Table 18: List of importing markets for a product exported by India. ITC trademap. Importers Exported value 2013 ( USD thousand ) Exported quantity 2013 ( t ) Share in India s exports ( % ) Unit value ( USD / unit ) Export growth in value between ( %, p.a. ) Export growth in quantity between ( %, p.a. ) World Saudi Arabia United Arab Emirates Yemen Netherlands United Kingdom Sudan USA Kuwait China Germany DRIED MANGO SLICED Dried mango is a popular snack. India exports its product around the world with clients in Europe, the Middle East, and Asia and the United States of America. The Middle East is their biggest trade partner for the sliced, dried mango from India. Nearly all markets have shown growth since 2008.

45 Chapter 2.International demand of processed mango 29 Top ten importing markets that source sliced dried mangoes from India Table 19: List of importing markets for a product exported by India ( value in USD 1000, vol T ). ITC trademap. Importers Exported value in 2008 Importers Exported value in 2009 Importers Exported value in 2010 Importers Exported value in 2011 Importers Exported value in 2012 World 1,136 World 1,622 World 1,889 World 4,165 World 3,298 UK 410 USA 314 USA 663 Bangladesh 1353 Saudi Arabia 1, Nepal 198 Saudi Arabia 490 Saudi Arabia 884 USA 834 Nepal 167 Bangladesh 170 Japan 214 USA 819 Netherlands 647 Japan 74 Japan 164 Nepal 120 China 224 Japan 225 Saudi Arabia 72 Netherlands 142 Belgium 101 Japan 207 Bangladesh 108 Belgium 25 Germany 126 Kuwait 65 UK 163 UK 69 UAE 13 Belgium 116 Netherlands 64 Netherlands 158 Malaysia 61 USA 12 Saudi Arabia 110 UK 53 Italy 96 Korea 60 Canada 9 UK 106 Bangladesh 23 UAE 74 Germany 46 Germany 4 France 56 Poland 21 Bhutan 74 Turkey 33 Bahrain 3 UAE 50 Germany 17 Algeria 32 UAE 29 Importers Exported volume ( t ) in 2008 Importers Exported volume ( t ) in 2009 Importers Exported volume ( t ) in 2010 Importers Exported volume ( t ) in 2011 Importers Exported volume ( t ) in 2012 World 1,499 World 2,093 World 1,251 World 5,431 World 2,272 Bangladesh Bangladesh 826 Bangladesh 875 Saudi Arabia 297 Bangladesh 3,920 Saudi Arabia 831 UK 248 Nepal 336 USA 291 Saudi Arabia 581 Netherlands 553 Nepal 209 USA 144 Nepal 180 USA 297 USA 273 Saudi Arabia 76 Saudi Arabia 135 Japan 115 Netherlands 138 Malaysia 105 Japan 68 Belgium 118 Bangladesh 111 UK 88 Bangladesh 104 Canada 26 Japan 101 Belgium 69 Bhutan 85 Japan 96 UAE 13 Netherlands 99 Netherlands 46 Japan 76 UK 82 Belgium 10 Germany 74 UK 33 UAE 55 Korea 45 USA 7 Italy 60 Bahrain 30 China 40 Germany 41 Bahrain 5 France 46 Kuwait 28 Qatar 27 UAE INDIAN MANGO PULP India is the biggest exporter of mango pulp in the world with partners on each continent. The country has exported 1,74, tons of mango pulp in year During that year the major export destinations were Saudi Arabia, Yemen Republic, Netherlands, Germany, United Arab Emirates, Sudan and the United States. The main varieties of mango pulp from India are the Alphonso Mango Pulp, Totapuri Mango Pulp and Kesar Mango Pulp. The Netherlands and Saudi Arabia are important pack houses and juice blenders. Products are then re-exported to other countries. Pulp production has increased tremendously in the past 5 years, with pulp getting used in an increasing number of products ( APEDA 2014 ).

46 30 Chapter 2.International demand of processed mango Top ten importing markets that source mango pulp from India Table 20: List of importing markets for a product exported by India. ITC Trademap. Product : Fresh or dried guavas, mangoes and mangosteens : Mango pulp. Importers Exported value in 2008 Exported value in 2009 Exported value in 2010 Exported value in 2011 Exported value in 2012 World 174, , , , ,833 Saudi Arabia 46,887 45,625 45,931 33,888 26,434 Yemen 12,361 13,952 13,309 10,746 15,897 Netherlands 24,908 18,637 23,578 20,296 12,346 UAE 19,623 12,749 13,508 8,587 8,013 USA 5,297 5,914 6,157 5,376 4,990 United Kingdom 8,533 9,783 12,478 6,154 4,345 Sudan 5,584 4,575 8,912 1,745 4,209 Kuwait 6,724 8,191 7,619 7,044 3,985 China 333 1,026 1,293 3,300 3,153 Egypt ,715 2,358 2,911 Japan 8, ,454 6,022 2, MANGO PROCESSING SECTOR IN KENYA INTRODUCTION FRUIT PROCESSING IN AFRICA Figure 8: Share of processed fruit production in Sub-Saharan Africa by country (ACET 2013: 32) Share of processed fruit production in Sub-Saharan Africa, by country Percent, 2009 Swaziland 2% Ghana 2% Other 6% Madagascar 3% Côte d Ivoire 3% Kenia 13% South Africa 71%

47 Chapter 2.International demand of processed mango 31 For most of the Sub-Saharan producing countries, the fruit industry in mainly is focused on production and exporting. Due to the sector s early stage and heterogeneity, only broad observations can be found from sources such as the Food and Agricultural Organization ( FAO ). More reliable and comprehensive data on fruit processing is still needed. South Africa has a well-developed agro-processing sector and high focus on horticulture and accounted for more than 70 % of processed fruit in Sub-Saharan Africa by volume in Juice and canned fruit ( especially pineapple ) are the main products. One of the major fruit processors is Ceres, which processes different types of juices which are exported regionally and internationally. Another major player is Dole, which focuses on trading fresh fruit but is also involved in fruit ( and vegetable ) processing ( ACET 2013 :31 ). Within Sub-Saharan countries, Kenya is another major fruit processor. In 2009 the country accounted for 13 % of all the processed volumes the region. Most of volume is processed in the form of canned pineapple by Del Monte. Because the food processing sector in Sub-Saharan countries is mainly driven by informal processors, it is hard to give exact estimations of the market growth. However, an increasing amount of processors is shifting towards the formal sector ( ACET 2013 :32 ). Fruit processing can be classified into four high-level groups : 1. Dried and dehydrated fruit : this process includes both solar and industrially dried fruit. Drying is a very common process or raisins, dates and prunes. Dried pineapple and mango are not that common. 2. Juice : this includes fruit processed to create intermediate products, such as pulps and concentrates. 3. Canned and preserved fruits : includes canned, pickled, and brined fruits. 4. Specialty fruit : includes prepared meals, soups, and prepared desserts. ( ACET 2013 :32 ). A study from African Center for Economic Transformation ( ACET 2013 ) states that the juice processing, with its size, growth, available local market, and scope for positive spill overs in the development of industrial capabilities, appears to be the most important and attractive fruit processing sector for policymakers in Africa. However, this seems to be a general statement and it should be taken into consideration while analysing the processing forms of specific fruit types. However, the same study reveals that the growth of the mango juice sector has grown considerably in Africa over the past few years. This is mainly thanks to the growing interest for tropical flavours and also thanks to the emerging markets that already are familiar with tropical fruits ( ACET 2013 :20-22 ). From the African perspective, juice is a highly attractive category. It is a growth sector overall, with growth of 3.7 % a year through Indeed, tropical fruits such as mangoes are outperforming the overall sector at 4.8 % year-on-year growth, thanks to mature markets increased interest in new tropical flavors and growth in emerging markets, which are familiar with tropical fruits. ( ACET 2013 :22 ) MANGO PROCESSING IN KENYA In 2012, Kenya exported 14.6 tons of processed fruits with a value of 18.4 million USD. In 2013, this amount doubled with a volume of 30.3 tons and a value of 36.0 million USD ( USAID 2013 ). Mango processing has not increased however. According to the summary of the National mango conference in Nairobi in 2010, less than 1 percent of the mangoes that were produced in Kenya were processed in that year. Although the percentage of processed mango is still very low, it seems that there are opportunities to increase mango processing in Kenya. The country is already a small-scale exporter of

48 32 Chapter 2.International demand of processed mango fresh mango and there are established processors and exporters that have experience with exporting processed fruits all over the world. It may be convenient for regional or international buyers when processors can process other fruits ( pineapple, passion fruit ) as well. Year round processing enables the factories to optimize the use of their infrastructures, which will be economically more viable. The best quality grades are exported, but there is also a market for mangoes that are of lower quality. Processors work with these lower qualities for processing the fruit into pulp ( USAID 2010 ). However, at different levels of the mango supply chain there are constraints hampering the development of the mango chain. There are many problems at farm level, marketing, processing and export stages. Although mango productivity levels in Kenya are among the highest in the world, still many farmers lack good planting material. There is, for example, a general shortage of grafted seedlings. The consequences are that farmers use inferior, low yielding seedlings. And many of them still lack the knowledge of improved production technology, and there is little or no use of fertilizers and pesticides. Many of the produced mangoes have black spots from fungal diseases. Plagues such as mango seed weevil and fruit fly are regularly problematizing farmers production. Fruit flies do not only hinder on farm production, but may also affect processing. Although there are some cultivars produced that are suitable for the international market, most cultivars are of indigenous varietals that can only be consumed at locally ( too many fibres and therefore little market value ). The production of these mangoes that are suitable for export is still very scattered in often remote areas. The infrastructure needs to be developed further to prevent high logistic costs and high wastage. Also, there are still inefficiencies at the port and problems with sea freights that have their influence on the competitiveness of Kenya as processed mango exporter. Although Kenya has the conditions for mango production throughout the year, there is mainly a consistent supply to factories during 7 months in a year with different cultivars. So processors struggle having a consistent flow of mangoes coming in during the rest of the year. According to a study of USAID in 2010, there was still insufficient fruit for existing fruit processing facilities. Also, processors cannot pay more than Ksh10-12 / kg to compete with imports or export to world markets ( USAID 2010 ). Also exporters experience difficulties with price instability in the international markets and stiff competition from other countries like India, Pakistan, Brazil, Mexico and Costa Rica. These competitors offer higher quality cultivars at lower prices, due mainly to lower shipping costs ( Summary National Mango Conference 2010, USAID 2010 ). 20. DEMAND EVALUATION OF MANGO PULP AND JUICE Mango Pulp is prepared from selected cultivars of fresh mango. Matured mangoes are harvested, quickly transported to the fruit processing plant, inspected and washed. Fully ripened mangoes are then washed, blanched, pulped, deseeded, centrifuged, homogenized, concentrated when required, thermally processed and aseptically filled maintaining sterility. The preparation process includes cutting, de-stoning, refining and packing. In case of aseptic product the pulp is sterilized and packed in aseptic bags. Refined pulp is also packed in cans, hermetically sealed and retorted. Frozen pulp is pasteurized and deep-frozen in plate freezers. The process ensures that the natural flavour and aroma of the fruit is retained in the final product. Mango Pulp / Concentrate is perfectly suited for transformation into juices, nectars, drinks and jams. It can also be used in puddings, bakery fillings, fruit meals for children and flavours for food industry ( ADEPA ). Major products of processed mangoes include mango pulp / puree ( approximately Brix ) and mango concentrates ( roughly Brix ). The term Brix is used to measure the sugar content of mango pulp.

49 Chapter 2.International demand of processed mango MANGO PULP AND JUICE PROCESSING FOR THE LOCAL MARKET According to the National mango conference in 2010, domestic consumers have no resources to purchase natural mango juice. It is expensive and most people consume products from the informal production system and from indigenous cultivars. Relatively cheap imported mango juices are available from Mauritius, South Africa and Egypt. Further competition comes from locally manufactured, chemically sweetened mango flavoured soft drinks ( Summary National Mango Conference 2010 ). For a locally produced juice, it would be necessary to work on efficiency and complementarity with other production processes ( e.g. combined processing factory with other fruits ). Price of the end product is a major factor to consider WORLDWIDE DEMAND MANGO PUREE / JUICES According to a study from Grow Africa reports that from 2007 to 2009, global volumes of imports of mango pulp grew at an annualized rate of 4 %, while juice grew at 7 % ( no figures provided ). Mango pulps are widely accepted in global food market and every year many of the mango products are exported to the international market. Small domestic industries are also getting the benefits of this increased demand as they are getting more and more work of producing processed mango products. Gulf States are the leading importers of Mango fruits and Mango pulp. While, top importers include Libya ( US $ 1.4million ), Egypt ( US $ 1million ), the USA, China, Europe, UK, and Japan are following countries. Many of these countries process the product in juices and re-export the latter in the region ( Grow Africa 2012a ) DEMAND EVALUATION OF MANGO PULP AND JUICE THE EAST AFRICAN MARKET Imported volumes of Mangoes, mangosteens, guavas have been multiplied by almost 5 in the years between 2007 and 2011 and 2.5 times in value. Volume and value of fresh and dried mangoes, mangosteens guavas that has been imported by East African countries Table 21: Volume and value of mangoes that has been imported by East African countries / Imported mangoes, mangosteens and guavas by Eastern Africa. Item 571, element 5622, FAOSTAT 2014 Imports in Value ( USD 1000 ) countries Eastern Africa + ( Total ) , Djibouti Tanzania Zimbabwe Somalia Seychelles Uganda Kenya Malawi Ethiopia Rwanda Zambia

50 34 Chapter 2.International demand of processed mango Imported Volumes Tons countries Eastern Africa + ( Total ) 1,490 3,379 4,621 4,181 7,131 Tanzania 1 1,802 2,866 2,020 4,649 Djibouti 1,422 1,422 1,652 1,964 2,250 Uganda Somalia Zimbabwe Seychelles Kenya Malawi Ethiopia Rwanda Zambia Also the imports of fruits juices have increased considerably in Eastern Africa with a growing middle class with sufficient purchasing power to buy these products. This is an indicator that the products are appreciated and purchased by consumers when available. In value, imports have more than doubled while in volume they are close to having doubled in the period of for Eastern Africa. Kenya is the 3rd largest importer both in volume and value. Imported fruit juices by Eastern African countries Table 22: Imported juices by Eastern African countries. Item 622, element 5610, FAOSTAT Imports value ( USD 1000 ) Eastern Africa + ( Total ) 18,395 25,732 30,261 32,862 40,674 Zimbabwe ,751 5,657 8,611 Zambia 3,459 5,048 4,726 6,834 7,649 Kenya 2,229 1,827 2,178 2,893 5,395 Mauritius 2,104 2,950 3,766 3,288 4,410 United Republic of Tanzania 2,459 4,465 4,146 4,656 4,156 Ethiopia 2,819 4,369 5,874 1,928 2,330 Malawi ,872 2,661 2,117 Rwanda ,142 1,730 Madagascar ,068 Uganda 1,234 1,685 1,465 1,633 1,058 Imported Volumes ( tons ) Eastern Africa + ( Total ) 23,876 31,761 36,030 33,835 39,442 Zimbabwe ,020 5,558 7,806 Zambia 3,232 4,597 4,009 4,625 5,410 Kenya 3,307 3,186 3,359 3,629 4,935 United Republic of Tanzania 4,394 5,945 5,771 5,190 4,437 Mauritius 2,354 3,180 3,901 2,463 3,377 Rwanda ,455 2,478 3,299 Ethiopia 4,292 6,732 8,400 2,737 2,932 Malawi ,465 1,923 Uganda 1,766 2,240 2,199 3,075 1,765 Madagascar ,215 1,392 Djibouti 1,452 2,267 1, Seychelles Burundi Comoros

51 Chapter 2.International demand of processed mango 35 When looking specifically at mango pulp ( used for juices and nectars ) the average growth of exports destined to Africa since 2008 have grown by an average of 20 % in value and 25 % in volumes, while declined for the world by 9 % in value and 3 % in volumes. The difference between value and volumes means that slowly prices per ton are decreasing. The largest clients are Sudan, Egypt, Kenya and Tanzania. Kenya and Tanzania have purchase mango puree for the cheapest price in 2012 and 560 and 603 USD / T. Highest prices were paid by Algeria and Libya, most likely for a higher quality product. Egypt and Tanzania exhibit the highest average growth in volumes of 300 and 200 % respectively. Kenya is well positioned geographically to serve the African market. Companies currently using imported mango puree / pulp could go through a process of import substitution and source locally their raw materials. Local sourcing has important benefits : securing supply, avoiding currency fluctuations, reduction of transport costs, proximity value chains, among others. Juice processors in Kenya could benefit from such a shift in practices. Favourable trade arrangements within the regions could also favour Kenya as compared to suppliers from India. On the other hand, local producers will have to compete with imports which are among the cheapest on the continent. Efficient production and sourcing are key to success. ( Local Sourcing KIT, SNV, Agri-pro-focus ) Exports of dried mango from India are marginal, valued at USD4 000 in 2012 ( ITC trademap ) Table 23: Exports of mango pulp from India to Africa ( Source ITC trademap and own calculations ) Rank Importers Exported growth in value between , % Exported growth in value between , % Exported growth in value between , % Exported growth in value between , % Average export growth value in % Exported value in 2012, US Dollar thousand Selling price $ / ton ( 2012 ) World , Africa Aggregation , Sudan , Egypt , Kenya , Tanzania , Libya ,054 6 Algeria ,010 7 Tunisia Uganda Angola South Africa ,

52 36 Chapter 2.International demand of processed mango Rank Importers Exported growth in quantity between , % Exported growth in quantity between , % Exported growth in quantity between , % Exported growth in quantity between , % Average export growth volume in % Exported quantity in 2012, Tons World ,536 Africa Aggregation ,002 1 Sudan ,724 2 Egypt ,642 3 Tanzania, ,071 4 Kenya ,948 5 Libya Algeria Tunisia Uganda South Africa , Angola DEMAND EVALUATION OF MANGO PULP AND JUICE FROM THE MIDDLE-EAST The Middle-east, especially in Saudi Arabia, there is a big industry in the production of juices and nectars. The table below shows the volume of imported fruit juices between 2007 and The biggest supplier is India with 43 % of the total volumes imported in 2011, but 88 % of the value. Second are Egypt and Thailand and European countries such as Germany and the Netherlands and the United Kingdom, but no other African country else than Egypt is listed as supplier. Fruit juices imported by Saudi Arabia between 2007 and 2010 Table 24: Imported fruit juices by Saudi Arabia. FAOSTAT Domain Country Item Import Quantity ( tons ) Year Value Crops and livestock products Saudi Arabia Juice, fruit nes 142, , Crops and livestock products Saudi Arabia Juice, fruit nes 118, , Crops and livestock products Saudi Arabia Juice, fruit nes 68, , Crops and livestock products Saudi Arabia Juice, fruit nes 33, , Crops and livestock products Saudi Arabia Juice, fruit nes 103, , The imported volume of mango juice in Saudi Arabia has increased in the past few years. As the figure below shows ; India is by far the biggest supplier and competitor of the specific product code , mango juice ( other ). It might be difficult for Kenya to compete on this market.

53 Chapter 2.International demand of processed mango 37 Top ten exporting markets where Saudi Arabia sources mango juice from Table 25: List of supplying markets for a product imported by Saudi Arabia. Product : Fruit juices ( including grape must ) and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening matter. Exporters Imported value in 2007 Imported value in 2008 Imported value in 2009 Imported value in 2010 Imported value in 2011 World 42,892 51,052 60,976 India 38,050 45,224 53,992 Italy 1,095 1, Denmark 726 1,015 1,859 Turkey 1,115 1,416 1,155 Kuwait Netherlands Egypt United States of America Thailand The top 3 countries from which Saudi Arabia has imported unconcentrated mango juice ( product code ) from are shown in the table below. Yet again, this is regional trade. It might be difficult for Kenya to enter this market. Top three exporting markets from which Saudi Arabia sources not from concentrate mango juice Table 26: Top three exporting markets from which Saudi Arabia sources unconcentrated mango juice Exporters Imported value in 2007 Imported value in 2008 Imported value in 2009 Imported value in 2010 Imported value in 2011 World 3,299 4,509 3,879 United Arab Emirates 1,368 2,042 2,066 Kuwait 1,220 1,723 1,133 Egypt Product : Fruit juices ( including grape must ) and vegetable juices, unfermented and not containing added spirit, whether or not containing added sugar or other sweetening Matter. Juice of any other single fruit or vegetable : Of a Brix value not exceeding 20 : Mango juice : Unconcentrated. Pulp and juice in the United Arab Emirates The import of pulp and juices ( product code 2009 ) in the United Arab Emirates has also grown significantly in the last few years. Table 27: UN-Comtrade Fruit and vegetable juices, not fermented or spirited ( HS as reported 2009 ) Year Code Net Weight ( tons ) Trade Value Importer Exporter ,313 $128,684,312 United Arab Emirates World ,828 $110,843,602 United Arab Emirates World ,344 $96,801,486 United Arab Emirates World ,951 $112,196,256 United Arab Emirates World ,251 $96,106,907 United Arab Emirates World

54 38 Chapter 2.International demand of processed mango DEMAND EVALUATION OF MANGO PULP AND JUICE IN THE UNITED STATES Producers in the US are increasingly blending orange juice with small quantities of other juices, mango being one of the preferred additions because its natural sweetness balances the acidity in orange juice. The annual demand for orange juice by US consumers is considerable, 500,000 MT. Assuming that just 15 % of that amount is mixed with mango pulp and that the blend is made with 10 % mango pulp, the estimated needs for mango pulp in the US orange juice market niche alone would be 7500 MT / year. In 2011, the USA imported 2.2 tons for mango juice, sourcing mainly from Canada, the Philippines and Egypt. If trends in mango consumption such as these continue, then it is reasonable to expect the world demand for mango pulp will continue to grow ( USAID2009 :9 ).Pulp can also be used in a wide range of products including yogurts, ice cream and sauces. Latin America is well positioned to supply the USA market ( USAID 2009 ). Pulp and juice in the United States of America Value ( USD ) of fruit and vegetables imported by the USA between 2009 and 2013 Table 28: List of importing markets for a product exported by United States of America. Product : 2009 Fruit & vegetable juices, unfermented. ITC trademap. Year Code Value Importer Exporter ,024,056 USA World ,139,075 USA World ,313,789 USA World ,249,471 USA World ,237,640 USA World Top ten exporting markets where the USA sources mango juice from Table 29: List of supplying markets for a product imported by United States of America. Product : Mango juice, not fortified, unfermented, ITC trademap. Exporters Exported value in 2011 Exporters Exported quantity in 2011, Liters World 2,553 World 2,174,940 1 Philippines 782 Canada 659,567 2 Canada 526 Philippines 502,518 3 Belgium 333 Egypt 240,786 4 Egypt 231 United Arab Emirates 187,937 5 United Arab Emirates 165 Bangladesh 129,594 6 Brazil 142 Guatemala 118,926 7 Bangladesh 05 Brazil 92,237 8 Guatemala 100 Belgium 54,814 9 Dominican Republic 28 Colombia 49, Peru 27 Panama 34,736

55 Chapter 2.International demand of processed mango DEMAND EVALUATION OF MANGO PULP AND JUICE IN EUROPE Europe is a major player in the trade of processed fruits and vegetables. Germany, France, the United Kingdom and the Netherlands are the biggest importers of processed fruits and vegetables. In 2011, approximately about 35 % of the imports from Europe ( EU and EFTA ) came from developing countries. The largest share of EU / EFTA imports came from other European countries. Large exporting countries are : Belgium ( almost 9 % of all EU / EFTA imports ), Germany ( 8 % ), and Spain ( more than 8 % ). Outside Europe, the largest share of imports comes from Brazil ( more than 7 % of all imports, mainly orange juice ), China ( 5 %, apple juice and preserved vegetables ), Turkey ( 4 %, nuts, dried fruits and preserved vegetables ) and the USA ( 4 %, nuts, dried fruits and preserved vegetables ). Europe mainly exports to other European countries ( own production and re-exports ), and these exports are increasing to some extent. Production of processed fruits and vegetables in Europe remained relatively stable over recent years. However, the current trends towards more convenient and healthy food consumption are, according to a study from CBI in 2013, expected to endure over the coming years ( CBI 2013a ). Overall, European imports of processed fruits and vegetables have increased since In 2011, the import value was approximately 29 billion Euros. The volumes of imported fruits and vegetables remained more or less the same between 2008 and 2011, but the value of the imports increased. This trend can be observed for the imports of fruit and vegetable juices between 2008 and 2012 ( see table below ). European importers are interested in having long-term contracts with exporters from other countries. The main reasons are that price volatility can be controlled by agreeing on prices for three to five years. Long term relationships enable better traceability of supply ( CBI 2013a ). In terms of value and volumes specific imports of fruit and vegetable juices have remained fairly stable. This might be due to the fact that European consumers are increasingly purchasing fresh juices instead of juices made from concentrates and ambient juices ( table 30 ). Figure 9: Left figure : Intra and extra EU imports of processed fruits and vegetables, ( in million Euros ). Left : Intra and extra EU imports of processed fruits and vegetables, ( in million Euros ) Right : Total EU27+EFTA PFV Imports from countries, 2011, in % of quantity Please note that this Figure shows the intra- and extra-eu imports. When combined, they show the total import volume. Imports from developing countries are part of extra-eu imports.

56 40 Chapter 2.International demand of processed mango Value ( USD ) of fruit and vegetables imported by Europe between 2008 and 2012 Table 30: Fruit and vegetable juices, not fermented or spirited ( HS as reported 2009 ) UN-Comtrade Year Code Net Weight ( t ) Trade Value Importer Exporter ,871,402 $2,292,965,955 EU-27 World ,134,331 $2,098,444,951 EU-27 World ,037,659 $2,214,459,273 EU-27 World ,955,425 $2,736,399,051 EU-27 World ,863,104 $2,602,095,087 EU-27 World Figure 10 Right figure Total EU27+EFTA PFV Imports from countries, 2011, in % of quantity. Data source : United Nations COMTRADE database, DESA / UNSD. Figure created by LEI Wageningen UR ( CBI 2013a ) Total fruit juice and nectar consumption within Europe ( million people ) Figure 10 Total fruit juice and nectar consumption within Europe ( million people ) AIJN report 2013 Volume million liters % Change Total 11,346 11,199 11,041 10,737 10,387-3,3 % Purchasing requirements Organic Fruit juices In Europe the norms seems to be ascetic pulp in polyethylene bags in drums of 50L to 200L. These drums do not need to be refrigerated. The cultivar is of course important as the puree is will be processed into other products according to specific recipes. As such, products supplies should be of stable quality and taste. Brix should be above degrees while PH between 0.5 and 0.95 and colour yellow ( Please refer to the Annex document for greater details ). Here again HAACP certification, BRC et possible SFG for French and German supermarket are necessary certification. The market for fruit juice is dominated by conventional juice, with organic merely occupying a 2 % of all sales. Consumers tend to stick to conventional flavours such as orange and apple when buying organic juice. As the price of organic mango is higher than conventional, this would also drive prices of juice to higher prices and potentially make it less attractive to clients. Table 31: Organic fruit juice market ( source Fair Trade by the numbers ) Organic share of market % change Fruit Juices 2 % 45,582 MT 25,112 MT % MT Trend towards quality According to CBI and AIJN, in 2011 there has been an increase and notable trend in a number of countries ( In France and the UK ) observed where consumers buy more premium products. This has boosted the volume and hare of the chilled juice and NFC ( not from concentrate ) segments. According to AJIN, with from-concentrate raw material prices rising, the price differential between ambient and chilled juice is shrinking, although no figures are provided on prices. In the more mature high-volume juice markets, many producers have taken advantage of this trend to quality, by investing in innovation and, specifically, valueadded chilled and functional juices ( AIJN 2012, CBI 2013b ). What we can see from table is that there is an increase intake of chilled products while the from-concentrate and ambient segments are decreasing.

57 Chapter 2.International demand of processed mango 41 Table 32: Millions of litres of juice on European market Total fruit juice % change Total % Chilled % Ambient % From concentrate % Not from concentrate % Simultaneously, buyers requirements such as HACCP certification and packaging are becoming stricter, which is -in general- problematic for exporters in developing countries. Sustainability and traceability have become important values among many consumers in Europe. EFTA focus and EU legislation will focus more on strengthening the own market position in the world and on sustainability. Non-members of European producer organizations can face extension of rules, which makes it more difficult to enter the market ( CBI 2013ab ). An example of EU legislation is the novel Food Legislation ( European Commission ). At the same time, there is an opportunity for suppliers to add value to the product by ensuring that the fruits and vegetables are processed under good labour conditions and fair wages are paid. However, for smaller farmers it will be more challenging to meet certain types of these demands. Also the use of pesticides is less accepted and regulations are becoming more stringent. Overall, the increasing buyer demands could be both constraints and opportunities to differentiate for suppliers. However, on the longer term there will be opportunities for processed fruits and vegetables exporters in developing countries. The demand for healthy foods will very likely increase, the threat of substitutes is low and an expected raw material shortage in the future will improve the bargaining power of the suppliers ( CBI 2013ab ) EU market as compared to the World The EU market for mango pulp, however, is only 4.7 % of world exports, probably because mango is not a traditional juice in Europe. Although an upward trend in fresh mango imports to the EU bodies ; for mango pulp s long-term future in this market, the question is whether Kenyan purees can compete on the market with puree from different origin. Specific characteristics which give an advantage for competition and are appreciated by consumers are key. Global Demand for Mango Pulp / Concentrate, 2003 and 2008 Table 33: Global Demand for Mango Pulp / Concentrate, 2003 and 2008 PAMCO 2008, Pakistan *Estimated ( Tons ) 2003 demand % of world Growth rate 2008* demand Middle East 69, ,400 South-East Asia 56, ,520 North America 39, ,000 South Asia 38, ,500 Africa 30, ,500 South America 21, ,600 EU 12, ,200 Oceania 2, ,000 Far East 2, ,700 Europe ( non-eu ) 1, ,800 Central America 1, ,800 Total 276, ** 383,020

58 42 Chapter 2.International demand of processed mango India is a major supplier of mango juice. Prices paid internationally for mango pulp from Indian Origin in were the highest by Japan and the USA, while they were the lowest in Saudi Arabia at 505 per ton. This might partially be due to the large volumes and quality exported to Saudi Arabia. Table 34: Top ten importing countries of mango pulp from India in , APEDA ( exchange rate USD1 = 60.3 rupee ) Country Qty Value ( USD ) USD / ton 1 Saudi Arab 43,448 21,920, Yemen Republic 25,203 13,641, Netherland 11,236 10,598, U Arab Emts 11,737 7,228, U S A 3,784 4,424, ,169 6 Sudan 6,305 4,358, Kuwait 4,761 3,480, U K 3,199 3,402, ,064 9 China P Rp 2,876 2,924, , Japan 1,616 2,785, , DEMAND EVALUATION OF DRIED MANGO INTRODUCTION DRIED MANGO Osmotic dehydration During this process, mango slices samples are dehydrated by osmosis process in different hypertonic solutions of glucose and sucrose. It is always used as a way of pre-treating the mango ( Arnoldus 2011 :127 ) and ensures that the colour of the mango maintains clear and the sweet flavours are more pronounced as the acidity is extracted. This process is mostly used in Asia ( Thailand and Philippines ). These products are either consumed locally, regionally or exported to the USA. Because of the added sugar to the product, it is considered a less healthy snack than pure hot air dried mango which is more common in Africa. With the increasing consciousness of consumers towards healthy behaviours, it suggests that the African product will have an advantage on the long run on the USA market. In Europe the hot air dried mango is already the favoured product Hot air The most effective way to dry any fruits is to expose them to heated air. During this process the moisture will evaporate. Sources of heat can include burning various fuels, or other more environmentally friendly methods such as sun-drying. The quality of the mango has a great influence on the quality of the dried mango slices, so therefore the selection of proper varietals is essential. Many processing facilities that dry mango have standards in place to define the quality of their ideal starting material. Since this is very subjective, it is hard to set out universal standards. However, their quality is measured according to the overall appearance, the feel, varietal and aroma. Finally, knowing the source and the producers are an important factor when the processor wished to monitor and control the quality ( Mercer 2012 ) ( see also Mercer 2008, Mercer and Myhara 2008 ).

59 Chapter 2.International demand of processed mango DEMAND ANALYSIS FOR DRIED MANGO IN THE MIDDLE-EAST The Middle-East region encompasses 13 countries with a total population of 290 million inhabitants ( Arnoldus 2011 :35 ). Of these countries, the populations of the United Arab Emirates and Saudi Arabia have the highest purchasing power. The countries in the middle-east already have solid linkages with the eastern Asian countries. Especially Indian merchants are well established in the market. Also in terms of transport, the supply of Asian products to the Middle-East cost less as they are easily accessible. Dried mango has to compete with dates and figs, and raisins which are traditional dried fruits of this region. They are consumed in large quantities and prices are low. While in Saudi Arabia Mango was the most expensive dried fruit in 2010, it is also the one with the smallest share of the market. Barely 9 tons were imported In UAE in 2010 at a price close to 1000$ / t. Table 35: Imports of dried fruits in Saudi Arabia and United Arab Emirates in 2010 ( source FAOSTAT and ITC trademap, data for mango exported from India ) Country Code Product $ / tons Volumes ( T ) Value ( $1000 ) Saudi Arabia 194 Apricots, dry 1, , Saudi Arabia 194 Dates 477 4,053 1, Saudi Arabia 194 Figs dried 1, Saudi Arabia 194 Fruit, dried nes 1,125 3,881 4, Saudi Arabia 194 Plums dried ( prunes ) 1, Saudi Arabia 194 Raisins 1,142 7,687 8, Saudi Arabia Dried mango slices ( India ) 2, United Arab Emirates 225 Apricots, dry 4, , United Arab Emirates 225 Dates 1,081 25,421 27, United Arab Emirates 225 Figs dried 3, , United Arab Emirates 225 Fruit, dried nes 1,062 6,489 6, United Arab Emirates 225 Plums dried ( prunes ) 2, , United Arab Emirates 225 Raisins 3,183 22,052 70, United Arab Emirates Dried mango slices ( India ) 1, ,000 Mango is at a disadvantage because : 1. The product is relatively unknown 2. There are other products better positioned ( dates, figs, tamarind, nuts ) 3. Some countries have close ties with South Asia. The mango from these regions is better positioned on the market. 4. Halal certification is required Table 36: List of supplying markets for the product imported by United Arab Emirates in Product : 0804 Dates, figs, pineapples, mangoes, avocadoes, guavas. ITC trademap. Exporters Imported value 2013 ( USD thousand ) Share in United Arab Emirates imports ( % ) Imported quantity Imported growth in value between ( %, p.a. ) Imported growth in quantity between ( %, p.a. ) Imported growth in value between ( %, p.a. ) Total 92, , India 40, , Pakistan 17, , Philippines 6, , Egypt 5, , Turkey 3, ,

60 44 Chapter 2.International demand of processed mango Exporters Imported value 2013 ( USD thousand ) Share in United Arab Emirates imports ( % ) Imported quantity Imported growth in value between ( %, p.a. ) Imported growth in quantity between ( %, p.a. ) Imported growth in value between ( %, p.a. ) Oman 2, , USA 2, Thailand 2, Tunisia 1, Australia 1, DEMAND ANALYSIS FOR DRIED MANGO IN THE UNITED STATES The United States is the third biggest importer of dried fruits in the world, after the United Kingdom and Germany. Like in Europe, dried mango is a niche product, without any specific category in the statistics except for products imported from India and Thailand. So, it is hard to estimate the volume of this market. Nevertheless prices for dried mango from Thailand are the highest, only affordable to consumers with the higher purchasing power. The volumes imported from India and Thailand were about 800 tons of mango in 2010, only 5 % of the total imports of apricots in volume. Country Code Product $ / tons Volumes ( T ) Value ( $1000 ) USA 231 Apricots, dry 4,047 13,499 54,632 USA 231 Dates 1,567 11,811 18,503 USA 231 Figs dried 1,800 6,127 11,029 USA 231 Fruit, dried nes 4,838 19,937 96,464 USA 231 Plums dried ( prunes ) 2, ,317 USA 231 Raisins 1,705 22,030 37,570 USA Dried mango slices ( India ) 1, USA Dried Mango ( Thailand ) 6, , DEMAND ANALYSIS FOR DRIED MANGO IN EUROPE The annual dried fruit market in Europe is estimated at an amount of tons. Raisins represent 50 % of the commercial volume. The market for dried mangoes in Europe is relatively low compared to fresh fruits. Consumption in Europe stands at about 3,000 tons according to ( Strategic Policy Document of the mango value chain in the ECOWAS ). This figure represents about 1 % of the total demand for dried fruits in Europe. Dried mango is a relatively new product on the European market and consumers are slowly getting use to the taste and the texture as fresh mango is also increasingly popular. Consumers appreciation is very much linked to the quality of the products offered on the market including texture, taste, and colour. Volumes are extremely low as compared to the volumes of raisins. There are not specific data on imports of dried mango from Africa although South Africa, Burkina Faso Mali and Ghana are suppliers.

61 Chapter 2.International demand of processed mango 45 Table 37: Imports for dried fruits in Europe in 2010 ( Source FAOSTAT and ITC trade map ) Country Code Product $ / tons Volumes Value ( $1000 ) EU( 27 )ex.int 269 Apricots, dry 4,028 39, ,841 EU( 27 )ex.int 269 Dates 2,627 71, ,779 EU( 27 )ex.int 269 Figs dried 3,724 28, ,787 EU( 27 )ex.int 269 Fruit, dried nes 4,218 30, ,896 EU( 27 )ex.int 269 Plums dried ( prunes ) 2,487 57, ,938 EU( 27 )ex.int 269 Raisins 2, , ,108 Netherlands Dried mango slices ( India ) 2, United kingdom Dried mango slices ( India ) 1, United kingdom Dried Mango ( Thailand ) 7, In the past, much of the products marketed on the European market were of low moisture content of % which is easier to transport and preserve, especially when produced in Africa. These products are often hard to chew and less appealing to the consumers. Products of higher humidity content ( % ) have a more juicy texture and are much more appreciated on the market. The drying process and packaging requires more attention and the product is more easily preserved with SO2. Colour, texture and a characteristic mango taste are appreciated by European consumers. S02 is often used to preserve conventional products. For organic products, nitrogen packaging is a good option for a quality product. Figure 11: Dried mango specification in the British market ( CBI 2012 ). Specifications Form of Sale Weight classes per portion Net weight Brief Description Retail ( as a snack, sometimes in a dried fruit mix ), wholesale, or food industry. Industrial selling or wholesale : vacuum packed 0.5-5kg, bulk 12-15kg ; or variable depending on the request of the customer. This is usually some kind of plastic bag in a carton box. Retail : Between 100 and 250 grams depending on the packaging. Direct sale or wholesale : vacuum packed 0.5-5kg, bulk 12-15kg ; or variable depending on the request of customer. Retail between 100 and 250 gram depending on the packaging. Labelling Brand ; ingredients ; weight, certification, logo, if applicable ; nutrition value ( optional ). Packaging Form and Packaging Plastic bag or pouch. SO2 and nitrogen and cold chain can impact significantly the preservation of the product especially when transport time is long. In slices or chunks. Figure 12: Price indicators dried mango. Be aware that these figures are just indications. Price depends on the quality, brand, and retail outlet ( CBI 2012 ). Price Dried mango, sliced or chunks Conventional Retail 5-45* p / kg 5-45* p / kg Wholesale p / g p / kg Dried grapes, prunes, dates and figs are popular dried fruits among European consumers. Dried mango, on the contrary, is commonly not used as a separate snack for consumers. Value can be added by manufacturers by using dried mango in combination with other products. This could make these products more attractive and more exclusive ( nice target groups ). The United Kingdom could be an interesting market for dried mango, as it has a substantial ethnic minority that is familiar with dried mango as an ingredient for cooking. ( CBI 2012 ). The most important migrant groups accustomed to mango products are originating from India, Pakistan, Bangladesh, South Africa, Nigeria and Kenya, together accounting for a quarter of all the foreign born residents in the UK in 2012 ( Source migrant observatory 2013 ).

62 46 Chapter 2.International demand of processed mango Table 38: Share of all foreign residents in UK 2012 Country of birth India Poland Pakistan Ireland Germany Share of all foreign born United States Bangladesh South Africa Nigeria Kenya Figure 13: Consumption, imports and exports of mangoes, guavas, and mangosteens ( dried and fresh ) for the British market ( Souce CBI factsheet 2012 ) 22. DEMAND EVALUATION OF IQF MANGO Market developments are closely linked to ongoing innovation processes. The sales of meals packed in bags with contents that can be separated into individual portions have increased considerably as a result of the Individually Quick Frozen technology ( IQF ) technology. This technology prevents the product from freezing into one large block, so it is easier to separate. IQF is also the only technique that preserves practically all the characteristics of the mango. This process of quick freezing makes ice crystals, which are very small and are formed inside the cells of the tissues. During this process, the texture, nutritional values and flavour as a freshly harvest produced are guaranteed. The mango is cut automatically in individual small blocks before freezing. After freezing, they are packed in boxes of 10 to 20 kilograms. IQF cubes are used in food products where the perceptibility and the taste of the pieces of mango are important for the consumer. They are used in yoghurts or in toppings of luxurious ice creams. In terms of volume of sales, the most popular products in Europe are frozen strawberries ( 9.2 % ) raspberries ( 9 % ) and tropical fruits ( 3 % ) ( 2008 ) ( CBI 2009a ). Frozen mango cubes and other tropical fruits are becoming increasingly popular as they are not grown in Europe. Mango products are mainly used in dairy products. Although the IQF market is smaller than the mango pulp market, it remains an important commodity. Many importers trade pulp, juices and IQF. Prices are around $ 1,200 per ton and buying criteria are the same as for the pulp. HACCP, GMP, ISO 9000, BRC and IFS certification are required, packaged in boxes of 10 to 20 kg with paper lining. Major producers in the world market are Thailand, the Philippines and, to a lesser extent, India. Importers are generally interested in new opportunities for the supply of this product. However, the production on an industrial scale is necessary to achieve economies of scale, to offer competitive prices and meet hygiene criteria buyers.

63 Chapter 2.International demand of processed mango 47 The question would be whether Kenya would be ready to compete with other producing countries on IQF, since a well-functioning infrastructure and organization for a negative cold chain is mandatory. Experience shows that this is costly and difficult from Africa ( Arnoldus, van der Pol, Ravry 2011 :14 ), ( CBI 2005 ). According to CBI margins in the international trade in frozen fruit and vegetables are under pressure. Trade volumes are increasing fast while prices tend to go down. An accurate picture of prices and margins is difficult to give. Products can be differentiated for the consumer market and for the wholesale market, where prices are lower, but volumes higher. In import / wholesale margins vary between 3-10 %, while at retail level they may reach 50 % or more. ( CBI 2009a ) 23. FRUIT SNACKS Fruit snacks are increasingly positioned as a healthy alternative to conventional snacks or confectionery, or used to bring interest and variety to the health food market. An average of 20 percent of all meals during a day consists of snacks. Therefore, healthier snacks could be an interesting marketing point for food companies and manufacturers for national, regional and international markets. The European dried mango market ( snack consumption ) Table 39: Dried mango market in Europe ( Arnoldus 2011 :29 ). Country Estimation of total market ( tons per year ) Estimation of Fairtrade and Organic market ( tons per year ) United Kingdom Switzerland Austria Germany France Netherlands ,5-20 Belgium Denmark ,5-6 Sweden ,5-6 Italy Ireland ,5-6 Total Most of the dried mango is used in muesli. Each box of muesli contains % of dried fruits, seeds and nuts of which most of these are almonds and raisins. Dried mango consists between 2,5-5 % of the total volume. It is allowed to have less than 5 % of ingredients that are non-certified in organic muesli. Therefore, it could very well be that conventional dried mango is used in an organic muesli mix. Dried mango is also used in fruit bars that often consist of a mix of cereals, dried fruits, nuts and chocolate. For these fruits bars, two different types of dried mango are used : Mango leather is made from the pulp of the ripe mango, which is spread out and then pressed. It should have a deep, orange colour with a very pronounced mango flavour. The texture is leathery but chewable. Small pieces of mango. These have to be tasty and soft.

64 48 Chapter 2.International demand of processed mango According to the U.S. Snack World magazine, May 2013, consumer demand for healthy snacks was the highest at 6.4 % annual sales growth, ahead of value and indulgence, while overall snack food volume fell by 0.5 %. Natural and organic snack foods performed strongly in the U.S. market in 2012, while Canada s Organic Trade Association reported that organic snacks grew 4 % in the country. 24. CERTIFIED MARKETS Consumers are more concerned about the food they are buying, where products come from, and how they are made. They demand more sustainable ( i.e., socially and environmentally responsible ) foods from the retail industry. This implies that sustainability certification can be considered a plus for DC producers. These are developments which create great opportunities for DC exporters as they boost the European demand for ( processed ) fruits and vegetables ( CBI 2009, 2013ab ) ORGANIC PROCESSED FRUITS Worldwide, organic farming is practiced in 162 countries. In 2011, there were 37.2 million hectares of organically managed farmland and organic farming accounted for 0.86 % share of the agricultural land ( Agricultural Marketing Resource Center website ( AGMRC ). Organics have continued to expand during the last few years, and industry experts are forecasting steady growth of 9 percent or higher ( OTA 2012 ). In North-Western Europe, the demand for pure and natural products and organic products is still increasing. The terms naturalness and organic evoke positive associations in consumers. As a consequence, many recently launched processed fruit or vegetable products claim to have no additives or preservatives so as to maintain the natural taste and goodness of the products. For example, fruit juice not from concentrate will have added value since it approaches almost freshly squeezed juice. Organic and preservative-free fruit and vegetable products will continue to be popular in the future. ( See also Figure 41 : Dried mango market in Europe ( Arnoldus 2011 :29 ) RAINFOREST ALLIANCE The Rainforest Alliance ( RA ) standard is a mainstream sustainability scheme with a main focus on environmental issues. Rainforest Alliance only certifies tropical products such as tropical fruits including bananas, pineapple, mango, avocado, guava and citrus and different kinds of nuts. The label is growing fast in the fresh fruit vegetables market. It is not very big yet in the market for processed fruit and vegetables and edible nuts except for the market of fruit juices, especially when products are traded in small volumes or part of blends. ( CBI 2013a,b ) FAIRTRADE MARKET The Fairtrade system currently works with 1.3 million people farmers and workers across more than 70 developing countries. There are now 1,149 Fairtrade producer organizations worldwide. The Fairtrade ( FT ) juice market experienced some decline worldwide in the past few years. The figure below show that FT fruit juice market share in the United Kingdom increased fast between 2002 and 2008 and then started to decrease again in the following years.

65 Chapter 2.International demand of processed mango 49 Estimated UK retail sales by value ( million ) : Fairtrade certified fruit juices Table 40: Estimated UK retail sales by value ( million ) : Fairtrade certified fruit juices. Max Havelaar statistics, unpublished Along with the 2012 sales analysis, these 2011 figures have been reviewed and updated The following figure shows the FT fruit juice volumes based the sales at consuming countries. Also this figure shows a global decline ( -4 % ) in the demand for FT juice between 2011 and Global FT fruit juice consumption Table 41: FT Fruit juice estimated volume breakdown Max Havelaar statistics, unpublished. Year Conventional Organic Unit Liter X Liter -4 % Over the past three years, the national Fairtrade labelling foundation in the Netherlands ( Max Havelaar ) is working on a strategic plan to develop the juice market. This strategic plan mainly concerns FT orange juice as this about 70 % to 80 % of all FT juices. As mango pulp or concentrate is often blended with other fruit juices, is does not have a great share in the total FT fruit juice sector. Also fresh Fairtrade mango is a very small market. In the Netherlands only 5000 kilograms of fresh mangoes is traded per year ( Max Havelaar interview June 2014 ). Mango nectar from Max Havelaar comes from Peru, while the Mango and Passion fruit juice from Max Havelaar also comes from Peru. One of the reasons for this is that mango is a difficult product concerning harvest times. This requires changes in sourcing and suppliers, which is possible, but not easy. Especially bigger customers such as supermarkets need consistent supply throughout the year. The estimated volumes of FT fruit juice traded worldwide in 2012 sourced worldwide Table 42: Estimated volume of FT fruit juice Max Havelaar statistics, unpublished. Type 2012 % relative to the total volume 2012 Unit Orange % Liter Mixed % Liter Mango % Liter Blank % Liter Apple % Liter Pineapple % Liter Banana % Liter Others % Liter Total % Liter

66 50 Chapter 2.International demand of processed mango Figure 14: Estimated volume of FT fruit juice Max Havelaar statistics, unpublished. Apple 4% Banana Pineapple 1% 2% Others 1% Fruit juice estimated volume breakdown by Type 2012 Blank 5% Mango 8% Mixed 21% Orange 57% 25. MARKET ACCESS REQUIREMENTS ( EU ) BUYER REQUIREMENTS Buyers are usually looking to specific product characteristics other than prices. Additional to this there are ( 1 ) musts, requirements you must meet in order to enter the market, such as legal requirements, ( 2 ) common requirements, which are those most of your competitors have already implemented, in other words, the ones you need to comply with in order to keep up with the market, and ( 3 ) niche market requirements for specific segments ( CBI 2014 ). The latter is less developed for mango as traded quantities are still small and must of course meet the standards to which the product is supposed to comply. Figure 15: Market requirements (CBI / /buyerrequirements) Composition Must Common Niche Food safety and control Rainforest Alliance Fair Trade Organic Sustainability Food safety certification Food contact materials Labelling Food contamination

67 Chapter 2.International demand of processed mango 51 Appearance Dried mango Mango flavour Orange Colour of the product, without white or brown spots Sweetness Texture : flexibility, humidity content, ease to chew Juice and puree Brix content Texture Mango flavour Not too much fibres LEGAL REQUIREMENTS Legal requirements are a must food safety and informing consumers correctly. Here you can find requirements you must meet when marketing your products in the EU. Pay attention to the indications of which materials / products are concerned per requirement described. The following musts apply to the products and uses listed here : Food safety and health control applicable to all food products Contamination applicable to all food products Composition for all food products, specific requirements for fruit juices and fruit jams, jellies, marmalade and sweetened chestnut puree apply Labelling for all pre-packed food products, specific requirements for fruit juices and fruit jams, jellies, marmalade and sweetened chestnut puree. Food contact materials for all pre-packed food products it is necessary to use food grade packaging material ( for specific requirement per country : http : / / exporthelp. europa.eu / thdapp / index.htm?newlanguageid=en ) There is food specific health control provisions applied for consumer packaging materials that come in contact with food ( e.g. cans, jars ). Food contact materials must be manufactured so that they do not transfer their constituents to food in quantities that could endanger human health, change the composition of the food in an unacceptable way or deteriorate the taste and odour of foodstuffs. ( CBI 2014 ) COMMON REQUIREMENTS Food Safety Certification as a guarantee. As food safety is a top priority in all EU food sectors, you can expect many players to request extra guarantees from you in form of certification. Many EU buyers ( e.g. traders, food processors, retailers ) require the implementation of a ( HACCP-based ) food safety management system. The most important food safety management systems in the EU are BRC, IFS, FSSC22000 and SQF. Different buyers may have different preferences for a certain management system, so before considering certification against one of these standards, it is advised to check which one is preferred ( e.g. UK retailers often require BRC and IFS is more commonly required on by other European retailers ). All the mentioned management systems are recognized by the Global Food Management Systems at the Standards Map.

68 52 Chapter 2.International demand of processed mango Safety Initiative ( GFSI ), which means that any of them should be accepted by several major retailers. However, in practice some buyers still have preferences for one specific management system ( CBI 2014 ). Global GAP Certification The production of mangoes and its product that are destined for export to the European market should strictly be under Global GAP certification ( good agricultural practices ). The Global GAP standard is primarily designed to reassure European consumers about how food is produced on the farm by minimizing detrimental environmental impacts of farming operations, reducing the use of chemical inputs and ensuring a responsible approach to worker health and safety. Traceability is also a key component in Global GAP certification. The Global G.A.P. Fruit & Vegetables Standard covers all stages of production, form pre-harvest activities such as soil management and plant protection product application to post-harvest produce handling, packing and storing ( GAP website ). Kenya has 2021 Global G.A.P certified producers of fruit and vegetables. Kenya GAP is considered the equivalent to Global G.A.P when benchmarked, therefore also accepted. ( http : / / / uk_en / what-we-do / the-gg-system / benchmarking / scheme-profile / KenyaGAP-International / ) ISO 9000 The ISO 9000 standards for quality management ( most recent version ISO 9001 :2000 ) provide a framework for standardizing procedures and working methods, not only with regard to quality control but to the entire organization : from purchasing to processing, quality control, sales and administration. This means that quality, health, safety and environmental management programs becomes strongly interwoven with the overall ISO management plan. ISO 9000 requires that you exactly describe your processes, and then follow these procedures exactly. It does not essentially address product safety and quality, but it is a guarantee that you always do things the same way ( CBI 2005 ). HACCP The need for good quality management takes on increasing importance. One of the main quality aspects is the food safety of the product. The HACCP ( Hazard Analysis and Critical Control Points ) procedure typically applies to the food-processing industry ( CBI 2005 ). It is a methodology, based on seven principles, which food processors, packagers and distributors must use to identify the potential hazards that can be introduced while the food is under their care. EU buyers give ( very strong ) preference to food processed while taking the HACCP principles into account. Although you might be able to find an EU buyer who accepts the EU standard regulation on hygiene, based on HACCP, many buyers want you to comply with a higher standard on food hygiene. For example : Almost all buyers in the UK market will require you to comply with the BRC ( British Retail Consortium ), which is a hygiene code based on HACCP. On the European mainland buyers will require you to comply with SQF, IFS or any other industry-developed standards. Internationally, large manufacturers and multiple retailers have collaborated in founding the Global Food Safety Initiative. Through this organization, which is part of the Global Consumer Goods Forum, they are coordinating the requirements for food safety and quality. As a result, the standards advocated by this initiative are quickly becoming the international norm. Other examples of standards are : ISO or FFSC ( CBI 2013c ). HACCP certification can be difficult to get for small processors in Africa. It entails setting up a traceability system with various control points. The required paperwork for the system as well as its organisation is often cumbersome processes for small industries.

69 Chapter 2.International demand of processed mango 53 Photo: (CC BY-SA 2.0) Photos ITC, shutterstock_ jpg Required adaptations to infrastructures especially if the processing is not initially taking place in a building fit for food production can be costly. It makes the process of obtaining certification a lengthy process for small, cash-strapped processors. CSR Corporate responsibility EU buyers ( especially large ones in western and northern EU countries ) pay more and more attention to their corporate responsibilities regarding the social environmental impact of their business. This also affects you as a supplier. Common requirements are the signing of a suppliers code of conduct in which you declare that you do your business in a responsible way, meaning that you ( and your suppliers ) respect local environmental and labour laws, stay away from corruption etc. Furthermore importers may also participate in initiatives such as the Ethical Trading Initiative ( ETI ) in the UK, or the Business Social Compliance Initiative ( less present in the UK ). These initiatives focus on improving social conditions in their members supply chains. This implies that you, as a supplier, are also required to act in compliance with their principles ( CBI 2013 ) DELIVERY TERMS Delivery terms are usually based on Incoterms 2000 and using DDP, FOB, CFR and CIF export terms. Delivery terms in preserved fruit depend largely on the type of clients. Delivered Duty paid ( DDP ) DDP deliveries are arrival contracts : the exporter is fully responsible for the goods until they arrive at the warehouse of the trade partner anywhere in the EU. Free on Board ( FOB ) and Cost, Insurance, Freight ( CIF ) are departure contracts : responsibility for the goods transfers from exporter to importer at the moment the goods cross over the ship s rail at the port of departure. DDP can lead to financial difficulties of exporters, especially for perishable products when transport conditions are not optimal. ( CBI 2005 ) Cost and Freight means that the seller must pay the costs and freight necessary to bring the goods to the port of destination but the risk of loss of or damage to the goods, as well as any additional costs due to events occurring after the time the goods have been delivered on board the vessel is transferred from the seller to the buyer when the goods pass the ship s rail in the port of shipment. ( World Class shipping 2014 )

70 54 Chapter 3. Roadmap and recommendations CHAPTER 3. ROADMAP AND RECOMMENDATIONS While at this stage decisions have not been made on the approach and investment required to foster regional and international trade, a few key recommendations can be given to optimize implementation. The recommendations are focused on quality, access to markets, sector organisation and finance. 26. PRIORITIES FOR THE IMPLEMENTATION OF THE ROADMAP Not all activities were given implementation priority by the participants. Nevertheless, based on the discussions during the plenaries it is possible to draw conclusions on which activities are judged as pressing by the stakeholders. It is also worth mentioning that participants emphasized the need to learn from past experiences of a number of projects aimed at developing the mango sector without reaching the desired outcomes QUALITY AND QUANTITY Quality and quantity are most likely the most pressing issues to address. With a reduction of post-harvest losses, improved efficiency in the chain and a quality product on offer Kenya can compete on and supply the international market with its products. With regard to volumes and addressing post-harvest losses a number of initiatives are ongoing on the topic, including the Nurture project, the Kevian PPP and the forthcoming project by Rockefeller. The KMCBP report for the NTFII project implemented by ITC, also addresses the issue. A new project would have to be complementary to the current initiatives, with supporting logistics and communication between actors to improve the efficiency in the chain, simultaneously working on quality management and control. GAP certification and traceability is one way to improve the quality and the quantity of the products supplied to the industry. Training on GAP and other procedures will be required by the different actors in the chain for this purpose. Issues related to logistics and storage should be tackled under a strategy of improved efficiency in the chain. Complementarity with other fruit and vegetable supply chain could be sought to use / rent facilities. Processing will also require special attention to comply with the quality required by international markets. Traceability of the product is one important component to comply with and for which mechanisms will need to be put in place and staff trained, including on product management, personnel management and QC / QA. In-depth analysis should be done prior to the acquisition of new processing equipment to ensure its suitability to the production environment, ease of operation, energy consumption and simplicity of repairs. GAP and HACCP are the 2 main standards for export to the European Union. While the focus market for juice is in the region, it does not hurt to already apply certain of the key principles of both standards although not yet required by buyers in the region. It

71 Chapter 3. Roadmap and recommendations 55 can only give an edge to Kenyan producers to process fruits with highest quality and sanitation standard, and in the future open doors to processors to new markets. Food safety procedures should not only be enforced for export markets to the EU or the USA, but also for local and regional markets. Quality packaging is important for Kenya to export their products, preserve the quality of the product in different climatic conditions and for branding. Therefore some research should be done to identify the best options. Additionally, experiments can be done with a few clients to evaluate the product under different packaging options. Export procedures should be well known to processors and information readily available. Some sort of portal of information could be created to display information on certification, procedures, accreditation, etc ACCESS TO MARKET AND MARKET DIVERSIFICATION Increasing the visibility of the Kenyan processors through fairs and exchange visits is an efficient way to improve access to markets, combined with strong branding and product diversification. Establishing preferred supplier relationship with buyers can be fruitful for Kenyan exporters, but it needs to be supporters with solid strategy to tackle issues of quality and quantity of the products offered. Market intelligence and related information can be aggregated by HCD and made available on a portal which would also include information on export procedures SECTOR ORGANIZATION AND COMMUNICATION Two different strategies should be adopted to improve the organization and communication in the sector. First of all, it is possible to support the creation of an APEX body, representing actors mostly towards the end of the value chain to support processing and export and give a voice to the sector. Such a body used to exist in Kenya but failed to achieve its mandate. Before resuscitating the APEX organization, thorough analysis of past experiences is required to avoid engaging in a similar process. The APEX should be able to address opportunities and constraints of the sector, support inter-professional communication and represent the sector s interests. It should avoid the membership of opportunistic members and avoid a focus on legislations and procedures to the expense of action and development. Second, it is also worthwhile to support producers and small processors into group action to improve access to services and favor linkages upstream in the chain. Working with existing groups should be the focus instead of creating new groups without a history of collaboration ACCESS TO FINANCIAL SERVICES Financial services are an important component of sector development. Different financial products will be necessary to fulfil the needs of the actors in the sector. Collaboration with IMF and Banks will be necessary to develop the required products for production, processing ( cash flow ), acquisition of new equipment, and commercialization. Because borrowing rates and conditions are often difficult to satisfy and not adapted to the sector, a project can contribute significantly to facilitating access and mitigating risks for both borrowers and lenders.

72 56 Chapter 3. Roadmap and recommendations 27. QUALITY AND QUANTITY COMPLYING WITH INTERNATIONAL STANDARDS QUALITY MANAGEMENT Production and volumes Per se, volumes of fresh mango do not seem to be the biggest problem of the Kenyan mango industry. Cultivars are also well adapted to the national, regional and international markets as well as for processing. In terms of volumes the main constraints are related to pests, post-harvest losses and the difficult aggregation of volumes produced my small scale farmers in the different region of the country in a timely and effective manner. Aggregation needs to be well-timed and the fruits need to be stored in appropriate conditions to preserve their quality. Quality management is an issue that needs to be tackled across the chain and not only at processors level. Quality of a processed product juiced or dried starts from the appropriate planting material, good agricultural practices, pest management and harvesting methods. A number of initiatives have focused on improving agricultural practices at farm level already and productivity, including the Nurture project. A new initiative should build on the existing approaches and upscale, supplement or complement the existing initiatives. At different level in the chain, implementing partners vary according to their role in the sector. At production level KARI, KEPHIS, MoA, and PCPB have a role to play in supporting and training farmers in quality management. Collaboration with organizations such as Technoserve and SNV, accustomed to work and train farmers is important. GAP certification, as identified in the CBP for mango is also a way to improve quality and volumes of the product, reducing the impact of pests and disease and sustainable management of orchards Recommendations Processing Actors conveyed to the workshop indicated that working on waste management and efficiency in the chain is the entry point of new initiatives to increase volumes of mango supplied to the processors. Other entry points such as grafting programs, and high density production should come after improving efficiency in the chain, if a volume problem persists or if orchards tree population need to be replaced altogether. Grafting programs should pay special attention to varieties appreciated on the regional and international market as well as their use ( fresh, processed dry, processed juice ) and agro-ecological suitability. Quality in processing is key to exportations. For dried mango, the appropriate drying technology should be sought, conform to HACCP standards and for which humidity of the final product can be well managed. There is no need to mechanized peeling, cutting and sorting processes. When selecting new equipment, it is important to bear in mind the adaptability of the equipment ( African made, vs Indian or European conception ) considering humidity, electricity and fuel costs as well as the possibility to quickly repair and changes parts of the machine. Same goes for the production of juice or puree ; equipment used need to be appropriate for the context in which the processor is operating. In both cases, fruit management and ripening process are key processes in keeping up the production flow. Traceability of the product from reception of the raw material to commercialization should be guaranteed, as a way to control food safety. Personnel should be trained on quality control and quality assurance ( QC / QA ) of products and have the necessary material to perform the required analysis.

73 Chapter 3. Roadmap and recommendations 57 A future initiative could support processors in training their staff on fresh fruit management, production flow management, leadership, GMP and quality control. Frequent control of the quality, including microbiological control of the product is necessary to ensure food safety. Trainers can specifically be hired for this purpose and support staff in developing soft and technical skills Recommendations Quality is important for the Kenyan product to be successful on the market. Additional to the quality of the fresh product use to for processing, processing equipment and techniques are key. It is good management and appropriate technology that will ensure product quality. Therefore it is necessary to have a twofold approach to quality. On one hand, train personnel on the different steps of mango processing and how to optimize product quality. For the different steps of production staff should be trained on how to optimize quality. Production managers should be responsible of supervising the production ; they should be well trained on how to handle any issues on the production floor ; able to interact both with the personnel and the management a mix of technical and soft skills. On the other hand, it is also necessary to have the appropriate equipment, with the staff being well trained on how to use it. Sometimes the most sophisticated equipment is not the adapted to local production condition. In case of hardware failure, it should be easy to replace or repair parts of the machinery QUALITY STANDARDS AND ACCREDITATION Remarks At farm level, GAP certification is important for export markets, especially Europe. For exports to Europe, quality standards and the required accreditation are high and difficult to obtain, especially for small processors. HACCP certification for example is not a one shot deal but rather a continuous process of improvement. It s also not only about being certified or accredited but it is about methods, organization and traceability within the industry. It s about controlling hazards and critical control points. While requirements for HACCP in the regional markets are not as stringent as for Europe, compliance to such system helps managing the quality of final products. It is important to train personnel on leadership and building their capacities to manage sections of the production flow. If new infrastructures were to be built, special attention needs to be given to production flow and construction materials. At the moment, the small volumes produced won t prevent exporters to operate, but nevertheless efficiency, production flow, food safety and traceability should be top of mind in food production with or without certification Recommendations It is important that processors offer a safe product to their consumers whether they are European or African. Standards and accreditation are one way to support the production of a safe product. For European markets HACCP certification is well appreciated and is perceived as a way to ensure a safe product because of its traceability system and QC / QA. HACCP is a continuous process for which processors will need coaching, training for staff and support to implement. Most likely adaptations to infrastructures will be required for which access to finance will be an important entry point to support entrepreneurs. Although HACCP may not be required to operate in the regional market, integrating components of the guidelines in the operation plan of the processors can only ensure a better quality and safer product and give a market edge to the processors.

74 58 Chapter 3. Roadmap and recommendations Storage, logistics Producer ( groups ) and processors need to be supported in improving the efficiency in the logistics. Currently, it seems like important volumes of mangoes can t be processed because of the difficult access to adequate storage facilities. It would be useful to pilot decentralized collection centers where a first grading and sorting process is done. Personnel should be trained on grading and handling of fruits. Collection centers should be equipped with appropriate crates to grade and store mango according to the ripeness level of the fruits. Crates help fruits conservation by diminishing the weight on each fruit, as opposed to heaps. Collection centers need to be managed like businesses, traceability procedures should also be established at that level. In collaboration with the processors, logistics need to be improved to coordinate transport and pickups. An information bank operated via SMS could be piloted where processors have access to data at collection center level and have the ability to plan collection and processing according to volumes available Recommendations Packaging Storage and logistics are very important issues which should be addressed in priority. The current arrangements in the value chain create important post-harvest losses with financial and reputational implications for the sector as a whole. The issue requires a system s approach to the issue with special attention to complementarities and synergies with other fruits / vegetable value chain to improved logistics and storage of fresh mango before processing. Coordination within the chain should be improved as well as the environment to the chain. Access to roads for example is in this case ( and for many other commodities ) a precondition to improve the sector s logistic. Improving communication and information flow in the chain is also a necessity to support the sector s development. The most adapted packaging material for each product and market should be analyzed. More specifically, it is necessary to assess how a product is preserved considering the shipping methods and time elapsed between packaging and consumption. Requirements and transport parameters vary with markets and clients. Therefore, it would be useful to test different combinations of packaging, transport and time to evaluate the best options to preserve the product quality for different markets and price options. Best options are likely to vary whether the product is organic or conventional or of if it is for the national, regional or international market. End buyers can be requested to evaluate the products submitted according to various criteria. Microbiology tests can be performed by international laboratories Recommendations Export procedures Recommendations are straight forward. A survey of available packaging material in the country can be done. Interviews with current clients can be done to discuss preferred packaging material and discuss the level of satisfaction of clients with regard to packaging and product quality. New pilots and tests can be performed to experiment with different packaging in collaboration with new and existing clients e.g. Coca Cola to establish the best packaging for the Kenyan product considering costs and quality. If not produced locally, options to produce or import at low cost the required materials can be explored. Export procedures should be known to processors. A better understanding of requirements can help in meeting these requirements. Processors and exporters should have access to training on export procedures and tailored assistance on meeting these procedures : not necessarily by providing direct financing, but rather setting up the required mechanisms and systems or hiring trainers for the specialization of staff.

75 Chapter 3. Roadmap and recommendations Recommendations Mango producers / orchards managers and processors should be trained by HCD and EPC on export procedures and requirements. Although the information might not be directly applicable to the actor trained, it fosters a wider comprehension of the chain and increases knowledge on the impact of individual actions. Some procedures may find it difficult to comply with some of the procedures. Again HCD and EPC can train processors on how to operationalize the procedures within their organization by setting up the appropriate mechanisms and training the required staff. 28. CREATE ACCESS TO RELEVANT MARKETS, DISSEMINATE MARKET INFORMATION & MAKE THE KENYAN MANGO SECTOR VISIBLE AT INTERNATIONAL MARKETS It is known that the local and regional markets for mango juice represent an opportunity for the Kenyan processors. Interviews and statistic gathered during the demand study and the workshop in Nairobi have shown the juice sector and consumer s interest in mango product. Now, Kenyan producers need to develop their products and refine their strategy to effectively tap into this expanding market MARKET AND PRODUCT DIVERSIFICATION A first step in market diversification is for Kenyan juice and purée industry to go through an import substitution strategy to source locally their raw material. This can be achieved by improving efficiency in the production chain ( e.g. logistics, waste, communication between sellers and buyers ) and offering competitive advantage against imported purée from India with a reliable, proximity, locally adapted and appreciated product with lighter trade procedures and forex. Access to new markets can be supported by the organization of exchange visits and trade missions to neighboring countries to promote Kenyan products and foster partnerships with regional companies. Many African countries import mango purée from India ; Kenya could position itself as a new supplier to this market MARKET INFORMATION Market information on the national, regional and international market should be made available to exporters and processors. A platform with results of market research, factsheets ( e.g. CBI market factsheets ) and promotional events could be set up with the help of HCD and other Business Development Services and TSI. Entrepreneurs wishing to buy new equipment can be supported in making appropriate and well-informed decisions. It is now always easy for small companies to evaluate the costs and benefits of different technologies or purchase adequate technologies from abroad where large amount of paperwork and other import constraints are the norm. Language can also be a barrier. Business support services and import services help business overcoming long delays and procedure while ensuring the best technology adapted to the needs is purchased. Access to finance for such purchases is also often an issue. A future project could support access to finance for production equipment ( see section 30 ).

76 60 Chapter 3. Roadmap and recommendations TRADE PROMOTION, MARKETING AND NEW DISTRIBUTION CHANNELS Participation in fairs, trade shows and food technology events needs to be supported. This does not have to take the form of payment for participation but rather can be done by supporting processors and exporters in exhibiting and presenting their products in a professional manner. A kiosk, banners and sample products with appropriate packaging is one way to attract potential buyers. Branded products are also an option for consumers to focus on Kenyan products and attract attention. Additionally, entrepreneurs can be supported if needed on brokering deals, international regulations or even translation. Another way to diversify is the organization of exchange visits in various countries which as not only a way to meet clients, but also gather more information and intelligence on technologies. The intelligence gathered can then serve to develop new marketing strategies Recommendations To strengthen the position of the Kenyan exporters in the regional and international market it is recommended to do additional market research. At a pre-competitive level, exchange visits can be organized by HCD in the sub-region for Kenyan processors to gather information on processing technologies and products. As a result of the exchange visits a few products and technologies can be piloted with the support of the project. Consumer appreciation can be tested. It is important for processors to work on their fruit recovery rate, using as much as possible of the raw material. Therefore it is also possible to test different products to improve the recovery rate of the products. A greater recovery rate will also help exporters to be more competitive and cost-effective. There are many ways by which Kenyan entrepreneurs can expand their market. One way is to go through a process of export substitution and source locally what is currently imported. It can also supply neighbouring countries who are currently importing from India. A process of lobbying and awareness creation can be started by representatives of the mango industry to promoted import substitution strategies at policy level. A second way is to seek partnerships and do product development. Mix of nuts and mango is one idea for snack. Such a product exists in the Philippines for example ; it s sold in market and also promoted on internal flights. Synergies could be explored with Nuts of Africa. Market share can also be increased by participating in trade fairs and food events where the processors can meet potential clients and showcase their products. It is important to develop a quality and trusted image for the Kenyan processors. At the international level, it is important to promote unknown varieties and test their suitability to international markets such as for yogurts and ice creams. 29. IMPROVE & STRENGTHENING THE KENYAN MANGO SECTOR ORGANIZATION AND INTER-PROFESSIONAL COMMUNICATION MAKE THE KENYA MANGO PRODUCERS AND MARKETING ASSOCIATION ( KEMPMA ) AN EFFECTIVE APEX BODY The Kenya Mango Producers and Marketing Association ( KEMPMA ) exist, but to date does not seem to be very active in representing members interests. Participants to the workshop have voiced their desire to have an effective APEX body for the mango sector. Before resuscitating past associations and bodies, it is important to understand failures of the past and the reasons why the organization is not more active in the sector to avoid repeating the same mistakes. It seems like the association has been supported by a

77 Chapter 3. Roadmap and recommendations 61 number of project and programs in the past but efforts to make it an effective APEX body have failed. It is imperative to understand why before engaging in the process again. As a second step, it would be necessary to choose a facilitator and entry point for this body to operate. With the members, constraints and opportunities of the sector should be analyzed considering production, technologies or marketing. There should be clear added value for members to actively participate in such a body. If there is no value for members, then it is unlikely that the association will be an effective body and will be able to represent its members interests, including influencing policy pathways through its actions, lobbying and involvement of key political actors in its activities STRENGTHENING THE LOCAL MANGO ASSOCIATIONS In the Kenyan context, it would be helpful to assist self-help groups and small producers organizations to work in a larger association where they can have access to tailored training and information on mango production, pest and diseases and fruit handling. At marketing and processing level, it will be more difficult to engage in a common process because of competition between actors. Nevertheless, basic information can be provided and tailored information provided individually per enterprise. Pre-competitive activities such as market research and piloting new technologies are activities that can be done collectively and for the benefit of all. While the needs of the producers and the processors are different and should be addressed independently, it is nevertheless important to foster collaboration and information exchange between the two clusters Recommendations There are a number of initiatives and partnerships already existing. It would be useful to organize sessions to learn from the past initiatives, achievements and failures and when possible joint actions can yield greater results. During the workshop it was mentioned a number of times that initiatives to boost the mango sector as succeeded one another for the past decades without yielding much results. All actors present have advocated for greater collaboration between initiatives in order to complement each other and avoid replicating past mistakes. PPPs like the Nurture project or Kevian generated great amount of information and have piloted a number of technologies, processes and products. Much can be learned from their experience and by joining forces to scale-up their achievements in organizing the sector. The involvement of private sector actors such as Coca cola is important for the stimulation of the sector as it offers an important pull factor to local producers and processors. Large national or regional buyers can also stimulate processors to work together at pre-competitive level to supply larger volumes of the required product to the buyers. 30. PROVIDE ADAPTED FINANCIAL SERVICES TO SUPPORT PRODUCERS AND EXPORTER CAPACITIES There are many ways by which access to finance can be improved for actors of the agricultural sector. For production credit, a first step could be to provide IMFs and saving associations with a fund or security aiming to offer lower interest rates to farmers. Lower interest rates would support producers participation in the credit schemes and support investments in the sector by small producers and entrepreneurs. Innovative ways of providing credit and payments could be piloted with similar systems as m-pesa. Different type of credits should be developed such as production, marketing, collection and processing with different timeframes and interest rates for the various activities. Saving associations such as SACCOS can be promoted on the basis of small farmer groups and associations already working together to market their products. Such saving and working groups can support farmer to buy inputs, chemicals or hire casual laborers or transport collectively to reduce individual financial burden.

78 62 Chapter 3. Roadmap and recommendations For farmer groups who wish to obtain credit, financial audits or assessments could be conducted to evaluate their credit worthiness, and what kind of capacity building is required to support the organizations in obtaining credits. Such assessments can be made by organization such as SCOPEinsight. Specific skills can then be identified and strengthen through training. At another level, it is possible to support exporters in developing forward contract to be offered to producers. This helps exporters to secure their supply, while farmers can use the contract to access credit in financial institutions, the contract acting as a guarantee. Another approach is to work with formal financial institutions and create awareness on the realities of the agricultural sector to develop tailored products. The contrary is also true : it is also necessary to work with potential clients of financial services such as exporters and large( r ) farmers to sensitize them on the requirements and procedures of formal services. Additionally, as for informal credit sources, funds can be made available to financial institutions to mitigate risks and reduce interest rates offered to clients of the sector. Equity Bank in Kenya is a frontrunner in the sector when it comes to access to finance in agriculture. For processors, access to credit for infrastructures, machinery, operation capital or collection credit might be some of the services that could be developed in collaboration with financial institutions. Processors will also need finance for aggregation, commercialization, equipment and training. Access to credit should also be provided by MFIs or formal institution depending on the size of the required investments. Different modalities for different type of loans can be developed in collaboration with MFI and financial institutions for this purpose. With the financial support of the project, interest rates can be lowered RECOMMENDATIONS A mixed approach to finance : formal and informal would be optimal as needs at producers and exporters level varies greatly. Training and information are important components of finance as well as developing tailored products for the sector and facilitating access and reducing risks by lowering interest rates. This is where a project can have added value. Financial products should be developed considering the different needs of the actors in the value chain, including for production, adaptation of processing units, equipment acquisition, processing ( cash flow ) and marketing. It is likely that important investments will be required from processors to optimize the production flow and to train personnel in soft and technical skills.

79 Chapter 4. Implementation Plan 63 CHAPTER 4. IMPLEMENTATION PLAN Part of the roadmap for the processed mango sector designed by the supply and demand analysis carried out, an implementation plan was produced. This plan was complemented during the national workshop held on the 14th of August 2014 at Ole Sereni Hotel in Nairobi, Kenya. The exercise was conducted in a participatory manner with the sector s key stakeholders present. Limited time was available to fill in a set of pre-established questions. Participants were separated in 4 groups to discuss key topics, and propose activities, beneficiaries and partner organizations for each activity. After the group work, participants were reunited in a plenary session to discuss the results of the group work. The outcome of these discussions is available below. During the workshop inputs from the participants were gathered on the sector to support the supply and demand analysis. The following section outlines the key activities to be implemented as well as a prioritization done by the participants of what requires special attention first to develop the sector. Topics discussed were as described below and divided into four key strategic objectives : Key Strategic Objective 1 : Increase quantity & quality of Kenyan processed mango complying with international standards. Key Strategic Objective 2 : Create access to relevant markets, disseminate market information & make the Kenyan processed mango visible at international markets. Key Strategic Objective 3 : Improve & strengthening the Kenyan processed mango sector organization and inter-professional communication. Key Strategic Objective 4 : Provide adapted financial services to support producers and exporter capacities.

80 64 Chapter 4.Implementation Plan KEY OBJECTIVE 1 : INCREASE QUANTITY & QUALITY OF KENYAN PROCESSED MANGO COMPLYING WITH INTERNATIONAL STANDARDS Suggested activities 1. Quality management 2. Quality standards and accreditation 3. Storage and logistics 4. Export procedures 5. Packaging Type of activity Production and post-harvest handling Sourcing and planting material of preferred, known varieties adapted to agro-ecological zones and consumer market Grafting programme Pilot high density production Provide training in Quality management at collection points Provide training of operators on fruit handling, grading and conservation Survey of existing collection facilities and infrastructures, Assessment of infrastructures : make adaptations necessary Provide training for enhancing capacity building for nursery operators, farmers, extension officers, traders, microprocessors and value addition groups on topics such as pest management, post-harvest handling, GAP Processing Organise pilot new technologies for juice processing and mango drying. Equipment should be adapted to conditions, energy constraints and easily repairable. Training of processors on HACCP and GMP Support to elaborate and implement HACCP plan ( practices and infrastructures ) Compliance is more important than accreditation for now. In the future accreditation will be an asset and provide a market edge. Train processors in quality control and quality assurance ( qc / qa ) ( physical and microbiological ) Train personnel on soft skills required Equip processors with simple technology :, small lab equipment Inventory of equipped collection centres good grading and sorting facilities, functioning as a business unit that is led by professionals and not by producer groups : pilot decentralised collection centres where fruits can be handled adequately and where processors can verify at all-time available volumes of products according to ripeness level of the fruits. Pilot communication system to reduce waste and improve knowledge of processors on available stocks. Capacity building of managers of these collection centres in management, governance, financial administration Training on fruit conservation and ripping procedures Increase awareness of export procedures by training exporters on quality control, traceability of product and food safety. Training a pre-competitive level. Assist / support on compliance ( infrastructures, procedures e.g. paperwork, traceability ) Identification of suitable and acceptable packaging for various markets. Pilot different treatment, packaging and shipping methods. Ask potential clients to participate in the study and test the products. Perform microbiology tests. ( E.g. tetrapack, plastic bottles, barrel, S02, nitrogen, food grade plastic, etc ) ( Research on competition, sizes, quantity, specs ) Designing and branding of packaging for the national, regional and international market. Direct recipients Research institutions Extension officers Producers Nursery operators Orchards owners Extension services Extension officers Producers Farmers Buyers Processors Exporters International market Processors Buyers Potential implementing Partners & other initiatives Kenya Agricultural Research Institute ( KARI ) KEPHIS Ministry of Agriculture HCD Pest Control Products Board ( PCPB ) Private sector Kenya Agricultural Research Institute ( KARI ) Technoserve Ministry of Agriculture KEPHIS HCD Developing partners Private sector HCD County governments Ministry of Agriculture Private sector Cooperatives ( Production and Marketing Organisation PMOs ) HCD Exporters EPC Private sector ITC Kenya Association of Manufacturers ( KAM ) Processors KEBS Kenya Industrial Research and Development Institute ( KIRDI )

81 Chapter 4.Implementation Plan 65 KEY OBJECTIVE 2 : CREATE ACCESS TO RELEVANT MARKETS, DISSEMINATE MARKET INFORMATION & MAKE THE KENYAN MANGO SECTOR VISIBLE AT INTERNATIONAL MARKETS Suggested activities 1. Market and Product diversification 2. Market information 3. Trade promotion 4. Marketing 5. New distribution channels 6. Export procedures Type of activity Pre-competitive market research ( regional and international ) Identify different types of products that can be easily processed and stored of interest for these markets. For example : pulp as being easy to store, jam. Pilot on different markets, evaluate consumer reactions. Pilot by-products and research on recovery rate of mango. Eg. Mango rolls, mango chips and mixed products. Explore partnerships with Nuts of Africa and a mixed nut / mango product. Import substitution of mango product for locally sourced product. Support entrepreneurs in accessing affordable credits to do product research Compiling and updating and dissemination of information on various topics related to the mango sector and processing NaHMIS, newspaper, radio, mobile phone. Both local and international campaigns / exhibitions to promote Kenyan mango : produced in Kenya. Position Kenya as a supplier of quality products made out of wellknown and appreciated varieties Promote local varieties for the national and regional market Evaluate the position of Ngowe purée on the international market ( pilot and test with pack houses, yogurt and ice cream companies, juice processors ) Branding, communication of local products. Participation in fairs Organize exchange visits and trade missions Help entrepreneurs in getting in touch with potential clients such as supermarkets, airlines, school feeding programs Juice processing for the regional market Participation in regional and international fairs Dissemination of standards and policies : Producers and processors need to know the standards that are required by national and international buyers. Direct recipients Producers Processors Traders Exporters Producers Processors Traders Extension officers Exporters Traders Exporters Processors and exporters Processors and exporters Producers Processors Potential implementing Partners & other initiatives Ministry of Agriculture HCD KARI USAID / KHCP Technoserve HCD ( through National Horticulture Market Information System ) NaHMIS Scientific institutions Ministry of Agriculture HCD EPC Ministry of Agriculture. CBI USAID HCD ( Export Promotion Council ) EPC Private sector HCD, EPC, TSI, US- AID, GIZ, ITC, CBI Kenya Bureau of Standards ( KEBS ) Priority & Ranking

82 66 Chapter 4.Implementation Plan KEY OBJECTIVE 3 : IMPROVE & STRENGTHENING THE KENYAN MANGO SECTOR ORGANISATION & INTER-PROFESSIONAL COMMUNICATION Suggested activities Type of activity Direct recipients 1. Make the Kenya Mango Producers and Marketing Association ( KEMPMA ) an effective apex body 2. Strengthening the local mango associations 3. Improve communication and coordination for mango production & processing issues between ministries 4. Develop Public and Private Partnership for the mango sector in Kenya 5. Develop national networks & partnerships 6. Develop regional and international network partnerships There is Kenya Mango produces and marketing association PSDA, GIZ, Kenya national of agricultural producers has tried to activate this organization. Find out from PSDA what issues they encountered Learn from PSDA experience Identify the reasons why the previous organisation was not successful and not operational Learn and share past experiences in the sector Identify ongoing small-scale initiative were groups and associations are successfully working together. Identify gaps, needs and support them. Bring different groups together to exchange on experiences Work on upscaling if necessary, identify a facilitator who can stir the organisation Train farmer organisations and small processors on business skills, entrepreneurship, contract negotiation, fruit and product management, traceability and food safety. The mango association can represent the sector s interest at policy level Communicate achievements of the sector through medias, radio Learn from previous experiences ( Kevian, Nurture project ) Initiate discussions between interest actors. Identify key sector development where partners can contribute. A number of partnerships already exist. Reinforcing these partnership, addressing constraints and opportunities faced by stakeholders in these partnerships. Scalingup where and when possible. Broker partnerships between fresh products exporters and processors for access to raw material Foster interaction with other national initiative such as Coca-Cola, and Rockefeller Develop partnership with regional juice companies by organizing trade visits, participation in fairs. Organize exchange visits to South Africa as an opportunity for processors to learn on technology and markets Approach companies for joint ventures, product development. Producers and marketing associations Processors Processors Sector will benefit Producers, processors Producers, processors, private sector Producers, processors, private sector PFPEAK, EPC, HCD, Potential implementing Partners & other initiatives NGOs and other development organisations working with producer groups Technoserve, SNV, GIZ, USAID NGOs and other development organisations working with producer groups Technoserve, SNV, GIZ, USAID HCD, projects, relevant ministries Ministries, projects and programmes Ministries, projects and programmes PFPEAK, EPC, ITC, CBI, HCD, ministries

83 Chapter 4.Implementation Plan 67 KEY OBJECTIVE 4 : PROVIDE ADAPTED FINANCIAL SERVICES TO SUPPORT PRODUCERS AND EXPORTER CAPACITIES Suggested activities Type of activity Direct recipients 1. Micro-credit and savings schemes 2. Improved access to formal credit Financial support to credit institutions to provide cheap credit to producers, lowering interest rates Support the creation of savings and credit associations ( SACCOS ) based on existing farmer groups and associations. Link up to mobile banking systems like m-pesa Identification, encourage farmers to enter micro credit and savings schemes through information sessions Awareness creation : farmers need to know what is around and how to access Promotion of these products through the media, mobile services. Strategic discussions with financial sector to develop financial products adapted to the agricultural sector Conduct farmer group solvability assessment, training to understand requirements of the formal financial sector Financial support to credit institutions to provide cheap credit to producers, lowering interest rates Support exporters in establishing forward contracts and linkages with financial institutions for farmers to access loans Farmers Traders County Governments MFIs Farmers MFI Potential implementing Partners & other initiatives Government of Kenya County government Trade support institutions Mobile service providers MFI Mobile service providers Media Government of Kenya Training institutions ( e.g. ATC ) Kenya institute for business training Equity Bank SCOPEinsight

84 68 Chapter 5. Conclusion & recommendations CHAPTER 5. CONCLUSION & RECOMMENDATIONS Kenya is the largest producer of mangoes in East Africa which gives it an advantage, in addition to the favourable climatic conditions for production, whereby different counties in the country harvest mangoes at different times in the year. This results to a more continuous supply of mangoes. The fruit production sector in the horticulture industry is mainly by small scale farmers hence through the proposed project, the farmers will benefit from income generated through sale to processors / processing companies. For a successful and sustainable project that will have an impact on the farmers lives and ensure food security : a. Increase pulp production and storage to enable processing during off season b. Train farmers and groups on entrepreneurial skills to enable them run the processing plants as businesses c. Small and medium enterprises can employ a professional team to run the processing plants more effectively d. Built capacity and empower the enterprises on packaging and branding Overall the world has seen an increasing use and need for fresh and mango processed products. On the other hand, the opportunities for Kenya are limited with many other international players being well established on the market. A few preconditions need to be met for Kenya to be competitive. Table 43: Concluding table Region Supply Competition Market requirements USA Asia Latin America Self-supply Geographic advantage of Latin and South America for supply. Dried mango ( osmosis ) comes from Asia. Juice and puree are still a niche market but increasing slowly. Own production well located to serve the world. Demand is high, but so it production. Europe Asia, Africa Increasingly difficult for Africa to meet standards West Africa South and East Africa Middle East Self-supply Self-supply, India Self-supply and Asian supply Ghana, Burkina Faso and Mali are producing juices and processed fruits. They are well positioned to serve their own markets and are already supplying Europe. Low cost of raw material and labour Export to Europe, USA and middle east South Africa : unreliable seasons, very well established local market Long historic ties with Asia Other fruits are competing on the national market HACCP, GAP Difficult market entry but increasing demand Standards and controls are less stringent but regional ties are strong HACCP, GAP Difficult market entry Local market is already well established, potential to improve products. Regional demand is expected to rise, but clients capacity to pay is lower than international markets Standards and controls are less stringent but regional ties are strong Other projects are contemplating working on mango at the moment. It is imperative for any new initiatives to be complementary instead of duplicating efforts. Coordination within the sector and among stakeholders would allow for more efficient use of resources and potential greater impact.

85 Chapter 5. Conclusion & recommendations FOR KENYAN PRODUCTS TO BE COMPETITIVE The cultivar needs to be accepted as competitive substitute to other cultivars. Or it is deemed special and accepted on the international market effectively competing with other varieties because of favourable characteristics. Efficiency in the value chain is reached from production to processing. For this purpose, post-harvest losses should be reduced, transport and aggregation optimised and when possible synergies with other value chains should be sought to use existing facilities and infrastructures. Processing technology needs to deliver a quality product for this, it needs to be adapted to the local conditions, but yet provide adequate results. Recovery rate of fresh products should be high, with the potential to develop by-products from the off-cuts of fresh material HACCP certification and Global GAP are a necessity : staff needs to be trained in soft and technical skills Transport for which Kenya has an advantage because of the Mombasa port it is efficient. Packaging of product is optimised for transportation and preserving products. Research should be conducted Organic and fair trade are niche products, but nonetheless appreciated on the market. Complementarity with other fruit or vegetable processing is desirable to optimise infrastructures and labour. Organisation of the sectors : a functional APEX body serving the interest of the sector. Support to farmer organisation and small processing group to access services, knowledge and create linkages with other actors upstream in the value chain. Access to finance should be facilitated a mix approach to formal and informal credit. Financial products should be developed for different activities e.g. production, processing ( cashflow ), commercialisation and acquisition of new equipment 32. PROCESSED FRUITS AND MANGO From 2007 to 2009, global imports of mango pulp grew at an annualized rate of 4 %, while juice grew at 7 % ( Grow Africa ). The Gulf States are the leading importers of Mango fruits and Mango pulp for which they have strong ties to Asia. The USA, China Europe, UK, and Japan are following countries. In 2012, Kenya exported 14.6 tons of processed fruits including mango, pineapple, and passion fruit, among others, with a value of 18.4 million USD. In 2013, this amount doubled with a volume of 30.3 tons and a value of 36.0 million USD. Mango processing in Kenya has not expanded, and according to the summary of the National mango Conference in Nairobi in 2010, less than 1 percent of the mangoes produced in Kenya were processed at that time. Due to the seasonal character of mango production, supply to factories lasts for seven months in a year ; hence mango processing should be complementary to other fruit or vegetable processing to optimise the use of equipment and infrastructures. Nevertheless, 7 months of supply is very good and longer than in most other countries. Kenya can benefit from its ability to provide products to the market on a longer period than its competitors, which enables the country to fill in production gaps from other regions. Ninety-five percent of mango produced in Kenya is made up of indigenous cultivars. These are rich in fibre, and of little market value : mostly consumed within the households or sold at very low prices in the village markets. The international market is keen on buying know cultivars such as Keith, Kent, Tommy Atkins, Magdalena, Totapuri, Alphonso, and Ica. For new varieties to enter the market, buyers need to test the new varieties.

86 70 Chapter 5. Conclusion & recommendations This is the case for all mango products on the market whether sold as such or in mixes. The Kenyan mango would need to exhibit either very similar characteristic to another well-known cultivar to act as substitute to this cultivar or would need to exhibit very special traits appreciated by consumers to be accepted on the international market. In case of substitution prices should also be close to the competitors. At this stage, it is impossible to know how the Kenyan mango would perform on the international market, but it is certain that is it not easy for new cultivars to be accepted on the market. Tests with companies and consumers would be necessary. Some companies do not mind integrating new varieties and origins in their portfolio as long as they exhibit some favourable characteristics. Companies are interested in selling the story to their consumers. Mango can t be produced all year long ; hence suppliers are spread across the world and grow different varieties. As a result, consumers can t expect their mangoes / products to taste exactly the same all year long. ( KIT experiences World Bank project 2013 ) Kenyan processors cannot pay more than Ksh / kg for fresh mango to compete with imports or export to world markets ( USAID 2010 ). Kenyan Exporters suffer from price instability in international markets and from stiff competition from other countries like India, Pakistan, Brazil, Peru, Mexico and Costa Rica. The Indian season still drives a lot of the worldwide market. These competitors offer higher quality cultivars at lower prices, due mainly to lower shipping costs. Hence worldwide competition is fierce and market entry is not guaranteed for Kenyan producers. Requirements from retailers are increasing. Their demand for low product prices will put more pressure on the developing countries ( DC ) exporters, while requirements with regard to sustainability, transparency, and pesticide use are becoming more stringent. In Kenya, the price of natural mango juice is expensive for most domestic consumers. In the future, with a growing middle class, this may change. Mango is already an acquired taste on African markets. Minute Maid ( Coca Cola ) is now marketing mango nectar on the national market. More research is necessary to assess the potential of the national market. However at this stage, absorption capacity is limited on the national market. In Sub-Saharan African emerging markets, the informal sector can be, at an aggregated level, a substantial part of the fruit juice sector, accounting for up to 70 % of volumes in such countries as Kenya offering products at a lower costs ( ACET 2013 :23 ). In the future, we could see a decrease in the shares of the information sector with products becoming more affordable for a larger share of the population who is also looking for quality and nutritious products. IQF production is not ( yet ) an attractive product for Kenya. Yet again, the product would be subject to stiff competition from other countries while the required infrastructures for the production are costly and difficult to establish ( especially the negative cold chain ). Maybe at a later stage, when Kenya as taken a more solid stance on the international this market it could be considered. Figure 16: Product opportunities National Regional International Dried x x X ( EU, USA ) Puree / Juice x xx X ( EU, USA, Middle East ) IQF X ( EU )

87 Chapter 5. Conclusion & recommendations GLOBAL EXPORT : DIFFERENTIATION THROUGH QUALITY Mango processing certainly has the potential to add value to raw fruit. The example of Mali s mango nectar production shows that the conversion of mango to pulp can increase its value by a factor of 2.8, while conversion to a ready-to-drink beverage at the factory gate raises its value 17.8 times. The largest area of value added is in packaging, which tends to be expensive. ( ACET 2013 :9 ). Although worldwide demand of mango pulp and juice is growing, it will be hard for processors in Kenya it is hard to compete on the international bulk market for purees and juices. Differentiation in terms of quality and serving specific niche markets could be a way to find openings in the already existing, competitive market. Some pulp which is made from specific varietals, such as the Alphonso from India is greatly appreciated because of its texture and flavour. Further research required to find out what unique characteristics Kenyan mangoes can offer and the dynamics of the demand side. However, CBI observes a growing demand for processed fruits from countries such as India and China. A further market research on potential markets for mango juices would be needed to understand whether mango juice from Africa could serve these growing markets in Asia ( CBI 2013 ). More general support and investments in the processing sector with obviously benefit growth. This is already happening now ( ACET 2013 ). 34. TRENDS The overall market trend seems the growing demand for healthy, natural products. Companies increasingly take sustainability seriously into consideration and have corporate social responsibility ( CSR ) guidelines. Another important trend is the growing requirements from buyers concerning food safety. 1. Growing demand for natural, healthy products 2. More requirements concerning food safety ( HACCP, BRC, GMP ) 3. Sustainability, traceability and corporate social responsibility ( CSR ) ( CBI 2013, company interviews ) Convenience ( ready-to-eat, cut and mixed, longer shelf life, snack size ) as well as smaller portioned packaging is becoming more popular in North-Western Europe. Although demand in other parts of Europe is still small, it is increasing ( CBI 2013ab ). The snack market represents a small opportunity for the Kenyan processed mango. While organic and Fairtrade have proven to be effective for certain commodities, at this stage it is not recommended for Kenya to engage in a specific trajectory to satisfy the demand because they remain a niche market and Kenyan organic certification is not yet recognized on the international market. 35. REGIONAL MARKET OPPORTUNITIES It may be possible for Kenya to supply the major juice processing facilities in Kenya or East Africa, which could compete with imported mango, concentrates from Asian producing countries. What is interesting is that African consumers already appreciate the taste of mango they do not need to be convinced about the taste. Additionally, they might be more receptive to local varieties than the international market. While fizzy beverages are very popular in Africa and available almost everywhere, it is yet to be seen

88 72 Chapter 5. Conclusion & recommendations Photo: shutterstock if natural juices can take up a share of the market. This is well possible as concerns for healthy products are also growing among African consumers. While South Africa is now producing mango products for the regional market, Kenya could get some shares of the market, it seasons continue to be difficult in South Africa or if South Africa increasingly supply other markets such as Europe. India is also a large provider of mango pulp to the continent. There is an important potential for import substitution from India for local mango pulp if efficiency and quality can be achieved locally. Kenya is better positioned to supply the regional market of Sudan and Egypt which is currently catered for by India ; Kenya also imports large quantities of mango pulp from India. Local companies could benefit from an import substitution strategy to source their mango products locally. Nationally and regionally, Kenya is well positioned to compete with the current suppliers logistically. Priority should be given to develop the national and regional markets. Fairs, exchange and promotion visits can be organised to develop the Kenyan market. Research & Development of products to diversify and improve the current products on offer should be an ongoing process.

89 ANNEX DOCUMENT ANNEX 1. KENYA-PROJECT MAPPING ANNEX 2. MANGO ANNEX 3.ECOLOGICAL REQUIREMENTS ANNEX 4.MATURITY / HARVESTING ANNEX 5.MANGO GRADING FOR EXPORT ANNEX 6.MAJOR MANGO INSECT-PESTS AND DISEASES ANNEX 7.POTENTIAL BOTTLENECKS FRUIT PROCESSING ANNEX 8.MANGO PUREE SPECIFICATIONS EU MARKET ( CBI 2005 ) ANNEX 9.MANGO PUREE SPECIFICATIONS JAIN ANNEX 10.PRODUCT SPECIFICATIONS AND PROCESSING FOR PULP ANNEX 11.PRICES MANGO PUREE ANNEX 12.SHIMLA HILLS PRODUCT SPECIFICATIONS ANNEX 13.MANGO PROCESSING FLOW CHART ANNEX 14.HACCP PLAN MANGO PROCESSING ANNEX 15.SUMMARY OF INTERVIEWS ( DEMAND ANALYSIS ) ANNEX 16.PRESENTATION TECHNOSERVE : LEARNINGS AND KEY LESSONSBY DICKSON MBANDO ANNEX 17. SUPPLY ANALYSIS PRESENTATION ANNEX 18.DEMAND ANALYSIS PRESENTATION ANNEX 19. MANGO COMMODITY BUSINESS PLAN ( NTFII PROJECT )...141

90 74 ANNEX DOCUMENT. Annex 1. KENYA-PROJECT MAPPING ANNEX 1. KENYA-PROJECT MAPPING In the table a recommendations column has been included, as they could be relevant for the project Funding Organization FAO International Fund for Agricultural Development ( IFAD ) Japan International Cooperation Agency ( JICA ) Japan International Cooperation Agency ( JICA ) Project Name and Duration Agribusiness support for smallholders Duration : ongoing http : / / or.ke / Smallholder Horticulture Marketing Programme Duration : http : // org / operations / projects / regions / pf / factsheets / kenya.pdf Market-oriented Agriculture Development Duration : N / A http : / / go.jp / kenya / english / activities / activitiy01.html#a02 Program on Improvement of Regional Transport Infrastructure http : / / go.jp / kenya / english / activities / activitiy01.html#a02 This project is part of Vision Components Activities The Agribusiness Support to Smallholders project ( AbSS ) is implemented by the Food and Agriculture Organization of the United Nations ( FAO ) in close collaboration the Ministry of Agriculture in Kenya. The project office is located within the Division of Agribusiness and Inputs Promotion, Ministry of Agriculture, Nairobi. AbSS covers selected districts in Central, Eastern and Rift Valley provinces ( see map ). The initially three year $2 million project funded by Germany s Ministry of Agriculture commenced in 2010 will now close in December 2013 after a one year project extension Project s objective : The overall objective of AbSS is Increased contributions of SMAE sector to agricultural and rural development in Kenya. AbSS is a pilot and has a limited timeframe and budget. However through lessons learnt and experience gained, it is expected that best practice Business Models will be developed for the Small and Medium Agricultural Enterprise ( SMAE ) sector. The models will be commercially viable and mutually beneficial, linking production to markets. These models may then be replicated by Government, donors and non-state actors wishing to support further development of the SMAE sector. This programme aims to improve farm productivity and incomes, and the health and welfare of rural Kenyans, by increasing the quality and consumption of fruit and vegetables. The programme covers 8 of Kenya s 35 horticultural districts and was designed as a pilot Initiative for possible replication throughout the country. It targets poor rural households and unemployed and underemployed people in areas of Kenya where horticulture is an important source of income, as many poor small-scale farmers in these areas sell a portion of their output on the domestic market. The programme invests in value chains and market infrastructure in order to improve the supply of inputs and the functioning of marketing chains. It also seeks to build the capacity of private-sector service providers, government institutions and farmers organizations. With focus on horticulture and rice, cash crops in Kenya, technical assistance to increase smallholder income will be extended in the area such as development and rehabilitation of irrigation facilities, strengthening of farmer s organizations improvement of productivity and market access. In addition, policy development in rice sub-sector such as NRDS ( National Rice Development Strategy ), will be supported in line with CARD ( Coalition for African Rice Development ) initiative. The program is to improve facilities and functions of Mombasa Port and regional trunk roads starting from the Port, and support streamlining the custom procedure in order to enhance the trade in the entire East African region. JICA Projects : Mombasa Port Container Terminal Expansion Project Mombasa Port Area Road Development Project Capacity Building for the Customs Administrations of the Eastern African Region ( Phase 2 ) Recommendations The business models that will be developed by this FAO project can be used or implemented in the ITC project. Value chains and market channels and market infrastructure could be of use at some point in the ITC project Method and models used in strengthening the farmer s organizations can be used for the mango farmers as well. Trading between the East African community markets more accessible, especially for the processed products from this project.

91 ANNEX DOCUMENT. Annex 1. KENYA-PROJECT MAPPING 75 Funding Organization MESPT ( Kenyan organisation ) Technoserve ( nonprofit organization that develops business solutions to poverty ) Project Name and Duration MESPT = Micro- Enterprises Support Programme Trust Website : Connected Farmer Alliance Website : http : // Components Activities Goal : strengthen financial intermediaries in order to establish a strong, stable, marketbased micro-finance sector in Kenya. Micro Enterprises Support Programme Trust believes that supporting the micro and small enterprises hold the keys to employment creation in Kenya. The activities of MESPT are therefore organized into 3 components : 1. Financial Services Component : that provides loans to financial intermediaries for onlending to enterprises. 2. Business Services component : that offers non-financial services to enterprises through intermediaries in areas such as product development, technology adaptation, market access and linkage, skills acquisition and productivity improvement. We encourage knowledge sharing and dissemination with policy makers, other institutions and communities around the region and strive to get new knowledge into the hands of those who can use it. 3. An Institutional Support and Capacity Building Component : that strengthens the ability of providers of financial services and BDS intermediaries to offer efficient and effective services. In doing so, we make an important contribution to Kenya s economic growth policies, complementing the work of the government and private sector in employment creation. Partners : DANIDA, EU, Gvmt of Kenya. The Connected Farmer Alliance ( CFA ) is a public-private partnership that seeks to promote commercially sustainable mobile agriculture solutions and increase productivity and revenues for 500,000 smallholder farmers across Kenya, Tanzania and Mozambique. The program also aims to increase revenues for agribusinesses and agricultural value chain service providers. Opportunity : Mobile solutions have great potential to increase incomes for smallholder farmers. They can be an effective means of delivering agronomic information and market prices to farmers while also facilitating agricultural transactions and access to financial products. However, costs for implementing mobile solutions are high and only a limited number of mobile network operators have successfully targeted rural African markets Strategy The Connected Farmer Alliance ( CFA ) is a partnership among the U.S. Agency for International Development ( USAID ), Vodafone and TechnoServe that aims to increase the productivity, incomes and resilience of 500,000 smallholder farmers, including 150,000 women, in Kenya, Mozambique and Tanzania. By developing sustainable business models that serve the interests of a broad range of private sector stakeholders, the program seeks to prove the commercial viability of mobile solutions for smallholder farmers. CFA works with farming communities and supply chain business partners across the three countries to develop and scale mobile applications that will enable rural households to make and receive payments securely, access other financial services such as micro-insurance, and connect to local and multinational agribusinesses, especially those working in priority value chains of Feed the Future, the U.S. Government s global hunger and food security initiative. Launched in June 2012, the Connected Farmer Alliance is a three-year program divided into three workstreams : 1. develop business-to-business services that lower transaction costs and reduce risks for agribusinesses to source from smallholder farmers. By engaging agribusiness partners, they can work to provide farmers with agronomic or market information, extension services, input crediting, or optimize the delivery of such existing services. These solutions will create supply chain efficiencies, linking farmers to commercial markets while facilitating productivity improvements. 2. designing, testing and launching new mobile money services to allow farmers without banks to save and invest their money. This phase aims to help smallholders accumulate assets and reduce financial risk. 3. the CFA will help farmers fully utilize the business-to-business and mobile money services developed in the first two phases to ensure sustainable, profitable and growing businesses. This stage will incubate a new generation of mobile value-added services targeting the agriculture sector. TechnoServe will provide business development services including product development, marketing, branding, financial management and access to capital for men and women. Recommendations The ITC processing groups could be financially assisted in buying equipment through established micro-enterprises This project will assist the mango farmers access information especially on prices thus act as a guide on having a competitive advantage on the processed products. Access to mobile banking will be of use for the mango farmers Results The CFA is currently facilitating communications and transactions for approximately 6,300 smallholder farmers and three agribusiness clients. In Kenya, the CFA is working with a multinational beverage firm to manage information and communications with approximately 5,000 mango and passion fruit farmers

92 76 ANNEX DOCUMENT. Annex 1. KENYA-PROJECT MAPPING Funding Organization USAID USAID Project Name and Duration Kenya Horticulture Competitiveness Project ( KHCP ) Duration : ongoing http : / / www. growkenya.org / index.aspx Kenya Agricultural Value Chains Enterprises Project ( KAVES ) Duration : http : / / gov / news-information / fact-sheets / kenya-agriculturalvalue-chains-enterprises-project http : / / com / projects.aspx Components Activities The Kenya Horticulture Competitiveness Project ( KHCP ) will increase incomes for 200,000 small farmers and strengthen the businesses network around them by improving and creating local, regional and global market opportunities. This project will help Kenyans feed themselves by building a countrywide horticulture distribution network that provides a year-round supply of high-quality, nutritious products grown by Kenyan farmers. The project is implemented in cooperation with Kenyan private and public sector partners through grants aimed at engaging marginalized groups such as women and youth and improving competitiveness and livelihoods throughout Kenya. Objectives : Enhanced productivity Increased value-addition Improved value-chain coordination, marketing, and trade promotion Improved business environment, and institutional capacity The project will promote value chain growth and diversification, increase the productivity and incomes of smallholder farmers and other actors along the value chain working in the dairy, maize and other staples and horticulture sectors. The project will work with more than 30 Kenyan government and private sector organizations. The project develops smallholder enterprises that combine maize, high value horticultural crops, and dairy farming to generate wealth, thereby enhancing food security, improving nutrition, and increasing economic opportunities for women, youth and other vulnerable populations. Engagement with the private sector in a meaningful, comprehensive way will ensure the sustainability of the project s work. Recommendations The regional and international market opportunities from ITC report can be compared to the ones from USAID-KHCP and utilized as well for the processed mangoes. The USAID- KAVES project : The mango project can ride on already diversified / improved mango value chain.

93 ANNEX DOCUMENT. Annex 2. Mango 77 ANNEX 2. MANGO Introduction Mango is native to Southeast Asia from India to the Philippines and was introduced to East Africa in the 14th century. Currently, most mango exports, including small quantities of green immature mangoes ( for pickles ), are air-freighted. However, sea freight is becoming increasingly important. The main market for Kenyan exports is in the Middle East countries. Other markets include Holland, U.K, Belgium, South Africa, Germany and France. Other exporting countries are Brazil, Pakistan, India, South Africa and Mexico, which compete with Kenya. The world trade in mangoes has been increasing over the years, and both exports from Kenya and local consumption are currently expanding. The world market continues to become more price-competitive. Production in Kenya has also expanded with new planting of bright colored varieties. Description The mango tree is erect with a height of 10 to 30 m with a broad, rounded canopy, which may with age attain 30 to 38 m in width. In deep soils the taproot can reach a depth of 2 m. The leaves are alternate and borne mainly in rosettes. New leaves that emerge periodically and are yellowish, pinkish, deep rose or wine-red and turn dark-green, glossy above, and lighter underneath on maturity. The fruits are oval, ovoid-oblong, kidney-shaped or nearly round. The skin is waxy, smooth, fairly thick, aromatic and colour ranging from light / dark green to clear yellow, yellow-orange, reddish-pink or grayish-purple when ripe. Some fruits varieties produces turpentine odour and flavor. The fruits produce flavored juice that ranges from sweet to subacid in taste. Varieties The original wild mangoes were small fruits with scant, fibrous flesh and it is believed that natural hybridization has taken place and through selection of the hybrids there are currently over 350 varieties propagated in commercial nurseries and orchards internationally. Popular varieties for the Middle East markets are the Apple and Ngowe, while European markets prefer Tommy Atkins, Kent, Keitt, Haden and Van Dyke. Varieties grown in Kenya Tommy Atkins Van dyke Keitt Kent Apple Matthias Kensington Parvin Azacus Zill Nimrod Irwin Haden Ngowe Boribo Batawi Dodo Sabre Peach Sensation Maya Sabine

94 78 ANNEX DOCUMENT. Annex 2. Mango Description of selected varieties Tommy Atkins Fruits are oblong-oval, medium to large with a thick skin. The colour ranges from orangeyellow to dark / light red. The flowers are purplish in colour. The flesh is of medium fibre, good quality and the flavor is poor if over-fertilized and irrigated. It is an early producer and has a long shelf life. The fruits weigh between g. Keitt The fruit is rounded oval to ovate and the colour ranges from yellow to light red when ripe and between g. The flower is lavender-like and colour ranges from yellow to red. The flesh is orange to yellow in colour, fibreless except near the seed and sweet -flavored. The tree is small to medium and very productive and matures late. Ethylene treatment enhances colour of the fruits when applied during post-harvest. Kent The fruit is ovate and the colour of the skin is greenish-yellow. The flower is grayish in colour. Fruits mature late, the last in the season and are large weighing g especially from young trees. Older trees tend to weigh less ( g ) due to fruit load on the tree. The flesh is fibreless, sweet and has good flavor. It is susceptible to black spot disease. To enrich the skin colour, ethylene treatment is required. Haden The trees grow large and spread widely and produce medium size fruits ( g ), which are juicy, moderate in fiber and very attractive in color. This variety is susceptible to anthracnose and is a medium early season variety, harvested around January and February. Sabine This is a local selection with attractive elongated fruits weighing about 500 g. The fruit is orange, yellow or red in colour and matures at around January and February. Vandyke The tree yields poorly and suffers heavy fruit drop. The fruits are small in size ( 300 g ), have attractive bright red colour, good internal quality and medium firm skin. Their maturity period is January and February. Apple This variety is adapted to coastal and lowland areas, and is very susceptible to rust in high altitude areas. Fruits are large, round and apple shaped, and have rich yelloworange to red colour. They are fleshy, juicy fibreless and with firm texture and matures early in the season between November and January. The fruit weighs on average, 397 g. Ngowe This is also a coastal variety, but can also be grown in medium altitude areas. The fruits turn yellow, although retains green colour when mature. The fruit size is large and weighs 523 g on average. Parvin This variety produces good quality fruits, medium to large size fruits ( g ) and matures mid late between February and March.

95 ANNEX DOCUMENT. Annex 3. Ecological requirements 79 ANNEX 3. ECOLOGICAL REQUIREMENTS Agro-ecological Zones Mangoes do well in the Lowland to Upper Midland zones. Altitude Mangoes grow well up to 1,500 m above sea level. However some varieties mainly Sabre, Peach, Tommy Atkins, Kent, Van Dyke and Keitt are adapted to altitude of up to 1,500 m above sea level, while Apple and Ngowe grow well in areas below 1000 m above sea level. Temperature Mangoes do best at an average annual temperature between 15 C and 30 C. Growth slows down and fruit quality decreases with decreasing temperatures. Rainfall Annual rainfall of 850 to 1,000 mm is sufficient for successful cultivation. A distinct dry or cold season stimulates flowering. Rain during flowering seriously reduces fruit set. After a mango tree is well established, it is drought resistant, especially when the taproots have reached the water table. Soil Mango trees are well adapted to many types of soils, but prefer deep ( at least 3 m ) soils that are fertile, loamy textured, and well drained for good growth. The water table should not be above 2.5 and 3 m. The optimum soil ph is between 5.5 and 7.5. Suitable Growing Areas The most suitable areas for the cultivation of mangoes are the Coastal areas, Lake Victoria region, Murang a, Thika, Kajiado, Meru, Isiolo, Taveta, Lower Embu, Machakos, Kitui, Mbeere, Meru, Makueni, and Kerio Valley. If irrigation is available during plant establishment, mangoes can be grown in drier areas.

96 80 ANNEX DOCUMENT. Annex 4. Maturity / Harvesting ANNEX 4. MATURITY / HARVESTING Harvesting starts three to four years after transplanting. For distant export markets, fruit should be harvested at the mature green stage. Maturity is determined by distinct skin and flesh colour changes and an increase in sugar content. Several methods exist for determining ripeness. However, the characteristics of each mango cultivar must be taken into account, when using the general indicators ; a. Shoulders should be well developed. b. Skin colour changes from green to yellow. c. Colour of flesh. The area around the seed turns from white to yellow. There is no method that can be universally applied to all varieties without modification. Fruits are harvested by hand ( where they can be reached from the ground ), by ladders, or by tree climbing. Picking poles with a bag or basket attachment are also used. It is recommended that fruits should be clipped from the tree in such a way that approximately 3 to 4 cm of the stalk is left on the fruit, which is later reduced to about 1 cm during final packing. A sticky secretion ( latex ) oozes out of the cut stalk, which if any adheres to the skin of the fruit, stains it, and renders it unattractive. It will also reduce its shelf life. The effect of latex flow immediately on cutting the stock may be reduced by draining the fruits over leaf ribs on the ground rather than washing them in water. Yields The first yields can be expected about three to four years after planting if grafted / budded mangoes are planted. The orchard reaches full maturity within six to eight years and yields can increase gradually for 20 years. A mature tree can yield 400 to 600 fruits / year. About 15t / ha can be obtained if regular and intensive orchard maintenance is provided. Alternate bearing is common in mangoes so yields will fluctuate from season to season.

97 ANNEX DOCUMENT. Annex 5. Mango grading for export 81 ANNEX 5. MANGO GRADING FOR EXPORT Mangoes are normally graded according to the required size, colour and texture. They are classified into two classes i.e. Class I and Class II. The minimum quality requirements for each class are as follows : - Class I Class II Fruits whole, sound, and mature Fruits firm and have a stalk up to 10 mm in length Fruits free from insect and disease damages Fruits free from foreign smells and tastes Fruits free from unhealed injuries and traces of latex on the skin Fibre content typical of the variety. Conditions of fruits that allow them to withstand transport and handling to ensure that they arrive in a satisfactory condition at the point of destination. Fruit typical of the variety in shape and colour Fruits free from blemishes Fruits uniformly sized. Generally fruits are of the same quality as those in Class I but may have the following defects : Traces of latex on the skin Slight blemishes Damaged or missing stalk Slight deviation from the colour and shape typical of variety Well-healed abrasions covering 10 % of the surface of the fruit. Mechanical damage up to 2 cm 2 Moderately fibrous flesh. Packing Mangoes for export are packed in single layer fiberboard cases, and are occasionally wrapped in tissue or packed with vertical dividers to make the mangoes firm and prevent damage during transportation. The number of fruits per carton ranges from 6 to 24 with gross weight of 4 to 5 kg.

98 82 ANNEX DOCUMENT. Annex 6. Major Mango Insect-pests and Diseases Photo: shutterstock ANNEX 6. MAJOR MANGO INSECT-PESTS AND DISEASES 1. Mango Weevil ( Stemochatus mangifera ). The beetle lays eggs on young fruit. Larva burrows into the flesh and destroys seeds. There are no external signs of fruit damage 2. Fruit Fly ( Ceratitis capitata ). Lays eggs in fruit, which becomes infested with maggots, which eat their way to the core, causing rot. The infested fruit parts become soft and have premature covering. 3. Anthracnose ( Colletotrichum gloeoisporioides ). Small spots on skin or leaves, which are brown and later, increase in size. It is mostly a post-harvest disease as the fruit are more susceptible when mature. 4. Cercospora / Scab ( Elsinoe mangiferae ). Appear as sunken purple spots on leaves and fruits. The spots later enlarge crack and turn black. 5. Powdery Mildew ( Oidium mangiferae ) Attacks stems leave flowers and pods, which appear covered. With white powdery growth which turn black later in the season.

99 ANNEX DOCUMENT. Annex 7. Potential bottlenecks fruit processing 83 ANNEX 7. POTENTIAL BOTTLENECKS FRUIT PROCESSING Chain segments Constraints Opportunities Production Processing Marketing Shipping and handling Lack of capacity of farmers on crop husbandry, technological application and overall farm management. Problems with storage facilities and to transportation. Low prices : no collective bargaining of prices. Lack of year round supply of mangoes to processing facilities Processors are struggling to pay good prices in order to stay competitive the international market Difficulties meeting export standards ( FAO ). Kenyan Exporters suffer from price instability More requirements concerning food safety and traceability Efficiency of quality of organization of shipping and handling is still low. Kenya with its diverse agro-ecological zones is very suitable for production of high quality mango fruits over 6 to 7 months a year. Kenya with its diverse agro-ecological zones is very suitable for almost year-round production of high quality mango fruits ( Rohde et al :664 ). Growing demand for natural, healthy products Shipping and handling costs are expected to be lower for processed fruits than fresh fruits as the cubic volume and weight are lower. Less water is exported. ( Interviewsqualitative )

100 84 ANNEX DOCUMENT. Annex 8. Mango Puree Specifications EU market ( CBI 2005 ) ANNEX 8. MANGO PUREE SPECIFICATIONS EU MARKET ( CBI 2005 ) PRODUCT PROFILE MANGO PURÉE 1. Product name : mango ( Mangifera indica L. ), puree, preserved by heat Main varieties : Alphonso, Totapuri Other varieties : Haden, Benett, Tommy Atkins, Carabao 2. Market requirements : Quality standards : No EU quality standards exist. Product should be prepared from sound ripe fruits, only mechanical and physical processes are permitted during production. Product should be preserved by appropriate heat treatment. Sensory characteristics : Colour : golden-yellow to orange-yellow, even and homogeneous ; no signs of enzymatic or non-enzymatic browning or oxidation Taste / flavour : pleasant, pure mango, typical for the fresh fruit ( sweet, slightly spicy, slightly reminiscent of peach ), no oxidation, caramellisation or other off-taste Consistency : thick-fluid at ambient temperature Appearance : homogeneous puree with small pulp particles, completely free from contamination ( including so-called black specks ). Chemical / physical characteristics : Total sugar content ( refractometer ) min. 16 Bx PH / Total acidity ( as citric acid anhydrous ) min. 5.5g / kg Ratio citric / iso-citric approx. 50 :1 Vitamin C ( ascorbic acid ) min. 25 ppm Beta-carotene min. 50 ppm Ash / % Potassium /- 200 ppm Phosphorus ( as P2O5 ) /- 20 ppm Formol number 15 + /- 5 Cadmium max ppm Lead max. 0.3 ppm Mercury max ppm

101 ANNEX DOCUMENT. Annex 8.Mango Puree Specifications EU market ( CBI 2005 ) 85 Pulp passed through 1 / 32 mesh sieve. Without added sugar ; presence of added citric acid is only allowed when declared quantitatively on the label. No colouring and preserving agents, and no flavouring substances, neither artificial nor natural, may have been added. Any substances in quantities that could be harmful to health should be absent. Microbiological quality : General aerobic count Yeast and mould count Coliform count Salmonella max / g max. 100 / g max. 10 / g absent / 25 g Any components and substances originating from micro-organisms in quantities that could be harmful to health must be absent. [Product must have been subject during processing to heat treatment of min C during 15 seconds, to eliminate heat resistant spore forming micro-organisms]. Minimum labeling ( on smallest unit of packaging ) : product name, incl. variety date of production identification ( name and address ) of supplier ( producer, packer or vendor ) net quantity kg added citric acid Packaging : Either aseptically packed in bag-in-box or bag-in-drum ( bags further to be specified ), hermetically sealed, or hot-pack in hermetically sealed tinplate cans. Sufficiently strong packaging, inner material of food grade quality. Transport and storage conditions : Ambient, cool and dry conditions, without exposure to excessive sun and / or high temperature. 3. Market structure : Growing and production throughout the year, depending on growing area. Demand throughout the year. Average prices : US $ to US $ per tonne ( CIF NL ) ( fluctuating according to harvest situation ). Market trends : As the EU consumer is becoming more familiar with the fresh mango, interest for mango processed in food products is also growing : primary application in dairy, ice-cream and soft-drinks industry. Application in jam industry still negligible. The main EU market is still the UK, having traditionally a substantial population of East-Asian origin.

102 86 ANNEX DOCUMENT. Annex 8.Mango Puree Specifications EU market ( CBI 2005 ) Photo: shutterstock 4. Main suppliers : No local EU production. Leading supplying country is India ; other suppliers are Pakistan, The Philippines, Brazil ; new producing countries : Mali, Kenya. 5. How to improve the quality : Primarily important in achieving a good product quality is to follow the abovementioned requirements. Unnecessary high and prolonged heat treatment should be avoided. Importers have strong preference for aseptic product rather than canned puree : because of its better quality ( reduced heat damage ) and because of trouble in opening cans involving considerable product loss and waste disposal costs

103 ANNEX DOCUMENT. Annex 9. Mango puree specifications : JAIN 87 ANNEX 9. MANGO PUREE SPECIFICATIONS : JAIN Source : http : / / / fruit / mango.htm Physical Characteristics : Product FarmFresh Aseptic Alphonso Mango Puree FarmFresh Aseptic Totapuri Mango Puree FarmFresh Aseptic Totapuri Mango Puree Concentrated 0 Brix at 20ºC. [Refractometer] Consistency * 16 Minimum Minimum Minimum < ph Colour Flavour Taste Characteristic Ripe Alphonso Mango Colour Characteristic Ripe Totapuri Mango Colour Characteristic Ripe Totapuri Mango Colour * ( Bostwick Cm / 30 Sec ) at 25 ± 2ºC Typical Ripe Alphonso Mango Flavour Typical Ripe Totapuri Mango flavour Typical Ripe Totapuri Mango flavour Characteristic Ripe Alphonso Mango Taste Characteristic Ripe Totapuri Mango Taste Characteristic Ripe Totapuri Mango Taste Packaging : Farm Fresh Aseptic Fruit Purees are available in 220 kgs bag in drum & 20 kgs bag in box packing. Aseptic fruit purees are filled on US-FDA approved aseptic filler into pre-sterilized, high-barrier bags placed in steel drums internally painted with food grade lacquer. The bag is heat sealed and drum tight-closed to ensure no free space inside the drum. Small and bulk packs will be made available soon. Quality Standards : HACCP, GMP, SPC & QA systems are applied in the manufacturing, storage & other operations. Product is approved for Kosher & Pareve. The system is certified for ISO & HACCP ( Food Safety ) by RWTUV, Germany. Storage : Aseptic product : It should be stored at cool & dry place below 20ºC. Preferably below 15ºC. for extended shelf life. Canned product : It should be stored in a cool & dry place away from heat. Shelf-life : Eighteen months from the date of manufacturing when stored below 15º C. The contents must be used immediately after opening the bag. Preservatives : Free from any chemical preservatives.

104 88 ANNEX DOCUMENT. Annex 9.Mango puree specifications : JAIN Photo: shutterstock Pesticide Residues : In conformance with WHO recommendations & EC directives. Flavour & Taste : The colour, texture, flavour and taste are uniform and consistent. Usages : FarmFresh Fruit purees are easy to handle can be used in unlimited applications. Some of these are : Bakery : Fruit breads, cakes, tarts, muffins, pie-fillings, icings, donuts, etc. Beverages : Milkshakes, fruit drinks, nectars etc. Diary : Ice-creams, fruit bars, milk shakes, yogurts, puddings, toppings, deserts etc. Baby Food : Cereals, juices, strained fruit, fruit desserts, fruit drinks, etc. FarmFresh purees can also be processed into other convenient forms such as spray dried freeze-dried powders etc.

105 ANNEX DOCUMENT. Annex 10. Product Specifications and Processing for pulp 89 ANNEX 10. PRODUCT SPECIFICATIONS AND PROCESSING FOR PULP Product Specification Parameter Brix Corrected at 20o C ( B ) Alphonso Mango Pulp Raspuri Mango Pulp Totapuri mango pulp >16 >14 >14 ph <4.00 <4.00 <4.00 Acidity ( % ) Color Golden yellow Reddish yellow Yellow Black Specs per 10 gm Nil Nil Nil Brown specs per 10 gm <10 <10 <10 Flavor Characteristic of good fruit Characteristic of good fruit Characteristic of good fruit Appearance Homogenous Homogenous Homogenous Taste Characteristic of Alphonso Characteristic of Raspuri Characteristic of Totapuri Consistency ( Cm / 30 Sec by Bostwick at 20 0 C ) TCC cfu / gm <10 CFU <10 CFU <10 CFU Yeast / Mold cfu / gm <10 CFU <10 CFU <10 CFU Coliforms Absent Absent Absent Salmonella Absent Absent Absent Mango pulp specification sheet : interviews with importing companies June 2014 Note : The specification could be modified as per the buyer requirement

106 90 ANNEX DOCUMENT. Annex 11. Prices Mango puree ANNEX 11. PRICES MANGO PUREE India, Alphonso, aseptic puree, 17 brix, US $ / MT FCA Rotterdam India, Totapuri, aseptic concentrate, 28 brix, US $ / MT FCA Rotterdam India, Totapuri, aseptic puree, brix, US $ / MT CFR Rotterdam Brazil, Palmer, aseptic concentrate, brix, US $ / MT FOB Santos Brazil, Tommy Atkins, aseptic concentrate, brix, US $ / MT FOB Santos Brazil, Tommy Atkins, ss aseptic, brix, US $ / MT FOB Santos Mexico, Tommy Atkins, aseptic concentrate, 28 brix, US $ / MT FCA Holland in bulk Peru, Chato d Ica, frozen ss, brix, US $ 1100 / MT CFR Rotterdam Colombia, Magdalena, aseptic concentrate, 28 brix, US $ 1475 / MT C+F Europe http : // / uploadedfiles / intracenorg / content / exporters / mns / fruit_ juice_ sample.pdf

107 ANNEX DOCUMENT. Annex 12. Shimla Hills Product specifications 91 ANNEX 12. SHIMLA HILLS PRODUCT SPECIFICATIONS Source : http : / / / processed-mango-products.php PRODUCT SPECIFICATIONS PACKAGING NATURAL ALPHONSO MANGO PULP Brix : Min. 16 ph : 3.5 to 4.5 % Acidity : 0.50 % to 0.70 % Colour : Golden Yellow ASEPTIC 215 Kgs / Aspetic Bag in Drum, 80 Drums / 20 FCL CANNED 6 X 3.1 Kg Cans / Carton 1000 Cartons / 20 FCL 24 X 850 grams Cans / Carton 900 Cartons / 20 FCL ** This products is also available in frozen form PRODUCT SPECIFICATIONS PACKAGING SWEETENED ALPHONSO MANGO PULP Brix : Min 22 PH ACIDITY 0.45 % % Colour : Golden Yellow 850gms Can size, 24 Cans / Carton 900 Cartons / 20 FCL NATURAL KESAR MANGO PULP Brix : Min. 16 Deg ph : 3.5 to 4.3 % Acidity : 0.40 % to 0.60 % Colour : Golden Yellow ASEPTIC 215 Kgs / Aspetic Bag in Drum, 80 Drums / 20 FCL CANNED 6 X 3.1 Kg Cans / Carton 1000 Cartons / 20 FCL 24 X 850 grams Cans / Carton 900 Cartons / 20 FCL

108 92 ANNEX DOCUMENT. Annex 12.Shimla Hills Product specifications PRODUCT SPECIFICATIONS PACKAGING SWEETENED KESAR MANGO PULP Brix : Min 22 Colour : Golden Yellow 850gms Can size, 24 Cans / Carton 900 Cartons / 20 FCL NATURAL TOTAPURI MANGO PULP Brix : Min. 14 Deg ph : 3.5 to 4.5 % Acidity : 0.40 % to 0.60 % Colour : Bright Yellow ASEPTIC 228 Kgs / Aspetic Bag in Drum, 80 Drums / 20 FCL CANNED 6 X 3.1 Kg Cans / Carton 1000 Cartons / 20 FCL ** This products is also available in frozen form PRODUCT SPECIFICATIONS PACKAGING RASPURI MANGO PULP Brix : Min. 15 Deg ph : 3.5 to 4.0 % Acidity : 0.40 % to 0.60 % Colour : Reddish Yellow ASEPTIC 215 Kgs / Aspetic Bag in Drum, 80 Drums / 20 FCL TOTAPURI MANGO PUREE CONCENTRATE Brix : Min. 28 Deg ph : < 4.0 Acidity : 0.90 % to 0.10 % Colour : Golden Yellow ASEPTIC 228 Kgs / Aspetic Bag in Drum, 80 Drums / 20 FCL

109 ANNEX DOCUMENT. Annex 12.Shimla Hills Product specifications 93 PRODUCT SPECIFICATIONS PACKAGING FROZEN CLARIFIED MANGO JUICE CONCENTRATE Brix : Min. 65 Deg ph : 3.6 to 4.5 % Acidity : 2.5 % to 3.4 % Colour : 40 Specified at 15Brix ) ASEPTIC 260 Kgs / Aseptic bags in drums CANNED 120 drums / 40 reefer container IQF ALPHONSO MANGO SLICES & DICES Brix corrected at 20 C ( o B ) : >15.0 ph : 3.5 to 4.0 Colour : Natural of the Fruit 10 Kg LDPE Bags in 5 ply Carton Box Net Weight : 10 Kgs Cases Per FCL : 2300 PRODUCT SPECIFICATIONS PACKAGING IQF TOTAPURI MANGO SLICES & DICES Tss of Fruit : 9-11 ( + / - 1 ) Brix ph : 2.9 To 3.5 Acidity : 0.8 % to 1.6 % Color : Light To Bright Yellow Packing : 10 Kg Carton Loading : 2300 Cartons / 40 Feet Reefer Container 5 Ply Brown Carton with neutral labels and a inner blue unsealed poly CANNED ALPHONSO MANGO SLICES IN SYRUP BRIX : 24 to 26 Natural Brix of Fruit : 16 BROKEN SLICES : Absent COLOURING & PRESERVA- TIVE : Absent 850gms Can size, 24 Cans / Carton 900 Cartons / 20 FCL 425gms Can size, 48 Cans / Carton 900 Cartons / 20 FCL

110 94 ANNEX DOCUMENT. Annex 12.Shimla Hills Product specifications PRODUCT SPECIFICATIONS PACKAGING FRESH MANGOES Variety : Alphonso, Kesar, Totapuri, Badami Origin : India 3Kg, 5Kg, 10Kg Corrugated Box

111 ANNEX DOCUMENT. Annex 13. Mango Processing Flow Chart 95 ANNEX 13. MANGO PROCESSING FLOW CHART Mango pulp flow chart : interviews with importing companies June 2014

112 96 ANNEX DOCUMENT. Annex 14. HACCP Plan Mango Processing ANNEX 14. HACCP PLAN MANGO PROCESSING Example of an HACCP Plan for mango processing : interviews with importing companies June 2014 Product Characteristics Product Name Raw materials and ingredients used General product Specifications ( appearance etc. ) Specific product Specifications ( chemical, microbiological and physical characteristics ) Preservation Method Primary Packaging Secondary Packing Shelf life Labelling instructions Potential mishandling of the product Intended Use Where it will be sold Who will consume Additional preparation methods before consumption Ultimate day of use especially after breaking the package Sensitive consumers Intended for High Risk Population Aseptic Mango Pulp Mango pulp Liquid, Fruit Sweet Taste,Colour ( Golden Yellow for Alphonso Mango Pulp, Yellow for Totapuri Mango Pulp, Reddish Yellow for Raspuri Mango Pulp ) Refer Product Specification Sheet By maintaining high acidity by adding acid ( Citric acid ), Sterilization ( Aseptic Filling ) Pre sterilized aseptic Bags Ploy bag lines with drums 24 Months from Date of Manufacturing Customer Name, Product Name, Product weight, Filling Dates, Batch codes, Product of country Consumption of damaged products. Usage of the product after the prescribed shelf life. Prolonged and / or improper storage after opening and consumption. Domestic & Export Market. As Industrial Raw Material-Ice Cream, Fruit Beverages, Jam & Jelly, Flavour Processor, Bakery, Fruit Powder etc. NA Do not store in high moisture location, Storage to be done as per instructions until the shelf life period. NA No

113 ANNEX DOCUMENT. Annex 15. Summary of interviews ( demand analysis ) 97 ANNEX 15. SUMMARY OF INTERVIEWS ( DEMAND ANALYSIS ) List of interviewed companies / organizations Ahold sourcing company.... Max Havelaar... Tradin Organic... Tradin Organic... Tradin Organic... MPak.... Fresh and processed fruits and vegetables Fairtrade Mango pulp trader Dried fruits and nuts trader Quality coordinator processed fruits Director South African Processor CBI... Centre for the promotion of imports from developing countries Fair and Organic Products Trading... Mango pulp trader ( also conventional ) Initiative for Global Development... RVJ Eurasia Food & Agro BV... Vice-president Managing director Previous experience : 3 years mango processing in Mali and Burkina Faso for EU markets World Bank project. General market trends Several traders have mentioned that the natural ingredient market has grown over the past years. They observe a growing demand for fresh mango, but also for processed fruits, including mangoes. They expect the market to grow further. Besides a growing demand from the consumers, also there has been a growth in supply. Especially the production volumes of existing countries seem to have raised, rather than an increase of new producing countries entering the market. Prices have decreased over the past few years. Traders perceive the market of purees has highly competitive and not easy to enter and compete with established trading houses. Differentiation in quality or involvement in the supply chain ( for example : traders that invest in a processing facility in a producing country ) would be an opportunity to enter this market. None of the traders that we have spoken, are sourcing processed mango in Kenya. However, we have discussed the opportunities and constraints from sourcing in East- Africa and Kenya specifically. Opportunities European sourcing companies focus on Africa as supplying continent and consider it an important source in the future. European buyers consider Kenya an interesting potential market thanks to its proximity to Europe. African suppliers are already focused on European market, so European buyer requirements are generally known.

114 98 ANNEX DOCUMENT. Annex 15.Summary of interviews ( demand analysis ) The types of cultivars will highly influence the interest and demand for Kenyan processed mango. Among favourite cultivars in Africa are : The preferred cultivars are Kent, Keitt, Brooks. The reason : Colour, texture and flavour are essential. It is not only the cultivars that determine the quality of the mango, the soil as well. So, the same variety can taste completely different among different countries. Buyers need reliable suppliers and / or partners in producing countries. Transparency is becoming very important among most buyers. Sourcing from Kenya could be interesting considering prices and duties. For example, for European buyers, sourcing from Central America is quite expensive due to the duties. Quality upgrading innovations could be worthwhile to invest in. Differentiated products have more potential to successfully enter the market ( for example dried mango slices with % moisture ). Constraints Buyers consider fresh mango and processed mango not easy products to enter markets ( especially bulk market ). Many established suppliers and traders. Buyers find it hard to find reliable suppliers in East Africa who can guarantee consistent supply in terms of volume ( takes much more time and effort to source from Africa compared to sourcing from Latin America ) Buyers consider it more risky to source from East Africa in terms of consistency of quality and food safety. Buyers see that suppliers in Africa struggle with obtaining HACCP certification and struggle with the understanding of European concepts of hygiene and quality. Bigger sourcing companies buy freshly cut mango pieces from Africa, but consider this as complicated in terms of food safety. Strict protocols concerning food safety and an impeccable logistical system. Mango is a relatively low value product, so transport and processing make costs higher. Efficiency is key to be able to compete on the international market. There are often problems with transits in Mombasa harbour. Buyers can already source high quality varietals in India and Latin America. Bigger sourcing companies consider working with smallholders as a challenge. Buyers have observed that new processors ( also in Kenya ) often lack expertise and experience in managing a factory and working in the processed mango sector. Value-differentiation could be an opportunity for Kenya to enter the market, but valuedifferentiation is not possible without ( big ) investments. Other producing countries are investing in quality upgrading technologies ( for example Mexico ), strong competition from these countries could be a risk for Kenyan processors. IQF mango is mainly bought from established processors, which are often bigger companies and are able to invest in these types of processing facilities. Buyers consider it would be hard for Kenya to compete on the dried mango market with Latin America and Ghana : due to the availability of raw material, geographical location, transport costs, general state of development of the countries, support services, cost of energy. Burkina Faso has already different organic certified mango products and does already sell in Europe. So, there is an already existing infrastructure. Can Kenya be competitive, offer unique products? Consumer prices of fruit snacks are high : this could inhibit the growth for demand. Alternatives for processors is selling via online stores, to cut out the retailers. However, this market remains small up to now.

115 ANNEX DOCUMENT. Annex 16. Presentation Technoserve : learnings and key lessons By Dickson Mbando 99 ANNEX 16. PRESENTATION TECHNOSERVE : LEARNINGS AND KEY LESSONS BY DICKSON MBANDO 4 year grant Bill And Melinda Gates Foundation & Coca cola company Increase the income farmers through mango and passion fruit value chain in Uganda and Kenya. Incomes have doubled Project in Uganda is no longer working. Purple passion fruit ( drift valley ) and yellow passion fruit ( east-central Kenya ) Mango : coast of Kenya : great varieties come from there. Also central and eastern regions of Kenya First phase of the mango project was focusing on productivity ( working with existing trees ) : trainings on GAP Second phase of the project : Technoserve realized there was a need for increasing business skills of farmers establishing producer business groups, which were the platforms for trainings. Also : an increased focus on the marketing : Technoserve was able to link farmers to various markets ( e.g. consolidators, processors, exporters in Kenya ). Farmers business organizations ( functioning like a small company ), registered as farmers cooperatives : elimination of brokers. ( this is what Technoserve tries to model in the coastal areas at moment when successful, Technoserve will scale up ). Linking business organizations directly to processors ( 2 of the processors are working with Coca Cola Company ). Local transport is challenging. Brokers have good relationships with transporters because they provide a lot of work. The farmer organizations do not have enough the capacities to process the next order without credit, access to finance. So we are working with banks to bring these actors together. Within the project time : exporting yellow passion fruit to the UK ( supermarket chain ) selection of 400 farmers and we took them through the training of certification of Global GAP. We worked with the procurement company, called Wilmar, they are known for flowers. We did a business case with them, the same business as flowers, you can do the same with passion fruits. They were skeptical in the beginning but now they are very excited ( Wilmar ). Good business model. 4 agronomist, train farmers, collection every week on a Thursday. Grading assistance. The Wilmar truck would come and pick up the produce and bring it the warehouse, do grading and sorting and best qualities would go to the UK. Wilmar is even considering to set up a processing plant. This is a success story.

116 100 ANNEX DOCUMENT. Annex 16.Presentation Technoserve : learnings and key lessonsby Dickson Mbando Other main challenges : health and food safety standards, it is not easy to raise these on farmer level. Another problem was that the farmers were dependent of rain fed crop. Some farmers were not able to push the volumes. Credit issue to increase the volumes. Future focus of project : reduction of post-harvest losses. The losses our at about 40 % in the whole value chain. One solution is better aggregation, bring actors together, work more efficiently together. Other future plans : UHD Ultra High Density : short trees that can be easily harvested. The density is different than what we currently have. In a few years, the harvesting is easier and the volumes. Irrigation systems. Processors : issue with prices / competition with pulp : significant difference is the overhead : we only have two mango cycles. Most of the time the factories are not utilized. Coca Cola : the mangoes that come from Kenya are used for puree in several east African countries. They actually supply 80 % is done by farmers in mango. But Coca cola is planning to grow gradually. Reaction from one of the participants Finnish embassy : In horticulture there are so many programs. I have heard about a presentation about a programme by the FAO. Challenge : Quality of mangoes ( same type of mangoes grown by different farmers ) Transport costs as main challenge ( mango supplied by large / scattered areas ), not always economically viable to process the mangoes. Main message : trying to avoid making the same mistakes as there are so many initiatives by different actors in the sector. Reaction from one of the participants : Coca Cola is a good way to start, but we can do more ( Example : peanut imported from Malawi. Import substitution ). A lot of mangoes are given to the cows, for whatever reason. Main message : do not only focus on the export markets. Within Kenya or the region, there are also opportunities. Beatrice ( HCD ) question to Technoserve : Are there any contracts between producers and the processors? Technoserve : Producer business group have a MOU. Delivery terms for the consolidators. Providing trainings on business skills. Record keeping of financial administration. The prices are never the same. MOU : farmers are able to make planning. Wilmar for example gives medium price, but promise to buy all the produces. Reaction from one of the participants ( county Machakos ) : losses of thousands tonnes of mango during the harvesting. One of the main reasons that it is hard to reach those farmers who are in the very remote areas. Waste issue : Technoserve communication with the Rockefeller foundation : initiative of post-harvest losses project : partnering. Working on the post-harvest losses together.

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154 138 ANNEX DOCUMENT. Annex 18.Demand analysis presentation

155 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 139 ANNEX 19. MANGO COMMODITY BUSINESS PLAN ( NTFII PROJECT )

156 140 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) Photo: (CC BY-SA 2.0) Mango, Jory.jpg The designations employed and the presentation of material in this document do not imply the expression of any opinion whatsoever on the part of the International Trade Centre concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries. This document has not formally been edited by the International Trade Centre.

157 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 141 LIST OF ABBREVIATIONS CIG EU FPEAK HCDA ITC KARI MoA NALEP Common Interest Groups European Union Fresh Produce Exporters Association of Kenya Horticultural Crops Development Authority International Trade Centre Kenya Agricultural Research Institute Ministry of Agriculture National Agriculture and Livestock Extension Programme

158 142 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) BACKGROUND In March 2009, the Centre for the Promotion of Imports from Developing Countries of the Netherlands ( CBI ) and the International Trade Centre, ( ITC ), a UN organisation located in Geneva, Switzerland, signed a partnership agreement creating the Netherlands Trust Fund II ( NTF II ) programme funded by the Netherlands Ministry for Development Cooperation while ITC took responsibility for the programmes implementation. The Netherlands Trust Fund phase II ( NTF II ) aims to create sustainable exporter competitiveness in specified export sectors within selected partner countries. ITC and CBI short-listed six potential beneficiary countries, including Kenya. After successive consultations with a range of Kenyan actors, CBI and ITC selected the Tree Fruit sub sector focusing on Passion Fruit, Avocado and Mango in Kenya. This resulted in the formulation of a two-year project NTF II Kenya. The Fresh Produce Exporters Association of Kenya ( FPEAK ) was chosen to co-lead the project with ITC and in close cooperation with two other Kenyan trade support institutions : the Export Promotion Council ( EPC ) and the Horticultural Crops Development Authority The project outputs are formulated as follows : Output 1 : Institutional structures are created and housed at FPEAK for the effective harmonisation and coordination of support activities in tree fruit sub sector. Output 2 : Commodity business plans, including buyer-led export plans, are in place and achieving targets. Output 3 : A functioning process for monitoring and evaluating commodity business plans put in place. It is in this context that this Mango Commodity Business Plan was developed to act as guide in enhancing development of the Mango sub sector in Kenya from 2012 to 2022.

159 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 143 EXECUTIVE SUMMARY The focus for the Mango Commodity Business Plan will be to increase smallholder revenues by reducing post-harvest losses, currently estimated at 40 %, to a level of 25 %, and by increasing the percentage of mango being processed from the current 8 % to 21 %, over the next 10 years. This will be achieved through a number of strategically targeted investments addressing the root causes of high post-harvest losses. At the same time, the plan will address logistical and standard issues limiting the volume of mangoes available for processing. The key causes of post-harvest losses for mangoes have been identified as disease and pest infestation ( fruit fly, seed weevil and anthracnose ), along with deficient practices in the areas of harvesting and post-harvest handling methods, storage, transportation and packaging. The mango commodity working group believes these deficiencies can be substantially ameliorated through farmer training in good agricultural practices ( GAP ). Farmers will be grouped together for training purposes and will receive comprehensive training in pre-harvest and post-harvest practices designed to minimise losses due to each of the listed causal factors. In addition to helping farmers reduce losses, this training will ultimately lead to GAP certification, which will facilitate access for their production into processing and fresh export channels. The dominant mango varieties produced in Kenya Apple and Ngowe are unknown in the markets of Europe and would not compete well there as consumers prefer the Tommy Atkins, Haden, Kent and Keitt varieties which are supplied by mango exporting countries in Latin America and West and South Africa. On the positive side, there is considerable private-sector processing capacity in Kenya to convert fresh mango into mango pulp and concentrate, along with global demand for mango-based products, including juice drinks, and use in the manufacture of baby food and confectionary products. These global markets, however, require compliance with international standards of quality and food safety, including HACCP compliance at the processing plant level, and traceability between the processing plants and the farms from which these facilities source their raw material. Largely because of their inability to insure traceability and GAP compliance among their suppliers, processing plants in Kenya generally operate at only 35 %-40 % of their capacity. The mango Commodity Business Plan will thus provide smallholders with an opportunity to increase revenues and margins by working with processors on a direct basis through their grower associations, while providing processors with a means of meeting their buyers requirements for GAP-certified, traceable product. The six strategic objectives envisioned in this Commodity Business Plan are as follows : Strategic Objective I : Post-Harvest Losses of Mangoes Reduced from 40 % to 25 % in the next 10 years Strategic Objective II : Reduce Damage of Mangoes by Fruit Fly and Seed Weevil Strategic Objective III : Percentage of Processed Mangoes Increased from 8 % to 21 % of the national production Strategic Objective IV : Establishment of Collection Centres Strategic Objective V : Industry Coordination Strategic Objective VI : Market Promotion

160 144 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 1. WHY THE MANGO COMMODITY BUSINESS PLAN? In identifying the initial focus for the Kenyan Competitive Tree Fruit project, particular attention was paid to commodities which were already in broad production within Kenya, for which patterns of trade are already in existence, and where Kenya was deemed likely to possess some measure of competitive advantage. Based on these criteria, mango clearly plays an important role. As described in the Mango Production and Standards Report, Mango is of great economic importance in Kenya. In 2011, 636,585 tonnes of mangos valued at approximately KES 12 billion were produced from 59,260 ha, mainly in the coastal and eastern parts of Kenya ( HCDA, 2011 ). Mango production in Kenya is quite widespread and covers almost all hot areas of the country. Although the varietal profile for the mango sector is dominated by varieties which are virtually unknown in the major mango-importing regions of the world, their organoleptic characteristics especially those of the Apple variety make them particularly attractive to consumers in Arabian Gulf markets. On the domestic market, which consumes over 98 % of the Kenyan fresh mangoes sold commercially, prices are generally low, intermediaries capture a significant portion of overall value, and post-harvest product losses are quite high. On the domestic processing side, we are confronted with the anomaly that processers generally operate only at 35 %-40 % of installed capacity, while growers find up to 40 % of their product going to waste before it can find a market. It is this counter-intuitive combination of high wastage and low processor utilisation which captured the imagination of the mango CBP team and which forms the principal focus for the Commodity Business Plan. This business plan aims at addressing the key challenges facing the mango industry in Kenya in the next 10 years in order to have a competitive and commercially oriented mango industry. The plan provides key milestones to be achieved. The basic principles to be pursued are : Reduction of post-harvest losses, Increased processing capacity utilisation and Expansion of volumes going into fresh export markets. To achieve these targets, the industry will invest in a number of initiatives such as establishment of produce collection centres, capacity building of farmers to meet GAP, fruit fly and seed weevil control, market promotion in key promising destinations, facilitation of grower aggregation, introduction of grades and standards, improved logistics at the exit ports and formation of a grower / processor / exporter association ( MEPPA ) to co-ordinate the industry growth. The process of preparing the Mango Commodity Business Plan began with the commissioning of a series of studies that identified key issues to be addressed in order to permit the expansion, and to improve the economic performance, of the mango sector. Studies on the following were undertaken : Production Logistics Marketing Standards These studies form part of this plan and are referenced where relevant. The full reports can be accessed as annexes to this Commodity Business Plan. Based on the findings of these functional reports, the NTF II Kenya project convened a cross-section of actors under the leadership of the sector s key private sector executives to discuss priorities for revitalising the mango sector. Participants included producers, exporters and representatives of government institutions. The strategic decisions and activities contained in this Commodity business Plan reflect the consensus of the group.

161 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 145 Photo: shutterstock 2. WHAT THIS PLAN INCLUDES AND WHAT IT DOES NOT This business plan is designed to be concise, driven by concrete actions and numbers, and to carefully prioritise actions to avoid the tendency to include everything and overwhelm the reader. The group therefore took a number of strategic choices : Reduction of post-harvest losses. The group felt that interventions required to address post-harvest losses, marketing and logistics would lead to increased volumes of quality mangoes for the processing industry which is currently operating at 35 %-40 % of its installed capacity. Mango processing offers unique opportunities to drive the industry because of growing local, regional and international demand for mango juices and juice-based drinks. There is also need to provide incentives for processing because over the years, farmers have avoided selling to processors because of the low prices offered. More awareness needs to be created on margins for fresh and processed products because there is money in both. The project can borrow from the farm-based primary processing like that done in India and feed that to the processing companies. Capacity building of farmers in GAP. Training mango farmers in GAP is an important step towards improving the quality of mangoes available for domestic and export markets. It will contribute towards reduction of post-harvest losses. It is also an important step towards GAP certification, which is necessary for fresh and processed products to enter European and other markets where GAP certification and traceability are essential. Varietal Composition. The plan does not recommend varietal conversion to the Tommy Atkins and Kent varieties favoured by the European market. Economic returns available from this market, coupled with high freight costs and low delivery reliability, would make this market region impractical for the foreseeable future. This is a living document and the authors expect it to evolve to cover elements which users find are not adequately covered.

162 146 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 3. REVIEW OF THE GLOBAL MANGO INDUSTRY ; TRADE AND OPPORTUNITIES World mango production has expanded at an annual rate of 5 % in the last decade, while Kenya s production has been growing at an average of 13.3 %. Global export growth has increased by an impressive 12 % per annum between 2006 and In 2010, world mango trade reached US $ 942 million, up from US $ 591 million traded in 2006 an impressive 59 % growth in value. The United States and EU-27 are the leading world importers of mangoes, each importing some 28 % of the world mango trade, followed by China ( including Hong Kong ) at 20 %. The markets of the Arabian Gulf, which account for virtually all Kenyan fresh mango exports, represented an estimated 7 % of world mango imports in 2008, the last year for which statistics from this region are available. The USA has stringent sanitary requirements and is also well served by South American states and therefore does not offer an opportunity for Kenyan mangoes. As discussed in the Mango World Market Report, The European market represents a mixed bag for mango exporters in search of new market opportunities. On the one hand, it can accommodate large volumes throughout the course of the year. On the other, its narrow range of varietal preferences, its stringent certification requirements, and its downward price trends, hinder its attractiveness as an export destination. However, Kenyan mango processors have indicated they have had numerous inquiries for mango pulp from Europe and the only barrier is the GAP certification of Kenyan mangoes. The markets of the Arabian Gulf are far less sensitive to phytosanitary issues than the USA, and far less concerned with third-party certification than the EU. In addition, major ocean carriers such as Maersk and MSC employ feeder vessels ex Mombasa to Salalah in Oman. From there, cargo must then be trans-shipped onto larger vessels for the onward westbound journey to Europe or the USA. While delays in Mombasa frequently result in missed connections in Salalah for Kenyan shipments to Europe, exports for the Arabian Gulf can utilise small ships or even overland vectors ex Salalah to reach other Gulf markets, making ocean transportation a more realistic option. Given the high cost of air freight, which is the vector of choice today for Kenyan mango exporters to the Gulf States, this ocean freight option could become an important competitive advantage in the expansion of Kenya s presence on Gulf mango markets. To convert this potential into a true competitive advantage, however, it will be necessary to improve the cost competitiveness and service reliability of ocean freight services ex Mombasa port.

163 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) REVIEW OF THE MANGO INDUSTRY IN KENYA In 2011, 636,585 tonnes of mangos valued at approximately KES 12 billion were produced from 59,260 ha, mainly in the coastal and eastern parts of Kenya ( HCDA, 2011 ). This is phenomenal growth compared to Kshs3.7billion achieved from 25,272Ha cultivated in The main varieties produced are Ngowe in the coastal zone, representing about 48.9 % of mango produced in the area, and Apple mainly in eastern Kenya and parts of central Kenya ( Thika and Murang a ) and representing about 50 % of the production. These varieties are popular in the local and Middle East ( Gulf States ) market, but they are not popular in the European market, where Kent and Tommy Atkins lead the pack. Ngowe is the variety of choice for local processors, while Apple tops the pack for fresh mango exports. Nationally, Apple represents 39 % and Ngowe 17 % of production. Table 44 : Mango production and value statistics per province for period Province Production ( MT ) Value ( Kshs. 000 ) Central 13,140 10,164 11,362 9,250 9, , , , , ,458 Coast 109, , , , ,783 1,636,560 1,623,600 2,569,550 3,017,840 3,637,830 Eastern 86, , ,250 91,326 93,958 1,245,900 3,543,750 2,865,000 1,682,630 1,732,980 Western 6,624 6,732 5,830 2,775 3,650 99, ,712 93,280 69,375 91,250 Nyanza 17,604 19,896 17,040 28,600 26, , , , , ,800 Rift Valley 12,555 11,448 9,924 35,117 21, , , , , ,652 Nairobi , N / Eastern 3,444 3,731 4,210 5,730 18,765 51,660 55,965 84, , ,540 Total 248, , , , ,315 3,682,965 5,865,615 6,399,598 6,289,606 7,808,284 Source : HCDA, 2010 Horticultural production report Between 2006 and 2010, Kenya s mango export value increased from US $ 5.3million to US $ 10million, an impressive 89 % growth rate ( 18 % annualised growth rate ). This has occurred despite Kenya s mangoes commanding prices almost twice as high as mangos from India and Pakistan in the same Gulf States markets! India and Pakistan supply 70 % of Gulf States imports of mangoes ( UN COMTRADE 2008 ), while Kenya supplies only 4 %. But imports from Kenya have been on the increase whilst those from India and Pakistan registered declines, both in value and volume. Kenya s advantage in these markets is based on strong demand for Apple in these markets followed by the fact that Kenya s export season occurs when the traditional export countries of India and Pakistan are out of season. As reported in the Mango Marketing & Logistics Report, There are four leading mango processors in the country, Milly Fruit Processors, AllFruits Processors both for pulp located in Mombasa, Sunny mango and Kevian located in Central Kenya. Others include Miritini Fruit Processors, and newly constructed Malindi Farmers Cooperative Fruit Processor / Malindi Natural juice Processors Ltd. Malindi processor has a capacity to process 50 MT of raw mangoes on a 24hr shift. The Coast Development Authority has also installed another mango processor in Hola with a capacity to crush 30 MT mangoes per day on a single shift basis. The facility will be commissioned during the next high season. Ngowe mango is the variety of choice for processors and exporters of mango pulp. Processors indicated that the flavour and colour are important attributes of this variety. Processors in Mombasa buy direct from organised farmers who receive an

164 148 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) Photo: shutterstock LPO to deliver a certain quantity of mangoes to processors in Mombasa. The farmers must make their own transport arrangements, the mangoes have to be delivered as per the specification of the processors, ripe or nearing ripening ( usually two days to ripening is preferred ), without blemishes, without insect bite sports, and mature. Size of the mango is also a consideration with large sizes preferred as they have a better yield. Other processors use brokers / commission agents who go to purchase from the buyers areas and supply the processing firms at an agreed fee. This, according to processors, minimises the level of post-farm losses as the brokers are knowledgeable of the grades required by the firms.

165 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) CHALLENGES FACING THE MANGO INDUSTRY IN KENYA The mango industry in Kenya faces numerous challenges along the value chain. At the production level the key issues revolve around lack of certified true-to-type seedlings, pests and diseases ( principally fruit fly and seed weevils ), poor agronomic practices and production of numerous varieties under small-scale production systems. Improper harvesting maturity is an additional challenge for quality-conscious mango growers. Since buyers typically purchase fruit on-tree and arrange for their own crews to enter the orchards to pick the fruit, buyers tend to pick fruit in an immature condition if markets are in short supply and to leave fruit on the trees beyond their ideal maturity date when markets are over-supplied. The post-production issues include high post-harvest losses ( estimated at 40 % ) and numerous logistical issues revolving around produce aggregation, poor infrastructure, high transport costs, lack of standards for mangoes, poor post-harvest handling, insufficient supplies to processing industry, lack of market intelligence, and high price fluctuation. On the export front, Kenya has tended to depend on one narrow market outlet, the Middle East. The industry also lacks enforcement of packaging standards for mangoes and a large part of the produce is transported in open trucks, leading to fruit damage and thus contributing to post-harvest losses. While the packaging and transport standards are under K S1758, there is a lack of enforcement of these standards. In addition to harvesting fruit at the wrong maturity, as mentioned earlier, the primary contributors to post-harvest losses are poor transport conditions, inadequate storage facilities, mango seed weevil and fruit-fly damage, and poor coordination between harvest and markets. Seasonality of production because of the rain-fed nature of production contributes to seasonal trade and processing of mangoes. Kenya, however, has an advantage as the coastal region has two crop seasons and the processors can have access to Ngowe and Apple mango for up to 9 months a year. The industry is also confronted with inefficient export logistics at the port of Mombasa, forcing exporters to use the more expensive air-freight option. Vessel delays at the port are caused by cumbersome documentation procedures by KRA and KPA as well as a lack of dedicated horticulture receiving and discharge berths. The industry also has not invested in standards such as Global Gap, including traceability issues, thus making it difficult to access the European market, whether in fresh or processed form. In terms of value addition, the processors are operating at 35 %-40 % capacity due to lack of regular supply of traceable, certified mangoes.

166 150 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 6. DEVELOPMENT ISSUES AND IMPLEMENTATION STRATEGIES The focus for the Mango Commodity Business Plan will be to reduce post-harvest losses, currently estimated at 40 %, to a manageable level of 25 % and to increase the percentage of mango being processed from the current 8 % to 21 % in the next 10 years. This will be achieved through a number of strategically targeted investments addressing the root causes of high post-harvest losses. At the same time, the plan will address logistical and standard issues limiting the volume of mangoes available for processing. Investments will be in four components along the value chain : production, marketing, standards and logistics. Strategic Objective I : Post-Harvest Losses of Mangoes Reduced from 40 % to 25 % in the next 10 years The key causes of post-harvest losses for mangoes have been identified as disease and pest infestation ( fruit fly, seed weevil and anthracnose ), poor harvesting and post-harvest handling methods, poor storage and transportation and packaging. Since mangoes are a perishable fruit especially when ripe and considering that a large portion of the fresh mango market is conducted in open air conditions, deterioration occurs quickly, which leads to high losses on the value chain. At the production level, mango farmers will be trained in Good Agricultural Practices ( GAP ) to ensure they apply appropriate measures to control disease and pests infestation, practice appropriate harvesting and post-harvest handling practices. Under the business plan 80,000 farmers each cultivating a minimum of 0.5hectare and with 70 mango trees with an estimated yield of 15MT per hectare will be trained in GAP. The farmers will be put into groups of 50 for ease of administering the training, which translates to 1,600 farmer clusters. The training will target 500 groups ( 25,000 farmers ) annually in the first three years, while the last batch of 100 groups ( 5,000 farmers ) will be trained in the fourth year. The plan does not envisage forming new farmer groups specifically for this training ; rather, existing group structures will be used. These include exporter-led groups, processor-led groups and Common Interest Groups ( CIGs ) formed under the National Agriculture and Livestock Extension Programme ( NALEP ). Training will be led by Ministry of Agriculture district agriculture staff, HCDA and the private sector and coordinated by FPEAK. Each farmer group has been allocated Kshs10, 000 for training, which will cover four strategic areas as listed below as a minimum : Training of the groups in Good Agricultural Practices Training in fruit fly and mango weevil control Training in appropriate chemical applications and traceability Training in fruit maturity index, harvesting and handling techniques Strategic Objective II : Reduce Damage of Mangoes by Fruit Fly and Seed Weevil Fruit fly has been cited as one of the most devastating insect pests in mango production, contributing to high post and pre-harvesting losses, and yet technologies exist for its control. Seed weevil is equally a menace, especially for export mangoes. Under this business plan, fruit-fly control technologies ( traps and sprays ) as well as weevil-control technologies will be introduced in all the mango growing areas. This will be accompanied by intensive capacity building of farmers on the control methods. A budget of Kshs 45 / tree / year has been established within the economic analysis ( Annex I ) to cover the costs of both materials and training. This is in addition to the Kshs 10,000 / grower group provision for GAP training and certification. This strategy will

167 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 151 contribute towards reduction of post-harvest losses and in improvement of fruit quality. It is also an important step towards achieving GlobalGap certification. The fight against fruit fly and seed weevil will be led by KARI, KEPHIS and Ministry of Agriculture and coordinated by FPEAK and HCDA. Other important players include the Pest Control Board and the farmer associations. The fruit fly and mango weevil control activities have been allocated Kshs45 / tree / year. If we assume an average planting density of 142 trees per hectare for the 59,000 Ha currently in production, we arrive at an estimated tree count of 8.4 million trees. The objective, of course, is to cover all production units throughout the country as quickly as possible, since all mango trees in Kenya both within and outside the NTF II Kenya project will continue to act as pest vectors until they are brought under control. Whilst the project team does not believe it will be possible to achieve universal coverage in Year 1 of the project, full coverage is forecast for all units currently in production by 2017, with provisions for coverage of increased national production up to a tree count of 13.4 million by Strategic Objective III : Percentage of Processed Mangoes Increased from 8 % to 21 % of National Production The mango processing industry is only operating at 35 %-40 % of the installed capacity due to insufficient supply of quality certified mangoes, while the demand for mango juice locally, regionally and internationally is growing ( USAID, KHDP Programme ). At the same time, Kenyan mango processors have received numerous inquiries about supplying mango pulp to the European market, but are unable to meet buyer traceability requirements in part because smallholders have received little or no training in maintaining traceability records, and because most supplies to processors are delivered by intermediaries who are completely disconnected from the traceability process. To increase the volume of mangoes available for processing and other market outlets, the business plan aims to reduce post-harvest losses through improvement of production and post-harvest handling practices as described in Strategic Objective 1 and to invest in collection centres to facilitate direct contact between processors and mango growers as stated in Objective IV. In addition, to penetrate the European market for processed mango products, the plan will invest in GAP certification through training and certification of farmer groups, which in turn will be linked directly to processors. GAP training and certification are important for processors who have been asked to supply the European market with mango pulp. As global standards converge, GAP will also become important for the Middle East markets as well as in the regional markets of East and Southern Africa. While these two markets accept mangoes without regard to GlobalGAP certification, both will probably move toward tighter compliance standards over time. There are instances where exporters and processors are already linked to groups in areas where they source their mangoes. In addition, the Ministry of Agriculture through National Agriculture Extension Programme has formed Common Interest Groups ( CIG ) across the country, including in mango growing areas. Some of these groups are actively involved in mango activities. There is therefore a core of organised groups that the plan can build upon, instead of creating new ones. Each of these groups will then go through a GAP training process delivered through the Practical Training Centre in Thika, which will lead to group certification. Twenty groups comprising 1000 farmers will be trained and certified in the first year. A similar number of groups will be trained and certified annually over the next nine years, for a cumulative total of 200 GAP certified groups ( 10,000 farmers ) by the 10th year. These groups will also be linked to the mango collection centres described in Strategic Objective IV.

168 152 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) Strategic Objective IV : Establishment of Collection Centres County Exporters and processors have cited produce aggregation as a major constraint in their operations because of the small-scale nature of production and poor rural access roads. This adds to high transaction costs and post-harvest losses. It also contributes to a lack of grading and standards in mango business. Under this business plan, a concerted effort will be made to manage the current collection centres owned by HCDA and also to build / or hire others in key strategic areas based on production volumes. In Eastern Kenya, Kibwezi, Machakos and Yatta HCDA collection centres will be taken over as the initial mango collection facioities. New centres will be opened, building on experiences of current mango exporters who lease floor space on seasonal basis in main mango producing areas where they aggregate and collect their produce. Also, building on the dairy industry s hub-model, the centres will be owned by the producers and enhanced in the long term to act as service and input distribution centres. These centres will provide training and spraying services, so individual farmers won t have to spray their own orchards, but will be able to hire trained service providers through the collection facilities. This will ensure adherence to spraying regimes and that recommended chemicals are applied in appropriate quantities. The local NTF II Kenya project team leadership, working with HCDA, exporters and processors, will work together to determine through simple economic analysis potential areas for establishing collection centres. Priority will be given to areas where exporters and processors are already working with organised groups ; additional consideration will be counties where production of mangoes exceeds 20,000 MT per season. The number of farmers engaged in mango production and number of trees owned per cluster within each county will also be taken into consideration for the establishment of collection centres. Area Number of farmers growing mangoes Total trees planted in the area Average No. of Trees Per Farmer Production in MT ( 2011 Census ) Meru 45,810 Meru Central 4, , ,000 Embu 61,360 Embu East 3, , ,150 Mbeere North 20,000 Kitui 39,120 Kitui Central 1,840 70, ,950 Migwani 1,823 68, ,400 Makueni 213,420 Makueni 7,180 41, ,580 Nzaui 61,990 Mbooni East 35,340 Machakos 75,230 Mwala 29,900 ( Source Mango survey study ADB Eastern Province 2011 ) The centres will be used as collection, sorting and grading points for mangoes in their specific localities. The purpose is to minimise transaction costs and post-harvest losses for exporters, processors and local traders and therefore increase margin capture by farmers. The facilities will also serve as quality control centres as part of the GlobalGap

169 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 153 programme for mangoes. The cost of running the collection centres has been estimated at Kshs 48 / MT / year, and is included in the economic feasibility analysis annexed to this plan. It has been assumed that 20 % of the produce will go through collection centres in the first year at a cost of Kshs 3.5 illion ; 25 % in year two at Kshs5 million ; 30 % in year three at Kshs 10.5 ; 40 % in year four at Kshs 14.7 m ; 50 % in year five at Kshs 20 m and 60 % in subsequent years. The collection centres could be hired premises of simple structures that meet the sanitary requirements for collection, sorting, grading and minimal storage of the fruit before it is delivered to buyers. MEPPA and the management of each centre will ensure efficient communication between producers and buyers to minimise the time produce is held at each collection centre. To ensure adherence to GAP, only farmers who have been trained and who exercise good agricultural practices will be allowed to deliver produce to the collection centres. Strategic Objective V : Industry Coordination The mango industry is disorganized, especially at the production and marketing level. This has resulted in poor service delivery and contributed to high post-harvest losses. A production and marketing association has recently been registered, but its linkage to the processing and export enterprises is weak. Under this business plan, an umbrella body representing farmers, processors and exporters is proposed, building on the newly registered Kenya Mango Producers and Marketing Association ( KEMPMA ), whose functions will include : 1. Coordination of collection centre availability and use 2. Coordinate production and processing sectors 3. Represent sector interests with government agencies active in the mango sector 4. Certification and surveillance of nurseries 5. Fruit fly spray controls 6. Compliance with established norms 7. Negotiate with shipping lines regarding rates and service standards to improve ocean freight services and 8. Represent sector interests for improved services at the port of Mombasa and other ports. Industry coordination is critical to ensure synergy among the different players and improve marketing efficiency. It will also serve as an arbitration avenue to ensure fair play among different actors along the value chain. PEAK is expected to play a crucial role in this through the already established fruits team. Strategic Objective VI : Market Promotion In conjunction with efforts to improve product quality and to provide buyers with assurances that Kenyan mangoes can comply with international norms of traceability and food safety, these attributes will be communicated to potential buyers. These promotional efforts should initially be focused on the buyers of processed mango products in Europe and the current buyers of fresh Kenyan mangoes in the Gulf States. Once these programs have gained traction and buyer confidence in the reliability of Kenyan mangoes has been firmly established, work can begin on the development and consolidation of secondary markets. This could include processed buyers in the United States, and fresh mango buyers in Eastern and Southern Africa and in Southeast Asia.

170 154 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 7. IMPLEMENTATION FRAMEWORK : KEY PLAYERS AND ROLES Strategic Objective Strategic Intervention Activities Responsible Institution S. O. # 1 : Reduce postharvest losses Training of farmers Improve linkages between growers and buyers Formation of Farmer Groups Training in GAP Training in Disease and Pests Control Training in harvesting index FPEAK HCDA MoA S. O. # 2 : Reduce fruit fly and seed weevil damage Fruit Fly / Seed Weevil Control Registration of fruit fly control technologies Registration of Weevil control technologies Registration of other chemicals with specific mango application information Implementation of fruit fly and seed weevil control technologies at the farm level Chemical application according to standard norms at the farm level KEPHIS PCB HCDA FPEAK MoA MEPPA Farmers S. O. # 3 : Increase the role of processed products Increase Proportion of Processed Mangoes Improve linkages between processors and producers Improve quality of mangoes Market promotion Improve transportation systems FPEAK HCDA Processors Farmer Associations S. O. # 4 : Collection Centres Establishment and Management of Collection centres Identification of actual collection centre location based on production volumes and infrastructure Construction / hiring of the centres Management of the centres FPEAK MEPPA HCDA Individual exporters / processors S. O. # 5 : Industry Coordination Growers organised into groups and linked with exporters and processors Identify natural groups into which growers have already aggregated, and build capacity for commercial activities Aggregate disparate growers along the model of the natural groups already in operation Organise collaborative meetings of farmer group leaders with processors and exporters FPEAK Exporters Processors MOA MEPPA S. O. # 6 : Market Promotion Campaigns Market Promotion Promote production of varieties on agro-eco basis and market demands Promote local consumption of mango juice and mango products Develop new mango products -promote good agro production practices -promote farm level mango business and farm based processing development models -introduce mango packaging standards -Solve the logistical issues around the Port of Mombasa ( documentation procedures, vessel arrivals and departures etc. ) - direct specific programs to buyers and industrial consumers of processed mango products in Europe. FPEAK MEPPA HCDA KRA KPA Shipping Agencies

171 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) RISK ASSESSMENT 1. Market Collapse RISK ASSESSMENT MITIGATION 2. Deterioration in service levels at Mombasa 3. Farmers fail to aggregate 4. Fruit fly control program fails Moderate Gulf States markets have been expanding for Kenyan product, even in the face of heavy price competition from South Asia Processor markets continue to be dominated by India. If supplies increase from this origin, prices will surely decline Moderate Several expansion projects underway to reduce berthing delays Maintenance / replacement of equipment remains a problem Low / Moderate Some growers always resist aggregation Economic advantages of integration should become self-reinforcing Moderate / High Control programmes in Tropics are invariably challenging All interested parties must cooperate unanimity is never easy Diversify markets ( EU, Middle East, SE Asia, RSA ) Diversify channels to include processed and fresh Grower-based organizations will monitor / militate Sector-wide association can speak with unified voice Out of 100 groups, some may fail, but some will certainly survive Maintain focus on less vulnerable markets Continue to develop new markets to buffer the impact in case of the loss of established markets 9. ANNEXES 9.1. ANNEX I : BUDGET KSHS 000 Yr1 Year2 Year3 Year4 Year5 Year6 Year7 Year8 Year9 Year10 Farmer Training ( 1600 groups ) 6 groups Kshs 60 K 400 groups 4,000K 400 groups 4, groups 4, groups 4,000 Fruit fly and weevil control Collection centres GAP certification Market promotion 255, , , , , , , , , ,691 17,280 19,920 22,944 26,126 29,483 33,271 37,270 41,502 45,988 50, ,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 Total 278, , , , , , , , , ,445 1US $ =Kes85 : Total Budget : Kshs 4.5billion ( US $ 52.9 million ). Each group has 50 members, each member producing 7.5MT of mangoes per year

172 156 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 9.2. ANNEX 2 UNDERLYING ASSUMPTIONS ANNEX II: UNDERLYING ASSUMPTIONS Mango National Business Plan Proposition: Improve grower and processor returns by reducing post-harvest losses from 40% (2012) to 25% over a 10-year period, and simultaneously increasing processing plant utilizations beyond their current levels of 35% of capacity Assumptions: 1 Of the current annual mango production of 600,000 MT in Kenya, 40% is lost due to poor agricultural practices, poor post-harvest handling practices, and poor linkages between growers and buyers 2 The project does not anticipate undertaking any change in the varietal composition of Kenya's mango crop, which is believed to be as follows: VARIETY CROP SHARE HA APPLE 39% 15,600 NGOWE 17% 6,800 IMPROVED/GRAFTED 12% 4,800 LOCAL 20% 8,000 OTHER 12% 4,800 TOTAL 100% 40,000 3 National production in Kenya will grow internally by 10% per year during the life of the project 4 Domestic fresh consumption will also grow at 10% per year during the life of the project 5 The project expects to modify the channel distribution of the Kenyan mango crop over the next 10 years as follows: YEAR Crop Share MT Crop Share MT Crop Share MT Crop Share MT TOTAL PRODUCTION 100% 600, % 726, % 878, % 1,414,769 POST HARVEST LOSSES 40% 240,000 34% 248,000 30% 264,230 25% 357,384 COMMERCIAL CROP 60% 360,000 66% 478,000 70% 614,230 75% 1,057,385 EXPORT FRESH 2% 10,000 2% 15,000 3% 25,000 4% 50,000 DOMESTIC FRESH 50% 300,000 50% 363,000 50% 439,230 50% 707,384 PROCESSED 8% 50,000 14% 100,000 17% 150,000 21% 300,000 6 Reduction in post-harvest losses will result from the following project initiatives -- Grower training in GAP practices --Grower aggregation to facilitate direct grower-buyer relationships --Improved grower linkages with Kenyan mango processors 7 Grower training will be provided to all SME mango growers in GAP, with special emphasis on fruit fly control, harvest maturity, proper chemical use and traceability, in order to insure that the requirements of fresh and processed buyers can be met 8 Growers will be organized into FBOs in order to facilitate direct relationships with exporters, processors and large domestic buyers 9 Growers will have access to collection centers, further reducing their reliance on intermediaries 10 A mango growers, processors and exporters association, building on the recent efforts of the Kenyan Mango Producer and Marketing Association (KEMPMA), will be established to perform sector-wide coordination, including: a. Coordination of collection center availability and use b. Coordination between the production and processing sectors to insure a smooth flow of product with minimum losses c. Representation of sector interests with pertinent agencies for certification and surveillance of nurseries, compliance with fruit fly spray protocols, compliance with established norms for product maturity and quality d. Facilitate negotiations with ocean carriers regarding rates and service standards to insure that products can reach market destinations at competitive levels of cost and quality e. Representation of sector interests with regard to improved services at the port of Mombasa 11 Investment Costs a. Farmer Training KS 10,000 per grower 80,000,000 80,000 growers (0.5 Ha/grower) b. Fruit Fly Control Kshs45/tree c. Collection Centres Kshs48/MT/Year d. GAP certification US 2400/group

173 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) ANNEX 3 CASH FLOW ANALYSIS

174 158 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) REFERENCES Acet Pathways to Transformation : The Fruit Value Capture Opportunity in Africa. http : / / acetforafrica.org / wp-content / uploads / 2013 / 06 / ATR-Agro-fruit-longform-June-5. pdf AIJN report Liquid Fruit Market Report. http : / / / pages / main / file. handler?f=aijnmarketreport2012.pdf AIJN report Liquid Fruit Market Report. http : / / / pages / main / factsfigures.html Apeda Agricultural and Processed Food Products. Export Development Authority. Mango Pulp. http : / / / apedawebsite / SubHead_Products / Mango_Pulp. htm. Arnoldus M, Pol van der F, Ravry, C Affaire juteuse ou déception amère : quel es l avenir des produits dérives de la mangue au Burkina Faso et au Mali? Perspectives et stratégies pour la production et commercialisation de la mangue séchée, de la pulpe et du jus de mangue. Amsterdam : Kit Publishers. CBI EU Market survey. Preserved fruit and vegetables http : / / jo / files / eu _ market _ sur vey _ pre_frui.pdf CBI Fresh fruit and vegetables : The EU market for mango. http : / / eu / system / files / marketintel / _-_ Mango1.pdf CBI. 2009a. The EU market for frozen fruit and vegetables http : / / / system / files / marketintel / 2009_-_Frozen_fruit_and_vegetables1.pdf CBI Product factsheet dried mango in the United Kingdom. Practical market insights for your product. http : / / / system / files / marketintel_platforms / PFS %20 Dried %20mango %20in %20UK %20- %20PFV.pdf CBI. 2013a. Trend mapping for processed fruits and vegetables including edible nuts. CBI. 2013b. Trade watch Fresh Fruits and Vegetables http : / / / system / files / marketintel_platforms / 2013_cbi_tradewatch_fresh_ fruits_and_vegetables.pdf CBI. 2013c. Market Competitiveness for processed fruits and vegetables http : / / / system / files / 2013_market_competitiveness_for_processed_fruits_ and_vegetables.pdf CBI CBI Market intelligence Platform. http : / / eu / marketintel_platform / tourism / / buyerrequirements / affiliate CGIAR Mango Book, Mango Cultivars. Research executed by CGLRC. Weblink entered in June http : / / / icraf / mangobook / Description_of_ Mango_Cultivars / Ngowe.htm Cirad Close up : mango. Fruittrop Magazine, n.164, p

175 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) 159 Lopez Garcia JL, Pinheiro Araújo JL A Study of the Mango Market in the European Union. Technical Scientific Documents Volumm 43, n.2. hhtp : / / / projwebren / exec / artigorenpdf.aspx?cd_artigo_ren=1314 Evans EA Recent trends in world and US mango production, trade and consumption. Published by the University of Florida. Web link entered in June http : / / edis. ifas.ufl.edu / pdf files / FE / FE pdf FAO Value chain analysis : a case study of mangoes in Kenya. Prepared by the Sugar and Beverages Group Raw Materials, Tropical and Horticultural Products Service Commodities and Trade Division. Web link entered in June https : / / www. responsibleagroinvestment.org / sites / responsibleagroinvestment.org / files / Mango_FAO_ Value_chain_Analysis_Kenya_Case.pdf ). Grow Africa. 2012a. Kenya s LAPSSET Corridor. Mango Production Investment Opportunity. http : / / growafrica.com / wp / wp-content / uploads / 2012 / 04 / Kenya-LAPSSET-Corrido- Mangoes-Business-Case.pdf Grow Africa. 2012b. Kenya s LAPSSET Corridor. Mango Production Investment Opportunity. Investor Presentation. http : / / growafrica.com / wp / wp-content / uploads / 2012 / 04 / Kenya-LAPSSET-Corridor-Mango-Opportunity-Presentation.pdf Jkuat Enterprises Ltd Mango Cultivation in Kenya. Web link entered in June http : / / / MANGO_CULTIVATION_IN_KENYA.pdf ) Jain irrigation system 2014 Mango Concentrate, Mango Pulp & Mango Puree http : / / / fruit / mango.htm Kehlenbeck K, Rohde E, Njuguna JK, Omari F, Wasilwa L, Jamnadass R Mango cultivar diversity and its potential for improving mango productivity in Kenya. World Agroforestry Centre KIT, SNV, Agri-pro-focus ( 2012 ) Local Sourcing in Africa Linden, van der UM Mango Puree and concentrate : a versatile and complex tropical submarket. International fruit juice week http : / / / fileadmin / Downloads / Mangopureeaversatile.pdf ) Mercer DG A Basic Guide to Drying Fruits and Vegetables. Ontario : University of Guelph. http : / / iufost.org / iufostftp / Guide %20to %20Drying-Full.pdf Mercer DG Solar Drying in Developing Nations : Possibilities and Pitfalls, Chapter 4, in Using Food Science and Technology to Improve Nutrition and Promote National Development, G.L. Robertson and J.R. Lupien, editors. Published by The International Union of Food Science and Technology. Mercer DG, Myhara R Improving the Operation of a Commercial Mango Dryer, Chapter 6, in Using Food Science and Technology to Improve Nutrition and Promote National Development, G.L. Robertson and J.R. Lupien, editors. Published by The International Union of Food Science and Technology, Migrant Observatory Migrants in the UK and overview. Dec 17, 2013 http : / / migrationobservatory.ox.ac.uk / briefings / migrants-uk-overview#top

176 160 ANNEX DOCUMENT. Annex 19. Mango Commodity Business Plan ( NTFII project ) NAFIS National Farmer information service http : / / / fruits / mangoes / harvesting / ) National Mango Conference http : / / / index.php?option=com_ content&view=article&id=229 :mango-conference&catid=215 :reports Ng ayu B Supply analysis of Kenyan processed mango. Draft. Organic Trade Association ( OTA ) http : / / / index.html SAI platform http : / / / projects / 70 / 98 / Project-Nurture- Sustainable-Mango-Production-in-East-Africa Sauco V Mango production and world market : current situation and future prospects. Acta Horticulturae, 545, SME Mangoes for Middle East market sub sector quick scan Tanzania. Study commissioned by SME competitiveness facility and conduct by Match Maker Associates Limited ( MMA ). PAMCO Pre-Feasibility Study of Mango Pulp, Pakistan. http : / / server47.dedicatedusa.com / ~pamco / downloads / mango.pdf Unctad AAACP products : Nfocomm Commodity profile Mango. http : / / / en / Infocomm / AACP-Products / COMMODITY-PROFILE--- Mango / USAID Mango pulp and nectar processing in Mali. A Technical and Financial Analysis for the Malian Investor. This publication was produced for review by the United States Agency for International Development. It was prepared by Ed Keturakis of Abt Associates Inc. http : / / pdf.usaid.gov / pdf_docs / pnads461.pdf USAID Tanzania Agriculture Productiviy Program. Mango, Market Bulletin #1. http : / / / cpanelx_pu / tapp / 16_45_6043_01_Market_Bulletin_USAID_TAPP_ Mango.pdf USAID Horticulture Market News : September 2013 http : / / / cpanelx_pu / kenya %20khcp / 10_35_8188_Horticulture %20 Market %20news %20September % pdf World Class shipping 2014 http : / / / incoterm_cfr.html STATISTICS ITC Trade map - Trade statistics for international business development http : / / / Food and Agricultural Organization of the United Nations FAOSTAT http : / / faostat3. fao.org / faostat-gateway / go / to / home / E UN Comtrade database http : / / comtrade.un.org /

177 161 Authors: Mrs Beatrice Ng ayu Mrs Geneviève Audet-Bélanger

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