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Exporting sacha inchi oil to Europe

Takes 29 minutes to read

You can find good opportunities in the European cosmetics industry for sacha inchi oil. Sacha inchi oil is becoming increasingly popular in Europe thanks to its fascinating marketing story and high Omega-3 content. However, there are a lot of competitors and challenges in securing sufficient supplies. To be successful, you need to get access to sufficient supplies and finance a marketing campaign. At the moment, most supplies are coming from Peru, but sacha inchi plants also grow in other countries in the Amazon.


1 . Product description

Sacha inchi (Plukenetia volubilis) is native to Peru, Ecuador and Colombia. Indigenous people have been cultivating the plant for centuries, but it can also be found in the wild. However, sufficient volumes for sustainable trade are not available in the wild.

The fruits of the plant are star-shaped and contain seeds. By cold-pressing these seeds, you can extract sacha inchi oil. The oil is a clear, pale to dark yellow liquid and contains Omega-3, 6 and 9 fatty acids.

Sacha inchi oil is used in several cosmetic product categories, as discussed in the section on market segments. In Europe the oil is now also allowed for use in foods, such as a gourmet oil for salads. For more information on this market, see our study on sacha inchi oil for food.

It is important to ensure that the raw materials you buy can be verified as Plukenetia volubilis.

See table 1 for an overview of classification names and codes for sacha inchi oil.

Table 1: Classification of sacha inchi oil

Source

Classification

CosIng: European Commission database with information on cosmetic substances and ingredients

INCI name: Plukenetia Volubilis Seed Oil

CAS number

Not assigned

Harmonised system codes (trade)

There is no separate code for sacha inchi oil, instead it is included with other products under:

Vegetable oil: 1515.90 (other fixed vegetable oils and fats, refined or not, not chemically modified)

Extract: 1302.19 (other vegetable saps and extracts)

2 . What is the demand for sacha inchi oil in Europe?

The overall European cosmetics market is fairly stable, estimated at €72.5 billion in 2014. This market grew by about 0.5% from 2013 to 2014. Europe is the largest cosmetics market in the world, followed by the USA, China and Japan.

In 2013 the European Union approved the use of sacha inchi for food products. This will probably increase demand further, together with growing demand from the cosmetics sector.

Demand for sacha inchi is growing not only in Europe. There has been a spike in consumer interest in both the nut and oil in the United States and Asia as well.

Because sacha inchi plants do not grow in Europe, buyers of the oil rely on imports. Currently, Peru is still the largest exporter of sacha inchi oil. Production of the oil in Ecuador and Colombia is growing, but their role on the international market for sacha inchi oil is still negligible.

Because of the oil’s international popularity in both food products and cosmetics, countries outside of South America have started cultivating the sacha inchi plant. Currently, a few companies are producing sacha inchi nuts and oil in Laos and Thailand, such as Nathan Trading Co., Maï Savanh Lao and Zenda Green Energy. Not all of these companies have achieved commercial harvests yet. There has also been a call for support to start a cultivation project in Myanmar, and the Agro-Ecology Learning Alliance in Southeast Asia has been supporting a sacha inchi plantation since 2013.

Tip:

  • Keep up with developments in sacha inchi cultivation around the world. These cultivators could become future competitors for your product.

Figure 1: Peruvian exports of sacha inchi oil to Europe, in tonnes

Peruvian exports of sacha inchi

Before 2013, most of Europe’s sacha inchi imports were used in the cosmetics industry. The oil was not approved for food use until 2013.

Because Peru is the main exporter of sacha inchi, this section focuses on Peruvian exports to give an indication of the European market for the oil. No specific European trade statistics are available for sacha inchi oil as Europe classes sacha inchi in the general product group of ‘other fixed vegetable oils and fats’ (HS code 1515.90). Peru compiles some export data on the oil. In 2015, these exports had a value of US$ 4.5 million (€4 million). There has been an average annual increase of 31% in value since 2011.

Peru has also compiled data on its main export markets for sacha inchi oil in 2014, which are shown in figure 1. Overall, Peruvian exports to Europe stabilised after a period of rapid growth from 2010 to 2012. Total Peruvian exports of sacha inchi oil to Europe reached around 46 tonnes in 2014, accounting for 21% of total Peruvian exports of sacha inchi oil. Outside Europe, the USA, Canada and Japan were the largest importers, accounting for 59% of Peruvian exports.

The leading European importers of Peruvian sacha inchi oil in 2014 were:

  • Spain
  • France
  • Germany
  • United Kingdom

These countries are interesting to target, as exports to them grew more than 20% a year between 2010 and 2014. Imports by France and Spain were relatively stable in more recent years. Exports to Germany and the United Kingdom continued to increase strongly between 2013 and 2014.

Other major importers of sacha inchi oil from Peru in 2014 were:

  • Slovenia (3.5 tonnes)
  • Switzerland (2.8 tonnes)
  • The Netherlands (2.4 tonnes)
  • Czech Republic (1.2 tonnes)

Of these, the Netherlands, Switzerland and Czechia greatly increased sacha inchi imports from Peru between 2013 and 2014. Growth varied from 46% (Czechia) to almost 1,400% (the Netherlands). This could be the result of these countries switching to import directly from Peru rather than through European re-exporters.  

In Europe, Spain, France and Belgium are thought to account for the highest share of imports of sacha inchi as a cosmetic ingredient. These can be interesting markets for your sacha inchi oil. France is a particularly important market for the cosmetic use of sacha inchi oil because it is the largest European producer of both conventional and natural cosmetics.

In addition, France and Germany are important trade hubs for sacha inchi, accounting for a high share of intra-European trade.

Tips:

  • If you are based outside Peru, tell buyers that you offer an alternative source of sacha inchi oil.
  • Target important and growing European buyers of sacha inchi oil in France, Germany, Spain, Belgium, the United Kingdom and Switzerland.
  • See our study on finding buyers for natural ingredients for cosmetics.

3 . What trends offer opportunities for sacha inchi on the European cosmetics market?

Growing demand for anti-ageing cosmetics

The European market for functional/active cosmetic ingredients continues to boom. Because of this, the fast-growing product group of anti-ageing cosmetics holds strong opportunities for sacha inchi oil. The oil’s Omega-3 fatty acids are believed to give skin a youthful look. What’s more, the oil has traditionally been used for that purpose. Cosmetics producers can use both aspects in their marketing.

The healthy connotations that consumers have with Omega fatty acids fit very well with anti-ageing products. Cosmetics producers are marketing anti-ageing products differently as the concept of age changes. This is a result of the changing consumer perception of what it means it be healthy. They see health as feeling good and looking radiant.

Cosmetic brands market products to ‘age well’, to feel good and look great later on in life. To sell this message, they use terms such as ‘radiant skin’, ‘rejuvenating’ and ‘returning skin to a balanced, healthy state’.

Tips:

  • In the information you provide your buyers, discuss the potential of sacha inchi oil for anti-ageing purposes. Refer to its high Omega-3 content and traditional use in cosmetics.
  • Show your buyers that you understand the changing perceptions of health and ageing amongst European consumers.
  • Use the appropriate terminology in your marketing materials and your verbal communication. How can your sacha inchi make consumers feel and look good? Does it have properties or components that people look for to do this?
  • Connect the marketing terms you use to the correct technical terminology.

Growing demand for natural cosmetic products and ingredients

European consumers recognise that natural ingredients can work as well as synthetic alternatives. Moreover, they increasingly believe that natural ingredients are better and safer than synthetic substitutes. This has led to a growing demand for natural cosmetics. Globally, the natural cosmetics market was estimated at $30 (€26) billion in 2014. These are both certified natural cosmetics and near-natural cosmetic products. This market is expected to grow 10% annually until 2019.

Germany, France and the United Kingdom have the most launches of natural cosmetic products and a strong focus on innovation.

Also, conventional cosmetic brands are increasingly using natural ingredients at low percentages to make a marketing claim.

Omegas increasingly popular

Omega fatty acids are popular among European consumers not only for their anti-ageing potential. European consumers see Omega fatty acids as something that is good for their health. In food products, Omega fatty acids are already being marketed as being healthy. Now, cosmetics manufacturers are starting to use these associations in their cosmetic products as well.

In their marketing at the 2016 in-cosmetics fair, European companies stressed that sacha inchi oil is rich in Omega-3 fatty acids and antioxidants. As examples, they mentioned that it can be used on dry skin, for damaged hair and that sacha inchi oil has both nutritional and cosmetic benefits.

Tips:

  • Educate your buyers on the uses of sacha inchi oil if they do not know them yet. Stress the high content of Omega-3 and its benefits in cosmetic applications.
  • In your promotional materials, stress that sacha inchi is a natural and plant-based source of Omega-3.
  • Do not claim health benefits for the oil as such claims are not allowed for cosmetic products.
  • For more information about the changing perception of health among European consumers, see our study about trends in the natural ingredients for cosmetics market.

Growing demand for ingredients with an interesting or exotic origin

European consumers are interested in cosmetic products made with exotic ingredients. Producers of such products can therefore use origin in their marketing. Consumers associate exotic ingredients with the rich biodiversity of the regions they come from, such as the biodiversity of the Amazon or the Andes. Consumers are also interested in a product’s traditional or specific local production processes, traditional use and local beauty rituals.

Cosmetics producers use exotic ingredients in their marketing. At the 2016 in-cosmetics fair, the origin of sacha inchi was heavily marketed, together with the oil’s properties. For example:

  • Sacha inchi oil is a ‘treasure of the Incas’.
  • It has been cultivated in the Amazonian rainforest by rural and indigenous people for thousands of years.
  • The plant grows at high altitudes in the rainforests of South America.

Tip:

  • Stress the Amazonian origin of sacha inchi oil in your marketing materials. Include pictures of the region where the plant originates or where it still grows in the wild.

Demand for ethical products continues to grow

European demand for ethically produced cosmetics continues to grow, though the share of the total cosmetics market is still low. The main reason for this growth is an increasing concern amongst European consumers about the origins of ingredients and whether they are produced sustainably. This trend offers opportunities for sacha inchi. You can either demonstrate ethical and sustainable production in your marketing materials or certify your oil as organic or Fairtrade.

The main European markets for organic cosmetics are Germany and France, followed by Switzerland, Italy and the United Kingdom. The European market for fair trade cosmetics is growing as well, especially in the United Kingdom.

European cosmetics producers can choose to either certify their final product or to use fair trade ingredients without certifying the final product (which is more common). This has led to an increase in demand for certified Fairtrade ingredients. Fairtrade certification is often combined with natural or organic labels.

Tips:

  • Discuss certification options with your buyers. Assess their interest in certified Fairtrade or organic sacha inchi oil. If you want to obtain organic or Fairtrade certification, see our study on buyer requirements for natural ingredients for cosmetics for more information.
  • If you choose not to certify your sacha inchi, provide your buyers with stories, pictures or videos to show the social aspects of your sacha inchi.
  • Build a marketing story around the ethical production of your sacha inchi oil. You can also link this to the traditional use of sacha inchi in cosmetics. Help cosmetics producers to communicate these stories in their marketing. For example, give them good quality pictures that show how your sacha inchi is harvested or processed. Or give them information on how your product helps local communities that collect the sacha inchi nuts, if it is wild-collected.
  • Check the websites of potential buyers to find out if they work with certified ingredients. Buyers that do not are unlikely to pay a premium for such certification.
  • Look at our study about trends in the European market for natural ingredients for cosmetics for more information about relevant trends.

4 . What requirements must sacha inchi oil meet to be allowed onto the European market?

You can only export sacha inchi oil to Europe if you comply with the buyer requirements for natural ingredients for cosmetics.

If you want to export sacha inchi oil as a vegetable oil for food, you need to comply with the requirements for food.

Requirements for cosmetic ingredients

Global requirements

The Nagoya Protocol on Access and Benefit-sharing aims to ensure that the benefits of genetic resources and traditional knowledge are shared in a fair way. The Protocol contains terms and conditions for companies wishing to use genetic resources or traditional knowledge. You only need to comply with requirements on Access and Benefit-sharing (ABS) if you use genetic resources for research and development (R&D). For example, if you research sacha inchi genes or its biochemical composition. Anyone who carries out R&D, including downstream in your supply chain, such as your buyers, has obligations under the Nagoya Protocol.

Tip:

Additional buyer requirements

Many buyers have additional requirements that go beyond legislation and standards. These are established in buyer specifications and can include the following requirements:

Requirements for niche markets

Standards for niche markets include:

  • Natural cosmetics: NaTrue, Cosmos and BDIH
  • Organic cosmetics: Soil Association (UK), Ecocert (France) and BDIH (Germany), or ISO 16128 as an alternative minimum standard for organic cosmetics, which covers definitions and criteria for natural and organic cosmetic ingredients and products
  • Fair production: Fairtrade and FairWild (for wild-collected ingredients)

Tip:

Quality requirements

The quality of sacha inchi oil depends mainly on its fatty acid profile, acid value, iodine value and content of peroxide and moisture. See this example of a sacha inchi oil brochure for more information. Table 2 shows the typical composition of sacha inchi oil.

Table 2: Composition of sacha inchi oil

Component

Typical content in sacha inchi oil

Omega-3

48%

Omega-6

37%

Omega-9

8%

Saturated fatty acids

6%

Vitamin A

681b μg per 100 g

Vitamin E

17 mg per 100 g

Importers of sacha inchi test for adulteration of the oil, for example with other vegetable oils.

Cosmetic companies prefer to use odourless vegetable oils in their products, and most cosmetics producers prefer odourless and colourless sacha inchi oil. However, you do not necessarily need to offer it as such. Sacha inchi oil is commonly deodorised in Europe according to formulators’ specific requirements.

Tips:

  • Dry the sacha inchi seeds before pressing to minimise moisture content and reduce the risk of microbial contamination.
  • Keep your facilities and equipment clean to prevent adulteration and contamination by foreign materials (such as dust). Filter the oil to remove press cake particles. Use plate and frame filters for unrefined oils and other filter systems to achieve 2 microns or less for use in manufacture. Which exact filters you need depends on your buyer’s specification and the specific downstream processing.
  • Your buyers want sacha inchi oil with minimal impurities. Make sure you use post-harvesting and processing practices that limit foreign mineral matter, gums, carbohydrates (including vegetable fibres) and protein.
  • Some European buyers may require a refined oil, especially if they want to use the oil directly for a cosmetic formulation. If it is commercially viable and the technology is available, you can refine the oil yourself. If not, you can work with a oil refiner (European or not). See our study on market channels and segments for more information.
  • Work together with a local university to determine the fatty acid profile of your sacha inchi oil. You need to include this profile in the product documentation you send to your potential buyers.
  • Create a standardised product with a well-defined specification, as buyers want a product of a consistent quality. Monitor cultivation and harvesting practices and blend seeds or oils from different crops (such as early and late crops or crops from different slopes or areas) to standardise your product’s quality. Also give your suppliers clear specifications for the seeds and/or oil you buy from them. Make sure that the raw materials you buy can be verified as Plukenetia volubilis.

Labelling requirements

You need to include product documentation and labels to comply with legal and buyer requirements. Your product documentation needs to include:

  • Technical Data Sheet (TDS), see this example for sacha inchi
  • CAS number (if available)
  • Certificates of analysis, see examples for different vegetable oils
  • Safety Data Sheet (SDS)
  • GMO certificate (if requested)
  • Certificate of origin
  • Product information sheet

If you send sacha inchi oil to European buyers, the product must include the following documentation:

  • Product name/INCI name
  • Batch code
  • Place of origin
  • Name and address of exporter
  • Date of manufacture
  • Best before date
  • Net weight
  • Recommended storage conditions

Tips:

  • Set up a registration system for individual batches of your oil specifying whether they are blends or not, and mark them accordingly to ensure traceability.
  • Label your products in English, unless your buyer wants you to use a different language.
  • Refer to our study on buyer requirements for natural ingredients for cosmetics for information on legal requirements for classification, labelling and packaging (CLP).
  • If you produce certified organic sacha inchi, include the name/code of the inspection body and certification number.

Packaging requirements

In addition to the legal requirements on the packaging of chemicals, European buyers also have their own packaging requirements. One of the main requirements is to preserve the quality of the product. To do this, you need to:

  • Use containers made from a material that does not react with components of the extract (such as lacquered or lined steel, aluminium or other as specified by your buyer).
  • Clean and dry the containers before filling them with sacha inchi oil.
  • Fill the container headspace with a gas that does not react with constituents of the extract (such as nitrogen or carbon dioxide) to reduce the oxygen content.

Tips:

  • Always ask your buyer for their specific packaging requirements.
  • Re-use or recycle packaging materials; for example, use containers made from recyclable material (metal, etc.).
  • Store containers in a dry, cool place to prevent quality deterioration.
  • Physically separate certified organic sacha inchi oil from sacha inchi oil that is not certified.
  • See our study on buyer requirements for natural ingredients for cosmetics for information on legal requirements for classification, labelling and packaging (CLP).

5 . What competition do you face on the European market for sacha inchi oil?

Market entry

European legislative requirements are forming a growing barrier to entry to the European cosmetic ingredients market. You need to prove and document the safety and efficacy of your sacha inchi oil. However, because most of the cosmetic properties of the oil are related to its composition, you probably do not have to do additional efficacy tests. You also need to show good practices in respect of your supply chain, processing, use, availability, corporate social responsibility and traceability.

If you are a new producer of sacha inchi oil, access to the seeds is a major barrier. You will need to find new suppliers and face competition from existing producers wanting to expand their production. Although you can cultivate the plants, there are some pest control problems.

You also may need to finance a marketing campaign to enter the European sacha inchi oil market. Although the oil is being used increasingly, you will need to convince prospective buyers of its benefits.

Because sacha inchi oil is becoming more popular, more and more new players are entering the market. They are not limited to Peru. Countries such as Laos, Thailand and China are also already cultivating sacha inchi plants. This offers opportunities for new entrants from other countries, but it can also be a threat if you already export sacha inchi to Europe. If you can already meet European buyer requirements, you can gain a competitive advantage over new entrants. It will be hard for them to keep up. This applies even more if you can go above and beyond European buyer requirements.

Tips:

  • If your sacha inchi seeds are wild-harvested, find out if you can cultivate the plant to secure future supplies of the raw material. Explore cultivation conditions and make sure you can resolve pest control problems. Contact local organisations such as Promperu in Peru or ProEcuador in Ecuador for advice.
  • Set aside enough money for a marketing campaign. Obtain market information through desk research and interviews. Also visit European companies or go to trade fairs in Europe, such as in-cosmetics (a travelling trade fair), Beyond Beauty (Paris, France), SANA (Bologna, Italy) and Vivaness, for organic producers (Nuremberg, Germany). Develop promotional materials and a website, or use social media. This may be expensive but is essential to promote your product. For more information, refer to local sector or trade promotion organisations.
  • Comply with market access requirements, including those related to quality control, traceability and sustainability.
  • Prepare detailed documentation on your product, technical specifications, safety and efficacy. Also send professional samples. Increase your capacity for safety testing and monitoring to do so.

Product competition

It is relatively difficult to introduce new vegetable oils in Europe, and the threat of substitution is quite high. Many vegetable oils are already available for use in cosmetics. At the same time, it is difficult for vegetable oils to stand out as their functions are generally the same. Whether your sacha inchi faces competition from other natural ingredients depends on:

  • its properties
  • its origin
  • relevant market trends
  • price level
  • what the manufacturer plans to use the ingredient for
  • the positioning of the manufacturer’s brand
  • manufacturer’s company image

Sacha inchi has a competitive advantage because it has a rare and popular fatty acid composition. This reduces the risk of substitution. It also has an interesting marketing story due to its exotic origin and traditional production by local communities.

See table 3 for a comparison of sacha inchi oil and argan oil, which are both high in Omegas and have interesting marketing potential. Rosehip oil is another competing product, as it is high in Omega-3. The most commonly used Omega-3 oils are fish oils.

Once a manufacturer has included an ingredient in a cosmetic product, substitution with new ingredients becomes more difficult and expensive. This means that you will face limited product competition from alternatives if your sacha inchi is used in a cosmetic product.

Table 3: Example of substitution potential for sacha inchi oil and argan oil

Component

Typical content in sacha inchi oil

Omega-3

48%

Omega-6

37%

Omega-9

8%

Saturated fatty acids

6%

Vitamin A

681b μg per 100 g

Vitamin E

17 mg per 100 g

Importers of sacha inchi test for adulteration of the oil, for example with other vegetable oils.

Cosmetic companies prefer to use odourless vegetable oils in their products, and most cosmetics producers prefer odourless and colourless sacha inchi oil. However, you do not necessarily need to offer it as such. Sacha inchi oil is commonly deodorised in Europe according to formulators’ specific requirements.

 

Sacha inchi

Argan

Comparative profiles

Sacha inchi is mostly used for its high content of Omega fatty acids, being  high in Omega-3 fatty acids (around 49%) and Omega-6 and Omega-9 fatty acids. Potential substitute products would have to have a similar profile.

Argan oil has a similar Omega-6 fatty acid content and a much higher Omega-9 fatty acid content (43%), making it a potential substitute. However, Argan oil contains very little Omega-3 fatty acids (<0.5%).

Competitive advantages

Sacha inchi has a competitive advantage in terms of chemical composition because argan oil does not contain Omega-3 fatty acids. To replace argan oil with sacha inchi, cosmetics manufacturers would have to reformulate their products.

The marketing potential is similar: sacha inchi comes from the Amazon and consumers already associate that region with exotic ingredients.

The availability of argan oil is higher, as it is produced on a larger scale by a very well-organised value chain.

The price of argan oil is (slightly) lower.

The marketing potential is similar, but argan oil is more widely known: argan oil from Morocco has a long traditional use as a cosmetic ingredient, especially in hair products. Moreover, its production by women is used extensively in the oil’s marketing.

Tips:

  • Determine the possibilities for substitution and which competing ingredients should be included in your market analysis. See table 3, which lists some considerations relating to product substitution by looking at a potential competitor for sacha inchi.
  • Differentiate your product through excellence in CSR, sustainability and traceability and/or by providing additional services compared to your competitors.
  • Explain the unique properties of sacha inchi oil to your buyers and its potential in cosmetic products.
  • Investigate if and show how sacha inchi can substitute other oils used by European manufacturers by comparing the properties of sacha inchi oil and alternatives.
  • If you want to compete with other Omega-rich vegetable oils, offer a competitive price.

Company competition

Peruvian sacha inchi oil exporters do not face much competition from other countries at this point. However, because of the growing popularity of the oil, producers in other countries have started cultivating the plant. Producers in these countries, mostly in Southeast Asia, may become competitors in the future.

At the same time, you can expect strong competition from Peruvian companies and other companies in the region. They will compete with you on the market for sacha inchi oil, but also in terms of getting access to sufficient raw materials.

The European Union has a preferential trade agreement with Peru and Colombia. This means that it is easier to export to Europe if you are located in these countries and that you have an advantage over countries without such a trade agreement. The European Union has also negotiated an agreement with Ecuador, but it has not been adopted yet.

Tips:

  • If you are based in Peru, use your competitive advantage. Secure sufficient supplies of the seeds to stay ahead of your competition. For example, adopt professional and regulated cultivated methods.
  • Organise your supply chain to differentiate your company on the market. Make sure that your supplies are traceable and well-documented.
  • If you are based in another country, keep up to date on the development of free trade agreements between your country and the European Union. Check the website of the European Commission on trade negotiations and agreements.
  • See our study on competition for natural ingredients for cosmetics for more information.

Through what channels can you get sacha inchi onto the European market?

Market channels

See our study on market channels and segments for natural ingredients for cosmetics for an overview of market channels, segments, trends and developments.

Sacha inchi is commonly exported to Europe as a crude oil. Vegetable oils are often filtered in the country of origin, but the oil refining is done in Europe. Whether further processing in your country is feasible depends on the quality of your oil, available volumes and your buyer’s needs.

European importers are your most important entry point into the market. The main reason for this is that sacha inchi is a speciality product and is traded in small volumes. European importers will supply the oil to refiners or processors if it needs to be refined. For certain products, they may supply directly to cosmetics manufacturers.

Agents are also important for speciality niche products such as sacha inchi. This is especially true if you have limited experience with exports or lack the knowledge to find good buyers.

Organic oils are often used in cosmetics directly because of the restrictions on chemical processing for certified organic ingredients. Therefore, these oils are commonly not refined. Even though further processing is restricted for organic oils, allergens do need to be removed from allergenic oils.

Small exporters from developing countries rarely supply to refiners directly. Usually, small exporters cannot provide sufficient volumes. Small exporters also do not supply derivatives industries directly as the requirements are often too high (quality, price, delivery, etc.). Derivatives include thickeners, foaming agents and surfactants.

Tips:

  • Meet your buyer’s requirements for quality, composition, quantity and cost of your sacha inchi oil.
  • See our study on market channels and segments for natural ingredients for cosmetics for an overview of market channels, segments, trends and developments.
  • Setting up installations to refine sacha inchi is not necessarily a good idea. First, find out if your buyers prefer refined oil, which depends on their final products. Then find out which installations you would need to meet your buyers’ requirements for refined oil. Also determine whether you will earn a return on your investment.
  • Instead of approaching end users directly, trade through European importers and agents to benefit from their experience and knowledge.

Which market segments offer the most opportunities?

In which types of cosmetic products is sacha inchi used in the European market?

Skin care products offer the most opportunities for sacha inchi oil, especially anti-ageing products. This is due to the oil’s physical properties (soluble in oils) and high Omega fatty acid content. Sacha inchi oil is registered as having moisturising and skin protecting properties. In skin creams, the oil reduces skin dryness and makes the skin soft.

Hair care products offer opportunities as well. Some cosmetics manufacturers already use sacha inchi in shampoos and conditioners. Other Omega-rich oils, such as argan oil, are also used in hair care products. In hair care, sacha inchi can revive dry hair and give hair a soft and shiny look.

Sacha inchi oil can also be used in soaps as a natural binding agent, and in massage oils for relaxation or to massage painful or stressed areas.

For which market players is your sacha inchi interesting?

Both natural and conventional cosmetic brands in Europe may be interested in your sacha inchi oil. However, natural cosmetic products offer the most opportunities for this relatively new ingredient. Once sacha inchi is more established, conventional brands may become interested as well. They use smaller quantities per product but their higher product sales would require larger total volumes of sacha inchi.

It can be more interesting for you to target niche brands than big brands. Niche brands are trendsetters and buy lower volumes of ingredients. Lower volume requirements can be useful if it is difficult to secure sufficient supplies.

Tips:

6 . What are the end-market prices for sacha inchi?

Sacha inchi oil is a still relatively new speciality vegetable oil. Therefore, there is no standard international price for the oil. It is common for buyers and sellers of speciality oils to agree on a price together.

To set your price, add a profit margin to your production costs. To calculate your production costs, create a detailed breakdown of all the costs involved in producing sacha inchi oil. Also include additional costs such as:

  • customs
  • loading/unloading
  • marketing
  • samples for chemical analyses
  • internal transport

The prices European buyers are willing to pay for vegetable oils generally depend on:

  • availability
  • variety
  • quality
  • novelty
  • exchange rates

If your sacha inchi oil is sold as a certified oil, such as organic or fair trade, it can be sold at a higher price.

By comparing the value and volume of Peru’s sacha inchi exports to Europe we can give an indication of export prices. In 2014, export prices varied from around $12 to $18 per kg (€10.60-€16.00 per kg).

Sacha inchi oil is now approved in Europe as a food ingredient. Therefore, demand for sacha inchi and resulting prices can increase until supply catches up. If you have enough available supplies, you can profit from this development.

Speciality oils are very trend-sensitive. There is a risk that product margins will drop if trends change or if there is an oversupply due to many new producers entering the market.

The following price breakdown gives an indication of costs and margins at different points in the sacha inchi oil value chain:

Figure 2: Price breakdown for sacha inchi oil, mark-ups in %

Export price

Air freight

Import

Sales

 

+30-40%

+5%

+30%

Source: ProFound, 2014

Tips:

  • Monitor harvests in Peru to anticipate price developments.
  • You can ask your buyers for information about price developments.
  • Obtain sufficient supplies of sacha inchi oil for your cosmetic ingredient buyers. If demand for sacha inchi grows, food ingredient buyers will become stronger competitors and prices may increase.
  • Do not depend on one sole product. Keep a diverse product range by including other natural ingredients aside from sacha inchi oil. This will help you to avoid the risk of changing popularity and prices.
  • Make sure you are ready for future price decreases if availability increases.
  • Reach a sufficient scale and improve the efficiency of your operations and processing to keep costs down. Also make sure your product differs from that product of your competitors, for example by obtaining certifications. This can get you a higher price for your product.