The European market potential for shea butter

There is an increasing demand for shea butter on the European cosmetics market. Shea butter is a versatile ingredient that has a wide range on applications in the cosmetics industry. The main driver is the increasing demand for natural and organic cosmetics on the European market. It is expected that the demand for shea butter will continue to rise in Europe.

1. Product description

Shea butter is a vegetable fat extracted from the sun-dried kernels of the shea tree Vitellaria paradoxa. The shea tree grows in the so-called shea belt, which includes roughly 21 countries: Benin, Burkina Faso, Cameroon, Central African Republic, Chad, Ethiopia, Eritrea, Ghana, Guinea-Bissau, Ivory Coast, Mali, Niger, Nigeria, Senegal, Sierra Leone, South Sudan, Sudan, Togo, Uganda, the Democratic Republic of the Congo, Kenya and Guinea. The largest shea butter-producing countries are Ghana, Nigeria and Uganda (Northern part).

Vitellaria paradoxa grows mainly in Western Africa, while Vitellaria Nilotica (a sub-species of Vitellaria paradoxa) is native to East African countries such as Uganda, Kenya and Sudan. Both trees produce slightly different shea butter in terms of consistency, texture and nutrient content. The shea butter form Western Africa is denser, while the shea butter from East Africa (nilotica shea butter) is more liquid.

Other differences between the shea butter from West and East Africa are as follows:

Western African Shea Butter                                            East African Shea Butter

• Higher concentration of vitamin A                         - More yellow in colour
• Higher melting point                                                     - Lower melting point
• Lower concentration of oleic acid                           - Higher concentration of oleic acid
• Harder in consistency                                                    - Soft and creamy texture
• Higher concentration of sterol                                

East African shea butter is considered a more luxurious product. East African shea butter spreads more easily and is more suitable for sensitive skin, ageing skin, bruised skin, burns, wounds, dry peeling skin and baby skin. West African shea butter is used for scars, blemishes, wrinkles and stretch marks because of its high content of vitamin A. East African Shea Butter is also scarcer because of a limited supply.

According to the Global Shea Alliance, the majority (85%) of processed shea butter goes to the food industry. The rest is used in personal care products; some of its main applications are:

• hair treatment products for damaged and dry hair;
• anti-ageing and anti-wrinkle creams;
• face- and body-moisturising creams;
• aftersun products and skin treatment after sunburn;
• stretch mark prevention products during pregnancy;
• hair treatment for dry scalp;
• shaving and aftershave creams to reduce skin irritation;
• creams to ease muscle fatigue and pain;
• treatment products for insect bites and stings;
• baby care products against diaper rash.

Cosmetics companies in Europe either use shea butter as a moisturising body butter in their products, or use shea-based ingredients obtained from stearin or olein. Many companies use shea butter because of its emollient properties, particularly its ability to soften the skin along with treating dry skin areas. The cosmetics sector is also less constrained by costs than the food sector .

Shea butter can be traded as a nut or as oil with these HS codes: 151590 for oil and 1207.92 for nuts. HS code 151590 refers to other fixed vegetable fats and oils (including jojoba oil) and their fractions, whether or not refined, but not chemically modified. HS code 120792 refers to shea nuts, but no trade is recorded under this HS code.

Figure 1: Examples of cosmetic products containing shea butter in Europe

Source: Various

2. What makes Europe an interesting market for shea butter?

The demand for shea butter in the European cosmetics market is growing. Shea butter is used mainly in skincare and haircare products because of its properties. This growth is driven by rising consumer awareness of shea butter and the consumer demand for natural cosmetics. Shea butter has unique properties and its widening availability makes it a favourite choice of cosmetic companies.

A publication from the African Journal of Biochemistry Research in 2018 stated that Africa produces around 1,760,600 tonnes of raw shea nuts a year. However, more than half is used in domestic applications. Tridge states that Nigeria and Mali are the largest producers of shea kernels in Africa. In 2019, Nigeria accounted for more than 39 percent and Mali accounted for almost 31 percent of global shea nuts production. The majority of shea butter produced in Nigeria is for domestic consumption. There is also undocumented trade of shea nuts across the country’s borders with Benin, Togo and Ghana.

However, there is growing investment in processing facilities in Nigeria. This is expected to have an effect on the trade dynamics of shea products in West Africa. There is a general trend of moving from export of raw materials to processing in most West African countries. It is expected that more processing will take place in Africa in the near future.

According to the Global Shea Alliance, it is estimated that around 300,000 metric tonnes of shea was imported into Europe in 2020. In Ghana, the largest exporter of unrefined shea butter, there are around 94 million shea trees in the country, which produce around 60,000 tonnes of shea nuts a year. Ghana has the most developed shea processing sector.

Figure 3 shows a rough breakdown of shea imports to Europe. It is shown that the majority of shea imports to Europe are kernels. Shea nuts are processed in Europe by some of the leading vegetable oils processors, such as Bunge Loders Croklaan, Fuji Oil Europe and AAK. Some processing is also done in Africa; shea butter, as well as shea derivatives, such as shea olein and stearin, are exported to Europe.

The global shea butter market is estimated to reach USD 2.9 billion by 2025. Europe accounts for more than a quarter share of the global market. The majority is used in the food industry. However, food processors tend to import shea nuts and process them in Europe. Cosmetics manufacturers source both shea butters. There is a shift towards the production of shea butter in Africa (countries of origin).

Figure 4 and 5 show imports of fixed vegetable fats and oils, the product category under which shea butter is traded.  It is shown that overall imports slightly increased in terms of value, but decreased in terms of volume between 2019 and 2020. However, the volume and value of imports from outside of Europe increased between 2016 and 2020. This is because the price of shea butter increased because of higher demand. The main reason behind this is the growing demand for natural ingredients from the cosmetics industry in Europe, a trend that is expected to continue in the near future. A major driver of this trend is the growing consumer demand for natural personal care products.

According to industry sources, the demand for shea butter is growing in the cosmetics industry. The growing demand for vegetable oils in the cosmetics industry is driven by an increasing demand for natural personal products. Although the majority of shea butter is used in the food sector, the share of the personal care sector has increased. This trend is expected to continue in the near future. Shea butter has unique properties and a wide range of applications, making it an attractive ingredient to cosmetic companies. There is also growing demand for shea derivatives on the European market.

Europe is the main export market for shea products. It is estimated that around 250,000-300,000 tonnes of shea products are exported to Europe annually. The volume of shea butter imported to Europe ranges between 50,000 and 90,000 tonnes. Finished cosmetic products with shea butter are also exported from Africa to Europe. It is expected that the share of shea butter and shea derivatives imported from Africa will further increase. This is because of ongoing investments in the processing sector in West Africa.

Figure 6: Processing Facilities in West Africa

Source: Global Shea Alliance

There is currently no official grading system for shea butter in the cosmetics industry. In 2017, a regional standard for Africa was approved for unrefined shea butter in the food industry. The African Organisation for Standardisation is currently in the process of developing a standard for shea butter. The Global Shea Alliance has developed a standard only for shea kernels.

The European market for natural and organic cosmetics was worth EUR 3.90 billion in 2019. The market grew at a healthy rate between 2014 and 2019. The market is forecast to grow at a similar rate in the coming years. More information on the growing market for natural and organic cosmetics is available from the Ecovia Intelligence report.

European consumers are willing to pay more for high-quality personal care products, especially those with natural/organic ingredients. According to a European importer of shea butter interviewed for this report, one reason for it is that ‘people are very much aware of the need for strong skincare products with no preservatives or chemicals’.

The growth of shea butter is driven by a growing demand for natural cosmetics on the European market. This trend is expected to continue in future, according to a European importer of shea butter interviewed for this report, who said ‘there a lot of people who want organic, so there is definitely a growing market’. The CBI Trends report gives details on the opportunities in the sector of natural ingredients for cosmetics.

3. Which European countries offer the most opportunities for shea butter?

The most attractive countries for shea butter exporters are considered to be the Netherlands, France, Sweden, Germany, the United Kingdom and Belgium. These countries are the leading importers of vegetable oils in Europe. Countries such as Germany, France and Italy have large markets for conventional as well as natural cosmetic.

The Netherlands

Table 1: Imports of other fixed vegetable fats and oils to the Netherlands, 2016–2020

2020	000 Tonnes	% Change Volume (2016-2020)	m EUR	% Change Value (2016-2020)	Exporters	Important Market Players
HSC: 151590	61.1	9%	133.9	16%	Germany (29.8%), Ghana (25%), France (8%),	Jan Dekker/ IMCD, More Natural

Source: Eurostat

The Netherlands is the leading importer of other fixed vegetable oils in Europe. It is an important entry point for raw materials into Europe. The imports of other fixed vegetable oils with an HS code 151590 under which shea butter is traded increased in volume and value between 2016 and 2020. However, this HS code also represents vegetable oils other than shea butter.

The Netherlands is an important processor of shea nuts. IOI Loders Croklaan and Maas Refinery are leading refineries. Loders Croklaan sources around 70% of its shea directly from West Africa, while the rest comes from third-party suppliers. Shea butter from the Netherlands is then re-exported to other European countries.

France

Table 2: Imports of other fixed vegetable fats and oils to France, 2016–2020

2020	000 Tonnes	% Change Volume (2016-2020)	m EUR	% Change Value (2016-2020)	Exporters	Important Market Players
HSC: 151590	50.4	-15%	132.4	-14%	Spain (21%), Belgium (18.5%), Burkina Faso (15.8%)	Ceratec SARL, OLVEA

Source: Eurostat

France is one of the leading importers of other fixed vegetable fats and oils with an HS Code 151590 under which shea butter is traded. The level of imports decreased between 2016 and 2020. However, the volume and value of imports were increasing between 2016 and 2019. There was a slight decrease which was a result of disruption in supply chain due to COVID-19. Other vegetable oils are also traded under HS code 151590 and the trend is not representative only of shea.

France has one of the largest cosmetic markets in Europe. There is a significant personal care processing sector in the country. It also has the second-largest market for natural and organic cosmetics. The country has a strong cosmetics manufacturing sector. Several large personal care companies, such as L’Occitane and L’Oréal have their own shea sourcing projects. In 2018, L’Oréal and OLVEA launched a shea sourcing project in Burkina Faso. The demand for shea butter in the French market is expected to continue.

Sweden

Table 3: Imports of other fixed vegetable fats and oils to Sweden, 2016–2020

2020	000 Tonnes	% Change Volume (2016-2020)	m EUR	% Change Value (2016-2020)	Exporters	Important Market Players
HSC: 151590	40.7	15.9%	69.5	19%	Denmark (98.8%), the Netherlands (0.5%)	AAK, Opella

Source: Eurostat

Sweden is an important importer of other fixed vegetable oils such as shea butter. Between 2016 and 2020, the imports of other fixed vegetable oils with an HS Code 151590 increased at a double-digit rate. Most shea butter imported to Sweden gets re-exported.   In 2020, more than 90 percent of other fixed vegetable oils imported to Sweden was from intra-EU trade. Denmark (89.6%) is the main supplying country. Between 2015 and 2020, the share of intra-EU trade decreased by 9.2%. This shows that there is a slight shift to direct sourcing, but in relatively low volumes.

The Swedish-Danish company AAK is a significant producer and processor of shea. The company has a processing facility in Aarhus, Denmark, where it imports mainly shea nuts and produces shea butter and derivatives. The company is one of the founding members of the Global Shea Alliance. There is a growing demand for natural and organic personal care products in the Nordic countries. Research shows that Nordic sales of natural and organic personal care products continues to increase during the pandemic. Sweden and Denmark have the largest country markets in the Nordic region.

Germany

Table 4: Imports of other fixed vegetable fats and oils to Germany, 2016–2020

2020	000 Tonnes	% Change Volume (2016-2020)	m EUR	% Change Value (2016-2020)	Exporters	Important Market Players
HSC: 151590	28.5	33%	109.6	7%	The Netherlands (29.2%), Finland (27.4%), Austria (8.3%)	Gustav Heess, Henry Lamotte OPW Ingredients

Source: Eurostat

German imports of other fixed vegetable oils with an HS Code 151590 under which shea butter is traded increased between 2016 and 2020. The volume increased at a double-digit rate during that period. However, other fixed vegetable oils are also traded under this HS Code, so this trend is not representative only for shea butter. Other fixed oil imports to Germany increased by 47% in volume and 26% in value between 2015 and 2019. Approximately 20% of these imports came from extra-EU trade in 2019, a slight increase from 2015.

Germany has the largest consumer market in Europe and it also has one of the largest markets for conventional and natural cosmetics in Europe. The market for natural and organic cosmetics in Germany is considered the most advanced in the world. The country has a significant processing sector. Several significant traders are based in Germany; they include Gustav Heess and Henry Lamotte.

German consumers are well aware of natural ingredients/cosmetics and are willing to pay for high-quality products. The demand for shea butter is expected to remain high on the German market in future.

United Kingdom

Table 5: Imports of other fixed vegetable fats and oils to the UK, 2015–2019

2019	000 Tonnes	% Change Volume (2015-2019)	m EUR	% Change Value (2015-2019)	Exporters	Important Market Players
HSC: 151590	25.0	148%	62.6	48%	Netherlands (60.4%), Spain (6.8%), Germany (6.5%)	Kerfoot, A & E Connock, Chemlink Specialities

Source: Eurostat

Imports of other fixed vegetable oils, such as shea butter, to the United Kingdom increased in value and volume between 2015 and 2019. Volumes increased at a triple-digit growth rate, while value increased at a double-digit growth rate.  In 2019, almost 90 percent of the United Kingdom’s imports came from intra-EU trade.

The British cosmetics market is one of the largest in Europe; it also has a growing market for natural and organic cosmetics. Demand for natural and organic cosmetics is expected to increase in the UK in the coming years.

However, Brexit has significantly affected trade between the EU and the UK as it has caused increased costs for UK importers. This can create an opportunity for exporters of shea butter from developing countries since many importers may want to buy direct from non-European sources. However, it may take time to renegotiate trade deals with developing countries , thus resulting in uncertainty for suppliers of shea butter to the UK.

Belgium

Table 6: Imports of other fixed vegetable fats and oils to Belgium, 2016–2020

2020	000 Tonnes	% Change Volume (2016-2020)	m EUR	% Change Value (2016-2020)	Exporters	Important Market Players
HSC: 151590	26.8	24%	61.1	24%	The Netherlands (25.3%), Ghana (16.8%), the UK (16.4%)	Fuji Oil Europe

Source: Eurostat

Belgium is also an important importer of other fixed vegetable oils with an HS Code 151590, under which shea butter is traded. Imports increased by double-digit rates between 2016 and 2020. However, other vegetable oils are also traded under this HS Code, so the trend is not representative of only shea. More than two thirds of other fixed vegetable oil imports comes from intra-EU trade.

Antwerp and Gent are significant entry points for raw materials to Europe. Fuji Oil Europe, a leading importer, is located in Belgium. Most raw materials are re-exported to other European countries.

4. Which trends offer opportunities on the European cosmetics market for shea butter?

The growing demand for natural ingredients in cosmetics is stimulating the demand for shea butter in Europe. Increasing innovation in the European cosmetics industry is also stimulating the demand. Sustainability standards and ethical sourcing are becoming increasingly important, as European buyers ensure that shea butter comes from verified sources.

Growing innovation of shea butter-based ingredients

Shea butter, including its factions and derivatives, can be used in a wide range of products due to its versatility as an ingredient and its functional properties. The growing demand for natural and organic cosmetics is leading companies to invest in more efficient yet quality-natural ingredients. However, the coronavirus pandemic creates challenges to exporters of shea butter in developing countries.

Cosmetic ingredient suppliers are looking at new market opportunities for shea butter and its derivatives. For example, the Danish-Swedish company AAK produces a wide range of cosmetic ingredients based on shea. Its portfolio includes bioactive ingredients, as well as functional ingredients such as emollients, surfactants and emulsifiers.

In spring 2019, AAK introduced a liquid shea ingredient under the Lipex SheaLiquid TR name. According to the company, the material saves up to 50% of energy and 30% of time in production compared with solid shea butter. The ingredient is also fully traceable to its origin.

More investments in shea butter ingredients are likely to be made in the coming years. Shea butter already has a wide range of applications in the cosmetics industry, as it is present in face care, haircare, men’s care and baby care products.

To capitalise on this opportunity, exporters of shea butter from developing countries should familiarise themselves with the wide range of ingredients made from shea butter. To further seize this opportunity, exporters should learn about shea butter’s versatility and the wide range of shea-derived ingredients. Having this knowledge is helpful when approaching European buyers and informing them.

Increasing importance of sustainability standards for shea production

Consumer demand for environmentally and socially produced products is growing across Europe. Consumers and retailers in Europe are increasingly putting pressure on companies to ensure their products are made according to environmental and social standards. European buyers of shea butter are therefore requesting suppliers to meet environmental and social standards.

There are a number of initiatives that promote sustainable production of shea. In August 2020, the Global Shea Alliance in partnership with the United States Agency for International Development (USAID) launched a project designed to develop a 50 seedling shea nursery. This initiative is part of the Action for Shea Parklands “ASP” program which seeks to address issues, such as climate change, lack of fallows, negative effects of commercial agriculture, as well as tree removal contributing to the decline in shea trees. The project is intended to promote and protect parklands while advancing the industry’s commitment to plant 10 million trees over the next 10 years across West Africa. 

As of 2020, around 8,000 shea trees have been planted and about 100,000 seedlings have been raised as part of the Sustainable Shea Initiative. The five-year project is funded by USAID and it promotes the sustainable expansion of the shea industry in Ghana, Benin, Ivory Coast, Togo, Mali, Nigeria, and Burkina Faso.

Sustainability practices in the shea industry are expected to become more important in the future. With increasing demand for shea coming from Europe and other regions, it is expected that an industry standard will be developed similar to the RoundTable for Sustainable Palm Oil Certification (RSPO).

Demand for sustainably produced shea butter is expected to continue to grow in the future because of rising consumer awareness and demand for high-quality ingredients. To capitalise on this opportunity, exporters of shea butter from developing countries should consider introducing shea tree conservation and management practices, as soil health and fertility are important for shea butter production.

Exporters of shea butter should also consider adopting certification schemes, such as organic and fair trade, to improve their shea butter standards and capitalise on this opportunity. Having certification can help to make shea butter more attractive to European buyers. Guru Nanak Oil Mills is an example of a company in a developing country that has tapped into this trend, as shown in its commitment to upholding social and environmental standards, including having Ecocert fair trade certification and Fair for Life certification.

Shift towards processing shea in Africa

In recent years, there has been a lot of investment going into shea processing facilities in Western Africa. The majority of exported shea products from Africa are kernels, which are further processed in other parts of the world, including Europe. The recent shift indicates that we will see more processing of shea in Western Africa.

For example, in 2020, Bunge Loders Croklaan opened a shea butter processing facility in Ghana. The new manufacturing plant processes raw shea butter made from locally collected and crushed shea nuts into shea olein and shea stearin. Another example is the opening of a shea processing and warehousing facility for a women’s cooperative in Ghana in February 2020. The new manufacturing plant is meant for Tiyumtaba Women’s Shea Cooperative that employs around 600 women.

There have been several new shea processing facilities created in Nigeria as well. For example, in August 2021, a new processing plant was opened in the Oyo state. The project was financed by the the Coca-Cola Foundation and implemented by The Initiative for Gender Empowerment and Creativity.

This is a positive development for the shea sector in Africa. You can take advantage of this trend and produce more value-added products. Make sure you are aware of whether there is any processing facility being built in your area. This kind of investment can also improve the quality and consistency of shea produced in your region, which can attract European importers.

This study has been carried out on behalf of CBI by Ecovia Intelligence.

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