Markets and Mangoes: A (not so) Brief Introduction
This blog chronicles the journey of one company to develop the mango value chain in Nigeria by growing mangoes, suitable for processing and the export market. We’ll be introducing new species, new management practices, implementing different models such as owner-managed farms and out-grower schemes.
The challenge: Develop a market-driven pilot to grow mangoes PROFITABLY, increase quality and quantity, help grow farmer incomes, and make it sustainable. Whew!
Challenge Accepted!
My name is Affiong Williams, CEO of ReelFruit- a dried fruit company with (not so) secret ambitions to do innovative things in horticulture and processing. Our vision is to become “the leading fruit agribusiness in Nigeria.”
I also admit that I’m very skeptical of primary agriculture, and tried to avoid it for the longest time. It’s laden with so much risk, and profit is elusive.
So why I, and the company, have chosen to venture into primary agriculture given my views is the reason you need to follow this blog.
Some background on the “Markets and Mangoes” project: It is a co-funded experiment by ReelFruit, and IDH (Shout out to our funders) to grow mangoes to support our processing efforts and also to open up export markets for fresh mangoes (where demand is high and Nigeria unsurprisingly isn’t a player). The pilot begins with us planting 8,000 mango trees of the Keitt and Kent variety as well as working with one out-grower who has a “large” farm of Tommy mangoes.
Fun Fact: As at 2013, Burkina Faso, a small landlocked country in West Africa, grew its Mango exports from 2- 30% (in 5 years), which command 3x the price of the local market, and earned the country $9MM in revenues. Figures on Nigerian local demand and exports are very difficult to find.
Besides a strong market demand, below are some of the reasons we feel it is the right time for us to backward integrate:
- We’ve developed a market: Dried Mangoes are a best seller both locally and internationally so we know that off-take for processing is guaranteed.
- This project is part sponsored by an NGO which means that we don’t have to take out commercial loans to fund it. This is quite pertinent as mangoes only start fruiting from year 4.
- We need to solve the ‘chicken and egg’ conundrum.
What comes first, Mangoes for processing or processing for mangoes? Having done extensive research on the mango value chain, the answer is not so straightforward. You need of mangoes to feed any type of fruit processing you embark on, but you need guaranteed off-takers for farmers to grow mangoes at meaningful scale. As a large number of fruit processors don’t use any local fresh fruit, but rather import concentrates, the equation is broken. There are no mangoes for processing and there’s no processing for mangoes.
Ricardo Hausmann, a renowned development economist exemplifies this occurrence in an interview on growth and inequality: “New activities always face this chicken-and-egg problem. A country cannot make watches if it doesn’t have watchmakers. But you don’t want to become a watchmaker in a country that doesn’t make watches. Even if you wanted to become a watchmaker, you wouldn’t have other watchmakers to learn from because nobody is making watches. This requires a government that can play a smart “coordinator” role, which most governments are not set up to do.” ReelFruit, with the support of our funders, has decided to “coordinate”
The market for Mangoes in Nigeria is unstable and undefined, given that there is almost no guaranteed off-take, even in the open market. We will elaborate on our research findings in a subsequent blog. As a company planning to process mangoes at scale, we knew we’d run into the “no raw materials” trap and have decided to take proactive steps to plug that problem as much as possible. On a related note, I cannot tell you how many times we’ve been told: “go to Benue, there are lots of Mangoes there…” In our next post, we’ll show you pictures of what we found in Benue- which should put that myth to rest. We will also share how we came about designing our project (some of our airy fairy assumptions) and how they have been continually refined by our experiences in the field. We’ll share the role lady luck has played in our achievements thus far.
So, who’s “We”? World domination isn’t a singular act, so the project lead, Dami Bolaji will be blogging with me. We’ll highlight all our partners as we go along.
We’re really excited be doing something innovative. The idea of creating a new model in Nigeria that could be successful and replicated is quite the thrill. The success of this project will be marked by the number of people who copy it and the increased number of Nigerian mangoes sold abroad.
We’re really excited to become mango experts and contribute to a better understanding of at least one value chain in Nigeria. Thanks to the latitude we’ve been given to experiment (almost risk-free), We’re going to maintain an “open door” policy, so feel free to share your views, doubts, praise, criticisms, etc.
We’ll be updating the blog every 2 weeks or so, so please check back with us every now and again.
Thank you for reading.
AW
