Hawthorn Market Report Available

Practitioner Sales Channel Assessment / Value Chain Opportunity Identification for Hawthorn

A new report from the Naturally Grown Herb & Spice Producers Cooperative (HerbPro) prepared by Raman Maangat with funding from the BC Agroforestry Industry Development Initiative

The purpose of this market study was to assess opportunities for BC and Canadian farmers of herbs and botanicals such as the native Crataegus species (i.e., hawthorn).

Historically farmers in the Canadian Herb/Botanical agricultural sector have been struggling to survive because of:

• Lack of small scale market demand
• Low profile of Canadian/BC grown herbs and botanicals.
• Competition with low cost commodity herbs/botanicals (China, Eastern Europe, South America)
• Little collaboration amongst BC and Canadian Growers

The Naturally Grown Herb and Spice Producers Cooperative commissioned Ms. Raman Maangat to conduct this study to determine whether there are opportunities to work directly with practitioners, apothecaries, and dispensaries to supply Canadian grown herbs and botanicals grown using safe and responsible farming practices.

The decline of the BC botanical and herb industry has been known for some time. However, it is thought there are some unique opportunities which may reinvigorate the industry. One such opportunity was thought to exist with respect to the naturopathic practitioners; this industry grew over 150% between 2001 and 2009 in Canada. To understand market opportunities it is important to complete a thorough assessment of the market in question.

After a complete market analysis of naturopathic practitioners in Western Canada, it is understood that although there is significant growth in this sector, it would be premature to consider this sales channel due to the following:

• Practitioner sales channel is very disparate. In order to understand the possible opportunities that may exist in the untapped practitioner sales channel market it is important to understand the scope of Canadian complementary and alternative medicine (CAM) channel in Canada and how the different areas of the discipline are defined. There does not seem to be ‘a common thread’ partially due to the number of different scope or treatment areas the practitioner chooses to practice or emphasize.
• Global competition has led to commodity based pricing. Currently botanical and herb producers in BC have not been able to differentiate their products and practices from that around the world.

1. The cost of production is generally higher in BC relative to many producing regions around the world.
2. Regulatory compliance has resulted in grower programs such as good agricultural and collective practices (GACPs), which add costs to production. Increased market awareness on GACPs and traceability should be initiated in order to differentiate the BC and Canadian industry/products from global competitors.

• Lack of published research and clinical trials associated with the indigenous Crataegus species found in Canada. Until there is science based evidence and proof that the indigenous species is better than the European Crataegus species practitioners will not accept hawthorn products that do not have science based evidence associated with the products. However, should there be future clinical trials; practitioners indicated willingness to participate in the trials.

Hawthorn growers in BC are urged to consider value chains in order to better understand the market opportunities. Some areas to look into with respect to value chain development include developing partnerships/relationships with existing companies that currently have direct sales to practitioners.
The market analysis has highlighted some key focus areas for hawthorn growers including the need for:

• More published research and clinical evidence.
• Generating market awareness on programs such as GACPs, traceability certified organic practices, etc.
• Considering other hawthorn based products.

Download a copy of this report

Hawthorn Producers Working to Develop New Markets

The Naturally Grown Herb & Spice Producers Cooperative (HerbPro), with funding from the British Columbia Agroforestry Industry Development Initiative, is working to enhance the sales of raw hawthorn ingredients and value-added products through natural health products (NHP) practitioners (those using natural health materials as complementary or alternative medicines).  This work will support value chain development for agroforestry industry advancement in BC.

There is a significant market challenge for BC agroforestry enterprises involved in the production of herbs and botanicals originating from low-cost, commodity-driven imports from Asia, Eastern Europe and South America.  Most Canadian producers of herbs and botanicals have focused on broker/distributor and direct sales, primarily targeted at export markets (Europe and Asia) or small direct-to-consumer sales (via farm gate and e-commerce).  However, despite a growing domestic retail market for NHPs, the sector has experienced decreased grower participation over the past 15 years.  This is primarily attributed to the lack of perceived market opportunities and low returns on raw material sales, particularly in the commodity marketplace through brokers and distributors where producers may receive 10% or less of the wholesale prices.

However, unique opportunities exist in the largely untapped, NHP practitioner market, particularly for high quality fresh or frozen raw ingredients such as hawthorn. Through a detailed analyses of this sales channel, development work led by HerbPro will provide much needed Canadian data on a new market opportunity for all BC hawthorn producers.  In addition, it will explore the potential of value-chain development with NHP practitioners. NHP manufacturers and practitioners are increasingly looking towards local supplies for raw herb materials where they can be assured that suppliers have supply chain control systems in place and can provide a safe supply of accurately identified herbs and botanicals. Together with leveraging the 'buy local' and food security movements, and a forward-thinking approach linking environmental sustainability with health, BC agroforestry producers are well positioned to add value in the practitioner sales channel supply chain and expand their sales opportunities and profitability. 

Incorporated in 2004, HerbPro grew out of a rural community economic development initiative in the BC Rockies.  The purpose of HerbPro is to develop herbal opportunities that balance economic, social and environmental concerns for HerbPro cooperative membership.  In 2005, HerbPro established the Hawthorn Agroforestry Demonstration Farm Trial to determine best practices for hawthorn production management based on the agroforestry land management principles of alley cropping.  This system promotes conservation and sustainable management practices and encourages biodiversity in the ecosystem, while providing a means to diversify farm revenues through intercrop production, and generation of revenue streams from short- and long-term harvested crops.

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Funding for this work has been provided through the BC Agroforestry Industry Development Initiative (AGF1101)