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Focus Issue:
A Market-Driven Approach to Sustainability in the Natural Products Sector

The natural products sector* is emerging worldwide as a keen area of interest for organizations working in economic development, biodiversity conservation, agriculture, and natural resource management. Demand for natural products has grown dramatically at a rate of up to 35 % annually over the past 10 years, and although growth has slowed recently, markets are still robust. In the United States alone, consumers spend more than $4 billion annually on herbal products. Europe, with Germany in the lead, is close behind, and markets in other countries are equally vibrant. More than 80% of the world's population still relies on traditional herbal medicines for primary health care, according to the World Health Organization. In Africa and Asia especially, the internal demand has also grown at a steady rate. This, in combination with the international market, has created a global boom in botanical commodities.

Traditional supply chains, however, cannot cope with the increasing demand for raw materials, largely due to over-exploitation of the resource base. Many materials are still sourced from the wild or grown in limited quantities on a seasonal basis. Destruction of habitat and over-harvesting threatens the viability of many wild species, while domesticated crops suffer from poorly planned production programs that do not adequately consider market linkages and demand. At the same time, buyers around the globe are searching for material that is either sustainably harvested or grown and processed according to a reliable standard, especially for products that are currently under-supplied or limited by seasonal factors.

This situation has opened up a number of promising opportunities for producers, especially organized groups of small-holder farmers and collectors from developing countries. Even so, the markets for natural products are often niche-specific, shallow and volatile. To take advantage of both domestic and international opportunities, HRF focuses on several key inputs: market research and product selection, supply chain development, business skills and communication capacity, and appropriate production technology and support. The key to success is choosing the right product mix (based on demand, biology/ecology, production system and infrastructure) and developing strong, sound relations with reputable buyers.

*The natural products sector includes medicinal herbs, teas, spices, flavorings, essential oil plants, nutraceuticals, functional foods, and any botanical commodity. Often referred to as non-timber forest products or botanicals, these products are grown in an agricultural setting or harvested from the wild.