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Production and Marketing of Cocoa Butter and Shea Butter Based Body Pomades as A Small Scale Business in Ghana

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The purpose of this paper is to assess the pilot-scale production, quality and sale of cocoa butter and shea butter body pomades in Ghana and to highlight the role of regulatory bodies in promoting these products.Cocoa butter-and shea butter-based body pomades were produced and sold to the general public at the Cocoa Research Institute of Ghana to determine their economic feasibility. The quality of the products was assessed by the Ghana Standards Authority and the Food and Drugs Authorityas a requirement before putting the products up for sale.Pilot-scale production of the two products was quite profitable and the capital investment put into the business can be paid back after seven years of production, with Benefit Cost Ratio of 1.01 and 14% Internal Rate of Return. Demand for the products was also high due to their good functional properties. Quality assessment of the products showed that they did not contain any harmful materials such as heavy metals and their microbial loads were all below the specification of less than 1.0 x 10 3 .The results suggested that production of cocoa butter and shea butter body pomades could be taken by entrepreneurs as a small-scale enterprise in Ghana.The findings and issues discussed in the paperwill also assist policy makers, development agencies and entrepreneurs to ascertain the appropriate strategy in developing the small and medium-scale enterprise sector for cosmetics in Ghana.
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Asian Journal of Business and Management (ISSN: 2321 - 2802)
Volume 03 Issue 05, October 2015
Asian Online Journals (www.ajouronline.com) 385
Production and Marketing of Cocoa Butter and Shea Butter
Based Body Pomadesas A Small Scale Business in Ghana
Esther Gyedu-Akoto*, Fred Amon-Armah, Emmanuel O.K. Oddoye
Cocoa Research Institute of Ghana
Ghana
*Corresponding authors email: akua_akoto2004 [AT] yahoo.co.uk
____________________________________________________________________________________________________________
ABSTRACT--- The purpose of this paper is to assess the pilot-scale production, quality and sale of cocoa butter and
shea butter body pomades in Ghana and to highlight the role of regulatory bodies in promoting these products.Cocoa
butter- and shea butter-based body pomades were produced and sold to the general public at the Cocoa Research
Institute of Ghana to determine their economic feasibility. The quality of the products was assessed by the Ghana
Standards Authority and the Food and Drugs Authorityas a requirement before putting the products up for sale.Pilot-
scale production of the two products was quite profitable and the capital investment put into the business can be paid
back after seven years of production, with Benefit Cost Ratio of 1.01 and 14% Internal Rate of Return. Demand for
the products was also high due to their good functional properties. Quality assessment of the products showed that
they did not contain any harmful materials such as heavy metals and their microbial loads were all below the
specification of less than 1.0 x 103.The results suggested that production of cocoa butter and shea butter body
pomades could be taken by entrepreneurs as a small-scale enterprise in Ghana.The findings and issues discussed in
the paperwill also assist policy makers, development agencies and entrepreneurs to ascertain the appropriate strategy
in developing the small and medium-scale enterprise sector for cosmetics in Ghana.
Keywords--- cocoa butter, shea butter, body pomade, small-scale enterprise, pilot-scale production, regulation,
marketing, feasibility
_________________________________________________________________________________________________
1. INTRODUCTION
One of the fundamental ways in keeping skin healthy is making sure the structure of the epidermis (outer layer of skin) is
intact. The components that do this are often called natural moisturizing factors (NMF) or ingredients that mimic the
structure and function of healthy skin. While the oil and fat components of skin prevent evaporation and provide
lubrication to the surface of skin, it is actually the intercellular matrix, along with the skin’s lipid content, that gives skin
a good deal of its surface texture and feel.The intercellular matrix is the skin’s first line of defense against water loss.
When the lipid and NMF content of skin is reduced, it results in skin surface roughness, flaking, fine lines, and a tight,
uncomfortable feeling. The longer the skin’s surface layer (stratum corneum) is impaired, the less effective the skin’s
intercellular matrix becomes (Sakai et al., 2000;Rawlings and Harding, 2004) and the skin’s healing process is also
impaired. Natural moisturizing factorsare made up of a large group of components that include amino acids, cholesterol,
fatty acids, triglycerides, phospholipids, glycosphingolipids, linoleic acid and glycerin. Ingredients that mimic the lipid
content of skin also include apricot oil, canola oil, coconut oil, cocoa butter and, shea butter. These ingredients can be
extremely helpful in making dry skin look and feel better.
Cocoa butter is mainly used in the chocolate and confectionery industry. According to ICCO Economic Committee
Report (2014), world cocoa products were expected to grow by 3.8% during the 2013/2014 cocoa season to 4.252 million
tonnes with strong demand for cocoa butter from confectionery manufacturers. Ghana is also expected to increase cocoa
processingmarginally by 3,000 tonnes to 28,000 tonnes in 2015 (WCF, 2014).However, the post-processing cocoa
products, which include cocoa butter, are mostly exported. Shea butter has also been used for centuries as a skin
treatment in Africa, particularly for new-born infants. Although the clinical data often referred to by the cosmetic
companies that market shea butter are hard to find, recent studies support its therapeutic value in the treatment of certain
skin disorders (Reynolds, 2010). The annual shea nut production in West African is about 600,000 tonnes and this can
produce about 200,000 tonnes of sheabutter respectively (Reynolds, 2010). Domestic production of shea exceeds
domestic demand as more than half of shea harvested is exported mostly as raw nuts and some as butter. Thus, the need
for the promotion of the utilization of cocoa and shea butter in Ghana, particularly in the local cosmetic industry cannot
be overemphasized.This will in turn help in the development of small- and medium- scale enterprise (SME) in Ghana.
Asian Journal of Business and Management (ISSN: 2321 - 2802)
Volume 03 Issue 05, October 2015
Asian Online Journals (www.ajouronline.com) 386
Creating a successful SME has never been easy, but it is more difficult in developing countries such as Ghana. This is
largely due to a lack of skill, confidence, education and access to SME capital. Representing more than 90% of all
businesses in Ghana, SMEs occupy a central part of the Ghanaian economy (Kayanula and Quartey, 2000). They are
essentially the drivers of the Ghanaian economy even though some of them are hardly noticed. The contribution of SMEs
to income, employment generation and ultimately economic growth is therefore not in doubt (Tetteh and Frempong,
2010). Though there are many studies on small and medium enterprises in Ghana, the focus of most of the studies were
on the financial aspects at the expense of the other equally important aspects. This paper therefore seeks to analyse the
production and sale of cocoa butter and shea butter pomades on a pilot-scale and the role of regulatory bodies in
ascertaining their qualities.
2. METHODOLOGY
Preparation of body pomades
At the Cocoa Research Institute of Ghana (CRIG), protocols have been developed for the pilot-scale production of cocoa
and shea butter body pomades. Cocoa butter used is obtained from the Cocoa Processing Company, Tema and the shea
butter is from the shea butter processing unit of CRIG at Bole.
Cocoa and sheabutter body pomadeswerepreparedby melting and mixing either cocoa or shea butter withpetroleum-based
products andother oils and wax in a melting kettle. Preservatives and fragrance were added to the mixture after cooling to
about 60o C. The mixture is then filtered using a white cloth, filled into plastic containers to a known weight, packaged
and labelled.
Quality assessment of pomades
Stability of the products was assessed by keeping them on the shelf at ambient temperature for a period of 12 months.
Samples of both products were sent to the Ghana Standards Authority (GSA) for quality assessment. The products were
assessed for particulate matter, heavy metals, melting point and microbial loads using analytical methods adopted by the
GSA. The microbial tests included total bacterial load, Pseudomonas aerugenosa, Staphylococcus aureus and coliforms.
Registration of pomades
Certificates of analysis obtained from GSA and product samples were sent to the Food and Drug Authority (FDA) of
Ghana for product registration.
Feasibility studies
Marketing studies were conducted on the products by selling these products at CRIG and analysing their production costs
for their economic viability using Projected Cash flow Analysis.Some regular customers are sometimes asked to bring
back their comments after using the products.
3. RESULTS AND DISCUSSION
In the cosmetic industry, butter from cocoa and shea are used as emollients and they haveproperties similar to those of
other non-fragrant plant oils. They are also a rich source of antioxidants such as polyphenol. In vitro research has shown
that cocoa butter helps improve skin elasticity and promote healthy collagen production (Gasser et al., 2008). Contrary to
popular belief, topical application of cocoa butter during pregnancy does not prevent or reduce the number of stretch
marks (Osman et al., 2008).
After a successful development of cocoa butter and shea butter body pomades at CRIG, the products were produced on a
pilot-scale to see how best they would perform on the local market. The products which are being sold at CRIG have
been well accepted by consumers who are mostly local and foreign visitors to the Institute. Most of the local visitors have
become regular customers of these products. Improvements have been made on these products over time based mainly on
feedback from these regular customers. Studies by Theofanides and Kerasidou (2012) have shown that consumers use
their senses in every buying process. Touch (texture), smell and sight play a determinant role in buying of
products(Lindström, 2005). Based on these stimuli, the consumer evaluates the quality of the product.The consumer also
assesses product quality based on its functional properties which include the moisturizing or hydrating effect,ultra-violet
(UV) protection, regenerative and anti-wrinkle properties.The two pomades according to the consumers are particularly
good for dry skin due to their high moisturizing and good spreading properties. These properties are due to the chemical
composition of cocoa butter and shea butter. They both contain many different plant chemicals such as polyphenols
Asian Journal of Business and Management (ISSN: 2321 - 2802)
Volume 03 Issue 05, October 2015
Asian Online Journals (www.ajouronline.com) 387
(Maranz and Wiesman, 2004; Gasser et al., 2008) that are beneficial to the skin and they also have similar fatty acid
compositions (Table 1). These fatty acids are what make both shea and cocoa butter superior moisturizers. However,
there are some subtle differences between cocoa and shea butter, and these may make one better than the other depending
on one’s needs.
The pomades have also been found to be highly shelf stable with no changes occurring in their physical and chemical
states during storage, transport and handling. This is due the nature and quality of the raw materials usedin their
production. Apart from the preservatives added to the products, cocoa butter and shea butter, contain natural antioxidants
which prevent autoxidation. The petroleum-based ingredients used do not contain any double bonds or reactive
functional groups (Castro, 2012) that would cause reactions such as autoxidation. The waxes used also thicken the
productsand make them solid at ambient temperature thereby preventing any form of damage. It has been reported by the
Scientific Committee on Consumer Safety of the European Union (SCCS, 2012) that exposure of cosmetic products to
changing temperatures, humidity, UV light, mechanical stress could reduce their intended quality and safety for the
consumer.
Table 1: Fatty acid composition of cocoa and shea butter
Fatty acid
Type
Shea butter*
Cocoa butter**
Oleic acid
Unsaturated
46.4%
22.78%
Stearic acid
Saturated
41.5%
21.53%
Linoleic acid
Unsaturated
6.6%
4.88%
Palmitic acid
Saturated
4.0%
28.16%
*Israel, 2014 **Zzamanet al., 2014
Currently, producing high quality cosmetic and personal care products in line with reinforced regulations are very
important to the consumer.The regulation requires that every cosmetic product placed on the market is safe to use
andproducers must ensure that their products undergo safety assessment before they are put out for sale. Every country
has a regulatory body which is in charge of reviewing the safety assessments and checking products already on the
market. In Ghana, the agencies responsible for the maintenance of acceptable standards for products and services are the
Ghana Standards Authority (GSA) and the Food and Drug Authority (FDA). In the U.S., cosmetic products and
ingredients do not need FDA approval before they go on the market (Ross, 2004). However, companies and individuals
who produce and market cosmetics have a legal responsibility to ensure the safety of their products. In order to take
action for safety reasons against a cosmetic on the U.S. market, there must be reliable information showing that it is
unsafe when consumers use it in the expected way.
Samples of cocoa butter and shea butter pomades sent to the GSA passed all the quality tests. They were found to contain
no heavy metals such as lead, cadmium and chromium. These metals which are naturally occurring substances in the
environment at low levels can be toxic to human health at higher concentrations. Long-term exposure may result in
slowly progressive physical, muscular and neurological degenerative diseases (International Occupational Safety and
Health Information Centre, 1999). However, some studies have shown that some pomades on the Ghanaian market
contain different levels of these heavy metals (Amarteyet al., 2011).The levels were significantly higher than the
permissible limits in cosmetics. Another study conducted in Pakistan revealed that some cosmetic products on the
Pakistani market have some levelsof heavy metals in them (Ullahet al., 2013).
Microbiologicalanalysis showed that both pomades had some levels of microorganisms. They had the same levels of total
bacterial load, Pseudomonas aerugenosaand Staphylococcus aureus(Table 2) butthese levels were within the
specification for cosmetics in Ghana. However, coliforms were not detected in both products. The low levels of
microbiological contamination may be due to hygienic conditions under which these products were made.Ingredients,
packaging containers and their coverscan be a potential sourceof contamination. If these are not kept clean,
microorganismscan develop in them, and onceenhanced, they can infect and multiply within the productitself. One
particularly important sourceof Pseudomonas and other gram-negative bacteria is water. Therefore, avoiding water
contamination can be effectedby factory hygiene such as using hot water, detergent and other treatmentsin the cleaning of
equipment, tanks, filters, etc.in other words, goodgeneral cleanlinessin production systems is important in
controllingmicrobiological contamination. Spillageof products mixed with dust, dirt and moisture provide a suitable
medium for the development of microorganisms. Regardlessof hygienic manufacturing methods, a poorly preserved
preparation provides many opportunities for microbial infection. However, preservationshould not be expectedto
compensatefor insanitary or carelessmanufacturing or packaging processes.
Asian Journal of Business and Management (ISSN: 2321 - 2802)
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Asian Online Journals (www.ajouronline.com) 388
Table 2: Microbiological data on both cocoa and shea butter pomades
Test conducted
Unit
Test methods
APC/30o C/72hr/PCA
cfu/g
ISO 4833 2003
Pseudomonas aeruginosa/37o
C/24hr/PsAB
cfu/g
ISO 13720 1995
Staphilococcusaureus/37o
C/48hr/BPA (RPF)
cfu/g
ISO6888 pt 2 1999
Coliforms/37o C/48hr/LTB
MPN/g
ISO 4831 2006
By 2020, the cosmetic and personal care market is likely to go up to $543 million (Utroske, 2015). Factors that may
cause this growth include demographic and climatic dynamics, regional consumer variations and global regulation
challenges. Climatic and environmental challenges such as exposure to the sun and pollution have resulted in more
consumers going for skin care products. The changing perception towards grooming by the youth as well as the aging
population may also contribute to the growth of the personal care market (McDougal, 2015). The growing awareness of
skin diseases is also boosting this market.Currently, the cocoa and shea butter body pomades produced at CRIG
arebecoming very popular and their demand is increasing by the day due to their healing and moisturizing properties.The
production of cocoa butter body pomade increased by 41% from 2013 to 2014 and that of shea butter body pomade by
over 100% from 2014 to 2015 (Table 3). This confirms the report by Kranton, (2003) that consumers are willing to pay
for high quality products. However, some consumers have targeted cosmetics as possible human health threats, claiming
that they contain carcinogenic chemicals and other toxic agents.Quality assessments of the cocoa butter and shea butter
body pomades showed no such results and for that matter have been registered with the FDA in Ghana.Profits made on
the two products are quite marginal and this is because their selling prices do not represent the actual price of similar
products on the market. These similar products are being sold at higher prices on the market and it will take an
entrepreneur with good commercial skills to do more to enhance the profitability of these products. Secondly, the low
levels of production incurred high production costs and this can be explained by the economies of scale concept which
describes a situation where the marginal cost of making a product falls as a company makes more of the product. In other
words, the cost of producing a product is lower per unit if it is produced in large quantities.
Table 3: Production and sales of cocoa and shea butter body pomades
Year
Product
Quantity(kg)
EPC (Gh¢)
ELC (Gh¢)
Revenue (Gh¢)
2013
Cocoa butter pomade
Shea butter pomade
Sub total
1,980
-
19,272.68
-
19,272.68
-
-
32,174.40
-
32,174.40
2014
Cocoa butter pomade
Shea butter pomade
Sub total
2,789
373
31,630.75
4,230.29
35,861.04
10,765.54
1,438.38
12,203.92
45,571.20
5,968.00
51,539.20
2015
Cocoa butter pomade
Shea butter pomade
Sub total
2,228
825
27,716.32
10,263.00
37,979.32
8,600.08
3,184.50
11,784.58
42,836.00
15,924.00
58,760.00
EPC - Estimated production cost ELC - Estimated labour cost Gh¢4.00 = $1.00
A projected cash flow statement is used to evaluate cash inflows and outflows to determine when, how much, and for
how long cash deficits or surpluses will exist for a business during an upcoming time period(Frey and Klinefelter, 1980).
That information can then be used to justify loan requests, determine repayment schedules, and plan for short-term
investments. The projected cash flow analysis for the production of cocoa and shea butter pomades have shown that they
are economically viable (Table 4). Assuming production fixed capital is obtained in year 0 and actual production begins
in year 1, by the seventh year, a positive Net Present Value will be realised and capital investment will be paid back, with
Benefit Cost Ratio of 1.01 and 14% Internal Rate of Return. It wouldtake that much time to pay for capital investment
because the lowlevels of production.
Asian Journal of Business and Management (ISSN: 2321 - 2802)
Volume 03 Issue 05, October 2015
Asian Online Journals (www.ajouronline.com) 389
Table 4: Projected Cash Flow Analysis for Cocoa and Shea Butter Pomade
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Fixed Capital
34025.00
Operating Cost (Cocoa butter pomade)
42396.29
36316.40
36316.40
36316.40
36316.40
36316.40
36316.40
36316.40
36316.40
Operating Cost (Shea butter pomade)
5668.67
13447.50
13447.50
13447.50
13447.50
13447.50
13447.50
13447.50
13447.50
Total cost
34025.00
48064.96
49763.90
49763.90
49763.90
49763.90
49763.90
49763.90
49763.90
49763.90
Quantity Produced (Kg) (Cocoa butter
pomade)
2789.00
2228.00
2228.00
2228.00
2228.00
2228.00
2228.00
2228.00
2228.00
Quantity Produced (Kg) (Shea butter
pomade)
373.00
825.00
825.00
825.00
825.00
825.00
825.00
825.00
825.00
Revenue (Cocoa butter pomade)
45571.20
42836.00
42836.00
42836.00
42836.00
42836.00
42836.00
42836.00
42836.00
Revenue (Shea butter pomade)
5968.00
15924.00
15924.00
15924.00
15924.00
15924.00
15924.00
15924.00
15924.00
Estimated Total Revenue
51539.20
58760.00
58760.00
58760.00
58760.00
58760.00
58760.00
58760.00
58760.00
Net Cash Flow (NCF)
-34025.00
3474.24
8996.10
8996.10
8996.10
8996.10
8996.10
8996.10
8996.10
8996.10
Cumulative Net Cash Flow
-34025.00
-30550.8
-21554.66
-12558.6
-3562.46
5433.64
14429.74
23425.84
32421.94
41418.04
Net Present Value (NPV)
-1968.60
2100.78
5734.15
8978.24
Benefit Cost Ratio (BCR)
0.99
1.01
1.02
1.03
Internal Rate of Return (IRR)
-4%
5%
10%
14%
16%
18%
Asian Journal of Business and Management (ISSN: 2321 - 2802)
Volume 03 Issue 05, October 2015
Asian Online Journals (www.ajouronline.com) 390
4. CONCLUSION
Developing the small-scale sector in the cosmetics industry requiresentrepreneurs who know how to relate technology to
the desires or needs of the consumer. Access to proven technologies is very crucial for creativity, competitiveness and
innovations and CRIG has developed the technology for the production of cocoa butter and shea butter pomades.This
technology has been proven through the pilot-scale production of these productswhich has also shown that for a small-
scale business to survive and grow, it must apply technical knowledge in fulfilling the needs of consumers and their
desire for quality products at affordable prices. The businessdoes not always have to resort to radical technological
innovations butgradual improvements in the quality of the products can contribute to itsgrowth.It also has to fulfil
regulatory requirements to ensure good quality products andit is important that it provides what the market demands.It is
also important that SMEs have access to research and development institutions because this will aid in the acquisition of
new skills, as well as gaining deeper knowledge about the market and its intricacies. Government can also provide
technical support in the form of dissemination and technology transfer.
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1023
... The fat content prevents evaporation on the skin and provides lubrication for skin surface which maintains the lipid content IOP Publishing doi:10.1088/1757-899X/1011/1/012037 2 of the skin thus it has a good texture. Cocoa butter also has similar lipid compositions with skin lipid composition [4]. ...
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