THE HAITI HANDICRAFTS VALUE CHAINSUSTAINABLE STRATEGIES FOR DEVELOPMENT

Karen GibbsTed Barber

September 14, 2006

A MARKET-DRIVEN, VALUE-CHAIN APPROACH TOECONOMIC DEVELOPMENT & POVERTY REDUCTION

Based on• USAID Global Market Assessment for Handicrafts • USAID Haitian Handicraft Value Chain Analysis • Haitian handicraft development projects• First-hand market experience

Karen Gibbs• VP Marketing at Aid to Artisans• Co-founder & President of Mélange, an import-wholesale company • Craft marketing consultant

Ted Barber• Small & Medium Enterprise Advisor• Co-founder, Voyageur East Company, an import/trade consulting firm

WHAT THE MARKET WANTS:A GUIDE FOR DEVELOPMENT PROJECTS

• Excellent knowledge of market & customers

• Competitively position a handicraft sector development project

KNOW YOUR CUSTOMER

End consumer vs. direct customer

Price

Quantity

Artisan

Exporter

Importer/Wholesaler

Retailer

KNOW YOUR CUSTOMER’S NEEDS

Products

Design

Materials

Skills

Quality

Labeling/packaging

Services

COMMUNICATION

Product Development

Customer Service

Shipping/logistics

ADDRESS YOUR CUSTOMER’S NEEDS

• Recipe = Identify your customer +Determine what your customer wants + Develop what your customer wants +Deliver what your customer wants

• Success = repeat the recipe• First order: 18 months or more• Relationship: 5 years or more

ONE-TIME PURCHASE OR SUSTAINABLE BUSINESS?

Rwandan Baskets

Original Improved NewColor

New Function

New Line

VALUE CHAIN ANALYSIS: HAITIAN HANDICRAFTS

• Began with a market study

• Homework first!

• Interviewed range of market players

“End markets, particularly if they are outside of the country where the study is based, are often ignored or inadequately investigated.”

MARKET STUDY FINDINGS

• Key trends• What buyers want from suppliers• Market’s advice

Haiti• Can’t compete with China – focus on high-end• Are there qualified agents?• Leverage creativity, handiwork & proximity• Best way to compete: global style

““The only way for the artisan to survive is to tap into his or The only way for the artisan to survive is to tap into his or her own indigenous culture to find what is really unique.her own indigenous culture to find what is really unique.””

VALUE CHAIN ASSESSMENT

• Market side guided supply side

• Interviewed range of actors

• Mapped the sector

• Described roles & relationships

V egetable Oil Consumers

Retailing

W holesaling

P roces s ing

A s sem bly

P roduc tion

Input S upply

E x tens ion

Functions

Small Scale Producers

Medium-Scale and Commerc ial

Producers

V illage Stockis ts

Chimoio Retailers Supermarkets

Processors

LEGEND

= Partic ipant in the V alue Chain = Final Market

Produc tion = Market f unc tions

Input Supply Companies

Oil Processors w ith Cake By Produc t

Producer

A ssoc iations

Engineering Serv ices

Financ ial Serv ices

A gents and Brokers

Machinery and Equipment SuppliersTraders

Wholesalers

A nimal Feed Market

S e rvice P rovide rs

= Partic ipant in the V alue Chain, broken

line indicates skipped f unc tions

P ro ducer A ss o c iat io ns

NGOs

V egetable Oil Consumers

M ozam bique Oils eeds Indus try : B as ic V alue Chain M ap

• Missing actor found – agents exist

• Familiar constraints, from market information to raw materials & financing

• Surprising opportunity – local lamp-maker

• An SME at risk, yet opportunity remains

SUPPLY CHAIN FINDINGS

THE FULL VALUE CHAIN

• Treat customer & market as partners

• A value chain is a chain of relationships

ACCURATELY COSTINGVALUE-ADDED UPGRADES

• Demands of the “luxury” market are higher than the former “ethnic” market

• Costs of value-added propositions must insure margins sufficient for sustainability

MARKET-DRIVEN, VALUE CHAIN APPROACHFOR SUSTAINABLE DEVELOPMENT

• Begin & end with the market – what does it want?

• Assess the entire value chain – raw materials to final consumers

“Bottom line is it has to be business, business, business – a business project with a business frame of mind.”

THANK YOU!

Please visit www.microlinks.org/breakfast for seminar presentations and papers

Karen Gibbskaren_gibbs@aidtoartisans.org

Ted BarberTedVEC@aol.com