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NATURALLYBEAUTIFULCOSMETIC ANDBEAUTY PRODUCTSFROM FORESTS

Published bythe Food and Agriculture Organization of the United NationsandNon-Timber Forest Products-Exchange ProgrammeBangkok, 2020

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Required citation:FAO and Non-Timber Forest Products-Exchange Programme. 2020. Naturally beautiful – Cosmetic and beautyproducts from forests. Bangkok. https://doi.org/10.4060/ca8590en

The designations employed and the presentation of material in this information product do not imply the expressionof any opinion whatsoever on the part of the Food and Agriculture Organization of the United Nations (FAO) orNTFP-EP concerning the legal or development status of any country, territory, city or area or of its authorities, orconcerning the delimitation of its frontiers or boundaries. The mention of specific companies or products ofmanufacturers, whether or not these have been patented, does not imply that these have been endorsed orrecommended by FAO or NTFP-EP in preference to others of a similar nature that are not mentioned.

The views expressed in this information product are those of the author(s) and do not necessarily reflect the views orpolicies of FAO or NTFP-EP.

ISBN 978-92-5-132398-4 [FAO]© FAO, 2020

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Under the terms of this licence, this work may be copied, redistributed and adapted for non-commercial purposes,provided that the work is appropriately cited. In any use of this work, there should be no suggestion that FAOendorses any specific organization, products or services. The use of the FAO logo is not permitted. If the work isadapted, then it must be licensed under the same or equivalent Creative Commons license. If a translation of thiswork is created, it must include the following disclaimer along with the required citation: “This translation was notcreated by the Food and Agriculture Organization of the United Nations (FAO). FAO is not responsible for thecontent or accuracy of this translation. The original English edition shall be the authoritative edition.”

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Contents

Acknowledgements .......................................................................................... vii

Acronyms and abbreviations ............................................................................ viii

Preface ............................................................................................................. x

Introduction .................................................................................................... 1

Cosmetic and beauty products from forests in Asia and the Pacific ................. 5

Forests and beauty: overview and synthesis ...................................................... 9

Strengths, Weaknesses, Opportunities and Threats (SWOT) to NWFPs ......... 19

Traditional uses for cosmetics and synthesis .................................................... 29Case 1: Wild Turmeric .................................................................... 32Case 2: Indian Soapberry ................................................................ 38Case 3: Thanaka ............................................................................. 44

NWFP benefits for the beauty sector .............................................................. 51Case 4: Forest Honey ...................................................................... 54Case 5: Seabuckthorn ..................................................................... 66Case 6: Manila Elemi...................................................................... 72

Trends in the beauty and cosmetics industry ................................................... 83Case 7: Langsat ............................................................................... 88Case 8: Gurjum Balsam .................................................................. 96Case 9: Hazel Sterculia ................................................................... 104

Contributions to rural/forest livelihoods in Asia and the Pacific ..................... 115Case 10: Medicinal Spa .................................................................. 118Case 11: Spikenard ......................................................................... 130Case 12: Sandalwood ...................................................................... 140

Discussions and conclusions: challenges and way forward ............................... 151

References ....................................................................................................... 155

Annex: Initial list of NWFPs used as beauty products ..................................... 166

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Tables, Figures and Boxes

Tables

Table 1. Characteristics of selected non-wood forest products’ productionfor use in beauty and cosmetics products ...................................... 10

Table 2. SWOT analysis – characteristics of selected NWFPs used incosmetics markets ........................................................................... 20

Table 3. Price of forest honey at the farmer level .......................................... 59Table 4. Major components of Manila elemi oil ........................................... 78Table 5. Income from NWFP collection by rural communities in

Asia-Pacific countries ...................................................................... 116Table 6. Comparison of values from the exploitation and production of

Red Dzao medicinal spa in Sapa ..................................................... 129Table 7. Sandalwood harvests (Tonnage) and landowner benefit (Vatu)

for 2009 to 2014 ............................................................................. 145Table 8-9. Sandalwood exports ........................................................................ 146

Figures

Figure 1. Dried soapberries ............................................................................ xiiFigure 2. Thanaka selling ............................................................................... 18Figure 3. Sandalwood seedlings ...................................................................... 28Figure 4. Turmeric processing ........................................................................ 32Figure 5. Fruits of a soapberry tree ................................................................ 38Figure 6. Annual price paid to soapberry collectors in the Nilgiris

Biosphere Reserve, Tamil Nadu ...................................................... 42Figure 7. A boy using thanaka as a sunscreen for his face .............................. 44Figure 8. Stone plate used to grind wet thanaka powder ............................... 50Figure 9. Huge beehives from the forest of Indonesia .................................... 54Figure 10. Map of JMHI members .................................................................. 55Figure 11. A nest of A. dorsata, consisting of a single exposed hanging comb ... 57Figure 12. A rafter or tikung ............................................................................ 60Figure 13. Seabuckthorn fruit .......................................................................... 66Figure 14. Tall Manila Elemi tree .................................................................... 72Figure 15. A mature Canarium tree ................................................................. 73Figure 16. Manila elemi is packaged in coconut shells ..................................... 74Figure 17. The bolo and wooden mallet used for tapping the trunk of

Canarium tree and the traditional method of tapping .................... 76

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Figure 18. Chemical structure of α- and β-amyrins......................................... 79Figure 19. Seabuckthorn fruit .......................................................................... 82Figure 20. Natural beauty trends ..................................................................... 83Figure 21. Beauty category growth performance, 2013 vs 2014 ...................... 84Figure 22. Langsat fruit.................................................................................... 88Figure 23. The green science of the MTIC...................................................... 92Figure 24. The research and development scheme of Sari Ayu Putih Langsat.... 93Figure 25. Sales’ growth of the Sari Ayu Putih Langsat series .......................... 94Figure 26. Dipterocarp trees ............................................................................ 96Figure 27. Hazel sterculia ................................................................................. 104Figure 28. Products produced from Sterculia foetida L. .................................... 105Figure 29. The first tapping method: using a knife to cause injuries to

the tree bark.................................................................................... 107Figure 30. The second tapping method: coring the tree bark .......................... 107Figure 31. Cleaning gum before sale and gum after cleaning........................... 109Figure 32. A misty morning in the community ............................................... 114Figure 33. Sambucus javanica Blume shrub...................................................... 118Figure 34. Clematis buchananiana D.C. ........................................................... 119Figure 35. Elsholtzia penduliflora W.W. Smith.................................................. 120Figure 36. Ficus semicordata Buch.-Ham. ex J.E. Sm. ...................................... 120Figure 37. Luculia pinceana Hook f. ................................................................ 121Figure 38. Mussaenda pubescens W.T. Aiton ..................................................... 121Figure 39. Sambucus javanica Blume................................................................ 122Figure 40. Medicinal spa products from the Red Dzao in Ta Phin commune ... 123Figure 41. The first shareholder general assembly of Sapanapro JSC and

Ms Ly May Chan, one of the founders of the company ................. 127Figure 42. Products of Sapanapro JSC ............................................................. 128Figure 43. Ta Phin commune members ........................................................... 129Figure 44. Sorting spikenard ............................................................................ 130Figure 45. Harvesting of spikenard in Humla district of Nepal ....................... 133Figure 46. FSC-certified spikenard and other essential oils produced

by community forestry user groups (CFUGs) of Humla andDolokha districts in Nepal .............................................................. 134

Figure 47. Processing sandalwood .................................................................... 140Figure 48. A spikenard plant ............................................................................ 150

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Boxes

Box 1. Resource depletion and domestication of sandalwood .................... 6Box 2. New institutional arrangements: Red Dzao spa .............................. 7Box 3. Hazel sterculia as a traditional medicine ......................................... 111Box 4. The benefits of hazel sterculia ......................................................... 112

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It has not been easy to find a set of products in Asia and the Pacific to feature in this collectionof case studies of forest resources used in the cosmetics and fragrance industries. As is evidentin the Annex, even this partial list of forest resources used in make-up, personal care andperfumery products is already quite extensive. We would like to thank all those who agreed tocontribute case studies to this volume, and especially their organizations for the supportprovided.

Specifically, we thank the case study authors: Sudarshan Khanal, Aakriti Poudel and Bhishma P.Subedi (Nepal) – Spikenard; Anita Varghese (India) – Wild Turmeric; Shiny Rehel (India) –Indian Soapberry; Cenon Padolina (Fiji) – Sandalwood; Tran Van On, Nghiem Duc Trong(Viet Nam) – Medicinal Spa, Hong Truong Luu, Trinh Thi My Dung and Tran Van TiepViet Nam) – Hazel Sterculia; Julia Fogerite, Naw Ei Ei Min and Hla Doi (Myanmar) –Thanaka; Anang Setiawan, Maria Cristina S. Guerrero, Nola Andaya (Indonesia) – ForestHoney, Nuning Barwa, Anna S. Ranti, Suryaningsih, Maily, Katerine Sinaga, FransiskaDjunardy and Heru D. Wardana (Indonesia) – Langsat; Veronique Audibert-Pestel (Cambodia)– Gurjum Balsam; Charisse Reyes (the Philippines) – Manila Elemi; and Xing Hong (China) –Seabuckthorn.

We thank those who have been ‘behind the scenes’ in helping us put this book together,especially Mariel de Jesus for helping with the editing, Robin Leslie for the final editing andproofreading, Shiny Rehel for the assistance in compiling the long list of NTFP species used inthe beauty industry, Tes Padilla-Matibag for the administrative support and gentle reminders toall our authors and Earl Diaz for the superb cover design and layout.

We are grateful to all participants involved in the research, most of all the communitymembers who have planted, gathered and processed the different species used in various beautypreparations and formulas. We thank you for sharing your knowledge with us.

NTFP-EP is especially grateful to FAO for placing trust in our team to collaborate in thisstudy. We particularly thank Patrick Durst, (now former) Senior Forestry Officer of FAO forAsia and the Pacific, who first approached us to compile this book and who has allowedNTFP-EP, previously, to explore and present the potentials of NWFPs in the fashion industry,but especially in this case, in the beauty industry. We also thank Chris Brown who hasaccompanied us through the preparations for the study, provided an overview and synthesis,and given guidance and monitoring support along the way. We are also grateful to Yurdi Yasmifor accompanying us through contracting and final reviews and Thomas Hofer for his inputsuntil the finish line.

Snehlata Nath, Maria Cristina Guerrero, Tanya Conlu, Earl Diaz

NTFP-EP

Acknowledgements

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AEC/FNCCI Agro Enterprise Center/Federation of Nepalese Chambers of Commerceand Industry

ANSAB Asia Network for Sustainable Agriculture and Bioresources

APDS Asosiasi Periau Danau Sentarum (Association of Periau in Lake Sentarum)(Indonesia)

APFW Asia-Pacific Forestry Week

APPCL Aadhimalai Pazhangudiniyar Producer Company Limited

ASEAN Association of Southeast Asian Nations

BDS Business Development Services

BPDAS Balai Pengelolaan Daerah Aliran Sungai (Central Management of RegionalRiver Flow) (Indonesia)

BRT Bilingiri Rangan Hills

CBI Centre for the Promotion of Imports from Developing Countries

CFUG Community Forestry User Group

CIFOR Center for International Forestry Research

DoF Department of Forests (Nepal)

DPPH 2,2-diphenyl-1-picrylhydrazyl

DPR Department of Plant Resources (Nepal)

ELC Economic Land Concession

EU European Union

EWG Environmental Working Group

FA Forestry Administration (Cambodia)

FAO Food and Agriculture Organization of the United Nations

FPIC Free and Prior Informed Consent

FRA Forest Rights Act (India)

FSC Forest Stewardship Council

GI Geographical Indication

GMO Genetically Modified Organism

HBTL Himalayan Bio Trade

HET-CAM Hen’s Egg Testing of Chorioallantoic Membrane

ICIMOD International Centre for Integrated Mountain Development

ICS Internal Control SystemIPR Indigenous Peoples’ RightsIPRA Indigenous Peoples Rights Act (Philippines)

Acronyms and abbreviations

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ITC International Trade CentreIUCN International Union for Conservation and NatureJMHI Jaringan Madu Hutan Indonesia (Indonesia Forest Honey Network)JSC Joint Stock CompanyLAMPS Large-scale Adivasi Multipurpose SocietyMAFF Ministry of Agriculture, Forestry and Fisheries (Cambodia)MAPs Medicinal and Aromatic PlantsMARD Ministry of Agriculture and Rural Development (Viet Nam)MoE Ministry of Environment (Cambodia)MTIC Martha Tilaar Innovation CenterNGO Non-governmental OrganizationNPK Nitrogen, Phosphorus and PotassiumNTFP Non-timber Forest ProductNTFP-EP Non-Timber Forest Products – Exchange ProgrammeNWFP Non-wood Forest ProductROPT Repeated Opened Patch TestROS Reactive Oxygen SpeciesSCPT Single Closed Patch TestSNV SNV Netherlands Development OrganisationSPC Pacific CommunitySWOT Strengths, Weaknesses, Opportunities and ThreatsUNDP United Nations Development ProgrammeUNESCO United Nations Educational, Scientific and Cultural OrganizationUSAID United States Agency for International DevelopmentUV UltravioletUV-A Ultraviolet A (long wave)VND Vietnamese dongVT Vanuatu vatuWCS Wildlife Conservation Society

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Flowers as garlands and seeds as beads

It is said that ‘there is a plant for every use in every continent’ – this is true of cosmetic usealso. Non-wood forest product (NWFP) use for beauty products extends into antiquity, whichis reflected in the poetry and literature of numerous countries. NWFP-based cosmetics andbeauty products have been used both as traditional preparations and for trade in various Asianand Pacific countries. This report covers their traditional uses and those that have beencommercialized by local enterprises or major brands.

The global beauty market had reached US$465 billion in 2014 according to EuromonitorInternational’s study in 2015. The use of plant extracts in the cosmetics range is increasing,mainly due to increased interest in the use of natural products as opposed to syntheticalternatives. Plant-based products are increasingly popular choices in modern markets. Manyfacial creams, soaps, shower gels and oils (including those used for massage, hair growth and soforth) are increasingly relying on natural products from forests. A classic example is aloe vera,which is widely used in the preparation of different products. Neem (Azadirachta indica) andsandalwood oil (derived from Santalum spp.) are widely used in soaps and shower gels. Otherproducts are used in relatively unprocessed form, such as dust from thanaka wood (Murrayaspp.), which is used as a sun block/skin care/beauty product in Myanmar. More controversially,palm oil is used in the preparation of many soaps and similar products.

During the last decade or so the extent of natural ingredients used by the cosmetics industryhas increased, but there is no comprehensive publication on beauty products based on forestproducts, although scattered information does exist. By bringing attention to the role of forestsin supplying beauty products and the connections with livelihood security and utilization ofNWFPs, awareness of the importance of forests and their connection with cosmetics will beraised.

Within this context, FAO and the Non-Timber Forest Products – Exchange Programme(NTFP-EP) Asia have conducted this regional assessment of NWFPs related to the cosmeticsand fragrance sector. The study compiled a set of case studies that examined specific NWFPsand the various traditional contexts in which they are collected, processed and marketed. Themain objective of this volume is to present the case studies and the emerging synthesis, whileencouraging cross-sectoral discussions in Asia on forests and beauty products. The study alsoprovides recommendations on further enhancing equitable arrangements between forestcommunities and industry players. The initiative also organized a mini-seminar on forestproduct contributions to the cosmetics industry as part of the Asia-Pacific Forestry Week 2016in Clark, Pampanga, the Philippines.

This volume covers plant species from across nine countries in Asia and the Pacific. The casestudies attempt to cover all scenarios that exist in the region, such as those NWFPs that are

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only locally used; those that have conservation value; those which are popular commercially;and those which are cultivated. Due to our special interest, we lay emphasis on community-based initiatives and enterprises.

The cases also provide diverse coverage of the parts of plants that are being utilized forcosmetic preparations. This volume covers fruits, barks, whole plants, gums and resins, leaves,roots, rhizomes and hardwood of different species. The only animal product included in thisvolume is forest honey, one of the oldest harvested NWFPs in history.

The contributors to this volume have made special efforts to cover their specific work domainsand often examined niche products with potential for development. In some cases, littleinformation is available on the product and more research will throw light on its potential inthe cosmetics industry. From other cases, we learn about the importance of NWFPs in theforest economy and of mainstreaming products in farms as part of different agroforestrysystems.

There are constraints to the further development of NWFPs, specifically in the global naturalpersonal care market. Unorganized trade systems, lack of land security, protected area status,unsustainable harvesting, lack of working capital, increasing use of chemical inputs andchanging perspectives with modern outlooks are some of the few factors facing thedevelopment of NWFPs in the beauty sector in the Asia and Pacific region.

More research, local-level economic incentives, proper organization and policy support,community forestry arrangements and further conservation are needed if NWFPs in the beautyindustry can realize their potential, meet the growing demand for green or natural products,and contribute more significantly to local economies. This study may be just the tip of theiceberg with reference to NWFPs used in the beauty industry and an initial analysis on thetrends and challenges faced by forest-based communities and industry players alike.

While working on this volume, the editors debated on the concept of ‘beauty’ itself. Poetically,beauty is a feeling from within or that lies in the eye of the beholder, but these notions do nothold true in today’s world for some. Large investments in skin whitening treatments in thecosmetics industry raised a number of eyebrows across the team for example. The clients ofthese cosmetics are mainly women. Is there a stereotype being perpetuated here? From theworld of NWFPs, it seems important to reflect a while on society and its norms – but also toraise our spirits with the following lines:

…… beauty is life when life unveils her holy face.But you are life and you are the veil.

Beauty is eternity gazing at itself in a mirror.But you are eternity and you are the mirror.

– On Beauty; Khalil Gibran

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Figure 1. Dried soapberries

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Introduction

subsistence and economic resources,which IPs use across the world. Besidesdirectly impacting forest communities,NWFPs are important as raw materialsfor the food, cosmetics and medicineindustries. Despite this role in peoples’well-being, local economy and industry,NWFPs rarely find a reference inplanning and policy documents. Landuse, forestry and rural livelihoodsschemes are made by governments;however this resource and the role it canplay is ignored. Information on NWFPsis also difficult to get, as it remainsmostly undocumented and is often notpresented in simple and useable ways.

Discussions on rural development inforested areas and those related to IPs,often feature NWFPs. They are alsoconsidered a better way to sustainablymanage forests vis-à-vis timber extraction.Advocacy from rights-based groups haveforced governments across Asia to granttenurial rights to IPs on both farm andforest land. The latter ensures rightstowards collection, management andmarketing of NWFPs. Different tenuriallaws, e.g. The Indigenous Peoples RightsAct (IPRA) in the Philippines; the ForestRights Act in India, the ConstitutionalCourt Decision MK 35/2012 inIndonesia and The Cambodian LandLaw, 2001 are fairly recent and in mostcases have not been fully implemented.Most Asian countries are faced withconflict in forested areas, due to landconcessions for mining, plantations or

Non-wood forest products (NWFPs) aredefined as “goods of biological originother than wood, derived from forests,other wooded land and trees outsideforests” (Dembner & Perlis, 1999).

The term non-timber forest products orNTFPs refer to biological materials otherthan timber which are extracted from forestsfor human use (de Beer & McDermott,1996). This differs from NWFPs in that theyinclude small branches, roots, fuelwood andconstruction materials for subsistence use.Other similar terms include minor forestproduce, ordinary forest products,secondary forest products, wild products,and others (Belcher 2003).

In a forest ecosystem, often timberproducts only comprise 10 percent of allproducts whereas 90 percent are NWFPs,which are estimated to account for asmuch as 25 percent of the income ofclose to 1 billion people (Molnar et al.2004). FAO clearly makes the case that50 million people in India depend onforests, mainly NWFPs, for subsistence(FAO 2013). In Lao PDR, wild foods areconsumed by 80 percent of thepopulation daily and similarly inCambodia, 50–70 percent of all meatand vegetables consumed come from theforest (Nomad RSI et al. 2012).

There is a growing recognition of therole of NWFPs in rural livelihoods,especially those of indigenous peoples(IPs). They are considered as cultural,

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other private uses. In some areas, strifeover land, resources and governance hasled to militarization and extremism.Land rights for IPs are an importantaspect being addressed by severalorganizations across Asia.

In India alone it is estimated that morethan 100 million people are dependenton NWFP gathering as a source oflivelihood (Kabra 2009). Forests in Indiacover only up to 20 percent of the landcover and pressure from large-scaledevelopment projects, mining,urbanization and unregulated harvests offorest products for the medicinal plantindustry negatively impact the quality ofthe remaining forest areas. Displacementof IPs and conversion of biodiversityresources are juxtaposed, leading to anirreversible erosion process for both.

Whereas NWFPs are most common forsubsistence across different indigenouscultures, their commercialization hasadded to the cash economy of thesepeople. Traded for centuries, some ofthese NWFPs have seen a shift fromtraditional to commercial use and haveindustrial use in various products. Someof the main sectors are alternativemedicine like Ayurveda and homeopathy,essential oils, cosmetics, paint andvarnish, food, crafts and so forth.

Overharvesting and destructiveharvesting may lead to populations ofsome species to dwindle in their naturalenvironments, which is the case forseveral NWFPs. Many efforts are beingtaken across the world to keepsustainable flows of NWFPs for bothrural incomes and industry. InCambodia, efforts are being made tocontrol fire used in the extraction of

Dipterocarpus alatus resin for example tostimulate the flow of resin. Othermethods without the use of fire are alsobeing tested. Some species havecompletely disappeared from naturalforests and are now being cultivated.Efforts to raise nurseries, propagate andreplant species are taking place as part oflarge restoration projects. In some areasinterventions have been made to revivecustomary practices related to first fruitceremonies and seasonal harvests. Someconservation groups, have also developedharvest protocols which are shared withharvesters to ensure sustainablepopulations of NWFPs.

Usually, across Asia, NWFP trade isconducted through informal andtraditional markets. Efforts are beingundertaken to mainstream NWFPs in allthe processes of raw material production,postharvest processing and sale ofproducts. These efforts are often made bydevelopment role players, eithergovernment or non-government agencies,to achieve community ownership andmanagement. The long NWFP valuechain, with many traders, wholesalers,retailers and intermediaries until itreaches the processing units, results inlow returns to gathering communities.Efforts which aim to bring the processingand value addition closer to rural areasare ongoing to shorten this value chain.This enables more control over thequality of products and provides forlocally generated employment andincome. Amongst our case studies, bothforest honey in Indonesia and medicinalspas in Viet Nam have community-owned models.

Specifically, in the cosmetics industrymany changes are taking place in the

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search for sustainable supply chains.Large industries look for products thatcan have a steady supply and communitybenefits. Globally, Brazil has been undercriticism due to high exploitation of theAmazon forest, despite having companieswho claim fair trade and sustainable use.The cosmetics industry looks for theinnovative and turns to natural productsfor options and inspiration. Manytraditional beauty recipes are now beingrevived and produced as marketableproducts by private companies. In a fairthat took place in Paris recently, severalinnovations were introduced, includingboreal forest products, marine products,honey and algae (Mohler 2016).

Almost any part of a plant is used by theindustry, for example:

1. Fatty oil seeds – by far the mostcommon ingredient for makingcreams and moisturizers, balms, etc.– cocoa, baobab.

2. Leaf extracts – neem, henna.3. Essential oils – acai, patchouli.4. Barks and woody parts of the plant

– sandalwood, red sanders, thanaka.5. Resins and exudates – hazel

sterculia, Dipterocarpus spp.,Canarium spp.

6. Minerals – kaolin clay, iron oxides,mica.

7. Gel – aloe vera.

With growth in natural cosmeticsindustries, pitched at almost 10 percentper annum, it will be essential to see howthe resource politics play out. Will theNWFPs be sustainably harvested, willthey be cultivated for large-scale use andwill they benefit forest-basedcommunities? Trends in privatizationmay not benefit communities in the longrun, making it essential for governmentpolicy to promote community-baseddevelopment models.

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Cosmetic and beauty productsfrom forests in Asia andthe Pacific

OVERVIEW

The use of cosmetic and beauty products derived from forests has a history dating back morethan 6 000 years. Traditional beauty products were almost invariably derived from plant, animalor surface mineral sources, including many forest products. However, today, the vast majority ofingredients in commercially available cosmetics are synthetic compounds mainly derived frompetroleum and natural gas. Nonetheless, plant-based products are becoming increasinglypopular choices in modern markets. Many facial creams, soaps, shower gels and oils areincreasingly relying on natural products from forests. There is significant potential for productsderived from forests to capture an increased share of the global beauty and cosmetic market,the value of which was estimated at USD 460 billion in 2014 and is expected to grow rapidly toUSD 675 billion by 2020.

Increasing use of natural and organiccosmetics has become a major trend inrecent years, driven by increasedenvironmental awareness and healthconsciousness. Particular trends in thetwenty-first century include interest inwellness, sustainability, ethical beautyand total holistic beauty. These trendsappear to offer significant opportunityfor beauty products derived from foreststo penetrate mainstream internationalcosmetics markets and develop specificniches through marketing of the‘naturalness’ of non-wood forest cosmeticproducts. A recent (2017) study by FAOand NTFP-EP examines the situationand prospects for 12 non-wood forestproducts (NWFPs) used in beauty andcosmetic products.

An overarching conclusion drawn fromthe analysis is that NWFPs used in

beauty and cosmetic products are, likemost products and services, subject toeconomic laws of supply and demand.NWFP beauty products sourced fromAsia-Pacific forests may often be victimsof their own success if, in the absence of‘barriers to entry’, scarcity of initialsupplies results in: (a) attraction ofadditional producers (NWFP collectors)to the industry; (b) severe depletion offorest supplies; (c) efforts to domesticateand cultivate the wild forest species;and/or (d) development of alternativesynthetic products.

Unless there are significant barriers toentry that create obstacles to newcompetitors from easily entering theindustry, as either collectors orcultivators, it is usually difficult for theinitial collectors of an NWFP (oftenpoor rural indigenous communities) to

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Box 1Resource depletion and domestication of sandalwood

The exploitation of sandalwood throughout the first half of the nineteenth century provides anearly example of how demand for a highly valued NWFP can result in rapid resource depletion.With little regulation of sandalwood cutting and lucrative prices in the main market, sandalwoodstocks were successively decimated in Fiji, French Polynesia, Hawaii and Vanuatu. By 1865, thePacific islands’ trade in sandalwood had all but disappeared. Currently, the small amount ofsandalwood produced in Pacific island countries is still mainly sourced wild from forests, largelyin Vanuatu. In the past 20 years, an important development for sandalwood markets has beenthe establishment of a significant sandalwood plantation estate (more than 15 000 hectares) inWestern Australia, which is currently coming into production. Over the next decade, this willsignificantly change the global dynamics of sandalwood production, with potential for theAustralian resource to produce more than 75 percent of currently traded volumes of sandalwoodheartwood and oil.

capture much of the additional revenuederiving from high valued products.Often, they are crowded out of theindustry by cultivated or synthesizedproducts, or otherwise raw materialsupplies are rapidly depleted or exhaustedby overexploitation (see Box 1). Wherenatural resources are not protected byproperty rights, then resource depletionmay occur in a ‘tragedy of thecommons’. Adjusting tenure or resourcegovernance arrangements may benecessary to maintain sustainablesupplies or encourage investment in

cultivation. On the other hand, ifpotential competitors face barriers toentry – either natural technical barriers(e.g. very limited habitats) or artificialregulatory barriers – then NWFPproducers may earn ‘above normal’returns due to scarcity of the NWFP orbecause it occupies a unique productniche.

While some NWFPs, such as sandalwoodand spikenard, have already establishedstrong product niches in internationalmarkets, others such as langsat and forest

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Box 2New institutional arrangements: Red Dzao spa

The Red Dzao people in Viet Nam collect a variety of plants for use as ingredients in atraditional spa, which is being commercialized as a tourist attraction. To better coordinatevarious activities and to strengthen their market position local people have established theSapanapro Joint Stock Company (JSC). The strong commercial focus of this entity is designedto overcome perceived weaknesses in various cooperative models including lack ofprofessionalism, high administrative costs, challenges in mobilizing financial resources and lackof incentive for action. The JSC has achieved some tangible financial gains including a 14-foldincrease in the per tonne selling price of raw materials.

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honey, are utilizing research to identifypotentially unique properties that mayprovide avenues for significantlypenetrating international markets andearning price premiums. Intellectualproperty, such as knowledge oftraditional recipes, as in the case of theRed Dzao spa ingredients (Box 2), mayalso be used to establish a specific marketniche and provide above normal returnsto local communities.

A particular challenge for NWFPcollectors and growers is in capturing asignificant share of the value of the final

beauty product. Most rural communitiesin Asia and the Pacific tend to have littlemarket power and serve as ‘price takers’.Efforts to overcome power imbalances inmarkets include establishing varioustypes of seller collectives (Box 2) anddeveloping local processing facilities tocapture value-added revenues.

Several other institutional arrangementsthat may be useful in increasing theprofitability of NWFP collection orcultivation include development ofquality assurance procedures for someproducts, certification systems and

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instituting fair trade arrangements. Atthe community level, overcominglogistical issues such as accessing workingcapital, obtaining market intelligence,developing appropriate marketingstrategies, implementing quality controlmeasures and providing appropriatestorage facilities and improved packagingmay all assist in increasing returns.

The way forward

Several overarching lessons help to chartthe way forward for NWFPs used incosmetic markets, including:

• Work to establish broad marketscharacterized by strong competitionwith multiple buyers and preferablywith direct links to local or nationalprocessing facilities.

• Address imbalances in marketpower that enable dominant buyersto exploit producers and depressproduct prices.

• Ensure security of product suppliesby addressing resource depletionissues and potentially seekingopportunities to domesticate andcultivate the product.

• Create sustainable market positionsby identifying barriers to entry (orlack of them) and acting tomaintain competitive advantages.

• Investment in research anddevelopment to identify uniqueattributes of the product will assistin creating a clear and robustproduct niche.

More research, institutional organization,appropriate local-level economicincentives and policy support, communityforestry arrangements, and conservationinvestigation may be needed if NWFPsin the beauty industry are to realize theirpotential, maximize contributions tolocal economies and meet growingdemands for green/natural products.

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Forests and beauty: overviewand synthesis

Introduction

An enormous number of beauty andcosmetic products are available for bothwomen and men. The value of the globalcosmetics market was estimated at USD460 billion in 2014 and is expected togrow rapidly to reach USD 675 billion by2020 (Business Wire 2015). A long list ofcosmetic products are currently offeredfor sale including make-up for face, eyesand lips; fragrances and deodorants; skincare products for cleansing, nourishing,protecting, coloring and treatingimperfections and inflammations; hairtreatments for cleansing, coloring, stylingand removing; nail polishes andtreatments; and teeth cleansing andwhitening products.

The use of cosmetic and beauty productsderived from forests has a history datingback, at least, several thousand years.Traditional beauty products were almostinvariably derived from plant, animal orsurface mineral sources, including manyforest products. However, today, the vastmajority of ingredients in commerciallyavailable cosmetics, by some accountsmore than 90 percent (Smeh, 1995), aresynthetic compounds derived frompetroleum and natural gas. Nonetheless, achange may be in the wind. Animportant consumer trend towardsincreased consumer preferences for“natural” commodities that are perceivedto be healthier alternatives to moreprocessed products – a trend that is

particularly evident in the food andbeverage sector – also appears to bereflected in beauty and cosmetic products.This is likely to result in new or expandedopportunities for formulations derivedfrom natural sources including non-woodforest products (NWFPs). Data on somedeemed important products may befound in FAOSTAT, and countries havetheir own statistics on NWFPs whichthey consider important to them.

Health, wellness and beauty arenecessarily intertwined. The wellnessindustry statistics value it at USD 3.7trillion for 2018 (Global WellnessSummit, 2018 with the industry growingfaster than our global economy). Healthand wellness trends are expected togreatly influence the beauty and cosmeticsindustry (McDougall, 2015). Trends forhigher energy levels will mean beautybrands will have to work with food, drinkand leisure brands to create healthy livingproducts that complement each other.Energy boosting products in hair and skincare are already on the way while“kitchen beauty” trends are focusing onartisanal foods and processes to controlbeauty through food consumption. Ourfocus however, is distinctly on beauty andcosmetic products from NWFPs.

Naturally beautiful: cosmetic and beautyproducts from forests comprises twelve casestudies that examine the situation andprospects for beauty and cosmeticproducts derived from trees and forests.

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Table 1 summarizes some of the keycharacteristics, commonalities anddifferences among the twelve case studyproducts. It is important to note that theclassifications in Table 1 and subsequentdiscussion and analysis relate specificallyto the various products’ usage in beautyand cosmetic products, even thoughproducts such as sea buckthorn, foresthoney, langsat and hazel sterculia are alsoused – sometimes extensively – as foodsor beverages.

Economic theory and non-woodforest products

In general, the use of NWFPs in cosmeticand beauty products might be expected toreflect, in a microcosm, many of theissues that occur in broader markets for

other NWFPs and other renewable (andsometimes non-renewable) naturalresources. Analysis of the 12 case studiesappears to generally bear this expectationout. One important difference is thatmany of these ‘other’ products, especiallyother NWFPs, are staple householdcommodities, often collected or grown forsubsistence purposes, whereas NWFPsused in beauty and cosmetic products aremore generally classified as luxury items.For example, products such assandalwood, Manila elemi and spikenard,which are highly valued in internationalcosmetics markets, are collected orcultivated almost exclusively for sale forcash incomes. An evident productcharacteristic is minimal subsistence useof the product. Conversely, for productssuch as thanaka, which is extensively used

Table 1. Characteristics of selected non-wood forest products’ production for use in beauty andcosmetics products

NWFP

Wild turmeric

Indian soapberry

Thanaka

Forest honey

Sea buckthorn

Manila elemi

Langsat

Gurjum balsam

Hazel sterculia

Red Dzao medicinal spa

Spikenard

Sandalwood

Legend: Minor Moderate Extensive

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in Myanmar but has penetrated fewmarkets elsewhere, development patternsare similar to many other NWFPs thathave been broadly commercialized andcultivated for local markets.

An overarching conclusion drawn fromthe analysis is that NWFPs used inbeauty and cosmetic products are farfrom immune to economic laws of supplyand demand. In particular, the basicpremise that when demand for a productexceeds supply, the product price will riseto encourage greater production effortsappears clearly applicable. Among thecase study products, several demand-driven reactions may be in evidenceincluding:

• The attraction of additionalproducers (NWFP collectors) to theindustry;

• Increasing the economic viability ofcollection (enabling exploitation ofresources from further afield);

• Encouraging efforts to domesticateproduction (agricultural cultivationof wild forest species); and

• Encouraging the development ofalternative synthetic products.

Unless there are significant barriers toentry that create obstacles to newcompetitors from easily entering theindustry, as either collectors or cultivators,it is usually difficult for the initialcollectors of an NWFP (often poor ruralindigenous communities) to capturemuch of the additional revenue derivingfrom high-valued products. Often, theyare crowded out of the industry bycultivated or synthesized products, orotherwise raw material supplies arerapidly depleted or exhausted byoverexploitation.

On the other hand, if potentialcompetitors face barriers to entry – eithernatural technical barriers or artificialregulatory barriers – then NWFPproducers may earn ‘above-normal’returns due to scarcity of the NWFP orbecause it occupies a unique productniche. The following discussion exploresthese concepts in more detail.

Collection from the wild andbarriers to entry

Among the 12 case study products,several – including gurjum balsam, theRed Dzao spa ingredients, spikenard andsandalwood in Pacific island countries –are harvested almost exclusively from thewild. Soapberry also largely regeneratesnaturally but, at least in some areas, thetrees receive some tending and are to acertain degree cultivated. Similarly, foresthoney in Indonesia is sourced from theforest, but collectors build artificialbranches to encourage wild bees toestablish nests in favourable locations, soto a small degree honey production is‘managed’. However, attempts to properlydomesticate the wild bees (Apis dorsata)have failed, thereby creating a substantialtechnical barrier to entry in theIndonesian forest honey market.

A variety of technical barriers to entryhave protected several other case studyproducts from domestication andcommercial cultivation. For example, theparasitic nature of sandalwood appears tohave provided a technical barrier todomestication/cultivation for many years,although in recent times a substantialsandalwood plantation resource has beenestablished in Western Australia andsignificant quantities of sandalwood havealso been established in home gardens in

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Vanuatu. Similarly, Nardostachysjatamansi, the plant from whichspikenard oil is derived, occurs atelevations above 3 000 metres in theHimalayas, which appears to haveconstituted a technical barrier tocultivation. In Viet Nam, the Red Dzaopeople have traditionally collected theingredients of their medicinal spa fromthe wild, including from forests. To date,the very limited and localized habitat ofsome ingredient species and knowledge ofthe traditional recipe for the spa (anintellectual property) have providedsignificant barriers to entry, although thecase study notes the incidence ofcommercial spas in the vicinitypurporting to use the Red Dzao formula,but in fact using fake recipes.

For several products, most notablygurjum balsam, the price paid for theproduct collected from the wild is likelyto be insufficient to tempt outsiders toenter the market. Gurjum balsam is aresin tapped from wild Dipterocarpus treesin Cambodia and several other SoutheastAsian countries. The relatively low pricepaid to resin tappers (USD 0.25–0.50 perlitre) likely renders uneconomic theestablishment of Dipterocarpus plantationsfor resin production, while alsodiscouraging other potential collectorsfrom tapping trees. In fact, one of themost significant challenges forCambodian resin tappers is competitionfrom illegal loggers who covertly fell resintrees for timber.

Resource depletion

Depletion of natural NWFP resources asa result of excessive harvesting or loss ofhabitat due to deforestation and forestdegradation is a significant theme in

several of the case studies, including thosefor forest honey, Manila elemi, gurjumbalsam, hazel sterculia, the Red Dzao spa,spikenard and sandalwood.

The exploitation of sandalwoodthroughout the first half of the nineteenthcentury provides an early example of howdemand for a highly valued NWFP canresult in rapid resource depletion. Withlittle regulation of sandalwood cuttingand lucrative prices in the main market(Guangzhou, China, formerly Canton),sandalwood stocks were successivelydecimated in Fiji, French Polynesia,Hawaii and Vanuatu. By 1865, the Pacificislands’ trade in sandalwood had all butdisappeared. Currently, the small amountof sandalwood produced in the Pacific isstill mainly sourced wild from forests,largely in Vanuatu. Pacific production ofsandalwood has been less than 100 tonnesper annum in recent years and continuesto decline. Similar trends are observed inother major sandalwood-producingcountries, where sandalwood is largelysourced from the wild, such as India,Indonesia, Malaysia and other SoutheastAsian countries.

In Viet Nam, production of hazelsterculia from the wild has largely beensupplanted by cultivation in householdplantations in two provinces. The wildresource is reported to be severelydepleted. For example, the case studynotes that in Nui Chua National Park,hazel sterculia was abundant up until1993. However, uncontrolled harvestingand inappropriate resin-tappingtechniques led to a vast reduction in hazelsterculia trees in the Park. More broadly,the case study suggests that the fewnatural remnant wild populations of hazelsterculia are being tapped destructively

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and the trees are at risk of extinction inthe wild.

Also in Viet Nam, depletion of some ofthe constituent ingredients of the RedDzao spa is increasingly an issue as urbanand tourist demand for the spa hasincreased. Development of a commercialcommunity enterprise, the SapanaproJoint Stock Company, has helped toaddress some sustainability issues bycoordinating collection of the herbalingredients.

Unregulated collection of spikenard hassimilarly resulted in resource depletion,with overharvesting, harvesting ofimmature plants and loss of spikenardhabitat identified as significant problems.In December 2013, the European Unionreportedly placed restrictions on importsof spikenard due to unsustainableharvesting. The case reflects the frequent‘tragedy of the commons’, whereby sharedresources are damaged or depleted byindividual users acting according to theirown self-interest, but contrary to thecommon good of all users. Approximately80 percent of the spikenard is nowharvested in areas formally managed byCommunity Forestry User Groups(CFUGs). The CFUG rights of tenureexclude outsiders from collecting spikenardand enable resources to be managedsustainably. For example, some CFUGshave implemented block rotationalmanagement systems for spikenard.

An informal, traditional system ofproperty rights governs the collection ofgurjum balsam in Cambodia. The personwho first collects resin from a tree retainsownership of the tree (although not theland the tree grows on). This protects thetrees from excessive, detrimental

collection of resin. Dipterocarp trees arealso protected from logging underCambodian law. However, extensiveillegal logging and land clearance foragriculture and development havesubstantially reduced the population ofresin trees causing a significant decline inproduction. Similar loss of forest habitathas affected the production of foresthoney in Indonesia.

Domestication and cultivation

When product prices are high and thereare no significant barriers to entry,attempts to domesticate and cultivatewild forest species are likely. Where theseattempts are successful, it is likely thatproduction efficiency of planted cropswill ‘crowd out’ supplies collected fromthe wild. A number of the product casestudies exemplify situations in whichcultivated crops have largely displaced (orare in the process of displacing) collectionfrom the wild, including wild turmeric,thanaka, sandalwood and hazel sterculia.For example, wild turmeric has becomewidely cultivated in the Asian tropics.The case study notes an example from theNilambur Valley in Kerala, India, wherethe indigenous people previously collectedwild turmeric from the forest. However,in recent times the traders who purchasedthat product have disappeared and wildturmeric is no longer collected from theforest, suggesting that demand for thewild product has been crowded out bysupplies of cultivated product.

In the case of thanaka, a widely usedtraditional cosmetic in Myanmar, the vastmajority is now grown in plantations,sometimes in an intercroppingagroforestry system. Thanaka cultivationis a well-established industry in Myanmar,

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with well-developed market anddistribution systems and collection fromthe wild, where it occurs at all, is largelyfor subsistence use.

In Viet Nam, collection of hazel sterculiafrom the wild has largely been supplantedby cultivation in household plantations intwo provinces. Wild resources of hazelsterculia are severely depleted and morethan 2,000 hectares of plantations havebeen established. The government viewsplantation-grown hazel sterculia as apromising crop for alleviating povertyand local government support is beingprovided in the form of extension andtree improvement. Cultivation of hazelsterculia is showing significant promise,with some growers earning up toUSD 9 000 per annum.

In the past 20 years, an importantdevelopment for sandalwood markets hasbeen the establishment of a significantsandalwood plantation estate (more than15,000 hectares) in Western Australia,which is currently coming intoproduction. Over the next decade, thiswill significantly change the globaldynamics of sandalwood production, withpotential for the Australian resource toproduce more than 75 percent ofcurrently traded volumes of sandalwoodheartwood and oil. Pacific island (andother) suppliers of sandalwood sourcedfrom natural forests will likely find lessdemand and lower prices for theirproducts.

Other case study products grown inplantations include langsat and seabuckthorn. However, plantations of thesespecies have been primarily established asfruit orchards (langsat) and for landstabilization (sea buckthorn). The

cosmetic and beauty applications oflangsat and sea buckthorn fruit areeffectively secondary products andcultivation of these species is largelydriven by the primary product/purpose.

Developing product niches

A caveat to the idea that cultivatedproducts may crowd out productscollected from the forest is that the ‘wild’product may be able to establish aparticular niche that yields above-normalreturns. Cultivated products may alsoseek specialist niches that emphasize theadvantages of their natural base,compared with, for example, syntheticproducts. Hence, several of the casestudies document attempts to carve outspecific niches through marketing the‘naturalness’ of the product.

Honey (and beeswax) is already usedextensively in cosmetic products as well ashaving an enormous market as a foodproduct. Wild forest honey in Indonesiais developing a market position as a nichefood product and has potential to developa similar type of niche in cosmeticsmarkets. Jaringan Madu Hutan Indonesia(the Indonesian Forest Honey Network)and related social enterprises havedeveloped a forest honey shampoo andare exploring other cosmetic productssuch as liquid soap. The use of wildhoney in cosmetic products is still in anessentially exploratory phase – but, is asomewhat different proposition to manyother forest beauty products in that italready has a well-established market as afood product and significant quantities ofhoney from domesticated bees are alreadyused in cosmetic products. A keychallenge for wild forest honey will be to

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differentiate its use in cosmetics from‘domesticated’ honey. In particular, foresthoney needs to identify a unique beautyfunction (product niche), not replicableby farmed honey, and particularly,command a price premium that reflectsits higher collection costs compared tofarmed honey.

Potential also exists to market the ‘social’and related environmental benefits ofNWFPs. Where producers are able toshow evidence of intensified efforts toprotect forests as the source of their rawmaterials, this can be a strong marketingtool. For example, ‘rain forest chocolate’and ‘rain forest coffee’ are creatingsignificant market niches based onleveraging of environmental protectionaspects. Similarly, organizations such asTrade Aid have, for many years,promoted goods from poor communitiesin less-developed countries as a means ofcreating and enhancing livelihoods.

Scientific research of beauty and cosmeticuses for products such as langsat, hazelsterculia and sea buckthorn are helping toestablish clear niches for these products.For example, the Martha TilaarInnovation Center (MTIC) found strongdepigmentation (whitening) andmoisturizing properties in langsat and hasdeveloped product lines accordingly.Challenges to strengthen MTIC’scompetitive advantage include improvingtraceability and consistency of theproduct and to apply proper organiccertification standards to strengthenconsumer acceptance and establish pricepremiums. Similarly, the Vinh TanCompany and several others in Viet Namare marketing commercial preparations ofhazel sterculia beauty products. Thismarket is only in a development phase

although rapid expansion of product salessince 2013 discussed in the Vinh TanCompany example shows plenty ofpromise. The sea buckthorn case studyfocuses on commercialization, noting thatmore than 200 companies are involved inproducing a wide range of sea buckthorn-based beauty products including anti-ageing facial creams, shampoos, cleansers,moisturizers and so forth. Generallycosmetic preparations derived from seabuckthorn sell in moderately well-developed markets with significant scopefor expansion.

Products such as thanaka and sandalwoodhave established dominant positions inspecific markets. In the case ofsandalwood oil, for example, it is a majorconstituent in many fragrances, reputedlyproviding ‘notes’ in 47 percent ofperfumes made in the last 200 years.Conversely, thanaka is a dominanttraditional cosmetic used largely, if notexclusively, in Myanmar and by Myanmapeople abroad. It is estimated that 90percent of women in Myanmar usethanaka on a daily basis. Consequently,thanaka cultivation is a stronglyestablished industry in Myanmar, withwell-developed market and distributionsystems.

Capturing a greater share of thevalue chain

A significant challenge for producers ofraw NWFPs, whether by collection orcultivation, is to capture a tangible shareof the value chain. In many instances,these producers are paid only a tinyproportion of the value of the finalproduct, especially when the final productis, for example, an expensive internationalfragrance.

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The case studies identify several distinctapproaches in attempting to capturegreater shares of the value chain byNWFP producers. An approachfrequently used by primary productproducers around the world is to bandtogether into seller collectives orcooperatives in an attempt to strengthenmarket power and increase prices(an approach formally known as‘cartelization’). A number of the casestudies, including Indian soapberry (large-sized Adivasi multipurpose cooperativesocieties), thanaka (producer associations),forest honey (Indonesian Forest HoneyNetwork), gurjum balsam (association ofcollectors), Red Dzao medicinal spa(Sapanapro Joint Stock Company) andspikenard (CFUGs) note the formation ofsome form of producer collective as ameans of organizing collection andmarketing, increasing market power andobtaining higher prices. Theestablishment of a Joint Stock Company(JSC), in the case of the Red Dzaomedicinal spa, is particularly interesting,in that it clearly identifies perceivedweaknesses in cooperative modelsincluding lack of professionalism, highadministrative costs, challenges inmobilizing financial resources and lack ofincentive for action. The Red Dzao spacase study identifies some very tangiblefinancial gains achieved by the JSCnoting, for example, a 14-fold increase inthe per tonne selling price of rawmaterials.

A second approach used in attempting tocapture a greater share of value chains isthe establishment of local processing andmanufacturing facilities. For severalproducts, including thanaka, seabuckthorn and sandalwood, robust

markets and marketing and distributionchannels are already established andstrong competition should ensure fairprices are achieved. Other products suchas wild turmeric, langsat and hazelsterculia are sold domestically to narrowersets of commercial companies,manufacturing downstream products.

Several of the case studies notesuggestions or efforts to add valuethrough local processing. For example,a producer company, AadhimalaiPazhangudiniyar PCL, has beenestablished to process Indian soapberriesinto a hair care product. Similarly, thesocial enterprises Dian Niaga and BorneoChic are manufacturing forest honeyshampoo and lotion in Indonesia, whileNatureWild is planning to build a gurjumbalsam refining facility in Cambodia as ameans of capturing value-added revenue.Spikenard oil is normally distilled inNepal prior to export, although usually atcentralized distilleries in Kathmandu andother urban centres. Conversely, theManila elemi case study notes an absenceof downstream processing of Manilaelemi in the Philippines and recommendsresearch in this direction to enhance localvalue capture.

Several other institutional arrangementsthat may be useful in increasing theprofitability of NWFP collection orcultivation include development ofquality assurance procedures for someproducts, certification systems andinstituting fair-trade arrangements.

Conclusions

For many forestry practitioners,particularly those working closely withcommunities, there may be a significant

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temptation to regard NWFPs as beingsomehow ‘special cases’ in terms ofapplication of economic theory. The goodnews, at least in relation to NWFPs usedfor beauty and cosmetic purposes, is thatmany of these products may indeed be‘special’. The bad news is that thisspecialness usually has to be proven, andonce it has, it may then be difficult toprevent outsiders from co-opting theproduct and crowding out the originalproducers (collectors). In this regard, it isimportant, at an early stage, to identifywhether any natural barriers to entry willpreclude potential competitors fromentering the market, or whether it ispossible to protect the current producersthrough regulatory means. Where nosignificant barriers to entry exist, currentcollectors can mainly protect their marketshare through increasing their productiveefficiency, possibly by seeking todomesticate and cultivate the NWFPthemselves.

Economics also has a tendency toimpinge on other aspects of NWFPproduction, including where excessiveexploitation and depletion of commonresources occurs and where market powerimbalances heavily constrain the share ofrevenues that accrue to the usually poorrural collectors and cultivators of NWFPs.In the case of resource depletion,government intervention or betterallocation of property rights may offersolutions. Alternatively, Ostrom (1990)developed a set of key principles for

governing common resources and thesemay also be effective in improvingmanagement. In relation to marketimbalances constraining revenues, variouscase studies discuss efforts atcollectivization to increase market powerand local processing to capture greatershares of the value chain.

An overarching competitive advantage ofNWFPs used in beauty and cosmeticformulations is the perception ofnaturalness compared to many otherproducts. However, additional scientificresearch and development may be crucialin establishing unique productcharacteristics to create a product niche.A key challenge then is to capitalize onthis niche advantage in order to earnprice premiums. Effective marketing willlikely be critical in leveraging competitiveadvantage into above-normal returns.

In general, the case studies demonstratethat prospects are very good forcontinued and increased use of NWFPsin beauty and cosmetic products. Avariety of important challenges existacross the case study products, butcollectively the case studies demonstratethat solutions to most of these challengescan be found. However, as for anyproduct, markets and developments aredynamic and change is ongoing. NWFPproducers of beauty and cosmeticproducts need to be continuouslyadapting and improving to ensure theymaintain their advantages.

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Figure 2. Women selling thanaka along the streets

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Strengths, Weaknesses, Opportunitiesand Threats (SWOT) to NWFPs usedin beauty and cosmetic products

Introduction

A common methodology for assessingthe likelihood of product success andminimizing risks is SWOT analysis. Thisis a simple strategic planning tool thatlooks at the strengths, weaknesses,opportunities and threats relevant to aproduct, organization or project. Inshort, a SWOT analysis examines:

• Strengths – the characteristics of aproduct or venture that give it anadvantage over others;

• Weaknesses – the characteristicsthat place a product or venture at adisadvantage relative to others;

• Opportunities – elements that aproduct or venture can exploit to itsadvantage; and

• Threats – elements in theenvironment that could causedifficulties for the product orventure.

A full SWOT analysis for an individualproduct may be quite a complex exerciseinvolving situational analysis coveringmacro-economic analysis, market chainanalysis involving characteristics andelements both internal and external to aproducer organization, and downstreamdevelopment of strategies and roadmaps.

However, a much more simplifiedversion of the technique can be usedacross a number of products – as in thecase of the use of NWFPs in beauty andcosmetic products – to identifycommonalities among the environments,opportunities and challenges faced byvarious products.

Table 2 provides a summary of keystrengths, weaknesses, opportunities andthreats relevant to the 12 case studyproducts. The subsequent discussionidentifies commonalities among theproducts arising from the analysis thatmay be broadly relevant to other NWFPsused in beauty and cosmetic products or,in some instances, more generallyrelevant to all NWFPs.

When looking at products, industriesand markets as a whole, obviously thechoice of perspective in identifyingrelative strengths, weaknesses,opportunities and threats is important.For example, while local growers andcollectors of NWFPs will likely view lowraw product prices as a weakness and athreat, for traders and manufacturers, lowraw material prices will likely constitute astrength and an opportunity. Similarly,natural resource depletion is a threat toNWFP collectors, but an opportunity for

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Table 2. SWOT analysis – characteristics of selected NWFPs used in cosmetics markets

Product Strengths Weaknesses Opportunities Threats

Wild • Development of

turmeric commercial

manufacturing

• Cultivated

resources give

supply security

Indian • Natural and

soapberry hypoallergenic

cleansing product

Thanaka • Very extensively

used in Myanmar

Forest • Unique niche

honey product

Sea • Large planted

buckthorn resource

established

• Important chemical

properties

well-established

• Established

market in China

Manila • Established market

elemi as component in

high-grade

perfumes

Langsat • Widely cultivated

• Established

product market

Gurjum • Potential in

balsam international

markets

• Weak or non-

existent NWFP

distribution systems

• Expansion into

mainstream

cosmetics markets

• Collection from wild

crowded out by

cultivated sources

• Limited

development of

commercial

products

• Alternative to

synthetic cleansing

products

• Competition from

other products

• Minimal use in

markets outside

Myanmar

• Development of

international

products utilizing

unique properties

• Penetration of

international

cosmetics into the

Myanmar market

• Limited supply

• Collection costs

• Little development

of commercial

products

• Potentially unique

chemical properties

• Competition from

farmed honey

• Threats to wild bee

habitat

• Little attention to

ease of harvesting,

berry improvement,

etc.

• Expansion into

mainstream

cosmetics markets

• Oversupply could

depress prices to

farmers

• Collectors have

little market

power/low prices

• Establishment of

a range of locally

produced perfumes

• Development of

synthetic or other

alternatives

• Fruit spoils very

quickly

• A single processing

company dominates

the market

• Further expansion

into mainstream

cosmetics markets

• Narrow processor/

retailer base

• Weak institutional

arrangements

• Ineffective and

excessive

regulation

• Lack of attention to

sustainability

• Low prices paid to

collectors

• Production of

cosmetics

domestically

• Further expansion

into international

cosmetics markets

• Deforestation and

forest degradation

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potential cultivators. In general, theanalysis in Table 2 – and the discussionin most of the case studies – reflects,as a priority, the perspectives of ruralcommunities in specific countries thatcollect or cultivate raw NWFPs.However, there are generally self-evidentstrengths, weaknesses, opportunities andthreats included in Table 2 that adoptalternative perspectives.

Strengths

There are significant commonalities inthe most clearly identifiable strengths ofthe case study products. An evidentstrength exists for products that alreadyhave an established niche in mainstream,international cosmetics and beautyproduct markets; as in the case ofsandalwood and spikenard, and to asomewhat lesser extent, Manila elemi and

gurjum balsam. Other products –including thanaka (Myanmar), seabuckthorn (China), hazel sterculia(Viet Nam) and langsat (SoutheastAsia) – are well-established in domesticor regional markets. Large and well-established markets ensure goodprospects of sales of raw materials andthe likelihood of strong competitionamong buyers to maintain price levels.

A number of products have establishedstrong security of supplies throughdomestication and cultivation. Inparticular, a large area of sea buckthorn –planted mainly to protect againstdesertification in western China – hasalso yielded significant supplies of fruit,flowers, leaves and rhizomes that may beused in cosmetic and other preparations.Similarly, a large planted resource oflangsat – established mainly as an

Table 2. (continued)

Product Strengths Weaknesses Opportunities Threats

Hazel • Established local

sterculia market

• Established

plantation resource

• Government

support

Red Dzao • Niche traditional

medicinal product

spa

Spikenard • Established

international

product market

Sandalwood • Important

constituent in

mainstream

cosmetics

• Basic processing

• Undeveloped

market for highly

processed cosmetic

products

• Further expansion

into mainstream

cosmetics markets

• Competition from

other cosmetics

• Potential for rapid

plantation

expansion to create

oversupply

• Fragmented

industry with most

revenues accruing

to downstream

traders and hotels

• Increased tourism

offers major scope

for expansion

• Potential to

domesticate at least

some of the plant

species used

• Collection of plants

from the wild risks

depletion and limits

expansion

• Competition from

other spas including

fake Dzao spas

• Relatively weak

institutional

arrangements

• Greater revenue

capture by

collectors

• Unsustainable

harvesting

• Encroachment into

natural habitat

• Resource severely

depleted

• Establishment of

planted resource

• Competition from

extensive

plantations in other

countries

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orchard crop – also provides enormoussupply security for langsat use incosmetics. Cultivation of wild turmeric(in India), hazel sterculia (Viet Nam),thanaka (Myanmar) and sandalwood(Australia) also confers greater supplysecurity to downstream manufacturersusing these products.

An analogue to supply security is thatdevelopment of commercialmanufacturing capacity increases marketsecurity for growers and collectors ofprimary products. Significant and recentdevelopment of commercialmanufacturing of sea buckthorn beautyproducts, and to a lesser extent, cosmeticproducts made from wild turmeric,langsat and hazel sterculia havestrengthened value chains and increasedsecurity for producers. In the case ofhazel sterculia, specific governmentsupport through extension, seedlingsupply and so forth, constitutes asignificant strength.

In part, scientific research to identifyvaluable (and potentially unique)chemical properties of raw products,particularly in the cases of sea buckthornand langsat, has provided an importantfoundation for manufacturingdevelopment and is a key strength forthese products. Such research will beuseful, and potentially crucial, inestablishing unique product niches forsome less-developed products includingforest honey and Indian soapberry.Meanwhile, the Red Dzao medicinal spais capitalizing on its status as anauthentic, unique traditional remedy as akey strength in building its market, withparticular appeal to tourists.

Weaknesses

A range of key weaknesses relates tovarious aspects of market and value chaindevelopment in relation to beautyproducts derived from NWFPs. At theraw material source, naturally producedproducts such as forest honey, gurjumbalsam, spikenard and sandalwood areincreasingly affected by forest or resourcedepletion and degradation and facechallenges in ensuring continuous supplysecurity.

For a number of other case studyproducts, including wild turmeric,Manila elemi, gurjum balsam andspikenard, the raw material collectorshave very limited market power and tendto be price takers who receive a verysmall proportion of the value of thefinished cosmetic and beauty products.Such producers may well be victims ofunfair trading practices and need to seekways in which market power imbalancescan be redressed. In some instances,collectors and growers have bandedtogether into various forms ofcooperatives to collectively increase theirmarket power, although with varying andoften small degrees of success. In the caseof the Red Dzao medicinal spa, acommunity JSC was formed to bettercoordinate various activities and has beenrelatively successful in increasing revenuesearned by stockholding participants inthe Red Dzao community. Nonetheless,many activities appear to be remainfragmented and much of the valueproduced still accrues to downstream spaoperators. In the case of wild turmeric, itappears many collectors may in fact beencrowded out of the market by cultivated

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supplies, which offer greater supplysecurity and potentially lower costproducts. In at least some localities, thedistribution system for forest-grown wildturmeric has collapsed with the tradersthat previously bought the producthaving disappeared. Collection costs arealso an issue for forest honey, which isgenerally more time-consuming andexpensive to collect than farmed honey.

Lack of development of commercial-scalemanufacturing, especially close tocollection/cultivation localities, limitsopportunities for value capture forvarious products including Indiansoapberry, forest honey, gurjum balsamand Manila elemi. Other products suchas hazel sterculia and spikenard haverelatively nascent processing industries.Further development of local processingwill likely offer greater potential for valuecapture by growers/collectors of theseproducts (particularly in the case of hazelsterculia). Langsat processing is moredeveloped, but with a narrow (singleorganization) manufacturing base thatpotentially leaves the langsat cosmeticindustry vulnerable to corporate failure.

The various case studies also identifya range of more diverse weaknessesincluding ineffective and/or excessiveregulation of harvesting, transportationand export of gurjum balsam andineffective protection of the trees fromwhich it is harvested. These appear to beissues for the Cambodian Government toresolve. Technical issues relating togrowing, harvesting and transportingvarious case study NWFPs may also posesignificant challenges. For example, thevery short shelf-life of langsat requiresthat attention be given to a chemical

treatment to help preserve the fruit orrapid transportation to processingfacilities. In the case of sea buckthorn,scant specific attention has been given toberry production, including planting andtending, to improve ease of harvestingand tree breeding, to improve berryquality, productivity and so forth. Similarcomment is probably applicable to mostother case study products.

Opportunities

Unsurprisingly, the most significantopportunities for most of forest-basedcosmetic and beauty products relate toexpansion of sales into broader markets,often the mainstream and internationalcosmetics markets. A number of theproducts, including wild turmeric, Indiansoapberry, langsat and hazel sterculia areat incipient phases of commercialization,with commercially-manufactured beautyproducts being produced, but with broadmarket penetration yet to be achieved.For example:

• Production of commercialformulations using wild turmericincluding specialized face washes,antiblemish treatments, face packsand acne treatments, which aremainly sold in India;

• Indian soapberries are increasinglyused in commercially producedherbal shampoos, soaps, bodywashes and other cleansers, mainlyin India, although moderatequantities of soapberries are alsonoted as being exported to variousEuropean countries and Japan;

• MTIC has developed the Sari AyuPutih Langsat collection of beauty

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products based on the skinlightening and moisturizingproperties of langsat; and

• Commercial preparations of beautyproducts such as skin creams basedon hazel sterculia are currentlyproduced by a small handful ofcompanies in Viet Nam.

For these products, the initialopportunity is to broaden their marketbase, including strengthening andbroadening marketing and distributionsystems, and eventually, seeking toexpand into new international markets.

The sea buckthorn case study focuses oncommercialization opportunities for aproduct already enjoying substantialsuccess in China. More than 200companies are already involved inproducing a wide range of productsincluding anti-ageing facial creams,shampoos, cleansers and moisturizers.The major opportunity for sea buckthornproducts, initially, is the rapidlyexpanding Chinese beauty and cosmeticsmarket, with cosmetics users in Chinaforecast to double from 200 millionto 400 million people in the period2015–2020.

For products such as Indian soapberry,thanaka and forest honey the greatestopportunities possibly lie in research toidentify unique properties that can bemarketed in broader international andniche markets. In the case of thanaka,opportunities to sell the traditional pasteformulations used in Myanmar ininternational markets seem relativelylimited, but the protective and soothingqualities of the product appear to offerprospects for developing new, alternative

formulations that could be successfullysold in wider markets. Similarly, thesuccessful marketing of forest honeybeauty products will likely be dependenton identifying unique chemicalproperties that will enable products tooccupy a specific market niche. For bothproducts, lessons from the langsat casestudy may be relevant.

For other products – including Manilaelemi, gurjum balsam and spikenard –the case studies suggest that furtherdevelopment of local processing and localmarkets may offer the best prospects ofincreasing value capture for collectors ofthe raw material. In particular, thedevelopment of community-basedtechnologies that enable greater localprocessing might enable greater valuecapture near the product source.

In general, there should be considerableand increasing scope for direct marketingof products using the Internet, therebyremoving layers of intermediaries andenabling greater producer capture ofproduct revenues. Direct marketing oftraditional products, such as thanaka, todiaspora should also continue to providesignificant sales opportunities. Newpromotional angles directly tyingproducts to traditional cultural aspectsmay offer additional opportunities indiaspora markets. Similarly, promotion ofsocial and environmental benefitsincluding forest protection, supportingdevelopment in poor communities andfair-trade aspects offer promotionalaspects that might be more vigorouslytaken advantage of. In some instances,the use of Geographical Indication (GI)to link particular products to specificlocations and particular communities or

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groups may offer useful promotionalopportunities and assist in developingprice premiums. GI might also assist inestablishing voluntary quality standardsfor cosmetic products by enablingcertification of qualities attached to theproducts themselves and establishingtraceability instruments and trustworthycontrol systems.

A variety of other opportunities exists forseveral products. There is potentialopportunity to increase supply securitythrough cultivation for products such assandalwood in the Pacific islands andAsia and also for some of thecomponents of the Red Dzao medicinalspa. Increasing tourism should also offeropportunities for the Red Dzaomedicinal spa and potentially otherproducts that might appeal to touristsincluding forest honey, langsat, andperhaps, thanaka.

Threats

An evident threat to all forest-basedbeauty and cosmetic products iscompetition from more mainstreamproducts. The case of thanaka as atraditional cosmetic in Myanmar isparticularly of interest in the mediumand longer term as markets become moreopen to mainstream internationalcosmetics. There would seem to bepotential for significant substitution ofthanaka by other products, especiallyamong younger generations. Similarly,products which enjoy widespread‘traditional’ or subsistence use indomestic markets – including hazelsterculia, Indian soapberry and wildturmeric – may similarly be particularlyvulnerable to competition from

mainstream products, including syntheticalternatives. The development ofsynthetic substitutes, which replicate thechemical properties of natural products,is a potential threat to many productsincluding Manila elemi, gurjum balsam,spikenard and perhaps even stronglyes