Honeybush is an indigenous plant found exclusively in South Africa, within the fynbos region. It is used to produce a uniquely flavoured, herbal tea. The Honeybush plant is easily recognised by its trifoliate leaves, single flowered inflorescence and bright, sweet fragrant flowers. The most sought after part of the plant is the flowers and leaves, this is what is used to produce Honeybush tea. The tea is so named due to the flowers having a honey scent.

 

Honeybush is grown wild and cultivated in the Langkloof region of the Eastern and Western Cape. The favoured Honeybush species in the CDM is that of the Cyclopia Intermedia.

 

 

Within the CDM there are a total of four Honeybush processing factories, they are located in Misgund, Kareedouw, Humansdorp and Joubertina. The cultivation process is usually done by means of teams of harvesters who harvest the plant and sell it to the factories who then process it. Cultivation is needed as the demand is far exceeding the current supply of wild Honeybush.

 

The area in which Honeybush is grown is characterised by small, rural populations who have limited access to economic opportunities or employment. The labour intensive nature of harvesting Honeybush is therefore an important economic activity for these low income earning individuals. The nature of producing and processing this tea is ideal for improving rural livelihoods.

The first commercial crop of Honeybush tea was only conducted in 1995. Processing of the plant has significantly increased over the years, from 5 tons in 2001, 52 tons in 2003 and 200 tons in 2009. This significant increase is largely attributed to the growth in the international market for herbal teas. 

 

Honeybush tea has traditionally been processed through harvesting, cutting off the plant material, fermentation and drying. This process is essential for the development of its characteristic sweet scent, taste and reddish brown colour. The production process is outlined in Figure 1 below:

 

  

The essential role players within the Honeybush industry are divided into seven categories, these consist of:  

The majority of harvesting and first-level processing takes place on locally-based processing factories. Tertiary processing and marketing takes place in Port Elizabeth, Mossel Bay and Cape Town.

 

Cyclopia Intermedia takes approximately two years to mature, thereafter harvesting of the plant is conducted throughout the year. Harvesters in CDM mostly sell their unprocessed Honeybush leaves to the processing factories in the area. Most of the Honeybush tea is still collected from wild populations, but cultivation has become necessary with the rapid growth of the industry.

 

A conveyor belt feeds the plant into a three bladed rotating cutter which cuts the tea into fine particles without damaging the structure of the plant.

 

A stainless steel fermenter or dryer rotary drum is needed to ferment the plant for roughly 24hours at a temperature of 85°C.

 

Sifting:

Once fermentation is completed an air pump blows the tea from the rotary drums onto three sifters whereby the tea is sorted into five grades.

 

Pasteurisation and dust extraction are processes that only occur occasionally. The tertiary level of the processing includes packaging the tea and conducting certain value added functions for the extraction of extracts for pharmaceutical and niche products.

 

There are 4 commercially used Cyclopia species, the variety that is most popular with the export market is that of Cyclopia Intermedia which is predominantly grown in CDM, and wild harvesting of this species is still widely practised.

 

The herbal teas market is largely an export market with the USA and Germany forming the largest importers of the international market. The main producing countries of herbal teas are Europe, USA and Japan; with the most prominent brands in the USA being Celestial Seasonings, Stash, Tazo, Numi and the Republic of Tea. These brands have all launched Honeybush tea under their own brands or blends. 90% of South African Honeybush tea is exported.

 

The majority of the final tea product is exported in bulk, and upon destination the tea is packed into teabags, and packaged. A gap in the market is that of Honeybush, tea is exported in bulk without a national Honeybush brand being created.

Role players in the sector include large retailers i.e. Unifoods and National Brands. Multi-national and local brands include:  Lipton, Freshpak and Five Roses have all launched Honeybush under their own brand names; similarly national retailers such as SPAR and Woolworths have lines of Honeybush products. The South African market is largely an untapped resource as international demand is higher than national supply.

 

The main competitors to Honeybush are Rooibos, as well as traditional teas and coffee.

Within the Cacadu District, Honeybush grows wild along the mountain slopes in the Langkloof, between Joubertina and Kareedouw, in the Cacadu District Municipality (CDM). The map below illustrates the areas with the most potential for the development of Honeybush tea. The Aberdeen Plain, Kareedouw and Joubertina were all identified as the most suitable areas for the Honeybush tea production.

The Cacadu region is classified as not containing a significant abundance of high potential agricultural land, however when compared to the other districts within the Eastern Cape Province, CDM proved to be the largest contributor when it comes to Agriculture. Unfortunately the agricultural land values have realized a steep increase in the value of land; however this increase in value is not completely driven by the increase in the agricultural productivity of land which one would assume to be the basis for the determination of the value of the land.

The Kou-Kamma Local Municipality fetches an average of R8,477 per hectare, while the Kouga LM receives R5,414 per hectare. These prices reflect the average spent in that area since 1995, where prices have steadily increased from 1995 onwards.

 

The various species of Honeybush adapt to different geographic areas and climatic conditions within the fynbos biome, since each species is characterised by different tastes, each product differs according to the region that it is cultivated in. Similarly due to the various climatic conditions that each species depends on, different species are inclined to be more abundant than others from year to year.

The Honeybush plant is best suited to sandy soil components found in the fynbos biome, average to high rainfall as well as mountainous areas are most suitable for the growth of the plant.

§         The infrastructure requirements for the production of Honeybush are low to non-existent for wild harvesting.

§         The only requirement is that of sufficient transport to deliver the wet tea to the factories.

§         The infrastructure required for the processing phase is access to basic infrastructure such as electricity, water, transport routes and a sufficient building to operate in.

§         The above mentioned infrastructure requirements are all present within the identified areas for potential Honeybush production.

The human resources requirements at each stage in the processing of Honeybush are outlined below:

§         Harvesting: Labour intensive and does not require skilled labour. Harvesters form teams of approximately 5 labourers each and there are roughly 6 teams that operate in the CDM to source and harvest the Honeybush.

§         Processing: Semiskilled operators for machinery.

On a 10 hectare farm, the producer is able to grow 10 000 plants per hectare, the minimum amount of tea obtained from 1 plant is 1kg, therefore for the Honeybush Cyclopia Intermedia, the harvester is able to obtain 10 tons per hectare every second year. The price for the wet tea is R4 to R5 per kg. The final product, once it has gone through the first and second level processing is sold at R25 per kg. The annual turnover for 2009 amounted to 180 tons exported and 20 tons sold locally, at R25 per kg. The detailed capital and operating expenditures is located as Annexure 1 and 2.

 

§         Honeybush lacks local marketing attention and is not well established in the minds of local consumers who often confuse the tea with its main competitor, Rooibos.

§         The Honeybush name is unprotected, there is a need to gain government support to ensure that the economic benefits associated with the Honeybush name remains South African.

§         Geographic positioning of the growth of the tea provides a natural barrier to entry for other countries wishing to enter this market.

§         Unsustainable harvesting practices are decreasing the natural population of the Cyclopia species.

§         Cyclopia is not a protected species under the Nature Conservation Ordinance 19 of 1974.

§         Costly to obtain all relevant certification documents.

§         Constraints in terms of cultivating are: capital costs, land and irrigation and waiting time for maturation of the plant as well as the sourcing of the seeds and the plants.

§         Constraints in terms of processing: requires capital equipment, technical “know-how” on how to produce the tea and the lack of training in this process.

§         Prominent barrier to growth in this industry is the lack of sustainable supply of high quality tea in large quantities. Quality of the product is assessed in terms of the cut, colour, taste, aroma and level of sediments found in the tea.

 

§         Develop a well designed marketing campaign to inform consumers of Honeybush and all the benefits that are associated with the tea.

§         The labour intensive nature of the harvesting process is key to local employment opportunities.

§         The tea is part of the sector which is increasingly known for its health benefits, and can further benefit from the positive image of other herbal teas.

§         Honeybush can align itself with growing niche markets such as the organic food and beverage market.

§         Honeybush is exclusively grown in South Africa, and therefore the Cacadu District has the competitive advantage in this market.

§         Implement sustainable harvesting practises.

§         Commercial cultivation, processing and packaging of South African/ Eastern Cape branded tea product.

 

References:

Personal communication with SAHTA, 2010

Cerkia Grant: Geographical Indications and Agricultural Products: Investing their Relevance in a South African Context, 2005

Cacadu District Municipality, State of the Environment Report, 2005

University of the Free State, Development framework and business plan towards utilization of indigenous products in the Cacadu District Municipality, 2006

 

§         All information contained within this profile was accurate at time of publishing.

§         The information contained within this report is intended only as an industry profile and does not assume to take the place of information contained within a business plan, pre-feasibility study or feasibility study.

§         The Cacadu District and service providers are not liable for any damages caused by the use of the information contained within this report.

§         The purpose of this profile is to both promote the area for investment and inform investors of relevant issues. It is advised that investors, who wish to pursue an investment within Cacadu DM, should use this profile as a basis to conduct further research.

The following costs incurred and income received is based on a case example; which outlines the potential budget for a Honeybush enterprise. This functions to provide investors with broad categories of costs experienced, however further research in terms of feasibility studies and business plans will need to be carried out in order to determine the relevant costs and income according to the specific enterprise entered into.

The size of a viable Honeybush farm is appropriately 10 hectares.

 

There are very little capital requirements for the harvesters of wild Honeybush in the Langkloof, this makes Honeybush an ideal crop for improving rural livelihoods. Between 5 to 10 harvesters, they would need to purchase a vehicle i.e. a bakkie and a trailer to transport the harvested plants. On average 2 tons of leaves are transported per week. The harvesting costs for a team of 5 to 10 harvester are listed in Table 4 below.

 

 

The capital input costs for the establishment of a processing plant, are outlined below:

 

* the capital equipment is often self designed and built, therefore to obtain these items specific orders for them to be manufactured will be required. 

 

 

If cultivating the plant a typical Honeybush farm of 10ha would employ 1 staff member per hectare. Otherwise the tea will be obtained from the wild harvesters who work for themselves, this process is deemed irregular depending on the supply of the plant in the area. The table below outlines the operating expenses of a processing factory that is incurred on an annual basis.