Marketing strategy MACA

Lepidium meyenii/peruvianum

Compiled for SIPPO by ProFound Advisers In Development December 2008

CONTENTS 1 Introduction and status quo ............................................................................................ 3 1.1 Product characteristics ............................................................................................ 3 1.2 Description of status quo and short analysis of the European market for Maca, the market potential respectively.............................................................................................. 5 1.3 Description of possibilities for application and market segments respectively ....... 9 1.4 Analysis of available product and export portfolio of Biocomercio companies in Peru, and their present experience with available product quality as starting point of a Biocomercio marketing strategy ........................................................................................10 1.5 Analysis and validation of competitors (national and international) .........................14 1.6 Analysis of in Europe registered trademarks and patents in the context of Maca ...15 2 Initial steps for Marketing Strategy and recommendations for follow-up ........................16 2.1 Quality products: strategies for optimizing quality of product offer ..........................17 2.2 R&D: What R&D efforts can strengthen the available marketing arguments for Maca, formulating new ones or ameliorate actual deficits in basic research or product development? ...................................................................................................................19 2.3 Value Adding: through Biocomercio, Organic, FairWild/Fairtrade, Geographical Indication etc. ...................................................................................................................20 Quantity vs. quality: income generation for small scale farmers or value addition at manufacturers and exporters level. ...................................................................................21 2.4 National Biocomercio-Strategy: What are the starting points to develop a national Biocomercio strategy, what stakeholders need to be included in the process? How can the Biocomercio strategy be a basis for a marketing strategy? ...............................................21 2.5 Product- and country specific differences in European countries ............................22 2.6 Product Scenarios (Maca-Powder, juice etc.): Elaboration of product specific strategies for the 5 important forms of marketing in Europe. .............................................22 2.7 Initial steps for a sector planning .................................................................................23 3 Conclusions and recommendations ...............................................................................27 Conclusions ......................................................................................................................27 Recommendations ............................................................................................................27 4 Annexes ........................................................................................................................28 4.1 Standards organisations .........................................................................................28 4.2 Sources of price information ...................................................................................28 4.3 Trade assocatiations ..............................................................................................28 4.4 Trade fair organizers ..............................................................................................28 4.5 Trade press ............................................................................................................28 4.6 Other useful addresses ..........................................................................................28 4.7 Literature ................................................................................................................29

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1.1

INTRODUCTION AND STATUS QUO

Product characteristics

1.1.1 Botanical classification Maca (Lepidium meyenii, Brassicaceae) is an herbaceous, perennial, cultivated crop, found only on the Andean Central Sierra of Peru (in Junn and Pasco) in the Puna agro-ecological zone above 4,000 meters asl (13,123 feet) (Maca by Quirs and Cardenas). Archeological evidence has been found that Lepidium meyenii was domesticated over 2000 years ago by the predecessors of the Incas, and primitive cultivars of Lepidium meyenii were even found in places dating back to 1600 years before Christ. Ancient Peruvian cultures have taken advantage of the health benefits of this plant over the centuries. Lepidium meyenii was not only for them, but also for their livestock. This plant has flourished under extreme conditions due to its great ability to concentrate the nutrients from the soils of the Andes. http://www.lepidiummeyenii.com/history.htm According to Antonio Brack Egg, Diccionario Enciclopedico de Plantas Utiles del Peru, 1999, 4 species of the genus Lepidium are important for traditional use in Peru: Botanical name Lepidium bipinnatifidum Lepidium chichicara Lepidium meyeni Described by G. Walpers in 1843 Lepidium peruvianum CHACON Common names Mostacilla Chichicara Maca Comments More than 2500 m asl Wild collection Until 3000 m asl Wild collection 3500 4500 m asl Meseta de Bombon cultivated Defined to the District of San Juan de la Larpa, Huancayo Province

Cultivated Maca

No further notice is available on comparative studies of the reference herbarium samples available in UC Berkley Jepson Herbarium, Berlin-Dahlem Herbarium, Museo de Historia Natural Javier Pardo, Lima, and Cesar Vargas Herbarium in Cusco. For easy reference please see for example: www.peruvian-maca.com . Further research is required for the on cultivated and wild species. For marketing purpose different private companies in USA and Europe offer private research findings on Botanical Description and Reproductive Biology, or Maca Species Classification. According to EU and German Medicine Commission the plant species where the Maca Plant is procured from are: Lepidium meyenii WALP, Lepidium peruvianum CHACON. In the phyto-geographical description of Hitchcook (1945) Lepidium meyeni is distributed in Argentina, Bolivia and Peru. According to Hernandez & Leon, 1992, the cultivated species is not Lepidium meyeni Walpers, but Lepidium peruvianum Chacon, on the basis of samples taken in the District of San Juan de la Larpa, Huancayo Province. The authors indicate that Maca is one of the Andean species which occupy a very narrow variation of habitat and a very limited distribution in the Sierra Central of Peru, in the Departments of Junin and Pasco. Originally the cultivation area was limited to Huayre, Carhuamayo, Uco and Cerro de Pasco,

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called Meseta de Bombon. Following the increasing demand the cultivation areas were extended to the Departments of Ancash, Apurimac, Huanuco, Ayachucho, Huancavelica and Puna. For taxonomic aspects the list of Synonyms of Lepidium meyenii Walpers includes 11 synonym names (Martnez A., Jos Vicente & Bernal, Henry Yesid & Cceres, Armando, 2000, p.230). Maca is included in the List of Vegetable Biological Resources Prioritized by the Peruvian National Commission against Bio-piracy. 2007. The note (p. 290) mentioned that 4 varieties are identified according to the colour of the root. As reference herbarium the germ plasma collection at INIAA, Huancayo, University of Ayachuco, is mentioned. 1.1.2 Product specifications Maca is grown for its root. The root of Maca is a hypocotyl with highly nutritious contents. The hypocotyl has a value as a food and as a medicine. Numerous studies have demonstrated the effects of maca on the reproductive system. The studies by Dr. Gustavo Gonzalez from the Universidad Peruana Cayetano Heredia are quoted often in claims regarding the positive effects of maca consumption on the reproductive system. Gonzales, G. Vasquez, V., Villegas, M., et al. (2006). Effect of two different extracts of red maca (Lepidium meyenii) on male rats with testosterone-induced prostatic hyperplasia. Laboratories of investigation and development and service of Quality control. Universidad Peruana Cayetano Heredia. Gonzales, G. F., et al. "Effect of Lepidium meyenii (Maca), a root with aphrodisiac and fertility-enhancing properties, on serum reproductive hormone levels in adult healthy men." J. Endocrinol. 2003 Jan; 176(1):163-8. Gonzales, G. F., et al. "Effect of Lepidium meyenii (MACA) on sexual desire and its absent relationship with serum testosterone levels in adult healthy men." Andrologia 2002 Dec;34(6):367-72 Gonzales, G. F., et al. " Lepidium meyenii (Maca) improved semen parameters in adult men. Asian J. Androl. 2001 Dec; 3(4):301-3. Note that most of the studies on the effects of maca (by Gonzalez and others) have been limited to animals and that the results on male and female fertility have been mixed. A study on the effects on men only found that male libido (sexual desire) increased, while it did not find any effects on sexual function. Thus, the claim that maca would be some sort of herbal Viagra is not based on scientific evidence. Finally, a study on sperm count and sperm function cannot be used as a reliable source, as no control group was used. A second claim by maca suppliers is the positive effect on women during the menopause. The effect is ascribed to the sterols and lysine which are present in maca. However, no scientific evidence exists to back this claim. The third major claim by maca suppliers is that maca offers benefits to weight lifters and body builders. Due to the number of steroidal glycosides present in maca, maca offers an alternative to anabolic steroids which produce increases in muscle mass and physical strength. Table 1.1 Specifications of maca

Technical specifications Main active ingredients Appearance Taste Moisture

Glucosinolates, flavonoids, amino acids, proteins Fine powder Sweet and characteristic flavor and odour Max 8.0%

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Preservatives Absent Anti-oxidants Absent Heavy metals Lead Max 10 ppm Arsenic Max 3 ppm Microbiological specifications Mesophiles aerobics Max 1,000 ufc / g Moulds and yeasts Max 100 ufc / g E. Coli Negative: 10 / g Salmonella Negative: 25 / g The available product data on Maca are summarised in the strategy paper of Biotrade. Please refer to Maca Material Data Sheet (p.52) and Maca Therapeutic Data Sheet (p.53). Maca as a product group is not explicitly included in the natural ingredients strategy for Peru by Biotrade in 2004. http://www.biotrade.org/National/Peru/Peru-docs/peru-strategynaturalingredients.pdf

1.2 Description of status quo and short analysis of the European market for Maca, the market potential respectively.

Market size Maca is a very nutritious food and is therefore mainly used in nutraceuticals. Nutraceuticals are foods or food ingredients that may provide health benefits beyond the traditional nutrients they contain. Nutraceuticals comprise functional foods, vitamins, minerals and food supplements. Estimations on the size of the nutraceuticals market vary a lot. The estimations depend mostly on the definition used. In The global report on nutraceuticals by ABOUT Publishing Group, the global nutraceuticals market was estimated at US$ 65 million in 2003 and growth was forecasted at approximately 10% annually until 2010. Growth in the nutraceuticals market is driven by continued interest in health food. At the same time, growth is hampered by consumers mistrust in manufacturers claims (Insights into tomorrows nutraceuticals consumers by Datamonitor, 2005). A number of consumer trends are relevant to the developments in the nutraceuticals market: Food as medicine Specific medical promises Low and light Lifeage Ageing nutraceuticals Baby supplements General health promises Fortification Dietary requirements Wellness Sports nutrition Mood and mental nutrition Cosmeceuticals / Beauty from within Source: The global report on nutraceuticals by ABOUT Publishing Group, 2003 The leading nutraceuticals market in the EU is the UK. Mintel statistics indicate which countries are at the forefront of the nutraceuticals market development. Mintel statistics show

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that most functional food launches in 2007 took place in France (154), UK (153), Germany (142), Italy (118) and Spain (94). Synomys?! Within the nutraceuticals market, maca has to compete with products such as ginseng, ginkgo and yohimbine, which have very similar health benefits or other functional properties. For this reason, maca is sometimes called Peruvian ginseng. The major traditional import markets are Spain, Portugal and Italy. In recent years the markets in Germany and especially in Czech Republic became important. Figures on the market for maca are not available. Maca does not have an individual HS code and imports of maca are consequently not recognized in European trade statistics (maca is part of the product group Roots and tubers, not elsewhere specified, fresh or dried with HS code 071490). As Peru is the major global producer of maca, supplies to Europe from Peru provide a good alternative for trade figures to indicate the size of the market for maca in Europe. Between 1999 and 2005, maca supplies from Peru to Europe increased from US$ 131 thousand to US$ 518 thousand (January-October) (Biocomercio Peru/PROMPEX, 2005). According to EU Novel Food Consultation, exports of raw material and extracts of Maca from Peru amounted to 2.28 Million in 2005. It is considered the most important (in terms of value) plant species for traditional food from Peru. However, according to industry sources, maca producers have responded to increasing global demand by an even larger increase in production. Consequently, an oversupply of maca was caused which resulted in lower margins. Market access requirements Legal requirements The EU has several legislative requirements for imported food products, in order to provide safety to the consumers. The following requirements are important for maca: General Food Law 178/2002/EC: basic principles EU Official Controls Regulation 882/2004: for imported products EU Regulation 852/2004: food hygiene Directive 2002/46: food supplements EU Regulation (EEC) 834/2007 (will come into force in 2009): organic food EU Regulation 1924/2006: nutrition and health claims made on foods Framework Directive 1999/2/EC: The Directive covers general and technical aspects for carrying out the process, labelling of irradiated foods and conditions for authorising food irradiation. Implementing Directive 1999/3/EC: "dried aromatic herbs, spices and vegetable seasonings". The General Food Law (GFL) 178/2002/EC, established in 2002, contains the basic principles of food legislation in Europe. The GFL aims to prevent fraudulent or deceptive practices, adulteration of food and other misleading practices. This is realized through legislation on the product, the processing/handling and communication about the product. Furthermore, the EU Official Controls Regulation 882/2004 applies to food products that have no animal content, and are imported from outside the EU. The regulation ensures

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official control performed for the verification of compliance with the food law. When products are suspected to be a risk to public health, the product may be banned. Moreover, when exporting a food product to the EU, it needs to comply with the European food hygiene legislation, which has been renewed in 2006. The general hygiene requirements for all food business operators are laid down in Regulation (EC) 852/2004. The new regulation on organic markets, which will come into force in 2009, will bring several improvements to the legislation on the organic market. The EC will no longer restrict organic imports to those from third countries which have organic standards and a control system officially recognised as equivalent to that of the EU. From 2009 on, the EC will also accept authorisations from inspection bodies approved by the EU in third countries which are not on this list. Important inspection organisations in the EU include Ecocert (Germany, France, Belgium, Italy), BCS and Naturland (Germany), SKAL (The Netherlands), Soil Association (United Kingdom), and KRAV (Sweden). Maca already had a demonstrated and documented use in the EU before 1997. The year 1997 is of importance, as it means that Maca is not a novel food and is not affected by novel food regulations. For exporters of maca, the legislation of the EU basically implies the following: Maca may not be contaminated by substances unintentionally added to the product. This is regulated through contaminant levels as set by the EU. Exporters can prove that they comply with this legislation by providing a certificate of analysis, issued by an approved laboratory. Processors of maca (and in the future maybe also producers) should put in place, implement and maintain a permanent procedure based on HACCP principles. Next to HACCP, food business operators (incl. producers and exporters) are also responsible for the traceability of their products. Food business operators have to provide the correct information on product labels. Labels have to indicate: (1) the name under which the product is sold; (2) the list of ingredients; (3) the quantity of certain ingredients or categories of ingredients as provided for in Article 7; (4) in the case of prepackaged foodstuffs, the net quantity; (5) the date of minimum durability or, in the case of foodstuffs which, from the microbiological point of view, are highly perishable, the use by date; (6) any special storage conditions or conditions of use; (7) the name or business name and address of the manufacturer or packager, or of a seller established within the Community. (8) particulars of the place of origin or provenance where failure to give such particulars might mislead the consumer to a material degree as to the true origin or provenance of the foodstuff; (9) instructions for use when it would be impossible to make appropriate use of the foodstuff in the absence of such instructions; (10) with respect to beverages containing more than 1,2 % by volume of alcohol, the actual alcoholic strength by volume. Food business operators may only use the organic label when they comply with Regulation 834/2007 on organic production and labeling. Furthermore, they may only make nutrition or health claims if they are substantiated by generally accepted evidence. Maca suppliers could only make a health claim (on the effects on sexual desire, production of hormones during the menopause, muscle production, etc) by providing a dossier to the European Food Safety Authority containing scientific studies to substantiate the claims.

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Transparency of supply chains The European market is developed for purchasing Maca raw material and Maca extracts. Marketing difficulties emerge based on the not transparent Maca product quality available in Europe, and high expectations raised through the past public relations as sexual stimulant. A number of serious importing companies are trying to recover grounds in Europe by offering well traceable raw material and a transparent supply chain for Maca. Irradiation Irradiated Maca is not allowed to be imported into the EU. However, in the past, irradiated raw material has entered the EU and has negatively affected the trade of Maca in the longterm. Pending cases of buyer reclamation date back to shipments before 2007. Despite detailed information (such as the information offered on the homepage for food ingredients on the website of the Center for the Promotion of Imports from developing countries) and specific company advisory, shipments of irradiated Maca material happen due to the relatively easy remediation of plant infestations arising from mishandling during harvesting and post-harvest procedures, giving a chance to infestation with toxins and other bacteria, viruses, insects, micro-organisms. Food irradiation is currently permitted in over 40 countries. The European Union has regulated processing of food by ionizing radiation in specific directives since 1999. The legal situation is transparent and easily explored and the several documents and reports are accessible via internet: http://ec.europa.eu/food/food/biosafety/irradiation/comm_legisl_en.htm The 'implementing' directive contains a 'positive list' only permitting irradiation of dried aromatic herbs, spices, and vegetable seasonings. However, any Member State is permitted to maintain previously granted clearances or to add new clearance as granted in other Member States when the EC's Scientific Committee on Food (SCF) has given a positive vote for the respective application. Because of the 'Single Market' of the EC, any food - even if irradiated - must be allowed to be marketed in any other Member State even if a general ban of food irradiation prevails, under the condition that the food has been irradiated legally in the state of origin. Furthermore, imports into the EC are possible from third countries if the irradiation facility has been inspected and licensed by the EC and the treatment is legal within the EC or some Member state. The Scientific Committee on Food (SCF) of the EC has given a positive vote on eight categories of food to be irradiated. However, in a compromise between the European Parliament and the European Commission, only dried aromatic herbs, spices, and vegetable seasonings can be found in the positive list. The European Commission was due to provide a final draft for the positive list by the end of 2000; however, this failed because of a veto from Germany and a few other Member States. In 1992 and in 1998 the SCF voted positive on a number of irradiation applications which had been allowed in some Member States before the EC Directives came into force, in order to enable those Member States to maintain the national authorizations. In 2003 (at the occasion when Codex Alimentarius was about to remove any upper dose limit for food irradiation) the SCF adopted a 'revised opinion which in fact is just a re-confirmation and endorsement of the 1986-opinion. The cancellation of the upper dose limit is denied, and before the actual list of individual items or food classes (as in the opinions expressed in 1986, 1992 and 1998) is expanded, new individual studies into the toxicology of each of such food and for each of the proposed dose ranges is requested. After 2003 the SCF has been replaced by the new European Food Safety Authority (EFSA), which has not yet voted on processing food by ionizing radiation.

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1.3

Description of possibilities for application and market segments respectively

For Maca raw material, natural ingredients and final consumer products the applications in food, cosmetics and pharmaceuticals are explored at present by applying different concepts of market introduction. Since 1999, the Peruvian government has prohibited exports of unprocessed maca roots. Consequently, maca is no longer exported as whole roots or slices. Instead, maca is exported as powder, gelatin, extract, capsules or as an ingredient in processed foods or drinks. The form in which EU importers prefer to import maca depends on their applications or on the applications of their customers. In the forefront of discussion about the marketing of maca remains the application as functional food, since Maca is not subject to the novel food directive. Maca is best known as an aphrodisiac, but is also known as a rich source of vitamins, minerals and other useful substances. In the functional food market, maca is mostly offered in capsules/tablets or powder. However, the traditional markets for Maca were based on the import of plant material (whole or powdered). European clients traditionally prefer to import plant raw material to reduce the risk of product contamination and adulteration. A common misconception is observed in the markets which results from the assumption that prices had to be negotiated hard and the supplier needs to be under price pressure. In the light of sustainability considerations of today this proved to be a totally wrong approach since it let to the rise of (sophisticated) adulteration and the reduced transparency and product documentation practiced today by the producers, exporters, but as well by importers in Europe. For innovative approaches of modern market development of Maca ingredients and consumer products the missing pro-activeness in value addition at different levels of market and product development is evolving as a major barrier. The possibilities for application and market segments are limited at present to the food sector. Recently a series of patent application is focusing on cosmetic applications. This move reflects the serious consideration about security and sustainability of the Maca production. The market for maca-based cosmetics is still under development. The cosmetics market characterised by low dosage and high value addition. For further development of the Maca market for food ingredient the insecurity of the present sourcing concepts requires re-consideration, because the botany is little referenced and supplies are still monopolised. Although the application of maca in processed food products is still limited, the number of potential processed food products with maca is very large. The sports nutrition market could be a particularly interesting for processed food products with maca. The energy beverages market was earlier identified by Dr. Kumar of Tiara International Consulting (TIC) in his strategy for exporting maca from Peru (TIC, 2006). Maca is traditionally mixed in fruit juices by the Peruvian people and energy beverages therefore have an already proven market. Smoothies are also mentioned by retailers as interesting applications for maca. Marmalade or jam has also been proposed as a maca-based product. Maca can be used in bread and pasta as flour. For most of the processed foods, manufacturers need maca in powdered form. Another maca application is coffee. Maca coffee can be made from roasted granulated maca. The taste of maca is said to resemble butterscotch, mocha and coffee, with a sweeter

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and more buttery flavor. A specifically interesting benefit of maca coffee is the energy content, while maca does not have the side effects of caffeine. Extracts of maca are also sold in Europe. However, the added value of maca extract is a subject of discussion. According to Dr. Gustavo Gonzalez, maca extracts do not add any value to the product, as the compounds which give maca its health promoting properties are unknown. The market for organic maca is relatively large. Due to the application of maca as a food supplement in capsules or tablets, organic status offers interesting possibilities for labeling. Manufacturers do not need to invest much in the procurement of many different organic ingredients. They only need organic maca. Also note that organic maca receives a price premium of around 5%.

1.4 Analysis of available product and export portfolio of Biocomercio companies in Peru, and their present experience with available product quality as starting point of a Biocomercio marketing strategy
For positioning Maca products in Europe the market is encountering a specific value chain scenario: Raw material procurement: Very limited area for expansion of cultivation area Sporadic, non coordinated research Monopolised supply chain for Peruvian processor, manufacturers and exporters Very few examples for well documented and (organic) certified supply chains. Technical Data Sheets (TDS) are available from the major suppliers with primary data from own analysis. The national implementation of international guidelines with regard to food and food ingredients and pharmaceutical ingredients are not regularly implemented. The basic data requirements according to the ICH and OECD requirements are not organised together with national and international service provider like universities and consulting companies/consultants. Well established Traditionally it is very difficult for Peruvian companies to prepare for the communication in international markets: writing letters/email/specification in English is often very demanding as experienced in the respective SIPPO and CBI programmes.

Product documentation

Transport requirements Marketing abilities

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In Peru, the black, red, purple, yellow Maca (www.Maca.ws) is known as raw material. The product quality varies widely from the different processors and marketing agencies in Peru. The traceability systems for the supply chains are underdeveloped due to a monopolised system of raw material procurement. Most of the processing companies are not having direct access to the resource base of Maca areas of cultivation and wild collection. The Maca festival in the Meseta de Bombon provided the unique access to areas of Maca cultivation and their inhabitants. As an exception to this rule is that a limited amount of marketing companies in Europe have developed their direct partnership with communities of Maca cultivation. Apart from the economic benefits for the European importers, such direct partnerships also provide more transparency on the maca supplies. This control is important as Peruvian suppliers have supplied mixed quality in the past. The quality problems had two aspects. First, the quality of the maca raw material did not meet the quality standards of the importers. Second, maca powder was mixed with other powders. European importers have even imported slices of maca root to be certain that it is maca root which they receive. The European and American partner companies, such as Maca4u.com and Imperialgoldmaca.com also implement elements of good agricultural practices and organic certification for Maca by attending to issues like farmers training and definition of pre-, harvest and post-harvest procedures. In these cases specific and tailor made supply chains are developed for a specific purpose and market segment. To a large extent Maca is exported as plant raw material to Europe. At the moment the market development of first organic certified producer companies is supported at Biofach fair in Nuremberg by SIPPO. In the past 6 years (2001 to 2007) companies of processed Maca extracts were introduced to markets in Europe and worldwide through trade fair participations at CPhI and Vitafood in the context of CBI and SIPPO programmes. The participating companies at the CBI Export Coaching Programme 2001-2007 for Natural Ingredients for Cosmetics and Pharmaceuticals from Peru with Maca products were: Raw material: R. Muelle As dry extracts: Zana, and Laboratorios Fitofarma. The following companies from Peru are participating in the ongoing SIPPO Trade Promotion Programme in Peru for organic products and natural ingredients with the respective Maca portfolio: Raw material: C.A.C.E. Alto Palomar, CAS Valle del Cunas Ltd. , Koken del Peru As dry extracts: C.A.C.E. Alto Palomar, CAS Valle del Cunas Ltd. , Koken del Peru Today the above mentioned companies offer their products with a well documented product technical data sheet as conventional and organic certified. Clarifications are required about the list of eligible biocomercio companies from Peru to report in a more tailor-made form for recommendations for the individual company (workplan). Based on the results of the SWOT analysis, recommendations will be provided in this report to formulate a strategy for Biocomercio companies from Peru for a durable positioning of Maca products in Europe. The Biocomercio companies are rather heterogeneous in their export experience and specifically in their export experience with Maca. Not all CBI and SIPPO promoted companies are part of the Biocomercio sector in Peru, and vize versa. Participating in earlier export promotion programmes selected Maca companies from Peru

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did implement SWOT analysis and export audits to identify their strength and weaknesses to further identify tailormade potential solutions and interventions. The Export audit is divided a. into the company audit, a self assessment of a company's Strengths and Weaknesses, shows strong resemblance to the so-called supplier quality assessments as performed by buyers, and b. into the market audit, an external analysis of the Opportunities and Threats in the markets. A key characteristic of the company audit is that the elements covered are all controllable by the company management. At this stage, you should describe the Strengths and Weaknesses of your company, related to the expansion strategy. Take into consideration that in the international markets an increasing emphasis on quality management requires companies to emphasize process performance (methods) and strive towards continuous performance improvement (measurables). A company audit takes these issues into consideration! A key characteristic of the external audit is that the aspects covered are market conditions which are uncontrollable by the company management. At this stage, you should describe the opportunities and threats of the current and target export markets. Company Strengths History of traditional use Company Weaknesses Botanical identification of reference herbarium samples Polyploidy as important adaptation to high altitude habitats in these species (1998) Different Maca root colours indicate different effects, yellow the best Actual product data situation for effects of Maca roots and different products thereof is not sufficient Target Market Europe Target Market Europe Opportunities In scientific literature a few studies are available for a health elevation of Maca Systematic research and report are missing No human intake recommendation as food additive available and possible Threats Informal markets for fitness and health studios as plant Viagra, Andean Ginseng and for body building

Well documented product (ingredient) available from several companies in Peru

Implementation of Competition by OECD guidelines and informal trade with presentation in OECD Maca products format for Maca harmonised with 91/414/EEC and SANCO Implementation treaty on Plant Genetic Resources for Food and Agriculture, Article 10, Annex I, excluded L. meyenii, approved EU 2001 Toxicological data Missing capacity for ICH and OECD conform design toxicology studies

Well defined habitats Different Maca and marginal Andean extracts (water, regions methanol, ethanol extracts) might have very different pharmacological effects and applications Excellent national and Not proper

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international (CIP) stakeholder research capacities in recognition and Lima benefit sharing Habitat of Maca is Area for expansion special and limited on limited due to specific global scale: Northern habitat Peruvian Puna, near Lake Junin

missing identified by NIH require focused research Build up of an (to be) organised research community including agencies of Peruvian Government, private sector and universities

Marketing of traditional knowledge

Main part of present research completed outside Peru is proprietary (patents) and not available to communities and potential investors Missing focus on sustainability in procurement and sharing of IPRs

Maca is one of 70 plant species domesticated and cultivated by the Incas All parts of plant are traditionally used in human consumption as food

Little knowledge about the selection and breeding criteria of ancient Incas Industry consultation revealed that present research completed outside Peru is proprietary (patents) and not available to communities and potential investors

Research outputs are channelled through a number of publications including Maca newsletters Future Maca research should target value addition/processing, plant physiology/ genetics & sustainability, markets, communication, community & industry developments and training of stakeholders.

In the ideal situation, the findings of the Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis, as carried out as part of the export audit, will provide numerous opportunities that match with identified company strengths. However, in reality, the findings will often show several threats in the market that correspond to weaknesses in the company. The main challenge here lies in addressing the weaknesses and transforming them into strengths, while optimizing the impact of the individual companys strengths to tap identified market opportunities. Remember that a threat is considered a threat because the company is unable to deal with it. It has an associated weakness. If the weakness is transformed into strength, the threat will disappear, and may even become an opportunity. The identified opportunities and threats should be considered as drivers for company adaptation and improvement. It is important to realize that the market conditions can not be changed, and for that matter they enforce the direction the company should take towards market entry. Remember that the strengths and weaknesses are controllable whereas the opportunities and threats are given market conditions. On the basis of the company level SWOT analysis, it is important to identify the main competitors in the target markets. What are their strengths and weaknesses and their expected strategic moves in relation to the opportunities and threats? Companies have to keep in mind that the opportunities and threats are not only drivers for your company performance but will also direct the other players in the market.

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1.5

Analysis and validation of competitors (national and international)

According to different botanical surveys, different varieties of Maca are reported from Ecuador and Bolivia (http://www.peruvian-maca.com/MacaClassification.htm). The international competitors for Maca are found in Bolivia only. SIPPO promoted maca producing companies at European trade fairs in recent years (e.g. Naturalcos at Vitafoods 2006). For more details please check http://www.macaspirit.eu/ for organic certified maca products from Bolivia. Another competitor from Bolivia is Laboratorios Hahnemann, an advanced processor and exporter of maca products. The analysis and validation of competitors is required in the countries of origin (Peru and Bolivia) and for Europe. First of all the products are required to be described in terms of their physical and chemical properties to evaluate the offer of the different national and international competitors. This part is missing for the present sector strategy. Since companies in Europe mainly promote the folkloric use of maca, little advice can be given on the technical product data available. Benchmarking is needed on the basis of TDS and MSDS, but as well as on the basis of claim substantiation. On the basis of the analysis and validation a competition strategy can be formulated for a certain quality of raw material and/or ingredient from Maca raw material. Companies will have to consider their competitive advantages (like good documentation and claim substantiation) to compete successfully with their rivals. The intensity of rivalry is influenced through the following industry characteristics: A larger number of firms increase the rivalry because more firms must compete with the same customers and resources. High storage costs and/or highly perishable products cause a producer to sell as soon as possible Competition through innovation. The Buyer Power for Maca is not developed because of the very diverse form of plant (botany) and product information available for the different stakeholders along the value chain. The services to support the strengths and weaknesses identified at the company level are most important for a future development of buyer power. The value chain analysis and the identification of market solutions are still pending. The development of supplier power strongly depends on the identification of interventions and the successful implementation and performance measurement systems attractive for communication along the supply chains. Barriers/Threats to Entry are numerous at present, including Government created barriers, patents and proprietary knowledge serve to restrict the entry into an industry, asset specifity inhibits the entry of an industry, or organisational Economies of scale. The degree of rivalry is varying, including product differences, or status of industry growth in origin. Firms succeeding in differentiation strategy are characterised by the following internal strength: access to well documented resources access to leading scientific research highly skilled human resources successful communication of the strength of the product, and/or reputation for quality and innovation.

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A company adopting the focus strategy is concentrating on a narrow segment and within that segment attempts to achieve either cost competitiveness or differentiation. This is currently not applied for maca raw material and ingredients.

1.6 Analysis of in Europe registered trademarks and patents in the context of Maca
The trademarks registered in Europe are owned by French and Spanish companies. The registered trademarks for maca products include Maca Pure and Maca Tonic from Naturex (France), Maca Vitae from Inkanatura (Spain), Maca Andina by Quimica Suiza (Peru) and Maca Vibe from Laboratorios Hersil (Peru). The European registered patents in the context of Maca include the following data: Title ALCOHOLIC DRING CONTAINING MACA EXTRACT PROCESS FOR PRODUCING MACA EXTRACT MACA EXTRACT AND COSMETIC COMPOSITION CONTAINING SUCH AN EXTRACT Inventor: MATSUMOTO TAKEHIRO [JP] ; KATO MEGUMI [JP] EP1743934 (A1) 200701-17 KATO MEGUMI [JP] ; SUWA YOSHIHIDE [JP] (+3) EP1714635 (A1) 2006-1025 PICCARDI NATHALIE [FR] ; PICCIRILLI ANTOINE [FR] (+2) EP1658043 (A2) 2006-05-24 Applicant SUNTORY LOGISTICS LTD [JP]

SUNTORY LTD [JP]

EXPANSCIENCE LAB [FR]

In the esp@cenet database approximately 135 results found in the Worldwide database for Maca were identified under:

http://v3.espacenet.com/results?AB=Maca&sf=q&DB=EPODOC&PGS=15&CY=ep&LG=en&ST=quick

Not all entries were related to the plant species Lepidium meyenii! The patents referring to Lepidium meyenii were discussed in a motion of the Peruvian Government at The Intergovernmental Committee on Intellectual Property and Genetic Resources, Traditional Knowledge and Folklore, Geneva, July 7-15, 2003 (http://www.wipo.int/edocs/mdocs/tk/en/wipo_grtkf_ic_5/wipo_grtkf_ic_5_13.pdf). In the WIPO databank 1 entry was registered for Maca: Title SKIN PROTECTIVE COMPOSITION BASED ON ARAUCARIA GRAIN EXTRACTS Inventor: LECLERE JACQUES [FR] Applicant NUXE LAB [FR] ; LECLERE JACQUES [FR]

In recent years, legal outsourcing companies have taken up the intellectual properties of maca as an international issue (http://www.cpaglobal.com/ip-reviewonline/1189/who_owns_a_tradition). The continuation of the international discussion is quite important, because the case of IP on maca is included in http://shr.aaas.org/tek/handbook/handbook.pdf. This information source is an internet based international handbook on issues and options for traditional knowledge holders in protecting their intellectual property and maintaining biological diversity available since more than 5 years.

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2 INITIAL STEPS FOR MARKETING STRATEGY AND RECOMMENDATIONS FOR FOLLOW-UP

The support of BSOs (Business Support Organisations) for exporters and their products is crucial as the primary service providers in Peru. The most important tool for sector action planning is threefold: Reviewing, analyzing and processing the collected information Comparing of market information with supply analysis Prioritisation and sequencing of actions for sector action planning. The elements of a sector action plan (SAP) to be covered are: Objectives Country strategy SAP Prioritisation and workplan Technical Assistance instruments Tools for measuring impact The technical assistance instruments to implement the workplan are identified in the course of a SWOT-based VCA. Market based solutions include: Technical assistance Training Finance Market access Technology Information Inputs & infrastructure Product development Advocacy. The following types of market actors provide market-based solutions to MSMEs in the context of sector development for Maca: Raw material suppliers Input suppliers Financial institutions Repair companies Equipment supply companies Accounting firms Consultants and training firms Business associations NGOs, community-, resource management based Buyers who introduce new product designs Transporters Exporters providing access to (international) markets. The identification of market based solutions cater for the shift to a new paradigm to involve the public sector as facilitator, and commercially viable service providers and Micro, Small, and Medium Enterprises (MSME) to implement market based solutions, their assessment and the identification of interventions. The assessment of market based solution is based on the identification of the potential value chain constraints and opportunities. The prioritisation of market based solutions, as well as the identification and selection of interventions are implemented through the assessment of market actors as market-based

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solution providers. In a country like Peru, a great number of market actors provide services to SMEs in the maca sector, starting with the raw material and input suppliers. Other market actors include: Financial institutions Equipment suppliers from collection, cultivation, post-harvest field processing, and semiand industrial processing for value addition at the different levels of the value chain in Peru, Accounting firms for documentation and review of costing, pricing and accounting, and transparency, Consulting and training firms for business planning and product design and documentation, Research and development institutions for basic and applied research for authentication and claim substantiation Transporting and logistic firms for supporting supply and deliveries of goods The aim is that commercially viable providers support the development of internal company services to respond to the client requirements for quality, quantity, availability, price and communication through specific, well-planned and self-financed interventions. The objective is to involve the international (global markets linkages and services) and national (supporting services) enabling environments to engage actively in the respective part of the value chain.

2.1

Quality products: strategies for optimizing quality of product offer

Before entering the discussion on sector strategies for maca in Peru it is important to understand the prevailing governance structure in the maca sector of Peru, the vertical and horizontal inter-firm cooperation and the global benchmarking. The portfolios of applicable strategies for optimising product offer include information on quality, marketing and buyers trust into Maca from Peru, and are based on the following 5 product characteristics of quality, quantity, availability, price and communication. Quality The 4 quality aspects of a Maca product include chemical, physical and organoleptic properties, and their documentation. Very heterogenic genetic material is cultivated in the origins, meaning that the genetic base is very strong, but the product quality is very variable as well. For wild collected and cultivated Maca a common phenomenon of variation of active principles is observed. The importance of the right harvesting time is of outmost significance for the availability of active principles. It is similar to the challenges scientists observe in the establishment of the cultivation (like of Hoodia spin South Africa where similar challenges are met when trying to cultivate wild plants without proper concept for domestication of species. This is the price the sector pays without a proper domestication of wild Maca species. The cultivated maca (Lepidium peruvianum) at high altitude lacks proper documentation of the product specifications from the cultivated species. Quantity The principle limitation for the development of the sub-sector of Maca is the sustainable supply of plant raw material. Maca cultivation is not limited to Peru, although the country is considered one of the pioneer countries of ancient agriculture.

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Maca cultivation and product development is also taking place in other countries. Germany, for example, started the R & D process to evaluate the future opportunities for domestication and plant breeding process (http://www.genres.de/infos/pdfs/bd22/22-39.pdf and http://books.nap.edu/openbook.php?isbn=030904264X&page=56). For income generation for small scale farmers, extensive support in domestication and plant breeding will have to be invested in an enabling environment, if not the impact and the sustainability of the intervention (trade promotion) will be doubtful. Availability Another important issue is overlooked: after a crop of Maca, the field requires a rest period of seven years. This limits the area for expansion of cultivation of the Maca crop. The rest period is out most important for the agricultural areas of Maca which are located higher then 4000 m above sea level. The traditional system of Maca cultivation is one of shifting cultivation at high altitude (http://www.cipotato.org/library/pdfdocs/RTA54679.pdf). Maca cultivation is characterised by distinct seasonality of the crop. On the demand side there is no expressed seasonality as the indications and benefits match a year-round demand as stimulant and enhancer. Price Since the production of raw material is requiring investment activities and national and international R & D inputs, the need for sincere, professional and participative cost and price calculation is apparent and thus considered as the main limiting factor for the development of the Maca sector in Peru. The most important impact raising the trust in the Maca value chains will be achievable only, if the Peru as a producer country comes up with a marketing concept for building up trust into the supply of Maca raw material and natural ingredients. The condicio sine qua non is the establishment of a certificate/ denomination of origin for the Maca supply of ingredients. The monopole supply situation in Peru does not permit the implementation of a transparent value chain. Processors and exporters need to insist in the transparency of the Maca supplies. The limiting factor is the re-structuring of the supply chain or better turning the traditional supply chain into a modern value chain with a transparent and mutually discussed and accepted cost and price calculation. Since the sales prices often do not cover the cost of production for the farmers the starting point for a unhealthy downward spiral in the sales price development is witnessed. As a long standing product in European markets (no Novel Food) information from the market research should give the insight into the prevailing retail and wholesale prices, appropriate margins and competitor prices. The question will arise whether or not the exporters from Peru want to stay with the established product specification or they will thrive for more value addition and, finally, will reach out for the product registration of final consumer. Communication Along the value chain for the production and processing of value added ingredients of Maca among the participating companies from Peru the following aspects for the establishment and introduction of quality certificates are indispensable: Botanical identification based on internationally acceptable reference samples

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Establishment and implementation quality analysis of Maca reference/marker substances (Saponins, Macalite & Macamite) combined with a fatty acid analysis in the Peruvian part of the value chain. It is important to develop the quality control manuals on the basis of reference laboratories in Europe. For the research into the fat analysis the University in Jena, Germany, a preferred partner. Other reference laboratories in Europe are of importance for the in-process analysis of identity, purity, and availability of active principles.

It is of high priority to decide on the strategy including as well the cost for product documentation, internal control system, implementation of quality and sustainability standards through audit and certification systems. Again these systems of product documentation are considered as innovative value addition and integer part of the Maca promotion strategy.

2.2 R&D: What R&D efforts can strengthen the available marketing arguments for Maca, formulating new ones or ameliorate actual deficits in basic research or product development?
The anatomy of impact: How does an international team of scientists generate and deliver research results that will significantly, sustainable, and measurably benefit large numbers of poor people, many of them small farmers? (CIAT homepage) Little market-oriented in-depth research for Maca has been documented in the national and international literature. Prof. Dr. Gloria Chacon de Popovici, Lima, research results stand out of the popular writing in Peru and abroad. As elaborated before in the text the research requirements identified by research groups in Peru are related to the main obstacles in sustainable procurement, use of traditional knowledge and patent and trade marks, like: reproductive biology improvement of cultivation practices establishment of different plant varieties analysis of nutritional content diversification to other zones of cultivation establish and maintain a register of biological resources and traditional knowledge, provide protection against acts of bio-piracy identify and follow up patent applications made or patents granted abroad that relate to Peruvian biological resources or collective knowledge of the indigenous peoples of Peru conduct technical evaluations of the above-mentioned applications and patent grants issue reports on the cases studied lodge objections or institute actions for annulment concerning the above-mentioned patent applications or patent grants establish information channels with the main intellectual property offices around the world, and draw up proposals for the presentation of Peru's interests in different forums. From the European point of view a different set of research requirements are leading the discussion on expansion of markets for Maca raw material, natural ingredients and consumer

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products from Peru. The research requirements vary for the different stakeholders along the value chain. The requirements are guided by the legal requirements for plant raw material plant extract Consumer (final) Maca products. The basic question is whether or not the requirements for TDS /Technical Data Sheet), MSDS (Material Safety Data Sheets), implementation of Good Agricultural and Collection Practices (GACP), and Good Manufacturing Practices (GMP), and the corresponding Standard Operating procedures (SOP) and Work Instructions (WIN) are satisfied.

2.3 Value Adding: through Biocomercio, Organic, FairWild/Fairtrade, Geographical Indication etc.
For future R & D requirements for Maca it is advisable to look at the research scenario of Ginseng as a similar product and its development of market entry years ago. Based on the above minimum requirements for R & D, the European market partners and authorities look forward to present the following general product information of well designed and documented Maca studies according to their priorities: Study Domestication and plant breeding for Maca Laboratory test for radiation In-process Soil analysis Multi-element analysis Investment to build up quality control Geographical Indication Biocomercio, Organic, FairWild/Fairtrade, Geographical Indication Performance-enhancing studies Daily intake dosis identification studies EU Health Claim Dossier requirements for Food, cosmetics and/or pharmaceuticals (trad.Med.) Extract type Extract technology Selection of solvent Registration trad. Medicine Gap analysis Impact Sustainability Financial requirements 1.000.000,- 250 250 5.000,- 150.000,- 100.000,- comments Time frame: 10 years As specified above enabling environment Double test Special focus on Germanium content for raw material and extracts at different harvest times enabling environment enabling environment

50.000,-

100.000,- 50.000,-

With high dosis: 45 gr./months enabling environment Varying dosis enabling environment Requirements for registration, evaluation and claim substantiation Product and technology development with pilot plant For high end sales of Maca extracts as ingredients Identification of interventions Monitoring of direct and indirect benefits Enabling environment

50.000,- 100.000,- 250.000,- 44.500,-

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Total research requirements

2.000.000,-

For 2009 and 2010

The R&D design has to consider the impact and sustainability of these research interventions for the communities and authorities in Peru. Based on a Maca Gap-analysis the direct and indirect benefits (impact) will have to be monitored over a period of approx. 2-3 years of implementation. Since the attribution gap lies between the assessment of direct and indirect benefits, this is where the division of labour is made. The sector development for Maca requires considerable financial and human resources insight and outside the metropolitan areas of Peru. Considering the impact and the importance of sustainability of commercially viable solutions and the selection and implementation of interventions high priority is needed to raise the funds and implement the above mentioned research package.

Quantity vs. quality: income generation for small scale farmers or value addition at manufacturers and exporters level.
Different to the potato development the Maca export promotion of today counts with: Harmonised international guidelines for procurement (GACP) and processing (GMP) supported by standards focusing on ecological (ISSC, UEBT) and social (Fair for Life, FairWild) sustainability. The SOP and WIN, but as well sophisticated design for domestication and plant breeding are ready for implementation and partnership. The Value Chain thinking and impact and sustainability oriented trade promotion activities of today can take care for a balanced development of a Maca value chain of today. It is not only the farmer and the company benefiting, it is a whole service sector necessary to run a wellstructured Maca Value Addition, even incorporating Government agencies and Embassies with their support for registration and challenging trademarks and patents on Maca.

2.4 National Biocomercio-Strategy: What are the starting points to develop a national Biocomercio strategy, what stakeholders need to be included in the process? How can the Biocomercio strategy be a basis for a marketing strategy?
The Biocomercio companies are rather heterogeneous in their export experience and specifically in their export experience with Maca. The Biocomercio guidance and the verification according to UEBT criteria are at a starting point in the sector development for Maca. During an earlier (2004) sector assessment Biocomercio included Maca, but did not include Maca in the resulting National Biocomercio-Strategy (2004). At this stage the expertise accumulated can help to re-open the discussion on a revision of the National Biocomercio-Strategy including the recent development and the history of importance of Maca. The importance of Maca through its direct and indirect benefits (impact) was apparently underestimated during the reporting time for the National Biocomercio-Strategy for Natural Ingredients in back 2004. The study intends to recuperate the knowledge available, document the importance of Maca evaluating the scattered information available in Peru. During the research work it became apparent that the degree of product documentation and the sustainable success in export marketing are interlinked meaning that no progress in export marketing is possible without reliable product documentation, quality control (inprocess and external (national and international)). The overarching aim of a marketing

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strategy focusing on impact and sustainability in trade development is to build up trust along the value chain support by services according to the international (WHO, FAO) requirements.

2.5

Product- and country specific differences in European countries

For Maca the product- and country specific differences in European countries can be observed according to history of trade with Latin America. The importance of use of Maca is the highest in Spain. Based on the results of the SWOT analysis recommendations are provided to formulate a strategy for biocomercio companies from Peru for a durable positioning of maca products in Europe with special focus on Spain, Italy and German speaking countries. A great addition are the Czech Republic and Slovakia the homelands of Father Soukup, the person famous for his contributions to Peruvian traditional medicine. A number of Czech companies are basing their marketing concepts for products including Maca in the respective lists of product components for health food and food supplements. It is the trade history with Spain which documented the considerable use of Maca before 1997 leading to the exception from Novel Food registration. At present French companies are including Maca in their pipelines of product innovations based on respective patent applications.

2.6 Product Scenarios (Maca-Powder, juice etc.): Elaboration of product specific strategies for the 5 important forms of marketing in Europe.
On the basis of earlier explanations there are few options left at the level of natural ingredients: raw material, value added products (powder and extract), but the export of final consumer products of Maca processed and marketed out of Peru. As important preconditions are to mention: the strengthening of product evidence from the origin, the traditional knowledge available in Peru and the use of the available information for Health Claim Dossiers and claim substantiation. It is important to organise a national Maca expert group with clear Terms of Reference including the World renowned capacities from Peru like Prof. Dr. Cabieses and Mrs. Dr. Chacon. Both are not utilised at the outmost for the claim substantiation and the compilation of the traditional and research knowledge from Peru according to the requirements of international dossiers. Once succeeded in establishment of the status quo for Maca the marketing strategy of Maca offers a broad range of value added product scenarios from export of plant raw material well documented and certified according to market and buyer requirements , a specific sentiment of ingredients by using the proper raw material and solvents, and a wide range of (final) consumer products Hecho en Peru with a well documented registration in overseas markets, like the EU. The portfolio of final products from Maca requires additional financial and human resources in Peru establishing service centres for product- and technology development for consumer products for national, regional and international markets. Support through facilitation and value chain partnerships is available, once the Maca history can be better explained and substantiated.

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2.7 Initial steps for a sector planning

In the sections above the collected information was reviewed, analysed and processed. Based on demand driven VCA and Gap analysis the market information was compared with the supply analysis, the prioritization and sequencing of actions for the planning of the maca sector in Peru in the form of a sector action plan (SAP). The elements of a sector action plan (SAP) to be covered are: Objectives Country strategy SAP Prioritisation and workplan Technical Assistance instruments Tools for measuring impact. A first draft outline of a sector plan for the maca sector in Peru is subject to discussion within the present study. Objectives Export development for value added natural ingredients based on sustainable sourcing (resource assessment, management and use). Country strategy The country strategy of sustainable use of biodiversity was developed some time back by Biocomercio Peru. Sector Action Plan Maca Peru For specific interventions the following problems and solutions need to be contemplated: Problems Stabilisation of the Food status Solutions For this purpose serious publications on registrations in books on nutrition must be supported. A new German encyclopedia on the nutritional use of plants and drugs includes two pages on Maca. Claim substantiation. Find relatively simple parameters to check the quality of Maca materials. Implementation of GACP based on SOPs and WINs. Conventional and organic (organic status per se does not mean effectiveness if the content of active ingredients is low). Clear whether extracts should be aqueous, methanolic, ethanolic or more lipophilic or even extract by carbon dioxide. The description of the solubility of extracts in water by the manufacturer must be correct. Possible interactions with other nutrients or juices must be investigated. If a lipophilic extract still makes sense it

Registration of nutritional claims / health claims Quality management

Create a certificate for proven Maca quality Product development

The solubility of extracts is very important. Interaction of active principles Product specifications

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Biological activity of extract

Bioactivity

Minimum intake versus biological activity

Artificial radiation

Monitoring of artificial radiation

is recommended to create a water soluble nano-scale emulsion from it (comparable to modern Q10-nanaemulsions). There is much know-how for this in Germany. It must be clarified up to which temperature Maca extracts may be processed without the loss of biological activity! It must be clarified how long Maca extracts are bioactive in water based on food supplements or drinks. At least about 500mg of a good extract are necessary for biological activity, than the price of this extract will be limited to about 60 Euro for the use in simple products. All Maca raw materials must be without artificial radiation even if radiation might be permitted in Germany nobody would bye a product in case of obligatory declaration of radiation. It must be clarified whether the European scintillation method for detection of artificial radiation is valid for products grown in such extreme altitudes like Maca. Many products were tested as radiated.

The identification of problems and solutions considered as cornerstones for a marketing strategy for a re-launch of Maca products in Europe was elaborated together with the identification of the necessary solutions and interventions. Prioritisation and workplan Specific information on identified and proposed interventions as services along the value chain is available in the final draft of this report specifying market based solutions, interventions, preliminary management set-up and budget required. Areas requiring market based solutions for Maca include: Areas requiring market based solutions Interventions preliminary management setup/ Market based solution providers Involvement and organization of value chain players in Peru

Raw material and input supply,

Financial services

Implementation of GACP Stakeholders responsibilities for quality and safety Technical assistance in setting up and managing the raw material procurement through wild collection and cultivation -Access to Micro-Finance Linkages with banks to

Consulting firms Commercial banks

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Quality control services; quality infrastructure

Equipment supply

Accounting and financial management services

Management and technical training

Quality management and quality control

Transportation services

International market access.

expand production - business planning and cost calculation -advance and cash payment for raw material -installation and management of social funds -Product and systems standardization -Physical and legal metrology -Physical and chemical testing and calibration -certification of products and systems -accreditation of quality laboratory and cert. body -Provision of pre-, harvest-, post-harvest-equipment to farmers at wholesale prices, -Access to design and construction of extraction technology and services - Business planning and cost calculation -Terms of payment & delivery -Advance and cash payment for raw material -installation and management of social funds -Training and technical assistance in raw material handling, quality control and hygiene methods -Export development and management -Collaboration with universities and technical Vocational Schools -Organisation of Quality Management through appropriate allocation of human and financial resources -Employee and customer satisfaction, impact on society -Export consulting -Selection of channels for distribution -Allocation of own human resources -Export auditing

Processors Government NGOs

Ministry of Industry Ministry of Commerce Ministry of Public Health Ministry of Science Ministry of Energy Ministry of Agriculture, and Technology and their specialised agencies

Consulting firms Operators Processors Government NGOs Consulting firms Operators Processors Government NGOs

Consulting firms Operators Processors Government NGOs Consulting firms Operators Processors Government NGOs

Consulting firms Operators Processors Government NGOs Consulting firms

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-BSO support to select the company specific target market -Market entry strategy for individual companies -Export promotion -Organising communication -Selection of trade partners -Management planning (sector & company level) -Action plan -Financial consequences -Contingency planning

Operators Processors Government NGOs

Technical Assistance instruments It is an innovative concept to use commercially viable service providers to implement the market-based solutions assessed by providers and users of Maca. It is the function of public sector agencies to function as facilitator of activities and to get involved in monitoring a (hopefully) improved performance contributing to rural income generation and reduction of poverty through and along a successful value chain of Maca in Peru. At the end it is the overarching aim to define an exit strategy whereby time-bound interventions undertaken by a facilitator help to ensure that solutions are sustainable through the impact of market forces once the interventions end. Tools for measuring impact The impact measurement is focused on performance measurement MSME-level, market solution level and sector programme level. It is important to measure performance at the 3 levels to verify the impact at the target beneficiary group (MSME), to ensure that the solutions are sustainable to supply and demand and to measure competition among providers and expanded outreach to MSMEs (Market solution), and on sector programme level to ensure appropriate cost-benefit ratio of increased impact. The tools are important to explore how markets can be used to identify and develop more impactful and sustainable solutions to MSME problems including the private sector service providers by transforming them into commercially viable providers of market based solutions, located in the national and international enabling environment for maca value chain. The identification and implementation of solutions commercially oriented and provided by the private sector in Peru addresses the maca business constraints in a sustainable manner. Public funding through donors and governments is focused on the process of development of market-based solutions for the identified constraints and opportunities and the facilitation of the implementation of the maca sector strategy through a multi-stakeholder process in Peru.

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CONCLUSIONS AND RECOMMENDATIONS

Conclusions
Artificial radiation of Maca tubers and value added products is not considered innovative any more, but provides limited scope of success in international marketing. For a general market entry strategy the following facts are to consider: Maca is an accepted food ingredient in Europe and it is not Novel Food due to the import into the EU before May 15th, 1997. Maca was advertised drug-like in many European countries and therefore it is a problem to justify the food status in some EU countries like Germany if the enhancement of libido or sexual power is advertised. Maca was very popular in the German market some years ago, but problems with the drug authorities led to the withdrawal of many food supplements in Germany and some other countries. Maca was popular and many people tried to use it. However many products were produced with Maca-Powder or extract of very low quality. So the people mostly were very disappointed and did not continue to use Maca products. Some companies tried to use lipophilic extracts which in reality were nearly totally insoluble in and the bioactive principles of the extract remained in the filtration cartridges. Since some time the European Health Claim Regulation Act permits only those claims which are registered by scientific dossiers at the European Food Safety Agency (EFSA). It must be checked, if and which claims were send to the EFSA in 2000. Further on the registration of claims is still possible as a company specific claim, but now you must pay for it. Based on the results of the SWOT analysis recommendations are provided to formulate a strategy for the maca sector in Peru and the participating Biocomercio companies from Peru for a durable positioning of Maca products in Europe.

Recommendations
A first draft outline of a sector plan for the maca sector in Peru is subject to discussion within the present study. To develop into a truly stakeholder driven process the results of this study are required to form part of holistic approach to involve all stakeholders to discuss the competiveness, the targeting and the enabling environment of the maca sector in Peru. The programme and sector strategy design and implementation imply distinctive multistakeholder processes for the identification and the assessment of the describe market based solutions, the identification of the necessary interventions and the performance measurement systems to secure impact and sustainability.

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4
4.1

ANNEXES
Standards organisations
European Union Law: http://eur-lex.europa.eu o General Food Law: http://euro o o
lex.europa.eu/pri/en/oj/dat/2002/l_031/l_03120020201en00010024.pdf Controls Regulation: http://eurlex.europa.eu/pri/en/oj/dat/2004/l_191/l_19120040528en00010052.pdf Organic food: http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=CONSLEG:1991R2092:20060506:EN:P DF

2009 organic food: http://eurlex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2007:189:0001:0023:EN:P DF

ISO: http://www.iso.org/iso/home.htm ILO: http://www.ilo.org SA8000: http://www.sa8000.org GMP and GACP: http://www.who.int HACCP: http://fsrio.nal.usda.gov/document_fsheet.php?product_id=155 Codex Alimentarius: http://www.codexalimentarius.net/web/index_en.jsp IMO: http://www.imo.org

4.2

Sources of price information

International Trade Center: http://www.intracen.org Prompex

4.3

Trade assocatiations
CIAA (Confederation of the Food and Drink Industries in the EU): http://www.ciaa.be

4.4

Trade fair organizers

BioFach (certified organic products): http://www.biofach.de, the next fair will be held in February 2009. FI Europe (food ingredients): http://www.fi-events.com, the next fair will be held in November 2009. IFE (food and beverages): http://www.ife.co.uk, the next fair will be held in March 2009. SANA (exhibition of health food, health and environment): http://www.sana.it, the previous fair was held in September 2008. SIAL (food and beverages): http://www.sial.fr, the next fair will be held in 2010. ANUGA (food and beverages): http://www.anuga.com, the next fair will be held in October 2009.

4.5

Trade press
Foodnews: http://www.agra-net.com

4.6

Other useful addresses

WIPO (World Intellectual Property Organization): http://www.wipo.int OAMI (trademarks): http://www.omai.europa.eu European Patent Office: http://ep.espacenet.com Tariffs: http://ec.europa.eu/taxation_customs/dds/tarhome_en.htm

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Eulaff (functional foods Europe and Latin America): http://www.efb-central.org/eulaff Skal (certification): http://www.skal.nl

4.7

Literature
Artuso, Anthony: Drugs of Natural Origin. Economic and Policy Aspects of Discovery, Development, and Marketing. The Pharmaceutical Products Press. Binghamton, 1997. Brack Egg, Antonio: Diccionario enciclopdico de plantas tiles del Per. CBC. Cuszco, 1999. Cabieses, Fernando: La Maca y la Puna. Universidad de San Martin de Porres. Lima, 1997. Desmarchelier, Christian & Witting Schaus, Fernando: Sesenta Plantas Medicinales de la Amazonia Peruana. Ecologa, Etnomedicina y Bioactividad. o.A., 2000. Graca, Javier: Amazona competitiva. El reto de la bioindustria. CEDECAM. Lima, 2002. Gruenwald, Jrg et altera (Hrsg.): PDR for Herbal Medicines. Medicinal Economics Company. Montvale, 1998. Hnsel, R. & Keller, K et altera (Hrsg.): Drogen E-O. IN: Bruchhausen von, F. et altera (Hrsg.): Hagers Handbuch der Pharmazeutischen Praxis. Band 5. 5., vollstndig berarb. Aufl. Springer Verlag. Berlin, Heidelberg, New York, 1993. Martnez A., Jos Vicente & Bernal, Henry Yesid & Cceres, Armando : Fundamentos de Agrotecnologa de Cultivo de Plantas Medicinales Iberoamericanas. SECAB. Bogot, 2000. Obregn Vilches, Lida: Maca. Planta Medicinal y Nutritiva del Per. Instituto de Fitoterapia americano. Lima, 1998. Rehm, Sigmund (Hrsg.): Spezieller Pflanzenbau in den Tropen und Subtropen. IN: Blanckenburg von, Peter & Cremer, Hans-Diedrich (Hrsg.): Handbuch der Landwirtschaft und Ernhrung in den Entwicklungslndern. Band 4. 2., vllig berarb. Aufl. Verlag Eugen Ulmer. Stuttgart, 1989. Sols Hospinal, Ramn: Produccion de Maca en al Meseta de Bombon. Cerro de Pasco. Huancayo, Per, o.A. Soukup, Jaroslav: Vocabulario de los nombres vulgares de la flora peruana y Catalogo de los generos. Editorial Salesiana. Lima, o. A.

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