Zambia's honey business is attracting private capital as farmers look beyond raw exports

Zambia's honey industry has a problem that has little to do with the bees. A large share of the honey produced in the country is still sold informally. That makes it harder for small scale beekeepers to reach bigger buyers and for local businesses to build a consistent supply of processed honey. Wuchi Wami is trying to change that.

The Zambian honey company has secured an investment from Inside Capital Partners, although neither company disclosed the value of the deal. Wuchi Wami works with more than 6,000 smallholder beekeepers and has put more than 19,000 top-bar hives into use. It buys Miombo honey from producers, processes it and packages it for retailers and food manufacturers in Zambia and other Southern African markets.

A market that still runs largely on informal sales

Zambia produces around 14,200 tonnes of honey a year, according to figures cited by Wuchi Wami. But about 90% of that honey is traded informally. That leaves a lot of business outside the formal market, from the beekeeper selling honey locally to the small businesses involved in moving, storing, packaging and selling agricultural products.

Getting honey into supermarkets or supplying a food manufacturer requires more than producing it. There has to be a way to collect it from different producers, check its quality, process it, package it and deliver it in the quantities customers need. That's the part of the market Wuchi Wami has built its business around.

Building a business around thousands of beekeepers

Wuchi Wami doesn't produce all its honey itself. Its network of more than 6,000 beekeepers supplies the company, while the business handles the processing and packaging before the honey reaches customers. The model gives the company access to production from a large number of small producers rather than relying on a single farm or a handful of suppliers. It also gives those producers another route to market. The 19,000 plus top bar hives deployed by the company are part of that effort to increase production and bring more beekeepers into its network.

Where SMEs come in

The impact of a larger honey business would not stop with the beekeepers. There are smaller businesses operating around the product at almost every stage. More honey moving through formal channels can mean more work for local transporters, packaging suppliers, equipment businesses, storage operators and small food manufacturers.

Retailers and independent shops can also get another locally produced product to sell, while food businesses can use honey as an ingredient in products such as sauces, baked goods and drinks. There is also room for small businesses to provide services to producers. Beekeeping requires hives, protective clothing, tools and other equipment, creating a market for suppliers as the number of commercial beekeepers increases. If Wuchi Wami expands its buying and processing operations, some of these businesses could see more regular demand. That is particularly relevant in a market where many small businesses struggle with inconsistent orders.

Why the investment is interesting

There is plenty of investment activity around African agriculture, but honey rarely gets the same attention as crops such as maize, coffee or cocoa. Wuchi Wami is a different type of agricultural business. It sits between the farmer and the customer, buying an agricultural product and doing the work needed to turn it into something that can be sold through formal retail and manufacturing channels. That can be a difficult business to build. The company has to keep its beekeeper network active, maintain quality and find buyers for the finished product.

The investment from Inside Capital gives it more capital to work with as it tackles those challenges. For SMEs around the business, the important question is what happens if the company starts buying more honey and selling more of it. More volumes would mean more deliveries, more packaging, more processing and potentially more orders for the businesses providing those services.

The next step is getting more honey into formal markets

The company already sells in Zambia and other Southern African markets. Its growth will depend partly on whether it can move more honey through those channels without losing the producers that sit at the start of the business. For Zambia's beekeepers, that matters because a larger formal market means more potential buyers for their production. For SMEs, it could mean something just as practical: more customers and more work around a product that is already being produced locally.

For Wuchi Wami, it comes down to a fairly basic equation: more beekeepers, more honey, more processing and more customers. The company has built the first part of that equation with its network of producers and hives. Now it has new private capital to see how far it can take the business and how many smaller businesses can grow around it.