01 Mar 2015
Fıelds of Gold
Building a sustainable saffron industry in Afghanistanby April WhiteTopics:
Growth Market: Afghan saffron has also attracted the attention of MBA classmates Ben Bines, Kimberly Jung, KinYan Chew, and Emily Miller (all HBS 2015), who founded Rumi Spice with a mission similar to Earth2Globe’s.
Hay-scented saffron is one of the world’s most expensive foods, retailing at $4,000 or more a pound. Iran is the largest producer of this highly prized spice, which stains food a brilliant golden hue, but David Luo (MBA 2011) believes that Afghanistan could become the world’s top-quality producer. The country’s Herat Province, which shares the geography and climate of bordering Iran, is capable of producing saffron that bests the benchmark in color, taste, and aroma, says the cofounder of the new social enterprise company Earth2Globe.
The still-small 1,700 acres of Afghanistan’s saffron flower fields are cultivated nationwide, more than 40 times the land dedicated to the crop a decade ago. That could be a boon for food lovers globally, but for Luo, the true value of Afghan saffron is its potential to support agricultural development. The question for Earth2Globe: how can it brand Afghan saffron as a premium product and ensure that the profits are reinvested in the country’s agriculture sector?
In the field
Saffron crocuses are harvested by hand during a 21-day window in October and November. They are picked only in the morning, before the blooms open, to prevent damage to the red stigmas inside.
At the processor
Each flower has three red stigma that workers—overwhelmingly women, who are considered more skilled at the delicate task—separate from the yellow “style.” The stigma are then dried.
Historically, Afghan saffron has been exported to a wholesaler, where it is combined with saffron grown elsewhere, obscuring its source and often producing a lower-quality product.
The wholesaler sells the packaged saffron to a distributor.
The distributor sells it to a retailer.
The retailer sells it to the consumer.
Retail price: Average of $13–$17 per gram for premium saffron. The farmer and producer receive 8%–15% of the final retail value.
Earth2Globe’s model reduces the steps between the farmer and the consumer and ensures a higher-quality product. Saffron is sold to Earth2Globe, which handles export and packaging, as well as marketing.
Earth2Globe sells direct to consumers. The farmer and producer receive 20% of the final retail value, 1.3 to 2.5 times the now-typical amount.
Retail price: $15 per gram for premium saffron.
All data via Earth2Globe
Class of MBA 2011, Section I