The health and wellness sector portends great opportunity for Grenada for a variety of reasons, not least of which is the exponential global growth of the sector and the fact that Grenada has unique attributes that give it some degree of advantage in the world stage.
Increasingly, the wealthy are seeking a place abroad where they can both holiday and, at the same time, tackle some aspect of their healthcare. Grenada produces some of the finest spices in the world, among which are some prioritized for export under the agriculture sector, but which also feed naturally into the production of the oils that can be used in health and wellness therapies such as massage.
Globally, health and wellness is a multibillion-dollar business and is growing. According to a 2012 McKinsey Report, The Emerging Trillion Dollar Market for the Health and Wellness Industry, the North American market for alternative medicine is estimated at US$16.4 billion. Annual sales have been recording around 6–7 percent value growth year on year, with products with natural health properties being one of the key segments driving growth.
Growth in demand is explained by:
- The ongoing demand for fitness, de-stressing, preventative actions, nature-based healing, relaxation and wellness counseling, for which improvements in their wellbeing people are increasingly willing to travel (hence ‘wellness tourism’);
- An aging global population interested in staying healthy;
- Consumer acceptance of, and preference for, the role of natural foods in maintaining health;
- The growth of health food stores, along with the expansion among traditional retailers of their offerings of both the traditional and non- traditional wellness products;
- Rising obesity, targeted by several international and regional campaigns; and
- Improved access to information on wellness options.
In this last regard, one report found that consumers use the internet to research a broad array of health options: 96 percent of American adults who use the internet use it to look up health information and are open to many different health options, including ‘alternative’ medicines (Cloos et al. 2012).
Spa and wellness is an important and profitable sub-sector of the health and wellness industry. According to the International Spa Association (ISPA), in 2011 the US spa industry grew to more than US$12 billion and spa visits, to 150 million (ISPA 2011). These were mainly day and hotel spas, and half of the revenue came from facials and massages. The spa sub-sector does particularly well among Europeans, who have a long history of using spas and wellness springs. Nutraceuticals and cosmetics with special wellness ingredients also have high margins in Europe. The sector is complex and expands into services, agriculture and agribusiness. Figure 1 is a graphic representation of the most critical segments of the health and wellness sector, with an indication of the global industry value. The total global value of wellness tourism, which can encompass all of the segments presented, is estimated at US$106 billion.
Figure 1 Critical Segments of Health and Wellness Sector
With wellness tourism on the rise, critical market segments for Grenada and the rest of the Caribbean include:
- day and hotel spa services and products, which have grown tremendously and dominate the regional landscape, and which may be simple (facials and massages) or more holistic systems, including cuisine and counseling, and luxurious or less sophisticated;
- traditional herbal products, including teas and tonics;
- cosmetic formulations (driving personal care products and services);
- fitness services and products, including gyms, hiking and yoga;
- bottled water and health foods, including organic, packaged veggie foods and healthier desserts; and
- centers for cleansing and other wellness treatments.
Although the Caribbean has a strong tradition in herbal medicines, this is yet to be fully explored.
Grenada, a largely tourism-based economy, is known as the ‘Spice Isle’ on account of the wide range of spices that it produces and exports. Some, such as cinnamon, cloves, mace, nutmeg and ginger, are exported in their natural form. Grenada also benefits from a variety of plants, some of which are said to have medicinal benefits, and are used by the rural population for healing and wellness. There has, however, been little attention given to pulling together these various assets, and to developing the herbal and other wellness market segments under the ‘Pure Grenada’ country brand.
The most well-known Grenadian export is nutmeg oil, sold for pain relief by Noelville Ltd, which produces a range of nature-based products. West India Spices Inc. also produces nutmeg oil, nutmeg butter and lemongrass oil. Other in-demand exports, such as honey, are produced in Grenada.
A few micro or small skincare and other cosmetics companies using local herbs and spices are now emerging and making their presence felt in the local and tourist markets. The dynamics of the market in these areas are suited to small and medium-sized enterprises (SMEs), and there are significant opportunities for growth if attention is paid to improving R&D infrastructure and policies, entrepreneurship, and training in export development and management to strengthen SME involvement.
Value Addition for Grenadian Farmers and Processors of Oils and Wellness Products
Figure 2 Value Addition Process for Herbal Products
The figure 2 illustrates the value addition process that exists in Grenada for herbal products. While some value addition is already taking place, there is room for significant expansion. Teas, tonics and spice oils for cosmetics/personal care and aromatherapy are in high demand globally. The formulation of teas, and even tonics is less complex than that of essential oils and there is less competition for raw materials. In the case of aromatherapy and personal care products derived from local essential oils, however, there can be a challenge with respect to the price incentive to farmers in comparison with the value available on the oil market.
One example is the value chain for nutmeg in its raw or ground form versus nutmeg oil. For nutmeg in its raw form, the following value chain can be observed:
- Farmers receive a price of US$4 per 1 lb of nutmeg from the Grenada Cooperative Nutmeg Association, GCNA.
- The GCNA adds a margin (value) and exports the nutmeg to wholesalers at a price of US$10.92/lb.
- The wholesaler adds value and then sells to grinders at a price of US$14.20/lb.
- Grinders, in turn, add value and sell to food processors at a price of US$21.29/lb.
In relation to the extraction of nutmeg oil for cosmetics and aromatherapy/spas, assuming 8 per cent oil distillation, 27 lbs of nutmeg are needed to produce 1 litre (l) of oil, which Grenada sells at a price of about US$95/l – around a third of the price that it can get for the nutmeg in its raw form. This is a disincentive to extractors as to be profitable, nutmegs have to be sold under US$4/lb for nutmeg oil distillation.
Based on data from the International Trade Centre (ITC), Indonesian essential nutmeg oil sold in 2016 at US$172/kg and organic essential nutmeg oil at US$185/kg (ITC 2014). Accordingly, there may be room for Grenada to improve its prices, especially for its organic oils. At the prevailing price of US$95/l, however, local farmers have little interest in producing for the distillation of aromatherapy oils.
If a better price for farmers cannot be negotiated, it might therefore be appropriate for cosmetics/ aromatherapy producers in Grenada to import some of their raw material and/or to use private labeling companies outside of Grenada, and to build a cosmetic and aromatherapy industry based on strong branding, leveraging Grenada’s reputation for spices, wellness and relaxation. If local farmers/ distillers were to sell nutmeg oil at US$100/l to the local and regional cosmetic/aromatherapy industry, however, that could gross more than US$250/l in aromatherapy and cosmetic lines, excluding costs for promotion and distribution.
There are other high-demand oils, such as clove oil and lavender, which can also fetch high prices along the value chain. Mark-ups of 500 percent along the chain from growing lavender to making and selling personal care products are common (Profitable Plants Digest 2016).
Figure 3 Increasing Value of a Herbal Commodity
The figure 3 illustrates the increasing value of the herbal commodity by means of the application of certain processes that could also be applied to cinnamon grown in Grenada, with the addition of teas from cinnamon. Other than an exotic country of origin, fair trade and transparency with respect to product inputs are important considerations to consumers in the European market. The main markets would be the tourist industry and Grenadian diaspora, directly or through business-to-business (B2B) distribution networks in the first instance, and subsequently using other channels for exporting the final product, bearing in mind the high mark-up required by retail stores in the industry.
The vision for the health and wellness sector in Grenada is: To establish Grenada as a foremost authentic source for a tropical, purely natural wellness experience, within 5–10 years. The strategic goals for the sector include:
- to leverage Grenada’s assets in tourism, agriculture production, and traditional knowledge of herbs and spices to increase the country’s share of the global wellness market; and
- To enhance the ‘Pure Grenada’ tourism product with a locally based spa and wellness experience.
In respect of the marketing of ecotourism and community tourism, communities can add to the authenticity of the ‘Pure Grenada’ tourism product by means of a well-structured, holistic, rural ‘homestay’ plan, which incorporates most of the elements of wellness. (see Figure 1).
Figure 4 Village Home Stay Plan
Stakeholders engaging in the strategy development sessions also considered the enjoyment of herb gardens, of imposing, but relaxing, features such as waterfalls and of quiet spaces in nature to be part of the ‘rejuvenation through nature’ and wellness experience. Most importantly, stakeholders also asserted that, because of the strong links of the sector with agriculture, tourism, science and technology, and manufacturing, and because of the need for well-developed health-related standards, it is critical to establish a ‘wellness cluster’, possibly under the leadership of the GIDC in collaboration with the industry associations. (see Figure 5 highlighting the dimensions of the Wellness Cluster).
Figure 5 Wellness Cluster
A strategic approach to implementation might comprise the development of the following products and services in the short and medium terms.
- Short term (year 1)
- Tonics in the regional market (which will require a testing and labeling protocol)
- Teas (some of which are already in production)
- Scrubs, wraps and minimally processed skin treatments
- Honey packaged under the ‘Pure Grenada’ brand
- Medium term
- Essential oils
- Facial creams and lotions
- Nutraceuticals with claims to wellness, pain relief and reduction of blood sugar (in which regard, some testing will be needed)
- Organic products
More specific strategic considerations can be outlined within the framework of the four levers of strategy (perspectives).
- Development perspective considerations
- Employment (goods) Collate information on plant species of therapeutic value (type, location, therapeutic effect, amount); and
- Encourage distillation of nutmeg essential oils for sale to potential producers of aromatherapy locally and for export.
- Employment (services) Develop standards, or employ existing standards developed by Caribbean Export, for therapists who can provide services to the visitor industry; and
- Roll out a certified training programme for therapists.
- Rural development Build capacity among rural villagers to offer an integrated wellness service; and
- Provide investment support to start-ups.
- ‘Behind the border’ considerations
- Promote the preservation of traditional knowledge in herbs and spices as a source of both export and income.
- Improve the country’s capacity to develop formulations for producers of wellness products by reorganizing the Produce Chemist Laboratory and tapping into the technical know-how of scientists at St George’s University (SGU).
- Establish and circulate information on standards, including labeling standards for various markets, establish certification requirements (possibly through a website), and create a system for monitoring the quality of health and wellness goods produced.
- Provide market information, and production and export data, to encourage local entrepreneurs to develop the production of teas, tonics and aromatherapy for the tourist and direct export markets.
- Mainstream wellness tourism (including herbal baths, spas, herbal remedies, organic and veggie foods) into plans for the development of ecotourism/geo-tourism.
- Put in place a PPP allied to tourism to promote Grenada’s wellness brand.
- ‘At the border’ considerations
- Participate in international trade discussions on traditional knowledge and intellectual property rights.
- Create a wellness cluster to include MALFFE, the Ministry of Health and Social Security (MHSS), and the Grenada Tourism Authority (GTA), along with the Caribbean Spa and Wellness Association (C-SWA), aimed at collaboratively developing plans to implement proposed actions. In respect of the relationship between ecotourism/wellness tourism and rural development, the health and wellness SWG proposed that three working committees be established to focus on:
- the development of therapeutic products
- incorporating environmental (and cultural) assets into the ‘Pure Grenada’ brand
- developing standards and quality control for wellness goods and services.
Community-based organizations (CBOs) should participate in these meetings.
The GIDC could also lead taskforces comprising representatives of the GTA, Grenada Cultural Foundation, MALFFE, the Ministry for Carriacou and Petite Martinique Affairs (MCPMA), and CBOs, with C-SWA to lead the standards committee.
Notwithstanding these recommendations, it is expected that stakeholder agencies will function collaboratively and that a monitoring mechanism will be established to include the private sector, with meetings at least semiannually to review progress in the sector.