The Opportunity

Panela is a natural and healthy sweetener that provides additional benefits to traditional sugar and other sweeteners. The current market for panela is significant ($323 Bn USD size estimation) and continues to expand due to its multiple benefits and uses not only within the food & beverage industry but in the cosmetic and healthcare industries.

Colombia is uniquely positioned to take advantage of this opportunity:

• The panela value chain is the second largest rural employer in Colombia: 350,000 families work along the panela value chain and 310,000ha of land are used for raw sugar cane production
• The Colombian panela export market has grown steadily over the past ten years and growth from the last five years is estimated at 24% for volume and 22% for value (CAGR).

There is a growing local and international market demanding superfoods, and those clients are closely looking to source these products from tropical bio-diverse countries such as Colombia.

Despite this opportunity, panela smallholder producers are generating loses due to multiple factors:

1. The informal market – Panela is part of the national consumer basket and customers are willing to buy panela that lacks the required sanitary standards. As a result, those producers that comply with bio-sanitary standards suffer from informal competition.
2. Lack uniformity – The availability of high-quality export-oriented panela is rare. Smallholder farmers lack the technology and knowledge to achieve the quality required by international clients.
3. Low productivity – Similarly, due to the lack of technology and knowledge, the sector suffers from low productivities, forcing smallholder farmers to broaden the spectrum of their activities to achieve a minimum income.