Value chain analysis (VCA) has been used by an ongoing project in south-west Ethiopia to explore how a spice, korerima, can be developed to increase forest value and enhance sustainable forest livelihoods. The Ethiopian government has identified the spice sector as having economic growth potential within its strategy for commercializing agriculture but the VCA identifies significant challenges that need to be addressed to achieve this. These include practical problems of harvesting spice safely from the forest, quality issues relating to processing and storage, and market-based issues of access and information. Practical and organizational interventions are identified but the implications for poverty, environment and gender are significant and more detailed, qualitative research is necessary before implementation. The paper concludes that VCA is not a quick fix and requires significant investment and expertise for effective use and therefore needs to be part of long-term, flexible, iterative development initiatives.