The document summarizes discussions from the World Cocoa Foundation meeting about challenges facing the cocoa supply chain over the next 15-30 years. It notes that while cocoa supply has kept up with 2% annual demand growth, supply will stagnate without improving farmer productivity as there is no available land to increase production. Key challenges include the aging farmer population, small and fragmented farm sizes, and low yields. Stakeholders are working on initiatives like CocoaAction to address these challenges through farmer training, higher-yielding cocoa varieties, community development programs, and strengthening farmer organizations. The goal is to transform cocoa farming into a viable profession with educated, professional farmers managing larger, more productive farms by 2030-2050.
After the cocoa industry was blamed for the many child labour scandals and because cocoa producers were being paid prices that were far too low, large chocolate companies took initiatives to improve the sustainability. What is the current situation, particularly after the cocoa price on the world market dropped significantly last year?
Even while market conditions are tough, across cocoa-producing regions cooperatives resolutely choose for sustainable or organic production and fair trade. Twenty of these cooperatives are supported by the Trade for Development Centre (TDC). To put a face on their endeavours, we visited Ghana and Côte d’Ivoire as well as Bolivia and Vietnam.
Discover how ethical your chocolate brand is. Ranking of 99 chocolate published by Ethical Consumer Magazine on their July/August issue 2018. Read about the sweet and bitter sides of the industry. You can help by choosing the right one and send a strong messages agains abuses in the industry like child labour, deforestation and poverty among many others.
Surveys conducted between 2009 and 2011 show that more than 250 000 children are used and exploited in cocoa plantations in West Africa (mainly in Ivory Coast). In 2001, some of the big names of the global chocolate industry signed the Harkin-Engel protocol and committed to addressing the worst forms of child labour. Ten years later, none of the goals set by this protocol were fully achieved.
In the article "Ethics in the chocolate value chain" the Trade for Development Centre describes the complexe structure which excludes poor cocoa farmers from sharing in the profits. The article lists some initiatives set up by the professionals and the big names in the sector.
After the cocoa industry was blamed for the many child labour scandals and because cocoa producers were being paid prices that were far too low, large chocolate companies took initiatives to improve the sustainability. What is the current situation, particularly after the cocoa price on the world market dropped significantly last year?
Even while market conditions are tough, across cocoa-producing regions cooperatives resolutely choose for sustainable or organic production and fair trade. Twenty of these cooperatives are supported by the Trade for Development Centre (TDC). To put a face on their endeavours, we visited Ghana and Côte d’Ivoire as well as Bolivia and Vietnam.
Discover how ethical your chocolate brand is. Ranking of 99 chocolate published by Ethical Consumer Magazine on their July/August issue 2018. Read about the sweet and bitter sides of the industry. You can help by choosing the right one and send a strong messages agains abuses in the industry like child labour, deforestation and poverty among many others.
Surveys conducted between 2009 and 2011 show that more than 250 000 children are used and exploited in cocoa plantations in West Africa (mainly in Ivory Coast). In 2001, some of the big names of the global chocolate industry signed the Harkin-Engel protocol and committed to addressing the worst forms of child labour. Ten years later, none of the goals set by this protocol were fully achieved.
In the article "Ethics in the chocolate value chain" the Trade for Development Centre describes the complexe structure which excludes poor cocoa farmers from sharing in the profits. The article lists some initiatives set up by the professionals and the big names in the sector.
Supply Chain Risk & Innovation is the new subscription publication from Innovation Forum. Bringing you insight, analysis and critical thinking on sustainable supply chain management.
This brochure lists a selection of our current subscribers, the key industries we cover, and information regarding our core audience. Also outlined are the benefits readers will receive with a subscription, and what to expect in the next couple of months.
Supply Chain Risk & Innovation is the new subscription publication from Innovation Forum. Bringing you insight, analysis and critical thinking on sustainable supply chain management.
This brochure lists a selection of our current subscribers, the key industries we cover, and information regarding our core audience. Also outlined are the benefits readers will receive with a subscription, and what to expect in the next couple of months.
1. AT ITS RECENT MEETING in Washington, DC, the
World Cocoa Foundation (WCF) detailed the
first 15 years of the industry’s efforts toward
establishing a sustainable cocoa supply chain
and then projected what the next 15 would
hold. What’s clear is that although there
has been progress, cocoa processors and
chocolate makers can’t rest
on their laurels; the
challenges of the cocoa trade
are daunting.
Presently, worldwide
supply and demand are
growing at about 2 percent
annually. Although supply
has kept up with demand,
there is no available land on
which to increase production
and supply will stagnate
unless farmer productivity
improves.
There are three to four
million cocoa farmers
worldwide with 95 percent
producing cocoa on farms
three hectares or smaller.
While farms need to be at
least five hectares to sustain a
family, many areas in West Africa are seeing
smaller farms as inheritance practices divide
up the land among siblings. Without enough
land to make a living, young adults are moving
away from the family land to the city. They
harvest what they can as extra income, but
don’t invest much in sustainable farming
practices.
The average age of cocoa farmers in West
Africa is 50 years and increasing.
THE CHALLENGE
Imagine one of the major parts you needed to
make your product wasn’t easily available.
Imagine instead, the makers of this part were
scattered all over the world,
each with the ability to make
only a few parts in a year.
Now imagine many of these
parts-makers couldn’t read
or write and didn’t have a
way to transport the parts to
you. Further, imagine they
were no longer sure they
wanted to pass their unique
skills along to others.
Imagine it were up to you to
solve this problem. What
would you do?
The reality is, if you
manufacture and/or sell a
chocolate product, these
farmers are supplying the
cocoa beans you need to
make chocolate. What are
you going to do?
THE VISION
Getting to the vision seems an elephantine task
but companies, governments, banks and others
are working together to bring about essential
changes.
Imagine a cocoa supply chain that operates
A Roadmap To
Cocoa’s Future
The future of the
cocoa supply is in
jeopardy, with a
range of factors
impacting its
sustainability.
Susan Smith
reports from the
recent World
Cocoa Foundation
meetings on what
can be done.
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CACAO SUSTAINABILITY
3M
to 4MNumber of cocoa
farmers worldwide.
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2. along healthier business practices —
one with young, professional, educated
farmers. Imagine each farmer works
within a business plan making product
to a minimum set of standards and
practices, and has knowledge of prices,
market factors and new technologies,
with sufficient credit to be able to take
out loans to expand his or her business.
Farmers belong to an organization that
provides them with business principles,
pre-financing and the ability to
successfully manage larger farms.
You, as the buyer, are able to verify
that the farmer’s product meets a set of
key performance indicators. The
farmers operate in an environment of
thriving communities providing good
wages, health care, education and a
good quality of life for everyone in the
community.
Imagine that by 2030 there will be
continued movement toward farmer
organizations (similar to farmer co-ops in the
U.S.) that will provide a business structure
including education, standards and pre-
financing and encourage professional farmers
to manage larger tracts of land. By 2050, cocoa
farms around the world will be larger and yield
more high-quality cocoa per hectare.
THE HOW
The enormity of the changes that must occur in
cocoa farming during the next 15 to 30 years
might seem impossibly large, but like all
enormous tasks, the only way to complete them
is to focus on one or two goals at a time. Cocoa
processors, chocolate manufacturers and
traders have banded together under
CocoaAction, an umbrella strategy to accelerate
cocoa sustainability by focusing on productivity
and community development. CocoaAction,
with WCF managing its implementation, is in
the midst of establishing key performance
indicators on which everyone can agree — not
an easy task when each company-led program
has its own methods, but necessary.
Once finalized, companies will commit to
key performance indicators in a variety of areas,
including training and delivering improved
planting material and fertilizer to 300,000 cocoa
farmers and assisting communities through
education, child labor monitoring and women’s
empowerment.
One clear goal is to assist women in
developing their own income-generating
endeavors. Focusing on improving women’s
income and involvement in the farming
business and communities is a high priority,
especially when it comes to educating children
and providing them with necessary skills.
Oxfam undertook a business case in Ivory
Coast and the results showed that $10 generated
by women brought about improvements in
child health and nutrition, while $110 in income
from a man would be required to bring about
the same improvements.
Experts including Jeff Morgan, director of
global programs, Mars, Inc., and Kip Walk,
corporate director for cocoa sustainability, The
Blommer Chocolate Co., identify the need for
one additional concept: going beyond
certification to verification.
Most chocolate makers have pledged to
certify all of their cocoa-based products by 2020
through organizations such as Rainforest
Alliance, UTZ, Fair Trade or their own in-house
process.
Many see third-party verification using
66 Candy&SnackTODAY Se p t e m b e r / O c t o b e r 2 01 5 w w w. c a n d y a n d s n a ck t o d a y. c o m
CACAO SUSTAINABILITY
Cocoa is grown close to the equator in Latin America, West Africa and Asia. Challenges include the
need for farmer co-ops, schools, farmer businesses and technical training, and women leaders.
Providing women with the time and business tools to
enter cocoa farming and other entrepreneurial fields
will lead to children spending more time in school
and less time working.
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Looming challenge in supply vs. growing demand
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S O U R C E: T H E H E R S H E Y C O.
3. widely accepted key performance indicators as
a crucial next step in ensuring all of the things
necessary to increase farmer productivity,
including farmer training, good tree stock,
fertilizers and other standard signs of a
successful supplier-customer relationship. It’s
standard business practice: To get the end
product you want and need, you have to tell
the supplier what you want and follow up on
your commitments and contracts.
Bill Guyton, president of the World Cocoa
Foundation, notes: “There is no substitute for
direct interactions with farmers.” However
desirable, these interactions are not now
common; in fact, they are nearly nonexistent in
some countries. As in any business, farmers
need to know who is buying their cocoa and
what the buyer is looking for. Guyton explains
that when buyers are more involved with their
farmer suppliers, each makes a commitment to
the other, and buyers are more likely to
contribute to community improvements that
they might not have thought of with a more
distant farmer-supplier-customer relationship.
Barry Callebaut Vice-President, Global Cocoa
Sustainability and MD Biolands Group Nicko
Debenham points out that in the past, many
industry players believed “prices are the best
fertilizer,” but despite fluctuations in prices,
farmer income has not varied for any number of
reasons, including government regulations.
Even certain proven interventions such as
grafting more durable or better-quality tree
stock onto existing trees are regulated by
government cocoa boards in some countries.
However, certification has meant that cocoa
boards have had to evolve to allow for some
management by the private sector through
warehousing that separates cocoa.
A more certain way to increase farm family
incomes is to increase farm yields, a clear
CocoaAction goal.
THE FUTURE
Imagine that, despite the daunting challenges, a
transformation will be well underway within the
next 15 years and larger-scale transformation is
likely by 2050.
Without productive professional farmers,
there will not be enough cocoa to meet
demands. But Gary Guittard, president of
Guittard Chocolate Co., imagines worldwide
changes comparable to radical changes that
have already occurred in the Dominican
Republic and Ecuador, where farmers are
producing more cocoa and receiving premiums
for the higher-quality cocoa they produce.
It is a hopeful road we travel toward the kind
of interaction most of us consider routine with
our suppliers, toward a business that supports all
participants along the supply chain. CST
Oxfam undertook a business
case in Ivory Coast and the
results showed that $10
generated by women
brought about improvements
in child health and nutrition,
while $110 in income from a
man would be required to
bring about the same
improvements.
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CACAO SUSTAINABILITY
Because cocoa farms are surrounded by forests in most parts of the world, there is
no land to expand. Cocoa farmers will need to increase yields on the land they have.
The main challenge is to increase average
yields at a rate similar to demand
Susan Snyder Smith is
a principal at SKS
Communications.
Formerly, she headed
communications and
public affairs at NCA
and was Executive
Director of its Chocolate
Council. She has had
the privilege of meeting cocoa farmers in
Latin America and West Africa. She can be
reached at susansnydersmith@gmail.com
and followed on Twitter at @susan3051.
CONTRIBUTOR INFO
S O U R C E: L M C I N T E R N AT I O N A L