Divine Chocolate: A Fairtrade company co-owned by cocoa farmers A Case Study in Social Enterprise.
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Transcript of Divine Chocolate: A Fairtrade company co-owned by cocoa farmers A Case Study in Social Enterprise.
Divine Chocolate: A Fairtrade company co-owned by cocoa farmers
A Case Study in Social Enterprise
The amazing story of how small scale cocoa farmers in Ghana came to own 45% of Divine Chocolate Ltd
• A business is a legal entity that provides products or services to consumers. • Most are privately owned and exist to make money for their owners.• Businesses provide products and services that have to meet the needs of
consumers.
Let’s look at conventional business first
Divine Chocolate is a chocolate company. Making a good quality product that consumers want to buy is the starting point for everything Divine Chocolate does.
• In other words, it’s a marriage between business drive and social mission• Divine Chocolate aims to ‘walk the talk’; in other words, the brand values
reflect the business as a whole • At Divine Chocolate the farmers are shareholders too, taking social enterprise to
a new level; making a profit becomes a core element of meeting social objectives • Divine Chocolate has been a pioneer in the fair trade movement, demonstrating
how success can be achieved with an alternative model for business• Finally, Divine Chocolate is first and foremost a business that makes and sells
delicious chocolate!
So what is a Social EnterpriseOne definition is…
“A social enterprise is a business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community rather than being driven by the need
to maximise profit for shareholders and owners.” Source: UK DTI
So What is Divine’s Social Mission? Improving the lives of cocoa farmers
Divine Chocolate’s mission is to improve the livelihoods of West African cocoa farmers by creating a branded chocolate proposition that puts farmers higher up the value chain
• There are 1.4 billion smallholder farmers who support 2 billion people – nearly a third of humanity
• In Ghana domestic markets for crops such as rice and tomatoes are threatened because the EU, US, and even China, are importing their subsidised crops to Ghana
• Crops grown for foreign markets (eg cocoa) provide export earnings but the farmers often see little of the value from the end product (i.e. chocolate)
• Unfair trade is one of many factors which threatens the livelihood of small scale farmers, including cocoa farmers
Why cocoa farmers? Like other small scale farmers, cocoa farmers remain poor
Other threats to small scale farmers
Fluctuating oil pricesRising food prices
AgrofuelsClimate change
• Ghanaian cocoa farmers typically earn less than £1 each day
• Farmers have little control over the price they receive for their cocoa beans
• Wanting to gain more control, farmers pooled resources to create a co-operative of cocoa farmers, known as the Kuapa Kokoo Farmers Union
• Kuapa Kokoo means ‘good cocoa farmer’ in Twi, the language of the cocoa farmers
The Divine StoryBegins with cocoa farmers in Africa . . .
• Together the farmers of Kuapa Kokoo provide nearly 1% of world cocoa output
• Around 20% of beans are sold to Fairtrade buyers
• The Fairtrade market is not yet large enough for them to be able to sell all their beans this way
• As demand for Fairtrade products rise farmers will be able to sell more of their crop through Fairtrade channels
The Divine StoryThe Kuapa Kokoo Farmers Union
In 1997 Kuapa Kokoo made the major and innovative decision to set up a chocolate company in the UK in order to get more value from their cocoa
The Kuapa Kokoo slogan, Pa Pa Paa,
means “best of the best”
The Divine Story …Then moves to the UK where Divine is created
Divine produces and sells chocolate
sourced solely from Fairtrade cocoa
beans bought from Kuapa Kokoo
Farmers sell Fairtrade cocoa beans to Divine
Chocolate
The better Divine performs the more it can spend on improving the
supply chain, paying dividends to shareholders
and on education
The more Fairtrade beans are sold the more the
farmers income increases and the more social
premium is earned to the benefit of the community
The Divine Storyobjectives combine business drive and social mission
To make and sell delicious chocolate
• Divine aims to sell a quality and affordable range of Fairtrade chocolate bars in the mainstream market
• Competing in the mainstream market is a challenge but also gives credibility
To be a bridge between consumers and producers
• Raising awareness of fair trade issues among UK retailers and consumers of all age groups
To act as a passionate advocate for a trading system that brings dignity and respect to all its participants
• To be vocal, acting as a catalyst for change
• To be visible in the debate about fair trade
• Includes paying a Fairtrade price for all the cocoa used in products
• …VERY BIG! • A very mature and competitive market• Globally dominated by six companies • Global chocolate market worth £43 billion• Global cocoa market £5 billion• The average person in the UK eats 10kg each
year which is the highest per capita consumption in the world
• In the UK three companies share 70% of the market: Cadbury’s, Mars and Nestle
The Divine Storythe chocolate market is…
The average UK family spends
more on chocolate in a year than a cocoa farmer
earns in a year
• Partnership based• Committed to Fairtrade• Ownership
The Divine StoryHow is the Divine business model different?
The Divine product range36 Products
The Importance of Great marketingDivine does advertising with ethics
Marketing DivineEarlier Creative images
The Divine StoryMarketing – tapping into key trade events
Marketing DivineUse of Celebrity endorsement
A Story Within a StoryThe Dubble Bar … boldly going where no chocolate has gone before!In 2000, Comic Relief joined forces with Divine Chocolate Ltd to make the first Fairtrade product for young people – Dubble! Over 10 million Dubble bars have been sold and the Dubble family has also hatched an Easter egg and mini-eggs Over 50,000 young supporters of Fairtrade have signed up as Dubble Agents to change the world, chunk by chunk! www.dubble.co.uk is a source of fun and facts about Fairtrade for young people
Year Turnover Profit Sales Growth
2007/08 £12,376,340 £330,184 16%
• Profitable with good sales growth
• Able to pay dividends to shareholders
What Success looks LikeFor Divine Chocolate
But sales and profits are only one measure of success
What Success looks LikeDivine Chocolate income to kuapa kokoo
Year Fairtrade sales
Fairtrade Premium
Producer support
Shared profits
2007/08 $2,664,000 $249,750 £214,050 £47,352
• Kuapa Kokoo sold 1,665 tonnes of Fairtrade cocoa beans to Divine Chocolate in 2007/08
• Four incomes streams altogether from Divine to Kuapa Kokoo
“For us, farmer ownership always made Divine Chocolate special. For the first time our members benefit as owners of a wonderful chocolate brand, and not only as suppliers of excellent fairly traded cocoa.”Mr Ohemeng Tinyase, MD of Kuapa Kokoo Ltd until 2009
What Success looks Likefor the community – water wells
What Success looks Likefor the farmers’ children - schools
What Success looks LikeFor women - empowerment
Comfort Kumeah Chair of Farmers Trust
What Success looks Likefor the cocoa farmers themselves
Ownership in Divine
Tangible benefits for farmers
Move up value chain
Sit on the Divine Board
Part of decision-making process
Profit share
Access to capital
Intangible benefits for farmers
Pride
Respect
Status
Reputation
Inclusion
Knowledge
A ‘seat at the table’
Divine Chocolate Limited has shown that it is possible for small holder farmers from Africa to co-own a successful company in one of the most competitive and mature markets in the world
in Summary
Now its up to you. . . .Why not…• Tell your family, friends and neighbours about Divine
chocolate• Take part in the STOCK THE CHOC campaign
http://www.dubble.co.uk/stock_the_choc– Take action through the Chocolate Challenge Manifesto– Sign up to be a Dubble Agent and get on a
MISSION:POSSIBLE• Hold a chocolate tasting event with Divine chocolate• Sign a petition asking local shops to stock Fairtrade
chocolate• Estimate what you spend on chocolate each year and what
you could do with your ‘buying power’
A Decade of Divine
“With ‘Divine’ we all show that there is a way, where people from the
industrial nations and people of the non-developed countries are working
successfully hand in hand…”Corde Budde, chocolate
manufacturer
"We'd walk 500 miles for Divine -
but fortunately we can get it in our
local shop. Happy Birthday and keep up the good work“The Proclaimers
“Divine has surpassed expectations and proved a
beacon to all those working and praying for a better world…”
Daleep Mukarji,Director, Christian Aid
“I am more respected in my community and
my organization through my
involvement with Divine Chocolate…”
Comfort Kumeah, cocoa farmer