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Beyond Fairtrade: Chocolate companies & socially sustainable
cocoa sourcingStephanie Barrientos
University of Manchester
Research Questions
• Why are companies mainstreaming socio-economic sustainability and fair trade in the value chains?– Changing profile of cocoa-chocolate value chain– Socio-economic challenges in cocoa farming– How are chocolate companies addressing challenges
of socio-economic sustainability in cocoa?
• Concluding Remarks
World Cocoa Producing CountriesWorld Cocoa Producing Countries
Cocoa is the strategic raw material for Chocolate manufacturing grown 8° north and south of equator.
3Cocoa: IDPM, University of Macnhester
Changing Global Cocoa-chocolateValue Chain
• Dismantling Cocoa Marketing Boards - SAPS 1980s
• Concentration of Chocolate confectionary industry
• Production – Fragmentation– 70% from W. Africa – 90% smallholder farmers– Decline Quality (except Ghana – COCOBOD)– Price volatility and secular decline (-13% 1993–2005)
• Market segmentation: niche, quality, volume• Future growth in Chocolate Demand in South
– Average rate of growth 2 -3%, BRICS much higher (8-10%)– Estimated 2020 cocoa shortage of 0.5 m tons + (Amarjaro)
Challenges to socio-economic sustainability (Ghana)
• Profile: ageing smallholder farmers (51 years)• Low yields (40% of potential)• Poverty (Mean per capita daily income $0.42 cocoa alone, $0.63
from all sources)
• Child labour• Poor social infrastructure (water, health, schools,
transport)• Youth aspiration - to leave cocoa • Risk to long term socio-economic sustainability of
cocoa sourcing
Promoting socio-economic Sustainability in Cocoa
• Responses on child labour– Harkin-Engel Protocol– Industry/IUF/NGO initiatives (eg. ICI)– Government plans (eg. Ministry of Manpower Ghana)
• Growth of Certification Schemes– Fairtrade, Rainforest Alliance, Utz
• Company-civil society Initiatives:– Farmers’ and cooperative group support - companies (including Kraft &
Cargill) + NGO Care (since 2006)– Cocoa Partnership (Cadbury/Kraft)
• Founded 2007 - UK£45m• Alliance with civil society organisations (north and south)
– Nestlé Cocoa Plan (2009) – Gates Foundation (2009) with World Cocoa Foundation, GTZ, Mars,
Hershey, Kraft etc. – cocoa and cashew programme Africa • ICCO est. 60 producer initiatives
Concluding Remarks
• KEY FINDINGS– Value chain (dis)articulation: companies v. producers– Sustainable cocoa supply no longer assured– Development shift at producer level
• KEY RECOMMENDATIONS– Rebalance value chain – companies, certifiers, trade– Building capabilities at grass roots - stakeholder
initiatives (inc. government, donors, NGOs, TUs)– Vision - farmers and workers organised and
empowered as productive value chain actors
Capturing the Gains
www.capturingthegains.org
