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Beyond Fairtrade: Chocolate companies & socially sustainable cocoa sourcing Stephanie Barrientos University of Manchester

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Presentation on theme: "Beyond Fairtrade: Chocolate companies & socially sustainable cocoa sourcing Stephanie Barrientos University of Manchester"— Presentation transcript:

1 Beyond Fairtrade: Chocolate companies & socially sustainable cocoa sourcing Stephanie Barrientos University of Manchester

2 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

3 World Cocoa Producing Countries World Cocoa Producing Countries Cocoa is the strategic raw material for Chocolate manufacturing grown 8° north and south of equator. 3Cocoa: IDPM, University of Macnhester

4 Changing Global Cocoa-chocolate Value 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)

5 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

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7 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 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

8 Kuapa Kokoo –Cooperative of

9 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

10 Capturing the Gains


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