Cocoa Industry

Camille Faure, Mehdi Husset, Thomas Bruneel,

David Julliard, Camille Chandaras

Summary
I.

Presentation of the sector

Information about cocoas sector

II.

Overview of an enterprise: Barry

Callebaut
Issues faced and solutions

III. Our recommendations

Some data about cocoa

79% of the production in Africa (59% Ghana, Ivory
Coast mostly) the rest is produced in Asia and Latin
America
World consumption is more than 3 million tons of
cocoa beans annually
By 2012, the global chocolate confectionery market
made net sales of approx. 80 billiondollars
Production comes from small plantations, and it
represents the only source of revenue of 5.5 million
of farmers family

Cocoa productions map

Industry actors

Source :
makechocolatefair.org

Stakeholders
Salary
Good work
conditions

Stimulate economy
Develop a strength sector of
activity
Stimulate employment
Defend Humans Rights
Improve ethics in
Governme
business
nts &
Protect the cocoa
public
farmers
institution
s

Employee
s

NGO
Inform customers about
the production processes
Help companies control
their reputation
Manufactur
ers

Label
accreditati
on
organisati
ons

Consumer
s

End
consumers
:
Return
on
lower
price, good
investment
taste
Make the company
successful
B to B : best quality
at lower price

Owners &
sharehold
ers

Suppliers

Farmers : good work

conditions, good salary,
insurance, improve practices
Secondary matter suppliers:
(packaging for e.g.) good
margins, constant activity

Interview of the Prime Minister of Ivory

Coast

GENERAL ISSUES

Ethical issues (1)

Human rights violation :
Slavery, child labour, human trading

When people eat

chocolate, they are
eating my flesh.

Ethical issues (2)

Unfair Trade :
Most of the value created is kept by cocoa and
chocolate manufacturers

Source :
makechocolatefair.org

Ethical issues (3)

Resources exploitation :
Extraction of a precious resource from the ground.
Farmers revenues are under the poverty line.

Ethical issues (4)

Farmers
The price of cocoa on the world market continues to
fluctuate up and down.
Farmers need to buy materials, such as tools,
fertilisers and pesticides, medicine, which are
expensive.
Farmers are often underpaid by local cocoa buyers
using fixed scales, set to show a lower reading than
the actual weight of their cocoa beans.
Even in hard times, it is difficult for farmers to switch
to other crops, which may take time to grow and
need new farming skills.

45,000 reasons to swap to fair-trade

chocolate

Vicious circle

Aggravating factors :
Poverty of countries
producing cocoa and
unemployment
Climatic conditions
to produce cocoa
Opening of new
markets ex. Asia

What causes child labour ?

Social factors :
parents themselves were child labourers
inter-generational poverty

Economic factors :
degree of poverty
unemployment

Public and government factors :

availability and quality of the educational system

Child & forced labour

BARRY CALLEBAUT

Presentation of Barry Callebaut

The worlds leading manufacturer of high quality
chocolate and cocoa products.
Founded in 1996 with the merger between the Belgian
chocolate producer Callebaut (founded in 1911) and
the French chocolate and cocoa company (founded in
1842).
Exclusively on B2B market.
2 types of clients : food manufacturer and
artisanal/professional users of chocolate.

Main date
1999 : acquisition of the Swiss chocolate maker
named Carma (founded in in 1931).
2013 : acquisition of the cocoa business Petra Foods
(founded in the 50s).
Barry Callebaut received in 2013, the Sustainable
Standard-Setter award from the Rainforest
Alliance for its collective sustainability efforts over the
past years

Faced issues (1)

Many players along the cacao value chain[]The cocoa
value chain is generally fragmented and complex; it often
involves intermediaries and varies from country to country.
To operate over 34 countries.

Faced issues (2)

Demand continues to grow BUT production remains
flat
Environment : the energy and carbon intensity
Make cocoa farming viable and attractive to
farmers today and tomorrow.
Sustainable production : when farmers are able to
follow responsible labor practices and safeguard the
environment. They must hence be able to earn an
equitable income and provide for the basic health and
education needs of their families

Relevance to stakeholders
Low
medium
high

Issues materiality matrix

Low

Biodiversit
y
Palm oil
GMOs
Sugar
Milk
powder
Soy
lecithin
Hazelnut

Health benefits
Calories
Food safety
Quality

Traceabilit
y
Transparen
cy
Governanc
e

CO2 emissions
Water used
Waste

oc
Ch
oa
Fo ild
Fa rce lab
rm
o
er d lab ur
Lo liv
o
Fu w y elih ur
tu r i e
o
e c ld s o d
su
pp ocoa
ly

Environment

nt
ty
Tale d safe
an ty
h
t
l
si
Hea Diver lations
es
e
r
e
r
ou
oy
l
Lab
p

Em

medium
Relevance to the company

high

Example of implementation : Barry

Callebaut (1)
Cocoa Horizons
3 gaps separating current reality from sustainable cocoa
farming : Farmer practices
Farmer education
Farmer health

Example of implementation : Barry

Callebaut (2)
Farmer practices
Training infrastructure
Model farms
Yield Enhancement Services
Controlled Fermentation
Certification
Controlled Fermentation Technology

Example of implementation : Barry

Callebaut (3)
Farmer education
Provide cocoa curriculum
Support literacy, life skills and vocational
training
Help to empower women and girls
Contribute to educational infrastructure
Support child labor sensitization
activities

Example of implementation : Barry

Callebaut (4)
Farmer health
Medical center in Goh
2,500 mosquitoes nets distributed (fight against
malaria)
Sanitations facilities in Ghana in progress
Partnership with the Child Labor Cocoa
Coordinating Group (CLCCG)

Recommendations (1)
There are different kind of
solutions:
Deliver disease-resistant cocoa
plantlets to farmers
Payment of compensations carbon
for the importation of the cocoa
Develop certification programs to
promote acceptable conditions for
farmers
Investment in agricultural research
focused on the cocoa
Use mobile technology to give
farmers information that will help.
This program is called CocoaLink

Recommendations (2)
Formed strong partnerships with different countries, local
governments, development organizations, industry peers to
develop programs
Professionalization of farmers : set up partners with different
Foundation to build or refurbish schools for children but also
for adult
Active Public-private platforms to debate on countries
orientations and exchange experiences on sustainability
Producing country engagement to certification to develop
cocoa country standards

Cocoa : KPI progress in 2012

Can the chocolate industry change its

ways?

Videos
http://www.cnn.com/video/data/2.0/video/bestoftv/2014
/02/28/exp-ivory-coast-cocoafarmers.cnn.html
http://thecnnfreedomproject.blogs.cnn.com/category/ch
ocolates-child-slaves
/
http://www.youtube.com/watch?v=YxBQs4JI8Zo#actio
n=
share
https://www.youtube.com/watch?v=CK5K-aHyxcE

Sources
Child Labour and Slavery in the Chocolate Industry:
http://www.foodispower.org/slavery-chocolate/
Franco-Canadian journalist killed by first ladys security guards, says French TV :
http://www1.rfi.fr/actuen/articles/115/article_4453.asp
Ivory Coast Arrests 3 Journalists Over Cocoa Story :
http://www.voanews.com/content/ivory-coast-arrests-3-journalists-over-cocoa-story-9866
1144/161593.html
Ivorian press June 2008 : http://abidjan.usembassy.gov/june_2008.html
The child slaves of the Ivory Coast - bought and sold for as little as 40 :
http://www.telegraph.co.uk/news/worldnews/africaandindianocean/cotedivoire/1317006/The-c
hild-slaves-of-the-Ivory-Coast-bought-and-sold-for-as-little-as-40.html
10 campaign : http://www.10campaign.com/issues/
History of Cocoa : http://worldcocoafoundation.org/about-cocoa/history-of-cocoa/
Fine chocolate industry : http://www.finechocolateindustry.org/
World cocoa foundation :
http://worldcocoafoundation.org/about-cocoa/cocoa-market-statistics/
International cocoa organisation : http://www.icco.org/statistics/other-statistical-data.html
Barry Callebaut Sustainability Report 2012/13
Quality Partner Program http://www.qualitypartnerprogram.com/
Barry Callebaut http://www.barry-callebaut.com/news
Cocoa Horizons Program http://www.barry-callebaut.com/cocoa-horizons