Divine Chocolate: A Fairtrade company co-owned by cocoa farmers

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Divine Chocolate A Fairtrade company co-owned
by cocoa farmers

• A Case Study in Social Enterprise

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The amazing story of how small scale cocoa
farmers in Ghana came to own 45 of Divine
Chocolate Ltd
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Lets look at conventional business first

• 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.

• 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.

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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

• In other words, its 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!

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So What is Divines Social Mission? Improving
the lives of cocoa farmers
Divine Chocolates 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
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Why cocoa farmers? Like other small scale
farmers, cocoa farmers remain poor

• 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

Other threats to small scale farmers Fluctuating
oil prices Rising food prices Agrofuels Climate
change
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The Divine StoryBegins with cocoa farmers in
Africa . . .

• 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

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The Divine StoryThe Kuapa Kokoo Farmers Union

• 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 Kuapa Kokoo slogan, Pa Pa Paa, means best of
the best
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
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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
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
Farmers sell Fairtrade cocoa beans to Divine
Chocolate
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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 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
To be a bridge between consumers and producers
Raising awareness of fair trade issues among UK retailers and consumers of all age groups
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The Divine Storythe chocolate market is

• 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 Cadburys, Mars and Nestle

The average UK family spends more on chocolate in
a year than a cocoa farmer earns in a year
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The Divine StoryHow is the Divine business model
different?

• Partnership based
• Committed to Fairtrade
• Ownership

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The Divine product range36 Products
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The Importance of Great marketingDivine does
advertising with ethics
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Marketing DivineEarlier Creative images
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The Divine StoryMarketing tapping into key
trade events
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Marketing DivineUse of Celebrity endorsement
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A Story Within a Story
The 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
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What Success looks LikeFor Divine Chocolate

• Profitable with good sales growth
• Able to pay dividends to shareholders

Year Turnover Profit Sales Growth
2007/08 12,376,340 330,184 16
But sales and profits are only one measure of
success
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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
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What Success looks Likefor the community water
wells
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What Success looks Likefor the farmers children
- schools
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What Success looks LikeFor women - empowerment
Comfort Kumeah Chair of Farmers Trust
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What Success looks Likefor the cocoa farmers
themselves
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 Stat
us Reputation Inclusion Knowledge A seat at the
table
Ownership in Divine
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in Summary

• 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

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Now its up to you. . . .

• Why not
• Tell your family, friends and neighbours about
  Divine chocolate
• Take part in the STOCK THE CHOC
  campaignhttp//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
  MISSIONPOSSIBLE
• 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

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A Decade of Divine
"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
I am more respected in my community and my
organization through my involvement with Divine
Chocolate Comfort Kumeah, cocoa farmer
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
Divine has surpassed expectations and proved a
beacon to all those working and praying for a
better world Daleep Mukarji, Director,
Christian Aid