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
Let’s look at conventional businesses first • A business is an organisation that provides products or services to consumers. • • Most are privately owned and exist to make money for their owners. • • Divine Chocolate is all about making and selling delicious chocolate. Making a good quality product that consumers want to buy is the starting point for everything Divine Chocolate does. Businesses have to meet the needs of consumers.
So what is a Social Enterprise One definition is… A social enterprise is a type of business which has been set up to achieve a social objective rather than just to make money for the owners • • Divine Chocolate is a brilliant example of a social enterprise Farmers own part of the company so they benefit when the business does well It was one of the first fair trade companies in the UK and is an example of how to be a successful business as well as helping make people’s lives better Working with a large cooperative of farmers in Ghana, Divine Chocolate sells Fairtrade chocolate and helps improve the lives of disadvantaged producers and workers at the same time
So What is Divine’s Social Mission? Improving the lives of cocoa farmers Divine Chocolate’s mission is to improve the lives of West African cocoa farmers by creating and selling chocolate bars that allow the farmers to earn more from the sale of those chocolate bars
Divine is a 100% fairtrade company • All Divine Chocolate’s products carry the Fairtrade Mark • The Fairtrade Mark is an independent guarantee that producers in developing countries get a fair deal • That means farmers get a fair price for their products and their communities receive a Fairtrade premium
Why cocoa farmers? Like other small scale farmers, cocoa farmers remain poor • • • There are 1. 4 billion smallholder farmers in the world They support 2 billion people living on the planet That is nearly a third of the world’s population • Smallholder farmers in poor countries often find that it is difficult to make a living from selling what they grow • Sometimes this is because the way trade works is unfair for them • Crops grown foreign markets (eg cocoa) provide valuable income but the farmers often see little of the value from the end product (i. e. chocolate)
The Divine Story Begins with cocoa farmers in Africa. . . • Ghanaian cocoa farmers typically earn less than £ 1 each day • Farmers have little control over the price they get 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 Story The Kuapa Kokoo Farmers Union • • They produce nearly 1% of world cocoa output Around 70% of their cocoa 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
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 lives of cocoa farmers and educating people in the UK about fair trade The more Fairtrade beans are sold the more the farmers income increases and the more money the farmers earn to spend on projects to help their community
The Divine Story objectives combine business drive and social mission To make and sell delicious chocolate To make the trading system fairer for everyone, including farmers To be a bridge between consumers and producers
The Divine Story the chocolate market is… • • • …VERY BIG! • In the UK 3 companies share 83% of the market: Kraft/Cadbury, Mars and Nestle A very mature and competitive market Globally dominated by four companies Global chocolate market worth £ 62 billion Global cocoa market £ 5 billion The average person in the UK eats 10 kg each year which is the highest per capita consumption in the world Did you know? The average UK family spends more on chocolate in a year than a cocoa farmer earns in a year
The Divine Story The Mixed blessings of success… • In Autumn 2009, Cadbury switched Dairy Milk to Fairtrade • The cocoa in Dairy Milk is sourced from Kuapa Kokoo • – Good news for Kuapa Kokoo – Fairtrade cocoa sales from Ghana have tripled – But increased competition for Divine Ironically, Cadbury could not have made the switch if Divine had not worked with Kuapa Kokoo for over a decade to create a Fairtrade cocoa supply chain with sufficient capacity
The Divine Story How is the Divine business model different? • Partnership based • Committed to Fairtrade • Ownership
The Importance of Great marketing Divine does advertising with ethics
The Divine Story Marketing – tapping into key events
Marketing Divine Use of Celebrity endorsement
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
What Success looks Like for divine chocolate Divine Chocolate Ltd is profitable with good sales growth and has been able to pay dividends to shareholders Year Turnover Profit 2009/10 £ 10, 415, 340 £ 22, 286 But sales and profits are only one measure of success
What Success looks Like For Kuapa Kokoo • Sold 1, 188 tonnes of cocoa beans at Fairtrade prices in 2009/10 • This earned the cooperative $3. 8 m • These sales earned Kuapa about $178, 000 in Fairtrade Premium to spend on farming improvements and community projects • Divine also gave Kuapa £ 208, 000 towards producer support and development in 2009/10 • Divine issued its first ever profit dividend to shareholders in 2007 and all 45, 000 farmers in the co-operative received $1 each
What Success looks Like for the community - water wells
What Success looks Like for the farmers’ children - schools
What Success looks Like for women - empowerment Christiana Ohene Agyare President of Kuapa Kokoo
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
Now its up to you. . Why not… • Tell your family, friends and neighbours about Divine and Dubble chocolate • Sign up to be a Dubble Agent at www. dubble. co. uk/dubble-agents • Hold a Fairtrade cake stall and raise money for your cause of choice with Dubble’s ‘Bake & Sell’ kit: www. divinechocolate. com/uk/shop/dubble • Estimate what you spend on chocolate each year and what you could do with your ‘buying power’ • Watch videos make the children of Fairtrade cocoa farmers: www. papapaalive. org
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