a fairtrade company co-owned by cocoa farmers

“The amazing story of how small-scale cocoa farmers came to own a share in

Divine Chocolate.”

Alistair MenziesWednesday 20th February 2008

FDIN Fairtrade Seminar, Birmingham

65% of the worlds cocoa is grown in West Africa

38%

18%

5%

5%

65% of the worlds cocoa is grown in West Africa

Côte d'Ivoire

38%

Ghana

18%

Nigeria

5%

Cameroon

5%Source: ICCO

Cocoa from Ghana

• Cocoa grows best in the humid shady conditions provided by the rainforest canopy.

• It is one of Ghana's main exports where it is mainly grown by subsistence farmers on small-scale farms.

• The average income of a Ghanaian cocoa farmer is c.US$300 pa*,(less that $1 per day).

*Source: Transfair USA

Introducing Kuapa Kokoo…

• Kuapa Kokoo was established in 1993. A co-operative of Ghanaian small-scale cocoa farmers consisting of 22 village societies.

• The Kuapa Kokoo logo ‘Pa Pa Paa’ is Twi for the ‘best of the best’. The co-op is keen to ensure that their cocoa and their business practices are the ‘best of the best’.

• Through a reputation for efficiency and honesty Kuapa Kokoo has expanded rapidly.

Kuapa Kokoo

• Kuapa Kokoo now has over 45,000 registered members, organised at three levels:– Society / village level– Area / regional level– National level

• Today Kuapa Kokoo produces over 1% of the world’s cocoa.

• The average income of a Kuapa Kokoo cocoa farmer is c.US$400 pa*.

*Source: Transfair USA

Kuapa Kokoo’s Mission

• Increased power and representation within the market for the farmers.

• Social, economic and political empowerment.

• Enhanced women's participation in all itsaffairs.

• Environmentally sustainable production processes.

Divine Chocolate Ltd

• In 1997 the Kuapa Kokoo members voted to create a Fairtrade chocolate brand and The Day Chocolate Company was formed – now Divine Chocolate Ltd.

• Divine Chocolate’s mission statement:“Improve the lives and opportunities of small-scale cocoa farmers in West Africa by establishing a dynamic, branded fair trade chocolate marketing company in the large UK chocolate market”.

The Rationale Behind Farmer Ownership

• Divine are trying to address how poor people can access more of the value they have indirectly generated.

• Company ownership formalizes the relevant contributions and distribution of income. Kuapa Kokoo own 45% of Divine Chocolate and play an active part in the strategic direction of the company.

• This gives both Kuapa Kokoo and Divine Chocolate a greater understanding the trading-chain and the continued development of business skills.

Divine Chocolate’s Objectives

• To take a quality and affordable range of fairtrade chocolate bars into the mainstream market.

• To raise awareness of fair trade issues among UK retailers and consumers of all age groups

• To be highly visible and vocal in the chocolate sector and thereby act as a catalyst for change.

• To pay the fairtrade price for all the cocoa used in products.

Heavenly Chocolate with a Heart

Heavenly chocolate….

Delicious Smooth

Rich Intense

Natural Irresistible

Tempting Indulgent

…with a heart

Farmer-owned Fairtrade

Empowering Honest

Transparent Inclusive

Sustainable Challenging

Selling the Story

• The Divine story is unique and helps achieve the initial sale, but ongoing purchase needs good product quality.

• Good quality product has led to increased product listingsand volumes each year.

• Excellent consumer marketingaffirms the consumer’s purchase.

2007 Highlights

• Successful Divine re-brand

• Several new high profile customersincluding: Lakeland, Boots, Virgin Atlantic

• Sales exceed £10M (20+% growth)

• Divine USA launched – created on a similar model to Divine Chocolate Ltd.

2007 Highlights

FY2005/06 - social premium payments on cocoa used in Divine chocolate exceeded £125,000.

2007 Highlights

FY2005/06 - Divine Chocolate announced its first dividend. As co-owners Kuapa Kokoo benefited by sharing in the profits.

Increasing Opportunity…

• Seasonal products offer an excellent entry point for Divine onto the fixture.

• Increasing demand Out of Home and B&I sectors.

• Divine bakery allows brand extension as well as increased purchases of cocoa / chocolate.

Conclusions

• Engaging with consumers and raising awareness of fairtrade has delivered an ongoing and growing demand for Divine Chocolate. Consumers want fairtrade products.

• The success of Divine Chocolate demonstrates that a ‘North-South’ joint venture is a viable business model.

• Thousands have benefited within Ghana as a result of fairtrade social premiums being paid on Kuapa Kokoo cocoa: schools, healthcare, micro-credit, sanitation etc

a fairtrade company co-owned by cocoa farmers

Thank You