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
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.
So what is a Social Enterprise
One 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, it’s 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!
So What is Divine’s Social Mission?
Improving the lives of cocoa farmers
Divine Chocolate’s 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
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 500 million small farms in developing
countries which 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
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 receive for their cocoa
beans
Wanting to gain more control, farmers
pooled resources to create a cooperative 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
•
•
•
•
Together the farmers of Kuapa Kokoo provide
nearly 1% of world cocoa output
In 2009/10 around 70% of beans were sold to
Fairtrade buyers
The Fairtrade market is not yet large enough for
them to be able to sell 100% of their beans this
way
As demand for Fairtrade products rise farmers
are 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
The better Divine
performs the more it can
spend on improving the
supply chain, paying
dividends to shareholders
and on education
Farmers sell
Fairtrade cocoa
beans to Divine
Chocolate
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
The Divine Story
objectives 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
The Divine Story
the chocolate market is…
•
•
•
•
•
•
•
…VERY BIG!
A very mature and competitive market
Globally dominated by five companies
Global chocolate market worth £62 billion
Global cocoa market worth £5 billion
The average person in the UK eats 10kg
each year which is the highest per capita
consumption in the world
The average UK family spends more in a
year on chocolate in a year than a cocoa
farmer earns in a year
Other
17%
Mars
27%
Nestle
21%
Kraft/
Cadbury
35%
Three companies control 83% of
the £3.7bn UK chocolate market
The Divine Story
The Mixed blessings of success…
•
In Autumn 2009, Cadbury switched Dairy Milk to
Fairtrade with cocoa sourced from Kuapa Kokoo
– Kuapa Kokoo Fairtrade cocoa sales 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
•
In September 2011 Mars announced its first foray
into Fairtrade with the switch of Maltesers to
Fairtrade in 2012
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
• Profitable
• Able to pay
dividends to
shareholders
Year
Turnover
Operating
Profit
2009/10
£10,415,340
£22,286
But sales and profits are only one measure of success
What Success looks Like
Divine Chocolate income to kuapa kokoo
•
•
Year
Fairtrade
sales
Fairtrade
Premium
Producer
support
Shared
profits
2009/10
$3,856,248
$178,200
£208,307
£19,852
Kuapa Kokoo sold 1,188
tonnes of Fairtrade cocoa
beans to Divine Chocolate in
2010
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
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
What Success looks Like
for the cocoa farmers themselves
Ownership in
Divine
Tangible benefits for
farmers
Intangible benefits
for farmers
Move up value chain
Pride
Sit on the Divine Board
Respect
Part of decision-making
process
Status
Reputation
Profit share
Inclusion
Access to capital
Knowledge
A ‘seat at the table’
in Summary
Divine Chocolate Limited has shown that it is possible
for smallholder farmers from Africa to co-own a successful
company in one of the most competitive and mature
markets in the world
Now it’s 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 chocolate tasting event with Divine chocolate
• 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’
• Sign a petition asking local shops to stock Fairtrade chocolate
• Watch videos make the children of Fairtrade cocoa farmers:
www.papapaalive.org