Sustainable, impactful
& collaborative
smallholder supply
chains: the Cafédirect
business model
EADI/ DSA Conference Sept 20th 2011
P-11 Panel: Tomorrow, the Business of Business will be ...?
Wolfgang Weinmann, Head of Strategic Development
Why we exist
At Cafédirect our mission is to
change lives and build
communities through
inspirational, sustainable
business.
Our brand today
Number 1 UK Fairtrade brand for sales in coffee
5.1% share of UK’s Fairtrade retail hot beverage sales
Turnover: 15.7 million GBP
•
6th largest Roast & Ground coffee brand
•
8th largest Freeze-Dried coffee brand
•
10th largest Tea brand
•
10th largest ‘add milk’ Drinking Chocolate brand
•
For more info visit our website www.cafedirect.co.uk
Source: CD Annual Report 2010 & Nielsen Scantrack, 52 w/e 16.4.11/ excluding Private Label
Is this sustainability?
Is it enough?
What are the new and upcoming challenges for
businesses?
Are product labels automatically providing solutions?
Are they the answer to everything?
Our São Tomé & Príncipe partnership
Reduce risk in our cocoa supply chain by
diversifying producer base
Improve our quality credentials in Hot
Chocolate category
Increase our impact where it counts most:
Least-Developed countries/ smallholder
farmers
São Tomé & Principe
• Second
smallest African country:
population of just 165,000
• 500 years of Portuguese colonial
dominance: independence only in 1975
• Economy dominated by agriculture:
cocoa, coconuts, bananas
• United Nations Human Development
Index: # 129 out of 169 countries
• One of the world’s Least-Developed
Countries under UN/ World Bank criteria
Cocoa Smallholder Situation
• colonial times: people living and working on
plantations (‘haciendas’) owned by Portuguese
colonists/ complete dependence and exploitation
• since independence, workers first laboured on stateowned plantations, then received land and now produce
cocoa as smallholders;
• little support from outside and
complete dependence on local
buyers for trading
• sell only raw material/ wet cocoa
Investment in Quality
Investment in Sustainability
End results
Enabling Trade
• Providing new market opportunities
• Establish long term partnership
Increasing Grower Profit Share
• Grower income is 4 fold for CD
purchased cocoa vs. selling wet cocoa
Outstanding Quality Hot Chocolate
• Quality improvement secured by
training & rewarding the growers
• Recognised Single Origin provenance
Wrap up
Possible to combine commercial with development
objectives from outset
Needs collaborative approach: PPP between CD +
IFAD + Gov of São Tomé + DFID / FRICH-Fund
Watch out ref time horizons:
Planning - Implementation: business usually quick –
development processes need a bit more ‘stages’
Impact: ppp’s set up for 2-3 year periods; however, impact
on the ground very often only materialises over longer time
Risks: slightly diverse appreciation of risk taking
across stakeholders
THANK
YOU