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

• A business is an organisation that provides products or services to consumers.

• Most are privately owned and exist to make money for their owners.

• Businesses have to meet the needs of consumers.

Let’s look at conventional businesses first

• 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.

• 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 a Social EnterpriseOne 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

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

• 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

Why cocoa farmers? Like other small scale farmers, cocoa farmers remain poor

• Crops grown for foreign markets (eg cocoa) provide valuable income but the farmers often see little of the value from the end product (i.e. chocolate)

• 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

• 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 StoryBegins with cocoa farmers in Africa . . .

• 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 Divine StoryThe Kuapa Kokoo Farmers Union

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 Kuapa Kokoo slogan , Pa Pa Paa, means “best of the

best”

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 Storyobjectives 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

• …VERY BIG!

• 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 10kg each year which is the highest per capita consumption in the world

• In the UK 3 companies share 83% of the market: Kraft/Cadbury, Mars and Nestle

The Divine Story the chocolate market is…

Did you know? The average UK family spends more on

chocolate in a year than a cocoa farmer earns in

a year

• 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 StoryThe Mixed blessings of success…

• Partnership based• Committed to Fairtrade• Ownership

The Divine StoryHow is the Divine business model different?

The Importance of Great marketingDivine does advertising with ethics

The Divine StoryMarketing – tapping into key events

Marketing DivineUse 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

Year Turnover Profit

2009/10 £10,415,340 £22,286

Divine Chocolate Ltd is profitable with good sales growth and has been able to pay dividends to shareholders

What Success looks Likefor divine chocolate

But sales and profits are only one measure of success

What Success looks LikeFor Kuapa Kokoo

• Sold 1,188 tonnes of cocoa beans at Fairtrade prices in 2009/10

• This earned the cooperative $3.8m • 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 Likefor the community - water wells

What Success looks Like for the farmers’ children - schools

What Success looks Likefor 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