Divine Chocolate: A Fairtrade company co-owned by cocoa farmers

1. Divine Chocolate: A Fairtrade company co-owned by cocoa farmers A Case Study in Social Enterprise

2. The amazing story of how small scale cocoa farmers in Ghana came to own 45% of Divine Chocolate Ltd

3. 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. Let’s look at conventional business first • 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.

4. So what is a Social EnterpriseOne definition is… • 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 shareholderstoo, 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! “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

5. 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

6. 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

7. 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 Why cocoa farmers? Like other small scale farmers, cocoa farmers remain poor Other threats to small scale farmers Fluctuating oil prices Rising food prices Agrofuels Climate change

8. The Divine StoryBegins 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 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

9. The Divine StoryThe 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

10. 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 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 Farmers sell Fairtrade cocoa beans to Divine Chocolate

11. The Divine Storyobjectives combine business drive and social mission

12. …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 The Divine Storythe chocolate market is… Three companies control 83% of the £3.7bn UK chocolate market

13. 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 StoryThe Mixed blessings of success…

14. The Divine StoryHow is the Divine business model different? • Partnership based • Committed to Fairtrade • Ownership

16. The Importance of Great marketingDivine does advertising with ethics

17. The Divine StoryMarketing – tapping into key events

18. Marketing DivineUse of Celebrity endorsement

19. 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

20. What Success looks LikeFor Divine Chocolate • Profitable • Able to pay dividends to shareholders But sales and profits are only one measure of success

21. What Success looks LikeDivine Chocolate income to kuapa kokoo • 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

22. What Success looks Likefor the community – water wells

23. What Success looks Likefor the farmers’ children - schools

24. What Success looks LikeFor women - empowerment Christiana Ohene Agyare President of Kuapa Kokoo

25. What Success looks Likefor the cocoa farmers themselves Tangible benefits for farmers Move up value chain Sit on the Divine Board Part of decision-making process Profit share Access to capital Intangible benefits for farmers Pride Respect Status Reputation Inclusion Knowledge A ‘seat at the table’ Ownership in Divine

26. 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 in Summary

27. 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