West African Chocolate Success Story

By David South, Development Challenges, South-South Solutions

SOUTH-SOUTH CASE STUDY

A Ghanaian chocolate company has become a big success in the United Kingdom and shown how it is possible to develop and market a high-quality product grown in West Africa. While the chocolate bars are manufactured in the Netherlands, the cooperative that owns the company initiated the push into producing a mass-market chocolate brand – and shares in the profits.

The Divine chocolate brand is available in shops and supermarkets across Britain and is the product of the Kuapa Kokoo (http://www.kuapakokoo.com/) cocoa farmers cooperative. The Divine brand was launched in the U.K. in 1998 as the first Fairtrade (http://www.fairtrade.org.uk) chocolate bar aimed at the mass market. Previously, most Fairtrade chocolate was made for high-end customers.

Apart from the chocolate bars, the co-op also sells its cocoa butter to The Body Shop (http://www.thebodyshop.co.uk/_en/_gb/index.aspx), a chain of natural beauty retailers.

In 1997, at the co-op’s annual general meeting, members decided to create a mass-market chocolate bar of their own. Ambitiously, they did not want to just be a small, niche-market chocolate bar. They wanted to take on the big brands. They set up The Day Chocolate Company in 1998 and received support from a collection of international charities, aid agencies and businesses.

The Chocolate Company is structured to have two members of the co-op on its board of directors, with one out of four yearly board meetings held in Ghana. As shareholders, the farmers also receive a share of the profits of chocolate sales. Britain’s chocolate market is worth £4 billion a year (US $6 billion) and the country has hundreds of chocolate brands, making competition for customers fierce. The Divine range of chocolate has been designed to match U.K. market tastes.

Ghana has an excellent reputation for the quality of its cocoa beans and has been growing cocoa since it was first brought to the country from Equatorial Guinea in 1878 by Tetteh Quarshie (http://www.ghanaweb.com/GhanaHomePage/people/pop-up.php?ID=128).

Kuapa Kokoo’s success story has its origins in responding to the structural adjustment programmes (http://en.wikipedia.org/wiki/Structural_adjustment) which started liberalizing Ghana’s cocoa market in 1993.

The lock the government had on selling cocoa to the Cocoa Marketing Company had been lifted. Now the opportunity was there for others to sell to the Marketing Company and some farmers decided to form a cooperative, Kuapa Kokoo – “the best of the best”. They wanted to get a better price for the cocoa and to improve working conditions and lives of the pickers.

The cooperative does all the processing of the cocoa and delivers it to market. One of the great advantages for the farmers is the honest weighing of the beans – something previous buying agents would cheat doing. By creating a more efficient and fair process, greater savings are made on the price paid for the beans and this is passed on to the co-op’s members.

The farmers are also trained to do tasks like weighing and bagging the cocoa, removing the need for outside help. Every year the farmers receive cash bonuses based on the co-op’s profits and any efficiencies made.

With this success, Kuapa Kokoo grew and now has more than 40,000 members spread over 1,300 villages.

The co-op offers various services to the farmers including a credit union to help with finances. There are also 33 Research and Development Officers employed by the co-op to oversee training and election.

The number of women farmers has grown over the years, from 13 percent to 30 percent.

Extra income-generating skills are encouraged for the women farmers as well. One project is to make soap from the potash produced from burnt cocoa husks. Women have also been given machines to crack palm kernels for cooking oil.

Comfort Kumeah, a 62-year-old co-op farmer, lives in the village of Mim in the Ashanti region. A former teacher for 39 years, she inherited 20 acres of land from her husband’s family.

“Each farmer has a passbook to record weight and payment. In the whole of Ghana, only Kuapa Kokoo … is certified Fairtrade,” she told the Sunday Times.

“I was voted chair of the farmers’ trust and national secretary for the union; once a year I attend a conference to vote on how the Fairtrade premium is spent. Last year we bought a palm-nut crusher and we sell the red oil on the market.”

“Before, I was always cheated. Purchasing clerks would come and weigh the beans and you never knew if their scales were correct, as no one checked them. Some embezzled the money instead of paying it to the farmers.”

“Owning this company has given cocoa farmers a voice for the first time.”

Kuapa Kokoo sells around 1,000 tonnes of cocoa every year to the European Fairtrade market (http://www.etfam.com/index2.php). This has many advantages for sellers if they meet certain conditions. These conditions include health and safety requirements and democratic decision making. If they are met, the producers receive a guaranteed price for their goods and long-term trading contracts. This means a stable price despite market fluctuations. With a stable price, it is easier to plan and save money.

Ghanaian cocoa has a good international reputation and trades at a higher price because of this. Cocoa once made up 66 percent of Ghana’s foreign exchange, but is now down to 35-40 percent as the economy has diversified into areas like information technology.

Cocoa is usually grown on small family farms in Ghana. Farmers also grow crops like plantain to provide food for the family. Around 1.6 million people are involved in growing cocoa and its business in Ghana. Cocoa trees grow to 15 metres in height and take three to four years to start producing a crop. An entire year’s worth of a tree’s crop can make three large chocolate bars.

A tree can produce two crops a year. Each cocoa pod produces around 40 seeds.

“A cocoa farmer’s life is hard,” admits Comfort. “In the lean season, we have no income. Also, cocoa is controlled by climate. Drought followed by too much rain causes fungus and rot, and then every farmer is poor.”

“I have saved money for my children’s education but my own needs are few: clothes, soap and toothpaste. Generally, you know, women are strong. Last year more women than men were voted onto the Kuapa Kokoo national executive and now hold some of the most senior positions.”

Resources

1) Divine’s online shop. Website: www.divinechocolateshop.com

2) An online shop with various Fairtrade chocolate brands for sale. Website: http://www.simplyfair.co.uk/acatalog/Chocolate.html?icid=J158-11634392-071H&gclid=CMOlycDN8KACFUkrDgodjXDsEg

3) How to make chocolate bars from the bean to bar. Website: http://www.wikihow.com/Make-Chocolate

4) Home Chocolate Factory: A website selling the moulds and other accessories for making chocolate products in small factories or at home. Website: http://www.homechocolatefactory.com/

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