Introduction to Cocoa Life Building a sustainable cocoa
Introduction to Cocoa Life Building a sustainable cocoa supply chain ICCO - International workshop on cocoa certification June 2013 David PREECE
Overview 1. 2. 3. 4. 5. Challenges of the global cocoa supply chain Certification and cocoa sustainability Our experience Cocoa Life Working together
Challenges of the global cocoa supply chain
Cocoa thrives in narrow geographic area Key cocoa origins % of global supply WEST AFRICA 70% LATIN AMERICA 10% Brazil Ecuador Peru Dom Rep 5% <5% <5% Cote d”Ivoire Ghana Nigeria Cameroon 35% 25% 5% 5% ASIA 20% Indonesia Malaysia Vietnam India 10% <5% <1%
Issues facing cocoa communities Farming Low yields due to aging trees, poor farming practices and lack of access to inputs. Community Many cocoa communities lack basic infrastructure making them unattractive places to live. Limited access to education and health services. Challenges around gender equality and women’s empowerment. Livelihoods The limited cocoa season and poor returns means that poverty and food insecurity are real challenges for the many small-holders which make up cocoa farming communities. Youth Environment Cocoa is struggling to attract young people from farming communities resulting in an aging and declining workforce. Child labour continues to be a problem in cocoa communities. Cocoa farming is conducted in a very narrow geographic area, vulnerable to the challenge of climate change.
Demand predicted to outstrip supply Without intervention a 1 MM tonnes deficit is forecast by 2020 Source: LMC
Certification and cocoa sustainability
Certification background • Certification is one of the tools the market has used to improve the sustainability of cocoa supply • Wide variety of different certification schemes – main ones: Fairtrade, Rainforest Alliance, UTZ • Varying approaches but similar objectives: to improve farmer livelihoods, minimize environmental impact, improve social conditions • Focus on farming practices. Fairtrade focus on trading relations • The amount of certified cocoa is growing rapidly. Currently 6% of the market (Source: KPMG ICCO report)
Sustainability and certification MDLZ is one of the largest buyer of Fairtrade cocoa and of Rainforest Alliance cocoa in the world Source: Cocoa Certification (2012) KPMG commissioned by the ICCO
Our experience of cocoa sustainability
Cocoa Life approach Generate empowered, thriving cocoa communities to increase sustainable cocoa supply Three principles Holistic farmercentered Partnership Sourcing alignment Measuring, evaluating and reporting on 5 key areas defining thriving communities Independently verified
Outcomes define thriving communities Farming We believe cocoa farmers deserve to earn an income that lifts them out of poverty so we help farmers improve their yields and livelihoods Community We believe in empowering cocoa farming families to create the kind of communities they and their children want to live in. We believe gender equality benefits everyone and work to improve women’s empowerment. Livelihoods We believe providing business knowledge and skills will create farming entrepreneurs and support farmers to increase incomes from other sources. Youth We are working towards eliminating child labor by helping communities tackle its root causes. We believe cocoa farming should be an attractive business for the next generation, so we work to inspire young people about a future in cocoa farming. Environment We believe in protecting the landscapes in which cocoa is grown to maintain ecosystems and provide viable environments and farming land for future generations
Working together
All stakeholders in the cocoa value chain must design solutions together For Mondēlez International, sustainability is a business necessity. Mondēlez International is a major buyer of certified products. „Cocoa Life“ will invest $400 Million by 2022 in West Africa, India, Indonesia, Dom. Republic and Brasil. Key principles: holistic farmer-centric, partnership, supply chain alignment.
Merci Thank You!
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