Tag Archives: Twin Trading

Divine Chocolate: Innovative, Fair, and Delicious

Introduction

A major problem that has existed within the chocolate production industry has been the ethics surrounding the harvesting of cacao. For decades the means of harvesting cacao involved slavery where people were forced to work in harsh conditions, for 18 hours a day without pay (Carla Martin, Lecture 5). After the major cacao producing countries outlawed slavery, the working conditions still didn’t improve and the pay the workers received was not nearly enough to live. In fact, because many of the cacao producing farms were hidden in the jungle, many farm owners still got away with slavery because the lack of visibility meant the farm owners weren’t held accountable for their unethical standards. Even today visibility and pay are still a major problem in the cacao farming industry. In 2015, the average income for a Ghanaian household working in the cacao farming industry was between 50 and 80 cents per day (Carla Martin, Lecture 7).  However, one company that is working to bring ethics and visibility to the cacao farming and chocolate production industries is Divine Chocolate. 

Divine Beginnings

Divine Chocolate is a British bean-to-bar chocolate manufacturer that was founded in 1998. Their mission is to create delicious and ethical chocolate from the harvesting of the cacao beans, to the selling of the bars. They also, ensure that all other ingredients that go into their chocolate bars are produced in an ethical manner. Divine Chocolate was created when Twin Trading and Kuapa Kokoo came together with the goal of changing the world cacao market for the better.  Twin Trading is a non-governmental organization that creates farming co-operatives around the world. They focus on improving the working conditions and paying fair wages to farmers. Their main focus is on the ethical farming of coffee, cacao, and nuts (“Who We Are”). One of their farming co-ops is called Kuapa Kokoo, which is a farming co-op in Ghana that grows and trades cacao. Kuapa Kokoo is comprised of 85,000 farmers from 1,257 different villages (“About Us”). That number continues to grow because of the exceptional way they treat and pay their farming members. All of the cacao that goes into the Divine Chocolate bars are grown by farmers in the Kuapa Kokoo farming co-op. 

Scorecard grading the ethical standards of chocolate companies
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Kuapa Kokoo Cooperative

Kuapa Kokoo was founded in 1993 and it means “good cacao growers”. Their mission is “to empower farmers in their efforts to gain a dignified livelihood, to increase women’s participation in Kuapa’s activities, and to develop environmentally friendly cultivation of cocoa” (“The Divine Story”).  In, 1995, Kuapa Kokoo was the first small farm farmers’ organization in West Africa to receive the Fairtrade certification. They ensure the farmers are working reasonable hours, with sufficient breaks, and proper pay. Kuapa Kokoo does all the administrative work that goes into trading cacao and bypasses all the shady government cacao agents. This is to ensure visibility, fairness and that the farmers are not getting swindled by government agents or other entities with ulterior motives. Specifically, Kuapa Kokoo, “weighs, bags, and transports the cocoa to market [and] ensures that all its activities are transparent, accountable and democratic (“The Divine Story”). Before the Kuapa Kokoo co-op existed, government agencies would use faulty scales that misrepresented the true weight of a farmer’s cacao harvest. This allowed them to steal from unsuspecting farmers which further harmed them. 

Structure of Divine Chocolate and Kuapa Kokoo 

Where Divine Chocolate is especially unique is in their company structure. Today, 44% of Divine Chocolate is owned by the Kuapa Kokoo farming Co-op. In other words, this means that each farmer in the Kuapa Kokoo co-op has a small ownership stake in Divine Chocolate. This unique business structure earned Divine Chocolate the Millennium Product award “for its innovative organizational model” (“Inside Divine”). This is the first company in the world where the cacao farmers have a stake in the chocolate company they are harvesting for. This is significant because Kuapa Kokoo and its farming members now have a say in how Divine manufactures, markets, and sells their products. Because the farmers partially own Divine chocolate and Kuapa Kokoo is a Fairtrade co-op, the farmers are paid exceedingly better than they were before. Receiving a cut of Divine’s profit, having a say in Divine’s operations, and having an influence in the worldwide marketplace has greatly empowered and motivated the farmers because now their work is properly valued, their ideas are considered, and their well-being is a priority. 

Divine is committed to ensuring that farmers of Kuapa Kokoo have a voice in the company. Currently two out of the five members of Divine’s Board of Directors are from Kuapa Kokoo. Divine also ensures that at least one out of the four yearly board meetings are held in Ghana (“Inside Divine”). This ensures that all the farmers can witness and participate in the company in a meaningful way. 

Video showing the success that Kuapa Kokoo and Divine Chocolate’s partnership has generated

Goodness in Ghana

The effect that Divine Chocolate and Kuapa Kokoo has had on the community has been immeasurable. First, because Kuapa Kokoo is a Fairtrade co-op, they receive a Fairtrade premium. The Fairtrade premium is a grant of additional money given to the co-op so the farmers can collectively decide how to improve their community and their workplace. With this premium, the farmers have invested in community development, farm skill development, clean water, improving education, and several other things that improve the lifestyle of those in the community (“The Divine Story”). They similarly receive dividends from Divine Chocolate which allows the farmers to upgrade equipment yearly so as to ensure high levels of production.

Kuapa Kokoo is also deeply concerned with social and environmental issues. They been on the forefront of speaking out against child labor because they understand that this is still a major problem that needs to be address throughout the industry. They also have created several goals that are aimed at improving the environment and increasing productivity while still adapting to environmental changes. 

Worldwide Effect

Divine Chocolate has also had a large effect on the global chocolate market. They have set an extraordinary example of how to ethically run a chocolate company. Since their founding in 1998, the number of Fairtrade chocolate sales in the UK has skyrocketed by more than 8800%. Many of the major chocolate companies have also made a shift to become more Fairtrade. Divine Chocolate’s success inspired Cadbury to convert Cadbury Dairy Milk to Fairtrade. This was a major move because, not only was Cadbury Dairy Milk its leading brand, but Cadbury was also one of the major five chocolate companies in the world so having them convert even one product to Fairtrade had a major effect on a lot of people worldwide (“The Divine Story”). In the years following Cadbury’s move, Nestlé and Mars began buying cocoa from Cote D’Ivoire which was the beginning of their process to partially convert to Fairtrade. By 2013, the shift to Fairtrade chocolate worldwide was in full swing. In the UK specifically, in 2013 eleven percent of the chocolate sold was deemed Fairtrade (“The Divine Story”). Divine Chocolate takes pride in the fact that they were one of the first companies to commit themselves to Fairtrade ethics and they are even prouder that their example has inspired other companies to commit to Fairtrade production. 

Graph showing the large increase in Fairtrade Chocolate Sales in the UK
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Divine in the US

As I mentioned before, Divine Chocolate was a company that headquartered and sold only in the UK. However, in 2007, with the help of Oikocredit, (a company that provides loans and capital), Divine Chocolate was able to launch its United States branch of the company. In fact, Divine Chocolate launched in the United States on Valentine’s Day 2007 which is the day the most chocolate is bought and consumed in the United States (“The Divine Story”). Their original launch was very small; however, now Divine Chocolate is sold at Whole Foods, Walgreens, Walmart, and through Amazon.com.

In 2015, after the Divine Chocolate USA branch gained solid footing in the American market, Divine Chocolate merged their UK and USA branches to form one unified company. With this new structure, the Kuapa Kokoo co-op still remained 44% owners of the company (“Inside Divine”). The CEO of the newly merged company was Sophi Tranchell. She was a managing director from the UK branch of the company before they made the merge. After the merger she said, “Having launched Divine in the USA nine years after the founding company launched in the UK, it has been very exciting to see it successfully navigate all the challenges in the USA market and mirror the success of Divine in the UK. We have seen a growing appetite around the world for business being done differently” (“Inside Divine”). In this statement Sophi Tranchell alludes to the fact that Americans became more aware of the issues involved with products that weren’t Fairtraded. This heightened people’s willingness to purchase Fairtraded chocolate even though they are typically more expensive. Sophi also mentions how the added American dimension to the company makes their global reach much larger and makes Divine stronger because they can inspire and market to a completely different group of people. Furthermore, the new market allows Divine “to deliver [on their] mission to fairly and sustainably remunerate smallholder cocoa farmers in West Africa” (“Inside Divine”). This larger market means more profit which, in turn, means more money for the farmers who need it the most. 

Uniqueness in the Fairtrade Chocolate Market

One way that Divine Chocolate differentiates itself from a lot of other bean-to-bar Fairtrade chocolate companies is through the products they offer. Many bean-to-bar Fairtrade chocolate companies only offer dark chocolate. This is very problematic because the majority of the global market prefers milk chocolate and, if there are no Fairtrade options, consumers are forced to turn to the big 5 chocolate companies which are generally not Fairtrade. In fact, in a 2013 survey it was found that 51 percent of people prefer milk chocolate, 35 percent prefer dark, and 8 percent prefer white chocolate (Ballard). However, Divine helps fill this gap in the Fairtrade chocolate market because they offer all three types of chocolate in a variety of different flavors which very few companies do. Divine, along with a few other diverse Fairtraded chocolate companies , are helping take power away from the Big 5 Chocolate companies that are not fairly traded. 

Shows the wide variety of chocolates and flavors that Divine offers
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Outlook

Divines presence in the world market place is growing nicely. I believe Divine Chocolate will continue to grow and thrive in the Fairtrade Chocolate market. Last year group sales increased 6.4%, however the impending Brexit decision has affected their overall profit margins mostly because of the decline in value of the dollar and pound in relation to the Euro (Annual Report 2017-2018). Nevertheless, the number of sales increased nicely from the year before and, once the turmoil surrounding Brexit is resolved, the increase in sales will begin to show in their balance sheet. 

Kuapa Kokoo is also flourishing as they now produce almost 5 percent of Ghanaian cacao, which equates to about 640,000 sacks of cacao a year (“The Divine Story”). While 5 percent may seem small, the most important thing is that it is all produced and sold ethically, while prioritizing the health of its workers and the environment. Divine also has plans within the next year to expand its range of cacao to São Tomé (Annual Report 2017-2018). This will broaden their market appeal and it will allow them to bring their groundbreaking business model to the people of São Tomé. The farmers on São Tomé have historically been treated very poorly over the years and they will greatly benefit from Divine’s co-op business model. 

Conclusion

I think things are looking up on all fronts for Divine Chocolate. Their commitment for over 20 years to empower the farmer has transformed thousands of people’s lives. It is very important that Divine continues with their mission because, while they have made a big impact already, there is still a lot of work to be done in the global market place. All in all, Divine has done a great job addressing the major problems in the chocolate industry that we have discussed in class. They have increased visibility, paid fairly, and empowered the farmer so that participating in the bean-to-bar chocolate making industry is desirable and sustainable for everyone from the top to the bottom. 

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