Asia Choco Cocoa Congress

Transcription

1 Asia Choco Cocoa Congress Case Study: Sustainability Without Satisfied Farmers? Vietnam s Emerging Cocoa Supply Chain Gricha Safarian Managing Director Puratos Grand-Place Indochina April 2015

2 Agenda 1. Elements of Sustainable Strategy 2. Concern today 3. Cases study: Sustainability Without Satisfied Farmers? Vietnam s Emerging Cocoa Supply Chain 4. Conclusion

3 Elements of a Sustainable Strategy R&D and Innovation Communicati on & Training Importance of stakeholders High & consistent quality Sustainable Strategy Fair repartition in supply chain Vertical integration Social responsibility Protect Natural resources & Environment

4 Trends of Sustainability Importance of pro-active Stakeholders engagement Increasingly companies have to pay attention and report to different groups of stakeholders Source: analysis by Professors Robert Eccles and George Sarafeim

5 Trends of Sustainability Resource scarcity Because of environmental conflict & instability, the last 10 years have seen a decoupling of the inverse relation between commodity price & GDP growth, cocoa is an example. Source: International Monetary Fund Primary Commodities Indices

6 Trends of Sustainability Companies are more exposed than ever In the current information age, nothing can be hiden due to the power & speed of social media.

7 Concerns affecting cocoa sustainability Unfair repartition between stakeholders in supply chain Farmers poverty Child labor Lack of training to improve yield & quality Competition with other crops Pre-financing of fertilizer Source: PGPV own study

8 A Sustainable Strategy Farmers happy with Cocoa Farmers wants. Fair & Stable Income Income Price Yield = X Market Training

9 CASE STUDY Sustainability Without Satisfied Farmers? Vietnam s Emerging Cocoa Supply Chain

10 Case Study Vietnam as a new cocoa player Output 3,500 tons (est. 2014/2015) An alternative to Coffee and Rubber A perfect inter-cropping solution with coconut, grape fruit Small holder farmers (ideal model?) A strong agricultural culture (world 2 nd in coffee, 2 nd in rice, strong in rubber, pepper, cashew)

11 Case Study Vietnam Roadmap according to PGPV strategy SUPER PREMIUM Price TRINIDAD 5,000 MT MADAGASCAR 10,000 MT PREMIUM VIETNAM 50,000 MT Ecuador 120,000 MT REP.DOM 20,000 MT VENEZUELA 30,000 MT Fine Flavor cocoa London Stock GHANA 800,000 MT IVORY COAST 1,475,000 MT BRAZIL 200,000 MT VIETNAM 3,500 MT Good Flavor cocoa DISCOUNT INDONESIA 410,000 MT Fermented Bulk cocoa Unfermented Bulk cocoa Quality

12 Case Study Quality approach via flavor A high quality bean International Cocoa Awards recognized as Cocoa of Excellence in 2013

13 Case Study Quality approach via flavor... Resulting in a great tasting premium couverture Gardener Dark 72% Gardener Dark 58% Gardener Milk 38% Gardener White 40%

14 Case Study Quality approach via certification Traceability High & consistent quality Social involvement - Certification premium creating value for the beans - Short term benefits for farmers and long-term benefit for country

15 Case Study Vertical integration: from pods to bars Cocoa beans Producing countries Semifinished products Liquor Butter Powder B-B chocolate Processing countries Consumer products Added value in cocoa producing country

16 Case Study Vertical integration: from pods to bars

17 Case Study Yield improvement via Training Cocoa Development Center (CDC) under the cooperation of Mars Group & PGPV Demonstrate the Productivity Package & guide farmers to optimize their plantation & get the best profit out of it Support technical knowledge from Clone, Grafting to mature

18 Case Study Fair repartition in Price Implement a true concept of sustainability in cocoa world by redirecting a part of sales price to be given back to farmers via Subsidy program Source: Cocoa Barometer Report 2015

19 Case Study Fair repartition in Price Chocolate Bonus (Fixed $/MT) Ex. $170/MT Ex. $212/MT Ex. $116/MT* Ex. 1,16 cent/100 gr Beans - Farmer Liquor - Grinder Chocolate Block - Choc Maker Chocolate Bar - Consumers (*) Dark chocolate 55% A fixed $/MT is paid at every level of the supply chain

20 Conclusion Increasing threat of competition with other crops (Vietnam but also Indo/Malaysia) Aging farmers, the new generations are looking for new options Extreme poverty is no longer acceptable in 2015

21 Thank you!