Cocoa for change

Fairtrade#TheCoopWay

working with

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2016 saw the continued fall of cocoa prices, which reached their lowest levels for three and a half years. Unsustainably low prices are the root cause of the poverty which many farmers face.

The safety net for all too few is the Fairtrade minimum price of $2000 per tonne which will sadly be reached very soon should prices continue to fall.

Cocoa: Reducing prices. Increasing poverty.

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$2952$3123

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ICCO daily average price by month ICCO.org

Drying the cocoa beans at Kuapa Kokoo Credit: Elizabeth Hudson

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We sold the UK's first Fairtrade labelled chocolate bar in 1994. We were then the first in the world to launch an own brand Fairtrade chocolate bar which, with the support of our Members, was soon available in every Co-op store.

And 15 years ago, we switched our entire range of own brand chocolate bars to Fairtrade and issued a hard-hitting report which highlighted the deep underlying issues in the cocoa industry. We proudly campaigned for an end to exploitation of cocoa farmers in the developing world.

Over the years we have helped to build awareness, raise the issues and promote Fairtrade as part of the solution to sustainable sourcing, whilst challenging the industry to follow our lead.

We have continued to drive benefits to Fairtrade cocoa farmers over the last 15 years and whilst we have seen some progress elsewhere in the market, the major issues in the cocoa industry sadly remain. Many cocoa farmers still live in poverty. They are surviving on less than $2 a day, facing unsustainbly low prices and the challenges those prices create. Add to that the impact of climate change on crops, and it's easy to see why the future of the whole industry is an uncertain one.

We must all face up to the challenges once more. Having seen many years of positive impact and lives being changed for the good, Co-op is continuing to put its weight behind championing Fairtrade with further pioneering commitments. And we want other businesses to follow.

Steve Murrells, Group Chief Executive Co-op

Fairer, better, sweeter“At Co-op we believe in Fairtrade. It lies at the heart of our values and we are proud to be Fairtrade pioneers, championing what we believe is right. By partnering with Fairtrade, Co-op is addressing the issues of an unsustainable cocoa industry."

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Co-op’s cocoa-tastic new commitment

All the cocoa Co-op buys for its own brand product range, from the sprinkles on its doughnuts to chocolate tortes, will be sourced on Fairtrade terms. In addition, all of its own brand chocolate confectionery will proudly carry the Fairtrade Mark.

In a first for UK retailers, by the end of May 2017, all the cocoa Co-op buys for its own brand products will be Fairtrade.

"We know that Co-op has been committed for a long time and I am happy and proud about this new commitment. Farmers in Fairtrade do not sell enough of their volumes as Fairtrade. Schools, wells, health centres and health insurance are all investments farmers can imagine for the future.”

Fortin Bley Secretary General CANN co-operative and cocoa farmer

442% risein the amount of Fairtrade cocoa sourced by Co-op

526 t

2,848 t

This is a ground breaking move for the industry and a lead which Co-op is proud to pioneer.

To make this commitment possible, Co-op and the Fairtrade Foundation have worked in partnership to develop a new retail ready version of Fairtrade's cocoa sourcing program. This will allow the retailer to increase its annual purchase of Fairtrade cocoa 5.4 times over and deliver an extra £450K in Fairtrade Premiums to farmers every year.

The original Fairtrade Sourcing Program, introduced by Fairtrade International, was firmly developed for chocolate brands to enable certified farmers to sell more of their cocoa to them on Fairtrade terms. The program model did not account for the complexity of dealing with a significant number of very different manufacturing sites across a wide supplier base, and a vast number of products ranging from bakery to ice cream to cooking sauces, all requiring various types and differing quantities of cocoa. Co-op and Fairtrade have now created a solution for all food retailers to follow.

Forecast annual purchase

Current annual purchase

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Although the commitment from Co-op may be significant, the challenge still remains.

Currently the world’s cocoa production is on average four million metric tonnes per annum and only 2.5% of this total production is sold on Fairtrade terms. Only a fraction of the estimated 5.5 million farmers who depend on cocoa for their livelihoods are experiencing the fairer deal Fairtrade can bring.

Co-op is the only retailer to offer 100% own brand Fairtrade chocolate bars and confectionary range. Moving on from chocolate, Co-op will become the UK's first retailer to source 100% of its cocoa across its entire own brand product range on Fairtrade terms.

Whilst some major confectionery brands have put a Fairtrade Mark on a product or two, Fairtrade still only represents 9.8% of the UK confectionery market and it’s not nearly enough. The total Fairtrade UK grocery market has grown to be worth an estimated £1.6 billion, with confectionery representing 24% of this. The opportunity to change lives is huge but the industry needs to do more.

Whilst the media and NGOs have been on the frontline of addressing the issue of cocoa sustainability and the reality of cocoa farmers’ lives, Fairtrade was an early active participant in trying to tackle the root cause of unfair pricing.

In 2015, Fairtrade reported that 179,000 cocoa farmers were part of Fairtrade certified groups with those groups only selling on average 33% of their crop as Fairtrade. This means these farmers only receive the Fairtrade Premium and price security for a small proportion of their crop, limiting the potential for life changing support.

In Ghana, over 60% of cocoa farmers are 55 or over. Unless cocoa farming can be made more attractive to young people, we face the possibility of cocoa farmers and their skills dying out. Whilst one generation of cocoa farmers gets older, many youngsters move to the cities to seek better prospects.

Raising the bar

Fairtrade confectionery still only represents 9.8% of the UK

confectionery market

Co-op is the only retailer to offer

Own brand Fairtrade chocolate bars and confectionery range

100%

£1.6 billionFairtrade UK market worth an estimated

of that is confectionery24%

9.8%

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In 1844, as the industrial revolution was forcing skilled workers into poverty, the co-operative model was conceived as a democratic solution to address resulting issues such as exploitation, inequality, child labour and women’s rights.

Fast forward 150 years to the launch of Fairtrade in the UK. An alternative trading solution aimed at addressing those identical issues for the world’s most vulnerable and exploited.

When Co-op first came together with Fairtrade all those years ago, it was the most natural of fits. Two movements for change with fairness and people at their very hearts.

Together, Co-op and Fairtrade have gone on to do great things and reached out to hundreds of thousands of farmers and workers. But the sad fact remains that as consumers demand cheaper products, somebody, somewhere always pays the price. Nowhere is this more evident than in the cocoa industry.

The consequence of decades of uncertainty and reducing prices is that many farmers have neither the incentive nor resources to invest in replanting ageing trees, or purchasing expensive inputs necessary to produce a high quality crop. Younger generations who see no future in cocoa are heading for the cities in the hope of finding a more dependable livelihood, but are often ending up with an equally uncertain existence on the streets.

As a result, the average age of cocoa farmers in West Africa is now between 51 and 62. These factors equate to serious concerns across the industry about the long-term sustainability of the supply chain: no cocoa farmers = no chocolate.

Co-op and Fairtrade — addressing the problem

Breaking down

the issues

3.6%of cocoa farmers sell their cocoa as

Fairtrade

Only

Low prices

force young people out of cocoa farming

Poorly managed

farming has destroyed balanced

eco structures

Climate change is reducing yields

of temperature sensitive cocoa crops

50mlivelihoods

depend on cocoa

children work in West African cocoa

production

Women struggle in what is seen as

'a man's crop'

In Cote D’Ivoire, forest cover has

fallen from 16m to just 3m hectares in

50 years

Many cocoa farmers earn below

$2 a day

Over 2m

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Over 20 years Co-op has been told repeatedly by farmers and workers across many agricultural sectors that Fairtrade is the best model of fairness and sustainability for them.

This latest cocoa sourcing commitment will bring not just security through a minimum price, but also social and economic benefits to cocoa farmers.

In West Africa, as part of its commitment to Fairtrade, the investment from Co-op will be directly supporting the funding of Fairtrade Africa's Women’s Leadership School project.

The Leadership School will work intensively with women from farmer groups in Cote D'Ivoire, with the objective of empowering them as future leaders. They will be trained in business skills such as decision making, managing resources and leadership to enable them to take up more important roles in farmer organisations and communities.

Although women make up almost half the agricultural workforce in developing countries, they account for just over one fifth of the farmers registered as members of the producer organisations that are certified by Fairtrade across all commodities.

What’s more, legal, social and cultural norms often act as barriers to women’s participation. For example, membership of co-operatives can be dependent on owning land or crops, which may not be accessible to women. Some agricultural work also may be deemed inappropriate for women, and they may be expected to undertake most of the domestic work in the home, giving them less time to participate in producer groups.

The impact of the Co-op and Fairtrade partnership

Adjoua Nguessan, farmer at CANN Coopérative Agricole NZRAMA de N'DOUCI, Cote D'lvoire. Credit: Fairtrade Austria

Women farmers at CANN Coopérative Agricole NZRAMA de N'DOUCI, Cote D'lvoire. Credit: Fairtrade Austria

Kuapa Kokoo has formed district level gender committees, introduced quotas on committees and taken steps to ensure women have access to training and resources.

But the Kuapa story is much greater than championing gender equality...

Kuapa Kokoo, which translates as “Good cocoa farmer”, was established in 1993 when, for the first time, it was possible to set up a private licensed buying company in Ghana. A group of cocoa farmers saw the opportunity to set up their own buying company run by farmers for farmers.

From the beginning, Kuapa Kokoo was established around Fairtrade principles with the farmer members’ welfare at its heart and quickly built a reputation for producing high quality cocoa, developing an honest and efficient business

In 1998, Divine Chocolate was created as a company to market the farmers' cocoa as high quality chocolate products. Soon after, Divine and Co-op started to work together to develop the world's first own brand Fairtrade product. As the new millennium was dawning, and Co-op embarked on the first steps of its mission to ‘mainstream’ Fairtrade, the Co-op Divine Milk chocolate co-branded chocolate bar was made available to Co-op members through every Co-op shop and helped put Kuapa Kokoo firmly on the map.

Growing a thriving, widely dispersed co-operative has brought many challenges, but Kuapa Kokoo has worked hard to maintain its co-operative principles and its priorities, such as ensuring women are empowered and that children get a good education.

Kuapa Kokoo farmers decide democratically how to invest the Fairtrade Premium with priority given to education, access to clean water, healthcare, sanitation, training and farming.

Today, Kuapa Kokoo has over 85,000 members, 35% of whom are women and produce around 6% of Ghana’s cocoa (c48, 000 tonnes). Its growth is a testament to what farmers can achieve if they organise and have additional income to invest in their families, farms, communities and business. If they receive a sustainable income, are well-informed and well-resourced, they can tackle the problems recognised in cocoa farming themselves.

Producer organisations that have taken active steps to increase the participation of women include Kuapa Kokoo, the Ghanaian cocoa co-operative that supplies some of the cocoa for Co-op products.

“The statistics show that when women are empowered to make decisions, life improves, and not just for the women, but for their families and communities. These positive changes range from improved nutrition to education access, to financial security and economic participation. The saying that if you educate a woman you educate the world is not just proverbial speak, it is quite literal in its outcome. Thank you to Co-op for supporting us to bring about this change for women in the cocoa sector.”

Dr. Tsitsi Choruma COO Fairtrade Africa

Kuapa Kokoo a Co-operative Fairtrade case study

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Working together to empower women

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“I joined Kuapa because an elderly person recommended it to me. I was shown that ladies could do well in Kuapa, and that they worked with management.”Linda Berchie Kuapa member

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As a pioneer in Fairtrade and sustainable retailing, Co-op actively tracks how its Fairtrade commitments weigh in against the aims and objectives of the Sustainable Development Goals (SDGs) set by the United Nations.

The UN SDGs are a set of 17 self-improving global goals which every country adopts to help end poverty, protect the planet and ensure prosperity for all.

The Co-op commitment to Fairtrade cocoa is a good example of how Co-op is having a positive impact on achieving relevant goals.

Food production is already, and will continue to be, one of the industries most impacted by climate change and extreme weather patterns which can damage, or even wipe out harvests and destroy the livelihoods of the farmers who depend upon them.

As Co-op invests in deepening the impact for cocoa farmers through this latest commitment, we will look at how we can work more closely with these communities to reduce the impacts of climate change, which will in turn safeguard their future and the supply of cocoa for generations to come.

But what about the bigger picture?

Protecting the future of agriculture

Referenceshttp://www.cocoabarometer.org/Download.html accessed 18/11/16http://www.fairtrade.net/fileadmin/user_upload/content/2009/resources/2015-Monitoring_and_Impact_Report_web.pdf accessed 18/11/16http://www.worldcocoafoundation.org/wp-content/uploads/CocoaAction-Primer-v1_English_May-2016.pdf accessed 18/11/16Dr. Francis K. Oppong, Dep Chief Exec, Ghana Cocoa Board, Cocoa Market Outlook Conference, London, 2016Doherty, B. (2008), ‘A truly co-operative venture: the case study of Co-operative Food, a retailer response to Fair Trade’, Journal of Strategic Marketing, 16 (3), 205-221[1] 43%. Source: FAO (2011) The State of Food and Agriculture: Women in Agriculture – Closing the gender gap for development. http://www.fao.org/docrep/013/i2050e/i2050e.pdf

sustainabledevelopment.un.org

Kondaogo Malicki, Farmer collecting the cocoa beans CANN Coopérative Agricole NZRAMA de N'DOUCI cocoa farmer. Credit: Fairtrade Austria

Our new commitment to Fairtrade has the potential to change lives in communities across the cocoa growing countries of the world.

It means that when you pick up a Co-op product that contains cocoa you will know that the equivalent volume of cocoa has been bought on Fairtrade terms.

You can think of the cocoa farmers gathering together to decide how to invest the premium that your purchases are generating. They may decide to invest in a school for the education of their community, in the development of their businesses to make them more viable, or for more immediate and vital needs such as putting food on the table.

We are proud to have had a 100% Fairtrade chocolate bar range for fifteen years. Our new commitments to extend the Fairtrade Mark across our chocolate confectionery range and to source only Fairtrade cocoa for Co-op production are further steps in our strategic drive for Fairtrade and sustainability. But we can only do so much on our own.

If other UK retailers were to pledge their support to sustainably sourced cocoa across their businesses, the economic impacts on cocoa farming communities could be far reaching. Even more so if they commit to sourcing their cocoa as Fairtrade.

We know that Fairtrade has the ability to change lives and farmers and workers continue to tell us that Fairtrade is the most effective certification scheme for them.

For Co-op, the evidence is overwhelming. Fairtrade is the most effective sourcing model to change lives.

What is important to us is that farmers are given a fair chance and empowered to take responsibility for their own futures. Making the decision collectively and democratically as a community is the principle that lies at the heart of Fairtrade and the co-operative movement.

Michael Fletcher Trading Director, Co-op

2017 and beyond

For further information, samples and images, please contact: Kirsty Rushby Press & Media Relations Manager — Retail

Tel: 07834 090 014Email: kirsty.rushby@coop.co.uk

coop.co.uk/food @coopukfoodCo-op Limited. Registered office: 1 Angel Square, Manchester M60 0AG

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