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Raising The Bar

Academy of Chocolate 2016 Conference: Chocolate In A New Era

Academy of ChocolateFounded in 2005 by five of Britain’s leading chocolate professionals, the Academy of Chocolate campaigns for the highest standards in the production of chocolate and works to raise awareness about the core influences on the cocoa bean to chocolate bar value chain. This month, (13th October 2016) the Academy held its 4th conference, “Chocolate In A New Era”. Speakers and delegates debated three critical influences shaping the ‘bean to bar’ value chain: Sustainability, Innovation and Education. Speakers represented all points along that value chain, from producers and agronomists, to directors of sustainability programmes, leading grinders, outstanding chocolatiers, and owners of valuable brands, not to mention: an audience of chocolate consumers.

If the Conference was unique in presenting a whole value chain set of perspectives on the powerful influences put up for discussion, it was equally honest in its assessment of the serious challenges to be addressed, especially in respect of Sustainability. However, by pressing for transparency in the sourcing of cocoa beans and for socially fair, and environmentally sustainable production, as core elements in the production of superb chocolate, the Academy is a forceful agency in promoting best practice across the global value chain.

A singular statistic was able to knit together the diverse perspectives presented over the course of the day. Frank Homann, founder and CEO of Xoco, a Central American producer of flavour cocoa beans, noted that while 50% of coffee produced is now sold as a speciality product, and 10% of all wine, only 1% of chocolate could be defined as a speciality product. Given the explosion of premium brands right across the developed world, noting the success of AIM listed Hotel Chocolat (a sponsor of the conference) which has created some $348m of shareholder value in just 13 years, this seemed counter intuitive. But of the annual production of 4.0 – 4.4 million metric tonnes of cocoa beans, much fewer than 200,000 mt would support truly premium or speciality chocolate products. While the highly sophisticated downstream consumer cocoa derived consumer goods sector has annual sales of approximately $120bn annually and an estimated capital value of $0.3-$0.4 trillion, (about 0.4% of global gdp), (see Cocoa, The Midas Commodity) 95% of upstream production comes from the 1-5 hectare traditional farms of more than 5 million smallholder farmers across the tropical belt. The absence of a professional farming sector, makes it difficult for the downstream sector to certify the provenance of the cocoa that is so critical to its commercial offerings, it makes the setting of industry wide quality standards difficult, and it means that the producing orchards are populated with trees that can survive under the basic conditions of smallholder farming, rather than trees producing the best flavoured beans.

In terms of sustainability the problem is even more acute: average yields are low in cocoa production, less than 0.5mt/ha across the global producer sector. Modern, well capitalised farms boast professional / trained management teams and high quality planting material. These estates can achieve yields of up to 2.5 mt/ha, five times the world average. In the first 15 years of this century more than 2.5m hectares of new land have been planted to cocoa, for an increase of nearly 33%: this is not sustainable (see Destruction By Chocolate). Growth in yields, rather than land in production, must become the norm if cocoa production is to be sustainable. Speakers including Bill Guyton, founder, and for 15 years until 2015, President of the World Cocoa Foundation, detailed the significant work undertaken by the Foundation and its members, many of whom are global names, in seeking to improve sustainability under the smallholder system. While data for investment in cocoa sustainability initiatives are not available, it is commonly assumed that hundreds of millions of US$ have been directed to this challenge. Yet progress as measured by average yields, has been negligible. The challenge is to reach millions of smallholder farmers, who are often poorly educated, ageing, and facing existential challenges. The conference heard how one major engagement programme in Ivory Coast and Ghana failed to reach more than 2.5% of farmers. More worryingly, speakers noted that even with training and the provision of support: of those surveyed, 61% of farmers did not use fertilisers, 50% did not use crop protection and 57% declined to use available micro-finance credit.

At Hardman Agribusiness, we note that in the quest for sustainably produced cocoa, a second front is opening in Latin America, where an innovative cocoa culture is promulgating new technologies and new methodologies to produce high quality, sustainable cocoa. It is encouraging to note, for example, that Mars Inc has begun acquiring technologically innovative cocoa farms and the brand states that it proposes to promulgate the technologies proven on these farms, where possible, across the smallholder producer sector (see Straw In the Wind).
While it is true to say that cocoa production is being ‘re-imagined’ in countries like Ecuador, with the African producing countries making up more than 70% of the global cocoa crop, the downstream sector and the billions of consumers of cocoa products throughout the world, will continue to rely on the output of millions of African smallholder farmers. It was strongly evident in speaker addresses and audience responses, that there is unwavering support for the smallholder sector across the value chain and a commitment to providing innovative technologies (including planting material) and further education to this critical segment in order to boost the sustainability of supply. One example of such technology was detailed to the conference: GeoTraceability Ltd, a Canadian company founded in 2011, is able to collect data on smallholder farmer activities, efficiently, economically and reliably using wireless technologies, in order to strengthen farming practices and improve traceability of cocoa: literally putting smallholders on the map!

In the ‘new era’ of the conference title, (the Anthropocene; see Disruptive Technologies) the human population has breached 7bn, on course, some say, for 12 bn before the end of this century. Christopher Reeves, of PwC told the conference that in this new era, human society will consume 35% more food, 40% more water and 50% more energy, and within 10 years another 1m mt of cocoa will be required. These realities underscored the central themes of the conference: sustainability, innovation and education.

The Academy of Chocolate works to educate consumers about the varieties of cocoa beans, their origins, the fermentation process, the roasting and grinding phases, and the subtle recipes and methodologies that produce the alchemy that is fine chocolate. The Academy also supports innovation in the creation of sublime chocolate with the provision of annual awards for excellence and innovation. The 2016 conference: ‘Chocolate In A New Era’ voiced the Academy’s support for greater innovation and education in strengthening the sustainability of upstream cocoa production, and for the expansion of the flavour cocoa segment, for the benefit of farmers and consumers alike.