Indonesia Cocoa Bean Value Chain Case Study

Barry Callebaut is one of the largest cocoa producers worldwide with an average annual production estimated to be around 1.7 million tons of coca. In year 1996, the merging of Belgian chocolate producer Callebaut and French company Cacao Barry took place. In the present the company’s headquarter is in Zurich, Switzerland. The company’s mission statement is clear, which is to improve the life conditions of their farmers and the community, through improved productivity and helping in community development. In order to do so, they ensure that their farmers are earning an equitable income, in addition caring for their health and the well-being of their families too. Since cocoa communities are mostly located in remote areas, they often have limited infrastructure development. Barry Callebaut is concerned with this issue

Côte d’Ivoire’s mass production practices lead to the cocoa trade becoming a highly influential economic factor (Losch, 2002, p. 210). Because of this, paired with governmental involvement in the sector, dreams of dominating the cocoa market and influencing prices naturally followed (Losch, 2002, p. 210). Unfortunately, market power is more complicated than supplying the majority of product. However, attempts to control the price of cocoa by pulling out of the market temporarily proved disastrous, ultimately aiding the other producers by reducing the competition (Losch, 2002, p. 212). Côte d’Ivoire also quickly realized that it was too dependent on the cocoa trade both economically and politically to employ this tactic for long

Banana is a commodity that is widely used worldwide. Bananas are neither too extravagant, nor too expensive meaning that anyone and any level of socio-economic status can purchase them, from the very poor to the very wealthy. Bananas can be found at any brand name store, farmers market, or flea market. Bananas are commodities that are highly valued, traded, and desired. The success of the banana can be attributed to the fact that it can be grown and harvested all year long in different parts of the world. The success lies in the mass production, distribution and consumption of these goods. However, there is an ugly reality people are exploited, countries and people are complete dependent economically on bananas, and countries and terrain are destroyed by those corporations that benefit the most from the distribution of bananas.

It is a globalised world. Being a part of this progressive society, growth is a key indicator of success. Global Trade is one such benchmark that differentiate nations and economies. Every nation has some policies to promote the strengths of their trade globally. Likewise, Colombia has been known to be the third-largest producer of coffee after Brazil and Vietnam (in terms of volumes produced) from a long-time. Coffee is the world’s most traded commodity and most of it is produced by the small-scale farmers. Hence, globalisation has had a great impact on its production as well as trade. Therefore, Colombia’s strength lies in the production of coffee but also promoting their strengths and honing them globally to their benefit. Coffee is not just a cash crop for the Colombians but it’s a way of life for them. The farmers associated with the credulous society of small scale coffee growers called National Federation of Coffee Growers of Colombia (NFC) (1) was founded in the year 1927.

In the United States alone, the chocolate confectionery market is comprised of over 1.6 billion kg of chocolate (Market Line). That means it takes over 3.2 billion trees to meet annual chocolate demand in the United States – alone. With demand for chocolate surging worldwide, cocoa sustainability is a huge challenge. Organizations, such as the World Cocoa Foundation, are partnering with chocolate companies to promote sustainable cocoa economies through support of cocoa growing communities, education, field programs, and scientific research (World Cocoa Foundation). Chocolate brands will greatly benefit from participating in sustainability efforts and making these initiatives publicly know.

The demand for palm oil and value of the palm oil industry is growing exponentially, with the value of the Global Palm Oil market expected to grow from $61.09 Billion Dollars, in 2014, to $88 billion by 2022 and the Global Market Demand for Palm Oil is predicted to grow from 74.01 million tons in 2014 to 128.20 million tons by 2022. However a business of the stature must have grand impacts, economically, socially and environmentally. This essay will discuss these effects and then evaluate whether the benefits of Palm Oil outweigh the adverse consequences.

Around one hundred and twenty five million people are dependent on coffee, making coffee the most valuable and widely traded tropical agricultural product. It is also one of the highest earners in the market with a worth of $70.86 billion dollars, therefore it is highly tradeable but it is largely investing into global poverty due to the rural coffee farmers earning such a small percentage of the overall profit. (Foundation, F. (n.d.). Fairtrade International. 2015) There are over seventy countries producing coffee but over eighty percent of the worlds coffee is only being produced in four main states which are Brazil, Colombia, Vietnam and Indonesia. With

And what do we mean by governance? Quite simply, it’s how leaders run the business. CEOs, presidents, principals, boards and other key individuals enact broad policies and specific decisions that they believe will best serve the interests of the firm, their employees and clients. In most cases, these are choices

Chocolate is $l3 billion industry in the United States; in 2000 the U.S. imported a

Labour, 2006). - Result opened new channels to export and distribute cocoa to international countries.

Chocolate was discovered in the 18th century and every child’s dream came true all over the world. In olden days, the ancient human almost led a nomadic life wandering from place to place in search of food. Food is the basic source of energy for living organisms including human beings. Hence all living being need food. But in modern period, man had started discovering new methods of producing food through Agriculture.

Coffee farming is crucial as the source of income for smallholders farmer in most of developing countries. Although, the number of private plantation is quite small, they might have the possibility to break the boundary and an access broader market channel. However, small-scale farmers might have several constraints that prevent them from reaching the market. The demand for high quality products and consistent volumes is one of the possible constraints that they might face. Several studies have been drawn the important barrier encountered by developing country producers regarding institutional and infrastructural support (Trienekens, 2011:52). To some extent, smallholders also faced a various disadvantage

Palm oil is in high demand due to the substance being used in almost everything. In Malaysia alone, the price of Palm Oil, as of 2013 to 2017, has ranged from around 960 to 500 USD. In total, tens of millions of tons of palm oil is made yearly, accounting for over 30% of the world’s vegetable oil production. This single vegetable oil is found in approximately 40-50% of household products in many developing countries like Australia. Palm oil can be present in a wide variety of products, including baked

Many small countries main income is through exporting agricultural products. Therefore, as demand increases countries will do whatever they need to do to meet the demand. Often, corners are cut, and there are many negative consequences. Palm oil is an ingredient that is found in many consumer products that are on the market. Companies should be held responsible for where the ingredients of their products come from and should be held accountable to source products such as palm oil in a sustainable way which does not contribute to deforestation (Larsson). Many areas are currently cutting down trees in order to convert the land into palm oil plantations. One example would be in the Borneo rainforest. Naomi

The business being studied, is that of Cargill Cocoa and Chocolate North America (CCCNA). It is part of Cargill, Inc. an International producer and marketer of food, agricultural, financial and industrial products and services. Cargill is the largest privately-owned company in the world based in Minnetonka, Minnesota. CCCNA partners with Cocoa farmers around the globe to procure, ship, and transform their produce to a wide range of cocoa and chocolate products and applications. After the consolidation of the sector in 1990’s, CCCNA has emerged as the largest manufacturer of Chocolate in USA and owns several brands, apart from supplying products for other well-known brands like Hershey’s, Mars, Nestle etc. and retail giants like Target and Costco.