Direct sourcing and - World Cocoa Foundation
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Transcript of Direct sourcing and - World Cocoa Foundation
Direct sourcing and sustainabilityDirect sourcing and sustainability
WCF, Partership meeting
October 2012October 2012
• Agricultural Development
• Support and training
• Cocoa plantation promotion• Cocoa plantation promotion
• Purchasing Model
• TraceabilityTraceability
• Social Commitment
• Scientific Approach
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Better quality of life inBetter quality of life in the country side• Strategy:
Our purchasing strategy is based on thedirect relationship with small growers andfarmer cooperatives making the supply chainshorter. We want to guarantee quality,traceability and volumes.
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Purchasingffioffices
Wh t d th l d?What do the people need?
• Proximity
• Technical support
• Money
• Right price
( )• Reliability (right weight, humidity measure, etc)
• Aditional services
What does the company need?What does the company need?
• Long term relationship ‐ commitmentg p
• Traceability
• Quality
• Volumes
• Give to the farmers the best price we can offer
• Deal directly with few people
• Efficiency
Our model
3870 families,5.100 has.5.100 has.
ASOPROLAN
375 familias,810 has.810 has.
Cooperatives and alliancesCooperatives and alliances
16.834TOTAL HAS.
A l iAs a conclusion
• We are trying to put the right money in theWe are trying to put the right money in the right hands looking for quality, volume, traceability and long term relationshiptraceability and long term relationship
WCFWCF PartnershipPartnership Meeting, 25thMeeting, 25th OctoberOctober 20122012
DIRECT SOURCING STRATEGY
WCF WCF PartnershipPartnership Meeting, 25th Meeting, 25th OctoberOctober 20122012
Key Facts Chocolats Halba 2011
100% Coop Switzerland owned Swiss Premium B2B Chocolate Manufacturer Starting in 2008: Export and Sustainability Strategy
E l 230 Employees 230 Turnover 111,2 Mio CHFT t l S l 12 600 t Total Sales 12.600 tons
Max Mustermann
Max Mustermann
Max Mustermann
Purchasing strategy Chocolats Halba
Direct Sourcing100% Fairtrade cocoa beans
Reforestationprojects withcocoa beanscooperatives
Direct sourcing
Honduras
Ecuador
Peru
Ghana
StartingStarting fromfrom scratchscratch…… ll germgerm plasmplasm qualityquality cooperativescooperatives cooperativescooperatives ……
Ti bTi b tt iiTimberTimber treestrees increaseincreasefarmersfarmers' ' incomesincomes byby
In Ghana In Ghana wewe havehave plantedplanted
ttimberimber treestrees sincesince 20112011
Every Every timbertimber treetree isis
OneOne timbertimber treetree absorbsabsorbs asas muchmuchCOCO22 asas
chocolatechocolate barsbars causecausechocolatechocolate barsbars causecause
Sustainable product marketing
LabelsLabelsCarbonFootprintCarbonFootprint
ProductsProducts QR‐CodesQR‐Codes
Cocoa Cocoa plantationplantation in Dos de in Dos de MaioMaio
Cocoa Cocoa plantationplantation in Dos de in Dos de MaioMaio
Advantages Direct Sourcing
Access to high quality raw material
Trust – efficient supply chain
Joint quality improvements
…
Max Mustermann
Challenges Direct Sourcing
Internal know how
Quality improvement process
"weak" structures within cooperatives
Pre‐financement
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Max Mustermann
Christoph InauenHead of Sustainability and Cocoa PurchasingHead of Sustainability and Cocoa PurchasingAlte Winterthurerstrasse 18304 Wallisellen+41 44 877 16 07 h i t h i @h lb [email protected]
Direct sourcing & sustainabilityCargill’s experience in Vietnam
Taco Terheijden
Z i h O t b 25th 2012CONFIDENTIAL. The information contained herein is believed to be true and accurate. However, it is made without guarantee,
expressed or implied, on our part. We disclaim all liability in connection with the use of this information, which is subject to change without notice. Disclosure, use or reproduction outside Cargill and inside Cargill, to or by those employees who do not have a need to
know is prohibited except as authorized by Cargill In writing
Zurich, October 25th 2012
Locations: Cargill cocoa beans sourcing operationsoperationsTo achieve the best product quality, consistency and sustainability we are present in every step of the chain
WCF Zurich 2012
Vietnam
• A relative newcomer to the cocoa arena is Vietnam.
• This Southeast Asian nation has all the shade warmth and humidity• This Southeast Asian nation has all the shade, warmth and humidity and deep, rich soil that a thriving cocoa crop needs.
I 2004 th h j i t ff t f D t h & Vi t t• In 2004, through joint effort from Dutch & Vietnamese government, Cargill & Mars. The Dutch government provided financial support whilst Cargill set up the supply-chain infrastructure and Mars Incorporated contributed technical consultancyIncorporated contributed technical consultancy.
• And with the Vietnamese farmers in place, ready and willing to diversify their crops all wheels were set in motion to develop a cocoadiversify their crops, all wheels were set in motion to develop a cocoa sector in Vietnam.
O ti i ti d d f t f A i d h l t• Optimistic demand forecasts for Asian cocoa and chocolate consumption
WCF Zurich 2012
Asian Pacific Chocolate Consumption
1,1008,500
Chocolate consumptionUnit: '000 MT
700
800
900
1,000
5,500
6,500
7,500
FORECAST
6004,5002007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
World (left axis) Asia Pacific (right axis)
Source: Euromonitor International
FORECAST
• World chocolate consumption is projected to grow by 11% by 2017 compared to 2012 (from 7,3 to 8,2 million tones).
I A i P ifi h l t ti i j t d t b 25% b 2017• In Asia Pacific chocolate consumption is projected to grow by 25% by 2017 (from 0,8 to 1 million tones).
• Share of Asia Pacific in the world chocolate consumption is forecasted to grow from 11% in 2012 up to 13% in 2017.g p
WCF Zurich 2012
Potential provinces for cocoa development
HIGHLAND:Gialai 4,000 haPhuyen 2,000 haDaklak 58 000 haDaklak 58,000 haDaknong 15,000 haLamdong 10,000 haTotal: 89,000 haTotal upto: 152 000 ha
SOUTH-WEST:
Total upto: 152,000 ha
Bentre 15,000 haTiengiang 2,000 haVinhlong 1,000 haTravinh 1 000 ha
SOUTH-EAST:Binhphuoc 24,000 haDongnai 10,000 haBRVT 5 000 haTravinh 1,000 ha
Tayninh 2,000 haTotal: 21,000 ha
BRVT 5,000 haBinhthuan 3,000 haTotal: 42,000 ha
WCF Zurich 2012
Dynamic crop model based on diversification
Highland
Cocoa is the suitableCocoa is the suitable choice for replacing old coffees!
South‐east
Cocoa is the suitable h i f i tchoice for intercrop with cashews
South‐west
Cocoa is the suitable choice for intercrop
WCF Zurich 2012
with coconuts, fruits…
Vietnam Crop and trends – to date
1. Current acreage & yield
Source: Vietnam Ministry of agriculture and rural development’s
WCF Zurich 2012
Direct sourcing in Vietnam – Why ?
> Close to farmer– TraceabilityTraceability– Quality– Increase yields
> Efficient supply chains– Increase farm income– Income diversification
> Knowledge & information transfer– Technical support – Consumer information
WCF Zurich 2012
Direct sourcing facilitates sustainable development of cocoa supply chain
Key market players
Key players in Viet Nam market Export destination
Local
Local company: Namsan
1%
Local company: Nonglam
3%
Local company: Phamminh
9%1%
Armajaro19%
Grand Place3%
Cargill65%
WCF Zurich 2012
Viet Nam cocoa supply chain visibility
Multiple farmers
Bean collectors
CargillBuyingStation
Consolidation and loading to container
Ship to oversea customers
Supply Chain Visibility
WCF Zurich 2012
Created and applied origin tracing system
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WCF Zurich 2012
VA0506-TG : Vietnam, Main crop Year 0506 – Tien Giang province001-NT-CG : Collector 001 – Local trader NT – Exporter Cargill
WCF Zurich 2012
WCF Zurich 2012
Knowledge and information transfer
WCF Zurich 2012
Quality overview 2011/2012
WCF Zurich 2012
Fertilizer distribution
WCF Zurich 2012
Viet Nam cocoa supply chain
Ship to oversea customers
WCF Zurich 2012
The future?
WCF Zurich 2012
