Olam’s cocoa sustainability drive makes headway in Ghana
Delivering cocoa supplies for the confectionery sector with enhanced ethical considerations presents a range of logistical and practical challenges, but as Olam Cocoa explains, it’s a mission the company is determined to succeed with
Cocoa, the key ingredient in chocolate and many sweet treats, is enjoyed by millions of people around the world, each and every day. But the social and environmental concerns surrounding its production may leave a sour taste in the mouth.
These issues are interconnected and complex, ranging from declining farmer incomes and unpredictable climate conditions, to poor digital and physical infrastructures. However, it is problems like child labour and deforestation that have inspired the greatest consumer concern, and this has helped drive the sale of chocolate that is produced from sustainably sourced ingredients; worldwide, Fairtrade certified producers sold 57 per cent more cocoa in 2017 than 2016.
The cocoa industry has been vocal about their efforts to tackle these issues, with cross sector initiatives like CocoaAction and the Cocoa & Forests Initiative (C&FI) pushing for real change.
There is a clear understanding that it is only through cocoa companies, chocolate producers, origin governments and NGOs all working together that child labour and deforestation can be eradicated from the cocoa supply chain.
But progress is slow, and any solution must focus on improving the livelihoods of cocoa farmers and their communities, often located in remote areas of developing countries like Ghana and Côte d’Ivoire.
One technique that the industry has applied is the development of digital tools that flag up issues in the supply chain and increase transparency. Having this data at their fingertips means that companies can more easily identify problems on the ground and intervene to better support cocoa farmers.
Olam Cocoa is one company using this technology to drive a sustainable cocoa sector. As the company’s Head of Cocoa Sustainability, Simon Brayn-Smith, said: “Only by understanding exactly where our cocoa comes from can we tackle the difficult issues in the supply chain and stay on course to achieve 100 per cent traceable cocoa volumes from our direct origination supply chain by 2020.”
Putting data insights into the hands of smallholder farmers to improve productivity
The Olam Farmer Information System (OFIS), which currently collects and analyses data from over 160,000 smallholder farmers across 20 countries, tracks a range of farm level data, such as the age of trees and soil type, while also providing the farmer with personalised recommendations about how to optimise production on their farm. These unique Farm Development Plans give tailored advice straight to a mobile phone, including suggestions about the exact amount of fertiliser and pesticide to apply in order to boost yield and minimise environmental impact.
Brayn-Smith explained, “Previously, cocoa farmers have been incredibly isolated, and it’s been difficult for them to access the advice they need to increase their yields. OFIS combats this problem and also allows Olam Cocoa to track output and improve our sustainability programmes.”
Take for example, Muhammed Adams, a cocoa farmer from Ghana. He more than tripled his cocoa output from seven bags a year to 25 after he received his Olam Cocoa Farm Development Plan, because it advised him on how best to eradicate disease in his crop without using pesticides, consequently saving him money and increasing his yield.
Improving market connectivity
Even with a plentiful crop, securing a fair price for the cocoa they grow can be difficult for farmers. In Indonesia, Olam Cocoa is piloting another digital tool called Olam Direct which connects farmers to a wider market for their crop and enables them to check the cocoa price online, indicate intent and transact with Olam Cocoa directly. By reducing the number of transaction intermediaries, the business believes the technology can increase value for farmers, while simultaneously improving traceability through a transparent sourcing process.
Once farmers have sold their cocoa, the journey to confectionery buyers can be convoluted. Because cocoa often travels between various buying agents, such as village level operators or cooperatives, complete traceability can be difficult.
So, another digital tool developed by Olam Cocoa has been designed to drive change in this area. Olam’s sustainability platform, AtSource, provides a range of metrics about the social and environmental profiles of products, as well as the farmers who produce them. Brayn-Smith comments, “our customers’ appetite for real-time data and transparency has never been stronger and AtSource helps satisfy this demand by connecting them to the source of supply and on through every stage of the supply chain.”
While digital tools are helping make the cocoa supply chain more transparent and improve the lives of cocoa farmers on the ground, there is still a long way to go to achieve a fully sustainable cocoa sector. It is up to the entire cocoa industry to challenge itself to do more and scale up commitments in order to achieve positive impact for farming communities and the environment.