World Confectionery Conference focus: Evolving the Luker Chocolate Dream
Our World Confectionery Conference has continued its strong thread of focus on sustainability, and the cocoa sector remains key to its future. Luker Chocolate joins our event’s Q&A session – here Julia Ocampo, the company’s vice president of cacao sourcing and sustainability explains the company’s vision
Cocoa farming is, for many living in rural Colombia, a stable, safe and productive source of income. Deeply interwoven into the fabric of many families, farming cacao fruit is also culturally significant and embodies the rich heritage of Colombia’s tropical fruit production.
In order to protect the significance of this cultural practice and invest in the growth of local communities – whilst simultaneously building a sustainable and profitable business – we, at Luker Chocolate, employ an approach called Creating Shared Value (CSV) through our sustainability plan, The Chocolate Dream. (you can hear more from the company at our 2023 edition of the World Confectionery Conference, with registration through our dedicated website at www.confectioneryconference.com)
Creating Shared Value is defined as “policies and operating practices that enhance the competitiveness of a company while simultaneously advancing the economic and social conditions in the communities in which it operates,” by Harvard Business Review.
In other words, it ensures that work with producers in growing communities is mutually beneficial. There are three ways of creating shared value: by re-conceiving products and markets, by redefining productivity
in the value chain, and by enabling local cluster development. An intentional effort to go beyond sustainability, our approach of creating shared value at origin is a business model that takes this idea further. It keeps capital and value within the country of origin and means we’re able to directly invest back into local Colombian communities.
Creating Shared value in the cocoa industry
To ensure quality, equity and genuine sustainability, cocoa manufacturers need to look at their entire value chain, establishing best practices to empower and protect all actors involved in chocolate production. This will become even more crucial in light of the new EU regulations set to impact the import of all soft commodities, including cocoa, into the EU.
By crafting products in the country of origin, and creating long term relationships with local communities, cocoa manufacturers can generate greater prosperity at a hyper-lo- cal level. In tandem, they can develop national and international partnerships that lead to a greater understanding of how the value chain must operate to ensure sustainable growth.
In Colombia and as a B Corp, we’re hoping that this model will come to act as a blueprint for the wider industry – thus ensuring all actors are empowered to make the best decisions to align people, planet and profit.
The first method of CSV I alluded to earlier – known as ‘reconceiving products and markets’ refers to our efforts to meet social needs while better serving existing markets, accessing new ones, or lowering costs through innovation. This can be a challenge in areas where cocoa manufacturing is not technologically advanced, but this creates better opportunities for human entrepreneurship, problem-solving and innovation.
In Colombia, for example, we serve the local market with hot chocolate, a democratised product available in every household. Secondly, we, as a business, do not operate in isolation. In fact, it’s the opposite – our collaborative work through The Chocolate Dream relies heavily on the wellbeing of all actors in our value chain ‘enabling local cluster development’.
To allow our partners and producers to thrive, we also choose to invest in local region development. In other words, we help to improve the educational facilities and methodologies, drinking water systems, and citizen participative governance. A happy, healthy and productive value chain equals a profitable and forward-looking business.
The final method of CSV, identified as ‘redefining productivity in the value chain’, refers to companies that act as stewards for essential natural resources whilst driving economic and social development, we talk about this as “climate smart agriculture”.
It essentially means we help producers to be climate resilient while improving the quality, quantity, cost and reliability of their cocoa production, whilst nurturing environmental and social wellbeing – meaning farmers reap the rewards for their hard work.
Going beyond single origin
In the chocolate industry, we use ‘single origin’ when referring to the source of cocoa beans, but it can also be applied to coffee, honey, and other soft commodities. The concept of ‘shared value at origin’ goes beyond this by integrating the entire value chain – from the farm to factory to the final product – in the origin country.
Any business with a shared value at origin model works with multiple stakeholders eg., farmers, buyers, suppliers, and governments, to understand the challenges in commodity production and provide localised and sensitive solutions.
At Luker Chocolate, we source all our Colombian beans from local farmers and producer associations. Where they face specific logistical challenges that make it difficult for them to transport (and therefore sell) their cocoa, we find creative solutions that enable them to maximise profits – like transporting their beans via canoe boat when there are no functional roads.
pic: Eugenia Jimenez farming for Luker Chocolate in Colombia. Pic: Luker
We then process the beans in local clusters and transport them to our Bogotá factory, where they reach their final form – exceptional chocolate. Up until the point the product is sold, the entire process occurs in Colombia, meaning our chocolate is helping to create additional jobs and fuel the local economy.
By creating an integrated value chain, manufacturers can have a direct and long-term relationship with cocoa farmers, participating from the outset in improving processes and growing conditions. The shorter the value chain, the more account- able each actor is held, and ultimately this means greater the value for the producer.
The shared value at origin model means competitiveness is rooted in triple impact: social, economic, environmental.
In practice, this means greater demand for farmers’ cocoa, the sustainable development of their communities and the protection and restoration of local ecosystems.
At Luker Chocolate, we do this in part by using ‘anchor farms’ in our top cocoa growing regions. These farms act as the exemplar for local farmers, and grant communities access to specialists for any issues or concerns.
These farms were established and developed through our collaborative plan, The Chocolate Dream, where we invite local communities to build sustainable well-being across the region.
Our on-the-ground support can range from advice on quality improvement to helping install agroforestry systems and support with resource management.
But our impact extends beyond simply cocoa farming, as we tackle issues with education, socio-emotional skills, access to water, ecosystems protection and entrepreneurship to develop communities. As a result of this hyper-local approach, we reached over 3,000 farming families in 2022.
It wouldn’t be possible to ‘create shared value at origin’ without collaboration, and we encourage manufacturers to heavily involve their clients in local impact projects too. This helps to bring in additional project revenue and offers brands the chance to make their own mark on the value chain.
UK confectionery firm, Choc Affair, based in York, is part of our Chocolate Dream ‘Dreamers Club’ and has directly supported local CSV initiatives in Colombia since 2019. In fact, they have been actively involved in our highly successful projects, ‘Vehicles for Learning’, which improves school attendance in Necocli, and ‘Guardians of the Tropical Dry Forest’ which preserves the tropicaldry forest and helps farmers to prevent desertification.
So, what does it mean to create shared value at origin? It means choosing to align all elements of a value chain with one common goal – happiness, prosperity and wellbeing. Working closely with those involved in production means companies can better understand the needs and context of commodity-growing communities, leading to a fairer more equitable and profitable industry.
- To find out more about this year’s World Confectionery Conference, which will feature Luker Chocolate’s Paul Morris as part of our QandA panel, visit www,confectioneryconference.com
