Chocolate company challenges Hershey's and Nestlé

Divine Chocolate shares the sweet success of building a $16.2 million dollar business that makes cocoa farmers the biggest shareholders.

July 7 is World Chocolate Day, marking the 466th anniversary of when chocolate was introduced to Europe. Unfortunately, the chocolate industry has been getting a bad rap recently, with lawsuits and boycotts against big names like Nestlé, Hershey, and Mars for reportedly supporting child slave labor in Africa. However, one company, Divine Chocolate, has shaken things up and is doing business in a completely different manner. With £12.6 million ($16.2 million) in annual sales and 18 years in business, they have proven that a different business model is not only more ethical but also quite profitable.

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Divine Chocolate isn't a classic enterprise story of one person having a great idea and pursuing it. It was an idea about collaboration put forward by the cocoa farmers it was set up to help. The company turns the supply chain on its head, so that the cocoa farmers--historically both exploited and marginalized far away at the remote African start of the supply chain--are the biggest shareholders in the business.

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Divine Chocolate began in 1997, when over 20,000 farmers of the Kuapa Kokoo cooperative in Ghana, realizing how much more money there was in chocolate than in cocoa alone, voted to establish their own chocolate company. Today, after a merger, Kuapa Kokoo has grown to over 85,000 members and sells 70 products in 10 countries around the world.

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In this unusual model, Kuapa benefits from four income streams from Divine: the price of the cocoa they buy; the Fair Trade premium they pay; 44 percent of distributed profit; and 2 percent of annual turnover for producer support and development (PS&D). Kuapa invests the premium in community health and welfare projects, farmer training, and individual bonuses. To date, over £2 million ($2.5 million) in PS&D funding has been invested by Divine directly into key development projects, particularly those supporting Kuapa's women's empowerment program and nurturing good governance as it continues building its business.

Building the solid foundation for this enterprise was no easy task. "Securing a partnership with a factory that could deliver both the product quality we wanted and consistently excellent new product development over time, while preserving our traceability, was key to our proposition--and to our success," explains CEO Sophi Tranchell. "Divine's first major challenge was to find a factory that could make high quality chocolate on the scale we needed, that was also independent, and prepared to make chocolate from our own supply of cocoa. Overcoming that and all the following challenges--managing the impact of a highly volatile currency exchange and competing with global players with multimillion-dollar marketing budgets--has required a team with both exceptional business and marketing know-how, as well as the vital passion for the Divine mission. It's our mission that gives our team the energy it needs, and the drive to think creatively."

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Divine's mission is completely integrated into its business plan. While prioritizing growing their sales (to enable them to buy more cocoa and deliver financial benefits), the company has also delivered on its mission in many other ways. Impacts include giving cocoa farmers unprecedented access to the market they supply, introducing farmers to thousands of consumers and businesses in the U.K. and U.S., and sharing the latest research and market data in the space. Divine Chocolate has mobilized a committed group of consumers who want to use their purchasing power to change the world. They've also introduced a whole generation of schoolchildren to the world of cocoa, using the power of chocolate to encourage young people to think about where their food comes from and the lives of the people who produce it. Divine has also been a catalyst for change in the industry, leading the way for all the major players to convert at least some of their products to Fair Trade certified.

"The farmer-owned proposition is so radical that it can sometimes take years for the reality of what this means to sink in," Tranchell says. "People are so used to the dominance of northern hemisphere businesses, and NGOs acting for the benefit of developing countries in the south, that their minds often resist the possibility that the opposite could be true! People often say to us, 'Why don't you tell the farmers to do such-and-such?' or 'You ought to be getting the farmers to grow organic'--and we respond, 'It doesn't work that way around here. It's them deciding what we can and can't do. They're the owners.'"

As Tranchell reminisces, "In the very early days, when the small team at Divine was first knocking on doors with a delicious bar of milk chocolate and a great story, they were often greeted with 'That's a lovely idea...but it could never work.' All those skeptics have been proved wrong." A passionate, committed, and creative team has been the impetus for this company's success--led by Tranchell, their visionary CEO. It's that team, her vision, and the incredible force of the consumers and partners who support this business that make it work. Together, they provide the kind of promotion that money can't buy.

Today, Divine Chocolate is not just held up as a leading Fair Trade pioneer and an award winning social enterprise but as an example of how to do business differently. Their ideas, passion, and example are exactly what is needed in the world today--radical and empowering solutions to poverty, food insecurity, and human rights. It's time for Hershey, Nestlé, and other big players to take note and move towards a sweeter future for us all.

You can taste Divine's sweet success through their website or Amazon.

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