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Co-op UK to source 100% Fairtrade cocoa under hybrid model for retailers

By Oliver Nieburg+

17-May-2017
Last updated on 18-May-2017 at 15:59 GMT2017-05-18T15:59:17Z

Co-op UK to support women's leadership program as cocoa in own label brands goes Fairtrade. Photo: Co-op
Co-op UK to support women's leadership program as cocoa in own label brands goes Fairtrade. Photo: Co-op

Co-op UK has invested in a women's leadership program in Côte d’Ivoire as part a move to source all cocoa for own label products as Fairtrade.

Co-op UK will source 100% of its cocoa for own label products - such a chocolate and sauces - as Fairtrade from Saturday next week (May 27).

It has agreed a hybrid model of the Fairtrade Sourcing Program (FSP).

A threshold for Fairtrade cocoa sourcing: 24 MT

Brad Hill, fairtrade strategy manager at Co-op UK, told ConfectioneryNews: "We agreed if one of our manufacturers was using more than 24 MT (metric tonnes) of cocoa (raw bean equivalent) a year in Co-op product manufacture they have to source that under Fairtrade from the big processors.”

The Co-op UK’s own label range comprises roughly 200 products, produced by around 50 contract manufacturers. The majority of its cocoa provisions come from Côte d'Ivoire.

"We've got quite a number of smaller volume users,” said Hill.

“It's impractical to get them to purchase Fairtrade from processors... But what they do need to do is report their use of cocoa to the Fairtrade Foundation quarterly and then the Foundation converts that to raw bean premium equivalent and Co-op will pay that."

Brad Hill, fairtrade strategy manager at Co-op UK, was in Côte d’Ivoire last week to launch the women's leadership program. Photo: Co-op

Women’s School of Leadership

Co-op will donate funds from the smaller cocoa users - roughly £40,000 ($52,000) per year – to a new Fairtrade project The Women’s School of Leadership. It has contributed additional finance from its own budget.

Fairtrade is launching the project this year in Côte d’Ivore to teach 24 female cocoa farmers entrepreneurial skills, which they can pass on to their local communities.

Hill said the project aims to challenge cultural beliefs on the role of women in society.

"There's a complete lack of empowerment in places... In cocoa, the structure does not really allow women to have access to land in many cases. And there is a continued belief that cocoa is a man's crop and they get the money,” he said.

Fairtrade estimates women make up 68% of the labour force, yet only 25% own land, hindering their capacity to access revenue generated from cocoa.

The project is also being funded by catering firm Compass Group UK & Ireland. Compass has pledged to raise £50,000 ($65,000) for the program by committing 5p ($0.06) of sales through newly launched EatFair snack bars.

Around 23% of official members of Fairtrade small producer cooperatives are women, while 48% of all workers on large certified farms are women, according to Fairtrade’s 2016 Monitoring Report. Photo: Co-op

A route in for retailers

Hill said Co-op’s adapted FSP model allowed retailers flexibility to engage with Fairtrade.

"It's about mass balance of course rather than trying to chase everything back. But it does enable retailers to go down this path and support cocoa farmers,” he said.

The FSP was created in 2014, allowing manufacturers such as Mars and Ferrero to bulk buy fairtrade cocoa. Previously, they had to source all ingredients for a brand on Fairtrade terms.

A new era of greenwashing?

Hill argued Fairtrade offered more protection for farmers through fixed minimum prices and premiums than other certification programs, which he said was crucial as cocoa prices decline.

He said: “I think it might be entering a new era of greenwashing.”

He cited a case where an Ivorian cooperative was doubly certified with Fairtrade and another program, yet the buyer cancelled a large Fairtrade order to purchase on the terms of the other, cheaper program.

"The business that has done this will continue to talk about sustainability, but by my calculation they have cost Fairtrade farmers over £250,000 ($324,000) in Fairtrade premiums."

Co-op and Fairtrade

Co-op has supported Fairtrade since the mark launched in the UK in the early Nineties.

Co-op is the UK's sixth largest grocer with a 5.9% market share, according to Kantar.

The UK retailer introduced what it claims was the world’s first retail own-label Fairtrade product in 2000, with a Co-op branded chocolate bar.

Last year, all its own brand chocolate Easter eggs used Fairtrade cocoa (mass balance).

The retailer has also worked closely with UK fair trade business Divine Chocolate and the Ghanaian cocoa cooperative Kuapa Kokoo, which owns a 44% stake in Divine.

Co-op UK did run its own cocoa project in the Dominican Republic under its Beyond Fairtrade campaign in 2011/12, where it helped to refurbish schools in cocoa communities.

But this work stopped when Co-op's banking arm took the group to near collapse in 2013 after a black hole was found in its accounts.

Hill said Co-op no longer has the capital to invest in community projects as it did in 2011, but said the women’s leadership project allowed it to up its engagement with sustainable cocoa.

Special treatment for Fairtrade brands?

Asked if Co-op gives Fairtrade brands such as Cadbury Dairy Milk listings and in-store merchandizing preference in stores, Hill said: “It's important to us that we don’t treat the brands as special and different.

“We have had a couple of promotions during Fairtrade Fortnight, but normally the relationship is the same as if they weren’t Fairtrade."

But he said Co-op has given special treatment to what it calls "pioneer brands."

"We just for example put a few Divine Chocolate branded products back into the range, which we stopped selling years ago.

"It would be nice to support those brands - but for the big brands the relationship is the same as before,” he said.

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