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Ghana Grows Our Cocoa, So Why Can鈥檛 It Make Chocolate? | Big Business - YouTube
Channel: Business Insider
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ghana is the world's second biggest
[2]
producer of coco but the country only
[4]
earns about two percent of the hundred
[6]
billion dollar industry
[9]
cocoa growers here export most of their
[11]
cocoa beans to europe and north america
[13]
where they're turned into chocolate we
[15]
are shipping out the cocoa in its raw
[17]
state
[18]
and if you look at the value chain of
[20]
cocoa
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money is made in the finished product
[24]
while big chocolate companies rake in
[26]
billions a year many cocoa farmers live
[28]
in poverty earning just two dollars a
[30]
day
[32]
and ghanaian entrepreneurs like michael
[34]
have struggled to open chocolate
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factories in their home country
[38]
we are trying to decolonize chocolate
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this time around we are saying that it
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can be done right here in ghana
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now the government is funding efforts to
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grow a domestic chocolate industry
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but can ghana's entrepreneurs get a
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bigger share of the profits
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we visit a cocoa farm and processing
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plant to find out
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ghana together with ivory coast grows
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over 60 of the world's cocoa
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the countries sell to all the big
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chocolate companies from hershey's to
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mars to nestle which process the beans
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abroad in mostly europe and north
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america
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paco your friend
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joseph bacha
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amaya coco farming
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for 18 years ago joseph grows 11 acres
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of cocoa and it isn't easy
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farmers battle more extreme weather due
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to climate change plant disease and
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fatigued land
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every october
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he and his family begin harvesting the
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yellow pods
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it takes just four days
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semi
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joseph collects the pods and takes them
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to the breaking ground here workers
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crack them open and remove the beans by
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hand
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joseph uses the leftover pods as compost
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under his trees
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joseph then dries the beans for another
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week
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in total he packs 75 bags of beans a
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year his income is about 27
[146]
a day it's a high wage for a guinean
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farmer because joseph grows organic
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cocoa without pesticides
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but many farmers in ghana live at or
[155]
below the poverty line earning less than
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two dollars a day
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that's because the majority of farms are
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small and aren't certified organic
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according to christy a cocoa scholar
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nicknamed the doc of chalk we were
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talking about really small plots and
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this is part of the reason why cocoa
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farmers are so poor
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but that's not the only reason farmers
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make so little
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coco's been armed in ghana for over 100
[180]
years there are many parts of the
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country where the land is really
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fatigued now and the trees are old
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in the 15th and 16th centuries portugal
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and spain monopolized cocoa controlling
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production and trade from their colonies
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in latin america and the gulf of guinea
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europe's elite were the biggest
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customers
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the crop arrived in what's now ghana in
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1876.
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around the same time the british
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declared the southern region a colony
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and began invading north locals own and
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ran all the small farms but the raw
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product was exclusively exported to
[214]
europe
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a lot of what we know today as like
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contemporary chocolate really grew out
[221]
of this
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this trading relationship between ghana
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and britain including the flavor of
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chocolate itself
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although ghana gained its independence
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in 1957 its one-way cocoa trade with
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europe still exists today
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and it's kept farmers at the beginning
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of the supply chain in poverty for
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generations
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to help raise farmer wages ghana and its
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neighbor ivory coast teamed up in 2019.
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the two largest cocoa producing
[247]
countries in the world and so when they
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get together on something
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everyone has to pay attention they
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introduced the fixed price system which
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set a price floor for coco in 2020 ghana
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set the price floor at twenty six
[260]
hundred dollars a metric ton
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that included a four hundred dollar
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premium added to every ton of coco
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and this value goes directly to the
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farmers the premium is called the living
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income differential or lid it was the
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first of its kind in the chocolate
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industry and it meant farmers took home
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nearly 30 percent more money than the
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year before at first big chocolate
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companies agreed to pay the lid
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you can't really not buy ghanaian and
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ivorian cocoa so
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the big buyers really had no choice
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the lid's markup may seem like a lot but
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the millions it's raised to combat
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farmer poverty is a fraction of big
[300]
chocolate makers sales
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but soon after it launched reports
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surfaced accusing hershey's of buying
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cocoa without paying the premium it's
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sad to to note that these companies who
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have the resources and may not want to
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abide by this simple appeal in an email
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to business insider the company said
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hershey supports and is fully
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participating in the living income
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differential
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when the corporations do pay the lid has
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helped farmers
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it's pushing farmers to even increase
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their yield that's how come last year
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were able to hit a record 1.2 million
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tons of beans after farmers dry the
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beans they're bagged up
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about 70 of these beans will be sent
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overseas ghana processes only 30 of its
[346]
cocoa beans domestically but in 2020 at
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a press conference in switzerland the
[351]
president announced he wanted to change
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that we intend to process more and more
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of our cocoa in our country
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with the aim of producing more chocolate
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ourselves and he said it right in front
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of the top commerce ministers of
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switzerland one of ghana's biggest
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customers that statement in in
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switzerland caused a lot of controversy
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i must say he clearly mentioned our
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intentions to put in efforts to also add
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value
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within ghana to support cocoa processing
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inside ghana the government created a
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free zone outside across any factory
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operating inside gets a tax break floyd
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ashley runs niche cocoa industry in the
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free zone
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in the freezer enclave you are getting
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10 years free
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duty on your imported parts for
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equipment so it gives you the
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opportunity to also increase capacity
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niche has become ghana's second largest
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cocoa manufacturer the company says it
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processes ten percent of the country's
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cocoa a niche processes two tons of it
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an hour the cocoa beans arrive here from
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farms all over rural ghana
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workers stack the bags high then cut
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them open one by one
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the beans funnel into this grate on the
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floor
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and the rest of the process is
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controlled digitally from roasting the
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beans to grinding them into cocoa mass
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that's then sent to get mixed with milk
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and sugar and from there it comes here
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for a different process a cooling
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process and then a packaging process
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mitch has been pretty successful but for
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small companies outside the free zone it
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hasn't been as easy to get up and
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running
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hello
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michael runs farah freak a cocoa maker
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that opened in amanasi to be closer to
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cocoa farmers but since it's outside the
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free zone it didn't get the tax breaks
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berafrik also had trouble buying cocoa
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beans as
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shocking as that may sound you know it's
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really hard in ghana to procure cocoa
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beans
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another hurdle keeping ghana's chocolate
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industry from taking off
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well it's very hard to make chocolates
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in ghana for one there's no dairy
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industry anybody producing chocolate in
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ghana is definitely importing large
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volumes of milk
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from either europe or other
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continent chocolate makers also have to
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import sugar mostly from brazil
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and finally it's hot in ghana chocolate
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by its nature is very sensitive to
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temperature any rise in temperature may
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cause the chocolate to melt there's not
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the kind of cold chain that you need to
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distribute chocolate effectively within
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ghana or
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you know much of west africa and
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building out that cold chain has been
[515]
expensive we have used insulated
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building materials for some sections of
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our building some sections of the
[522]
building is completely insulated roofing
[524]
sheet also ghana's power grid is
[526]
sometimes unreliable
[528]
electricity for example is another issue
[530]
here although there's power it's never
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stable fairfreak's top sellers are
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finished chocolate bars
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inside temperature controlled rooms this
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machine pumps the chocolate into molds
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so our installation capacity is 10 000
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bars of chocolate every hour
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that's a fraction of what a hershey's or
[550]
mars factory can do
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this machine wraps the chocolate bars
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with 68 workers the company's scaling up
[557]
to produce 50 million bars a year
[560]
the practice has always been that the
[561]
raw materials are sent to europe for
[563]
processing but this time around we are
[565]
saying that it can be done right here in
[568]
ghana
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but christie says the country still has
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a long way to go definitely no silver
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bullets for sure when you have a whole
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system like colonialism it doesn't shift
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quickly while there are five times more
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processing facilities in ghana today
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than a decade ago
[598]
most only process cocoa into
[600]
intermediate products like cocoa butter
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cocoa mass you know cocoa liquor cocoa
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powder not to chocolate
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96 of niche's business are these
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intermediate products
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most of the finished bars are still made
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abroad we need to increase the export of
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cocoa in a summer finish and also in the
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finished state
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lloyd wants to create demand for finnish
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chocolate within ghana
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cocoa consumption is very very low in
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africa
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i mean compared to europe where you have
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an average five kilograms per person
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consumption you're talking about 0.4 in
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africa that's because historically
[635]
finnish taco bars had to be imported
[636]
from europe so they cost a lot
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to create new demand in ghana niche is
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making a chocolate drink lloyd hopes to
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sell in schools
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he also hopes to source ingredients from
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inside africa dairy from egypt and sugar
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from south africa
[651]
to train talent in ghana farrah freak
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started this lab and hired locals to
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develop new flavors
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and for farmers advocates want to raise
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the cocoa price floor to about 3 100 a
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metric ton
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and they want big chocolate companies to
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foot more of the bill
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nearly every big chocolate producer has
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programs set up to lift farmers out of
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poverty
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but by some estimates 73 to 90 of ghana
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and ivory coast cocoa farmers are still
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below living income standards
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if you're the ceo of these big companies
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it's time to come down and look at these
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yourself as the industry is set to grow
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about five percent in the next six years
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canadian cocoa farmers and processors
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are vying for a larger stake in the big
[696]
business of chocolate
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cocoa companies
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can we also be allowed to add value it
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will be changing the lives of the people
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that play real rules and growing the
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beans
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