Cémoi CEO: Cocoa can be the “friend of the forest,” but crop diversification is key
31 Jan 2019 --- A diversification of trees on cocoa plantations will be key to securing the future of the cocoa and chocolate industry, says the CEO of leading French cocoa group, Cémoi. The company purchases some 145,000 tons of cocoa beans each year, which accounts for approximately 3 percent of the entire global volume. Patrick Poirrier, who heads Cémoi, stresses that today what it promotes to farmers is that the onus should no longer be on the monoculture of cocoa, with the growth of other crops, including banana and pineapple, necessary to securing the future of cocoa itself. “It is really about farmers being entrepreneurs. Of course we promote cocoa, but we also believe that farmers should diversify their revenue with other different crops,” he told FoodIngredientsFirst at ISM 2019, which finished in Cologne yesterday.
Cémoi is an independent family group (owned by the Poirrier family since 1962) and heir to a tradition dating back to 1814, with a €820 million turnover. The business is broken down as follows: 54 percent (France), 37 percent (rest of Europe), 9 percent (rest of world). Their business is neatly divided between B2B and B2C, with 51 percent of their turnover being for the consumer channel and 49 percent serving industry. The company is looking to expand its global reach, particularly in the US and Asian markets.
Cémoi’s ambition is to take chocolate further from a flavor perspective so that the same notion exists for French chocolate as it does for French wine. “We are from a winemaking region and make a lot of parallels between wine and chocolate because it is about the same experience, from first note to the lasting note in the mouth. We have had a lot of success with a 90 percent cocoa chocolate bar, which surprises many in blind tests. Cocoa content is a number, but what is important is the taste, experience and long-lasting notes.,” he says.
Patrick Poirrier, CEO, CémoiNew avenues with fermentation will be vital to exploring true flavor experiences. “Even regarding natural aromas, we want to go towards the real taste of the product. So we have this fermentation program and we work with other companies such as Lallemand, to be able to develop the tastes of the cocoa and chocolate products,” he notes.
Cémoi was one of the founders of The Cocoa and Forests Initiative about 4 years ago. This included the signing of a number of framework agreements by cocoa-producing countries Ivory Coast, Ghana and Colombia with leading chocolate and cocoa companies. Central to the framework is a commitment to no further conversion of any forest land for cocoa production. The companies and governments pledged to eliminate illegal cocoa production in national parks, in line with stronger enforcement of national forest policies and development of alternative livelihoods for affected farmers. Ivory Coast and Ghana combined produce approximately 70 percent of the world’s annual supply of cocoa, with Colombia responsible for an additional 1 percent.
The signing of the Frameworks for Action in Ivory Coast and Ghana took place in November 2017; the Colombian Framework for Action was signed on July 17, 2018. This set of public-private actions represent unprecedented commitments on forest protection and restoration, and sustainable cocoa production and farmer livelihoods. The combined actions, which are aligned with the Paris Climate Agreement, are claimed to play a crucial role in sequestering carbon stocks and thereby addressing global and local climate change.“I think the general mood in the industry is that today a lot of work has been done around the supply chain. Sustainability is a day to day word for everybody and all participants,” Poirrier notes. “There are challenges going on, which we need to face at this point. Cocoa in the 1970s and 1980s was seen as a tree that you plant in place of natural forest. Today we put with our agro-forestry management system in place, so that a cocoa plantation can also be a forest. We are quite proud about that,” he explains.
For Poirrier, agroforestry is not only about trade, it is also about working with other trees. Banana trees, for example, can protect small cocoa trees during the first years of plantation. “It is really at the point at which cocoa is the friend of the forest and we can really have cocoa plantations be C02 capture points,” he notes. “When you plant trees in a plantation it should not be in competition with others. It shouldn’t take the ingredient from the soil that you need to grow the cocoa trees. But you also need to consider that these trees contain minerals that are also able to bring more to the ground,” he adds.
Cémoi’s initial approach was started with a few pilot plantings in Ivory Coast. Last year, Cémoi distributed some 10,000 trees for shading in partnership with cooperatives. It requires a change of approach at policy level as one of the big discussions is whether the tree belongs to the farmer.
Cémoi at ISM 2019 (Cologne)“In the past, trees in the Ivory Coast belonged to the state, so farmers didn’t want to have shade trees, because if someone wanted to cut those trees they would destroy part of the plantation. Today we explain to the farmers that the shade tree belongs to them so it is also a retirement plant. In 10-20 years that tree will have a value,” he notes.
The current volumes adopting this approach still form a tiny percentage of how agroforestry is managed, but players such as Cémoi want to grow this. “The change of flow is gaining acceleration. We want to also put inside the loop all the companies that are exporting wood from the Ivory Coast. The commitment to replanting trees is really important. The way that we distribute plants into the crop is a way for companies to show their commitment to the forest in Ivory Coast,” Poirrier notes.
In the emerging cocoa production country of Peru, agroforestry management systems are more developed. When you go there, there are plantations of 10-20 hectares, with people that are able to choose which trees they will go with. In this way, they will be able to choose about the trees that they want to use. They know about the yield of the types of trees they have chosen,” he explains.
“There they already work with agroforestry management systems. Because they are operating in the organic space, they do their own composting, so that they have a better compost for their cocoa trees. So it is a really virtuous system. They reach yields above 1 ton per hectare as a result. So that’s a real model for the future for perhaps bigger plantations, with better management of the trees and yields you can achieve,” he adds.
The Ivory Coast remains the company’s most crucial sourcing country, but they are spreading their focus and looking towards other cocoa origin countries. “Today we have already expanded our reach, as Peru is really a new origin for us. We started three years ago, but it is starting to get into production with the new cooperatives that we are working with. We also work with Sao Tome and, of course, the Dominican Republic,” he adds.
At ISM 2019, the main marketing focus for the company was on the group’s Transparence approach “from bean to chocolate.” Poirrier explains that currently over 30 percent of the cocoa in their whole supply chain is sustainably certified. However, he stresses that the issue should not only be about certification, it is also about integration through a transparent system. Suppliers also need to be followed by their customers, who in turn are meeting the demands of the consumer on this issue.
At ISM 2019, the main marketing focus for the company was on the Cémoi Group’s Transparence approach “from bean to chocolate.”For this reason, Poirrier notes that the role of non-government organizations (NGOs) is key. “NGO work is really about keeping the consumer aware of dangers and explaining to them why sustainability is not a standard. There will be a premium for the consumer to have sustainable chocolate. That’s how the NGO has a role in creating awareness for the consumer. We work on that and increase our percentage of sustainable cocoa each year,” he adds.
When an integrated supply chain exists in-house, it means that new traceability technologies such as blockchain are less relevant. “Since we are an integrated company, we have traceability up to the farmer. We buy our own cocoa and manage the supply and also make real traceability about the premium quality. When you manage a crazy supply chain with a lot of middle people inside, I can understand the point of blockchain. We want to have more direct contact with cooperatives, so the direct work is significant for us,” he adds.
Most of Cémoi’s sales are still in France and the rest of Europe, but Poirrier highlights the US as holding strong potential for growth, particularly as tastes there evolve. In early 2017, Cémoi acquired Chris Candies, based in Pittsburgh, Pennsylvania, and it has already increased capacity. A specialist in molded chocolate, Chris Candies manufactures an offering of year-round and seasonal chocolates for premium markets. Aligned with trends of healthy eating, Chris Candies is specialized in organic, fair-trade and low-sugar chocolates. Poirrier stresses that the company purposely opted for this specialized focus to avoid competing on the volume on the saturated US mass market.
“The US market is changing and my view is that today awareness of the consumer and asking for taste is the same in big cities around the world,” Poirrier says. “For me, a consumer of dark chocolate in Paris or New York has the same needs. They have expectations around taste and want to understand the traceability. They want to know where this chocolate is coming from and what type of emotion you get from consuming it,” he adds.
Elsewhere the company is also continuing to grow in Asia, with China and Japan serving as two significant markets, and ambitions for growth in South Korea.
But it is essential to also boost sales of chocolate products in cocoa origin countries, with Cémoi looking to expand the chocolate market in Africa. In May 2015, Cémoi opened a factory in Ivory Coast with the capacity to produce around 10,000 tons of chocolate products annually as it targets West Africa’s growing middle-class consumer market.
It has proved successful so far. “We were quite surprised and thought it would be more of a cocoa spreads or cocoa drinks market, because of the price point. But the biggest expansion in Ivory Coast was in chocolate bars. We were surprised that people buy and appreciate chocolate bars, even though the price point is quite high. So we reduced the size so that the middle consumer can afford it,” he says.
However, being present locally is not just about cementing a company’s position in the community. It is also about the awareness of the product itself. “It is important that in origin countries people can taste the chocolate,” says Poirrier. “It is good that we take chocolate with us to farmers because they don’t always understand what will happen to cocoa after processing.”
He also stresses that understanding the process is important for European consumers. “You need to explain how far you have to go from a pod. We talk a lot about the bean, but the process including fermentation, roasting and drying is required to get a bar of really good tasting chocolate,” he adds.
Taking a local approach to markets being served is key for a family company looking to be “local in every country.”
“Of course we have our French roots and tradition when it comes to taste. But we are English in the UK and American in the US. We usually work with local teams and that is also our added value. It is about good products but with a local view,” he says.
Current geopolitical turbulence around Brexit and trade spats involving the US around the world will undoubtedly fuel this need even further. “Brexit is a concern for us, because UK citizens love our chocolate. We were one of the first manufacturers to introduce a 72 percent dark chocolate in the UK in private label,” says Poirrier. The company also operates a manufacturing facility in Wales for chocolate bars (KitKat).
This plant and indeed the Chris Candies business do offer the advantage of having a foot in the door, however. “We have a local footprint if something happens we will have to adapt just as we always have done. Geopolitical events mean that having one foot in the US, if there is something that happens as a trade barrier, is helpful,” Poirrier concludes.
By Robin Wyers
