BUSINESS BIO

Where is the enterprise based? London

Key business markets: Confectionery

Annual turnover: (08/09) £12.4 million

% of turnover which is trading income (as opposed to grants): 100%

Number of employees: 16

www.divinechocolate.com

 

ambassadors

Sophi Tranchell

Sophi Tranchell
  • Divine

  • Managing Director

  • London

Imagine if you could take every chocoholic’s passion for their favourite treat and use it to do good for communities who often struggle to get things we take for granted, like school books or clean water. Then imagine you could get major supermarkets to sell the idea on their shelves…

Even in tough economic times, we are a nation of chocolate lovers. But for all its strengths, the confectionery industry is highly competitive and dominated by a handful of giants.

It’s now 11 years since a social enterprise crashed the party and injected some social conscience into cocoa. Over that time, Divine has created a unique, fair trade business model that successfully grows, while distributing benefits to its suppliers and their communities.

What makes Divine unique is that it is part-owned by the farmers in Ghana who produce the raw cocoa beans. They don’t just get financial benefits from the business but are involved in decision making too. This business model is as much about shifting the balance of power as it is about fair distribution of wealth.

For managing director Sophi Tranchell, one of Divine’s first achievements was to educate the public about chocolate. “When we started no one had a clue where it came from,” she says. “If pushed, they might have said Birmingham because of Cadbury.”

As far as her ambitions go, it’s not a bad comparison. Eventually, Sophi wants Divine to become a £100m turnover business and feels the potential is there. “I want us to be the equivalent of what Cadbury’s was to the 20th Century,” she says. “I want this to be how trade is done.”

By shining a light onto the people in the supply chain, Divine has enabled consumers to buy into its mission to empower traditionally exploited farming communities in Africa.

Divine delivers four streams of income to Kuapa Kokoo, the cooperative formed by its Ghanaian cocoa growers: it pays a guaranteed minimum price for cocoa; there is a ‘social premium’ on top, which the farmers use to fund community facilities; two per cent of turnover is donated as a producer support fee to invest in the farming businesses and maintaining co-operative principles; and the growers also receive dividends on the shares they hold.

I want us to be the equivalent of what Cadbury’s was to the 20th Century. I want this to be how trade is done.

“Before fair trade, we growers were cheated,” explains Comfort Kumeah, national secretary of Kuapa Kokoo. “People adjusted the scales, we got little money from the purchasing clerks and the growers’ welfare was neglected. Kuapa Kokoo is the only cooperative which can solve some of our problems – they trade without cheating, with the welfare of the growers at heart.”

Alongside the range and quality of its chocolate, Sophi says the company’s legal structure has been critical to its ability to compete. Divine is a company limited by shares. Kuapa Kokoo owns 45%; the remainder is split between international development finance organisation Okiocredit and NGO Twin Trading. Christian Aid also holds preference shares.

By sculpting its form to suit its mission, Divine has created a dynamic enterprise structure without losing its social focus.

Having pioneered fairly traded chocolate, Divine is now facing stiffer competition than ever. In the UK, supermarkets account for half of all chocolate sales. With most now selling their own brand of fairly traded chocolate, Divine has to work harder than ever to compete.

And it's succeeding.  From 2007 to 2008, UK sales were up 16 per cent to more than £12 million, meaning increased premiums to its farmers. The business’ recent expansion into the US market in 2007 is also bearing fruit. “In the US, they like the idea of people setting up a company to improve their livelihoods – and they like the chocolate because it tastes delicious,” says Sophi.

Today, with its growing market share and global ambitions, Divine is living proof that well-run social businesses can compete in any market, anywhere in the world.

Quick Facts

  • 45,000 members of farming cooperative Kuapa Kokoo in 1,300 villages in Ghana have better economic stability due to the Fairtrade deal with Divine, and empowerment within the cocoa industry due to the ownership structure.
  • Divine has bought more than 7,000 tonnes of cocoa at fair trade prices since its launch in 1998.
  • In 2008, Divine reinvested almost £300,000 of net profit back into the business.
  • Britain consumes half a million tonnes of chocolate every year. The average UK family spends more on chocolate in a year than a cocoa farmer’s annual income.

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