An Analysis Of Cocoa Production Challenges In Leading Nations

Ivory Coast

Very few are there in the world who does not have any passion for having chocolates. Be it any marriage ceremony or joyful events, chocolates are an integral part of such occasions. In spite of having potential harm for the health, chocolate has successfully influenced a mass number of people across the globe. However, the number of supply is reducing due to poor farming methods. It has all created a sort of panic into chocolate lovers (Afoakwa 2014). This assignment tries to bring the production problem in some of the leading nations of world by conducting a PESTEL analysis. It also describes the scenario in Cargill Group, which is one of the leading companies in cocoa industry.

	Ivory Coast	Indonesia	Dominican Republic Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper
Political	· Civil Wars · Child Slavery	· Quality of production · No solution for pests infection	· Unorganized producers · Lacks in bargaining power
Economy	· GDP is high · Largest exporters of cocoa	· Challenged by international exporters · Involved in direct selling with Cargill, Olam and others	· Investments problem · Less commercialization of the production
Social	· Developed as a location that has 20% of its population in the production · Workers are from neighbouring countries such as Liberia, Guinea	· Farmers are efficient that has positioned the country as one of the largest producer	· Ageing population of farmers · Predecessors are not interested in cocoa farming
Technological	· Infrastructure is good · Education system is supportive for the advancement of technology in the production	· Good infrastructure for the logistics management	· Technical management of harvest is incapable
Environmental	· Depends heavily on agriculture · Dominant cash crop production	· Farmers are the backbone · Local traders do collect beans from these farmers	· Availability of small cocoa plantations · Availability of land to support harvest
Legal	· Governments are active in bringing relief from the civil wars	· Government is supportive · No threat for price controls · Trade license is easy to avail	· Majority of farmers lack legality in land titles

Table 1: PESTEL analysis

Source: (Created by Author)

Ivory Coast is suffering of civil wars that are one of the problems for the cocoa production; however, the government is active in bringing peace. The infrastructure of the production and the technological involvement is also supportive (Paschall and Seville 2012).

International exporters challenge Indonesia but it has supports from the well-established logistic management and the government policies. Moreover, it has no tensions for price hike and trading license (Minifie 2012).

Dominican Republic is suffering of organized production, technological advancements, legal adherence and many more (Schwan and Fleet 2014).

	Peru	Mexico
Political	· It has supports for having diverse relationships with leading economy in the world	· Engagement of the Federal Government to facilitate more supportive designing for the production
Economy	· Investment flows, good relations with leading countries in economy	· Devoid of local production · Most of the productions take place in Tabasco
Social	· Shares a long relationships with the cocoa production	· Majority of farmers have opted an alternative of cocoa for earning high profit
Technological	· Technical advancements have made this possible to add more flavours to cocoa such as organic cocoa	· Lacks in technological advancements · Lacks in supportive infrastructure for the production of cocoa
Environmental	· Environment is harvest friendly · Given place to organic cocoa	· Climate is not favourable for the production
Legal	· Supportive government rules that supports manufacturing of cocoa and export	· Government is supportive but climatic problem is stressing it to rely on neighbour countries for the production

Table 2: PESTEL analysis

Source: (Created by Author)

Peru is developing country, which has ample supports from the government. It is transforming the chances into some different forms of cocoa production such as organic cocoa (Joel et al. 2013).

Mexico has supports from the government but a climatic problem in the country has forced it to rely on neighbouring countries for the cocoa production (Giacometti, Joli? and Josi? 2015).

	Brazil	Cameroon
Political	· Imported chocolate is less consumed · It is expensive	· Poor community · Less knowledgeable farmers
Economy	· Among the top four producers of cocoa · Growth of 10% per year	· More than 75% of the population are cocoa farmers · Financial crunch
Social	· Among the top consumers of chocolates in the world · Export of cocoa is less because of huge demand in the local country	· Lack of knowledge of all the processing in the cocoa production
Technological	· Greenhouse gases · Family farm production · Import is low to be cost effective	· Lacks in technological advancements
Environmental	· Climate is favourable	· Lack of pesticides · Lack of warehouse
Legal	· Government is supportive · Allowed the addition of fats to make it cost effective and appealing	· Lack of solution to the poverties, which is affecting the curiosity of farmers towards the cocoa production

Table 3: PESTEL analysis

Source: (Created by Author)

Brazil is technically advance and has supports from the government that have all made this possible for the country to become one of the best producer of cocoa in the world (Spaargaren, Oosterveer and Loeber 2013).

Cameroon is deprived of solid proof solution to the poverties that is affecting the morale of farmers and the cocoa production (VERTER 2016).

	Ghana	Nigeria
Political	· It has all the supports on several things such as land, insecticide, labour, fertilizer and many others	· Many of cocoa farms are developed such as Bonny, Calabar, Ota and many others
Economy	· Main crops of the country · Second largest cocoa exporter	· Leading agricultural export of the country
Social	· Main agricultural export of the country · Harvest process is one of the most organized commodities in the world	· Farmers are encouraged with the set up of different farms by the government
Technological	· Inception of cocoa marketing board to control the industry	· Export is handled by few farms · Low scale farmers are involved in farming
Environmental	· Forested areas are cultivated where rainfall is maximum	· Harvest is done in regions that have high temperatures and scattered rainfall
Legal	· Supports from the government in the form of harvest infrastructure and availability of pesticides and fertilizers	· Liberalization of marketing and trade of cocoa

Table 4: PESTEL analysis

Source: (Created by Author)

Ghana is the second largest exporter of cocoa, which has ample of supports from the government and the local farmers. The technological advancements are serving the foundation of its success in the country (Montet and Ray 2016).

Indonesia

Nigeria is benefitted from the government move to establish many small farms to facilitate the production of cocoa (Varzakas and Tzia 2015).

The Company is operating in 70 countries across six regions such as Africa, India, Asia Pacific, North America, Europe, Middle East and Latin America. In India alone, it operates in several sectors such as cotton, sugar, food products, edible oils and many more.

It owns many companies across the globe of which five are the most important that is as follows (Clay 2013):

• Cargill Ocean Transportation
• Truvia
• Diamond Crystal Salt
• Cargill Cotton
• Cargill Chocolate and Cocoa

The Cargill is the largest private companies in America, which is winning the top spot for many years.

Industry Rivalry · ADM Company · Ag Processing Inc · Tate & Lyle · Kerry Group · Ingredion Incorporated	Power of Buyers · It is moderate · Switching cost is low · Numerous options of buyers are there
Power of Suppliers · It is also moderate · Many suppliers are available	Threat of New Entrants · It is low · High capital is needed to start up the business · Wide range of products are a challenge to the new entrants
Threat of Substitutes · It is moderate · Peru has already come up with its alternate such as organic cocoa · It is receiving a good appreciation from the customers

Table 5: Five-Force Analysis of Cargill

Source: (Created by Author)

• To acquire other companies to enhance the global appeal
• Marketing needs to be done aggressively
• Needs to switch to different suppliers to have cost effective production

The Cargill Company needs to acquire different companies in different parts of world may be in those parts, which are a rich producer of cocoa such as Ivory Coast, Ghana, Indonesia. This would help in availing cocoa in large number with the help of local companies. It needs to conduct marketing aggressively to arouse the curiosity of customers towards its well-being. Switching to different suppliers would provide a cost effective production of cocoa, which is important to have a good profit margin (Stewart and Amerine 2012).

Conclusion:

Injustice payment to the farmers who are responsible for the harvesting of cocoa is the one problem that is warning the shortage of cocoa in the future ahead. To mitigate the issue, it has become important for the local governments of different countries to step into the matter. The farmers are required to pay for their hard work.

References:

Afoakwa, E.O., 2014. Cocoa production and processing technology. CRC Press.

Clay, J., 2013. World agriculture and the environment: a commodity-by-commodity guide to impacts and practices. Island Press.  

Giacometti, J., Joli?, S.M. and Josi?, D., 2015. Cocoa processing and impact on composition. Processing and impact on active components in food. London/Waltham/San Diego: Academic Press. p, pp.605-12.

Joel, N., Pius, B., Deborah, A. and Chris, U., 2013. Production and quality evaluation of cocoa products (plain cocoa powder and chocolate). American Journal of Food and Nutrition, 3(1), pp.31-38.

Minifie, B., 2012. Chocolate, cocoa and confectionery: science and technology. Springer Science & Business Media.

Montet, D. and Ray, R.C. eds., 2016. Fermented Foods, Part I: Biochemistry and Biotechnology. CRC Press.

Paschall, M. and Seville, D., 2012. Certified Cocoa: scaling up farmer participation in West Africa. Case Study Series, New Business Models for Sustainable Trading Relationships, 28.

Schwan, R.F. and Fleet, G.H. eds., 2014. Cocoa and coffee fermentations. CRC Press.

Spaargaren, G., Oosterveer, P. and Loeber, A. eds., 2013. Food practices in transition: changing food consumption, retail and production in the age of reflexive modernity. Routledge.

Stewart, G.F. and Amerine, M.A., 2012. Introduction to food science and technology. Elsevier.

Varzakas, T. and Tzia, C., 2015. Handbook of food processing: food safety, quality, and manufacturing processes. CRC Press.

VERTER, N., 2016. Cocoa export performance in the world’s largest producer. Bulgarian Journal of Agricultural Science, 22(5), pp.713-721.