Overview of Cocoa Production in Different Countries
Disucss about the Switches To Wine To the Revive Troubled Hedge Fund.
Côte d'Ivoire is considered as the world biggest manufacturer as well as exporter of cocoa worldwide. The country has the market share of around 41% in 2016 and the number is only increasing with time. On the other hand, when the world discusses about the cocoa production and chocolate production in the ethical manner, Dominican Republic is considered as the leader in world map (Armstrong, 2015). The last country discussed under this section is Indonesia which is again the largest cocoa manufacturing nation in Asia and hold third position on the world map (Berlinger, 2016).
All three countries are majorly dependent on the cocoa production therefore, government take a lot of steps to encourage the trade to the fullest.
Liberalisation took place in Côte d'Ivoire more than twenty years back in 2012 by setting a national cocoa board also called as CCC. In Indonesia cocoa production was considered as the main source of income for more than 800,000 farmers (Bow, 2015). Fairtrade products promoted by Dominic Republic are those that have been part of global trade company to make sure that farmers get right compensation for the crops (Chocolateclass, 2017).
Indonesia tend to grow with no cocoa production which included the growth of 777,500 tonns of the production in 2013. The country has ben on the upward track which works on efficient methods for better trading revenue coming into the nation.
The technological development in all the three countries are impressive and the growth is only increasing. Cocoa market has become and continues to be the major market and technology is playing the important role to make the cultivation and production stronger and better (Ford et al., 2014).
Climate change is an issue. All three countries are taking a cautious effort to contribute to the problem of climate change and hazardous waste.
Trade in these countries are immensely facilitated by so many international and regional trade-based agreement with important import and export partnership.
The production of the cocoa doubled in Peru back in 2009 because of which the country has become the largest cocoa manufacturer in Latin America. The country is approximately producing 85,000 MT cocoa every year (Ft.com, 2017). On the other hand, big companies like Hershey and Ferrero has majorly invested a large amount in services for cocoa manufacturing in Mexico (Goldberg, 2015). However, the country is facing downfall of 50% in the cocoa production from last many years and has to import cocoa more rather then exporting it.
Government Initiatives, Fair Trade Practices, and Technological Advancements
Peru and Mexico are working on the environmental analysis, with handling the tax rates with laws about unionization and treatment of the homosexual workers who differ between the states.
Peru has 48000 hectares of land for the Cocoa production with 71175 tonnes of the cocoa beans production whereas 82000 metric tons of coca beans are produced which are at a higher economic price.
There are different dimensions which incudes the customs, lifestyles and the values that tend to characterise the society where the firm tends to operate in Mexico. In Peru, the it benefits people from the production ladle (Goodley, 2013).
Both of them provides the details of local problem solving, transport and addressing the resource, environment and health issues. It also includes the data processing needs which is used by smaller firms.
The environmental standards are set to match the performance of indictors and policies. Here, the population growth, urbanisation and industrialisation need to be focused on (Leake & Cooper, 2010).
The legal facing environment affects business of coca where the legislation in the consumerism, and the employee relations affect the society.
The cultivation of cocoa in Brazil started in 17th century and in the starting of 20th century Brazil become the largest producer worldwide and cocoa beans are also the second largest export-based product of the nation (Mattyasovszky, 2017). On the other hand, Cameroon has approximately total production of 220.000 MT make the country fifth largest cocoa manufacture in the world.
The proactive government is set with no political instability. The coca production in both the countries focus on maximising the land use with improved water holding capacity.
The experience is of the cacao yield collapsing the economy. The limitation of the variations led to the wipe-out of the trees. The stable inflation rate, and stable currency needs to be handled in effective manner.
The global warming has applied with site specific strategies for providing wildlife increasing biodiversity with less water (Ft.com).
The Brazil focus on lower income people and how the wealthy citizens focus on consumer population with target to the product.
There are famers who work on the maximised use of land with improved water holding capacity of the trees. They are surrounded plants for capturing carbon and require less water with forest preserved.
The opening is to the foreign investors, with different regulations to start the business and handling the double tax as well.
Key Environmental Concerns and Legal Challenges
Ghana takes the second position in cocoa production and approximately 800,000 MT of cocoa is produced in the country every year. On the other hand, the economy of Nigeria is mainly dominated by exports like oil and share of cocoa among the earning of export is way less than two percent and overall share in GDP is even less. But in some part of the country production of cocoa is important. Approx. 300,000 farmers operating on 650,000 ha of cocoa cultivation.
The political base in both the countries are struggling to make things work for the nations since cocoa industry is one of the important trade in the nation and decrease in the trade is affecting the livelihood of the farmer as well as the economy (NewsComAu 2016).
The central corporation in the Ghana cocoa industry is the COCOBOD often called Cocoa board. Both Ghana and Brazil are formally independent country and the developing nations. The economic health of the countries is improving with strong agriculture base and improvement in service sector.
The social stakeholders stressed the systems helps many farmers in both the countries but there are number of challenged. Farmers do not have any access to any free services and face challenges on routine basis.
Both the countries are still struggling to empower technological sectors of the country and there are issues on many fronts.
Both the countries have strong and rich base in terms of forests and nature. The country is still able to save their forests and rich heritage of nature.
The legal system requires a lot of improvement since the farmers are still fighting for their rights and the government is not much of a help (Tumbuli, 2015).
There is sudden emergency in the supply of cocoa beans from the world biggest suppliers, resulting in severe shortage of chocolate for the producers. It mainly questions how to save supplies of the cocoa that are threatened by many factors which goes from weather to politics to global trade. In country like Côte d'Ivoire and Brazil, people are growing cocoa from different generations but with these ongoing threats their livelihood is seems to be getting difficult. The experiment expected to give great results, but the harvest started declining and in addition to all the diseases, a tiny moth become the bane for the cocoa growers (Turner, 2015).
Hershey is a US based organization and one of the biggest chocolate producer worldwide. The headquarter is in Hershey which is situated in Pennsylvania. The company was founded in 1894 by Milton. S. Hershey. Hershey moved on to manufacturing chocolate mainly because of the increasing demand in the market.
Current Market Position of Hershey
Figure: Market Analysis
Reference: https://marketrealist.com/2016/07/hersheys-stock-rise-june-30/
Current market position of Hershey
In the year 2017, the company acquire Amplify Snack Brands based in Austin which manufacturer of SkinnyPop and is approx. valued at $1.6 billion.
Threat of new entrants: the threat is high with the entry of many new producers and new ideas and concepts.
Bargaining power of suppliers: all the organization in the industry source raw material from so many suppliers. The suppliers are powerful in the industry.
Bargaining power of buyers: since there are so many companies in the industries selling the similar products, the buyers have now become very demanding. Bargaining power of the customers is high.
Threat of substitute product: when any new product come and meet the need of customer in distinct ways, the profit earning capacity of the industry suffers. The threat of substitute product is also very high.
Rivalry among current competitors: the competition is very high among the current competitors.
References
Armstrong, A. 2015. 'Chocfinger' hedge fund Armajaro faces exodus of senior partners. [online] Telegraph.co.uk. Available at: https://www.telegraph.co.uk/finance/commodities/11791286/Chocfinger-hedge-fund-Armajaro-faces-exodus-of-senior-partners.html [Accessed 26 Mar. 2018].
Berlinger, J. 2016. Could this fruit solve an impending chocolate crisis?. [online] CNN. Available at: https://edition.cnn.com/2016/09/04/health/chocolate-shortage-mangoes/ [Accessed 26 Mar. 2018].
Bow M. 2015. ‘Chocfinger’ investor switches to wine to revive troubled hedge fund. [online] Available at: https://www.standard.co.uk/business/chocfinger-anthony-ward-switches-to-wine-to-help-revive-troubled-hedge-fund-armajaro-a3119401.html [Accessed 26 Mar. 2018].
Chocolateclass. 2017. Big Chocolate | Chocolate Class. [online] Available at: https://chocolateclass.wordpress.com/tag/big-chocolate/ [Accessed 26 Mar. 2018].
Ford, T., Neate, R., Branigan, T. and Saner, E. 2014. The cocoa crisis: why the world’s stash of chocolate is melting away. [online] the Guardian. Available at: https://www.theguardian.com/lifeandstyle/2014/nov/21/cocoa-crisis-world-chocolate-stash-melting-away [Accessed 26 Mar. 2018].
Ft.com. 2017. ‘Chocfinger’ ambitions soured by tough cocoa market. [online] Available at: https://www.ft.com/content/8fb81fa0-5374-11e3-9250-00144feabdc0 [Accessed 26 Mar. 2018].
Ft.com. 2017. ‘Chocfinger’ sells trading arm for price of a Mars bar. [online] Available at: https://www.ft.com/content/9703e992-63e1-11e3-98e2-00144feabdc0 [Accessed 26 Mar. 2018].
Goldberg S., 2015. Cocoa Shortage in Ghana Driven by Inept Policies. [online] Available at: https://www.wallstreetdaily.com/2015/06/29/ghana-cocoa-shortage/ [Accessed 26 Mar. 2018].
Goodley, S. 2013. Why a trader named after a Bond villain could make your cappuccino cheaper. [online] the Guardian. Available at: https://www.theguardian.com/business/2013/dec/21/coffee-global-speculating-anthony-ward [Accessed 26 Mar. 2018].
Leake C., Cooper R., 2010. Choc-finger: The real-life Willy Wonka who's bought £658m of cocoa beans. [online] Available at: https://www.dailymail.co.uk/news/article-1295608/Choc-finger-Meet-real-life-Willy-Wonka-Anthony-Ward-whos-just-bought-incredible-658m-cocoa-beans-.html [Accessed 26 Mar. 2018].
Mattyasovszky, M. 2017. Top 10 Cocoa Producing Countries. [online] WorldAtlas. Available at: https://www.worldatlas.com/articles/top-10-cocoa-producing-countries.html [Accessed 26 Mar. 2018].
NewsComAu. 2016. World on the verge of ‘chocolate deficit’. [online] Available at: https://www.news.com.au/lifestyle/food/world-on-the-verge-of-chocolate-deficit/news-story/04fb0772bed1a8c4dfd0bd92fe600f76 [Accessed 26 Mar. 2018].
Tumbuli S., 2015. Chocolate prices to double as world runs out of cocoa. [online] Available at: https://www.abc.net.au/local/stories/2015/04/01/4208965.htm [Accessed 26 Mar. 2018].
Turner, G. 2015. Lead Manager to Step Down From ‘Chocfinger’ Hedge Fund. [online] WSJ. Available at: https://blogs.wsj.com/moneybeat/2015/03/25/lead-manager-to-step-down-from-chocfinger-hedge-fund/ [Accessed 26 Mar. 2018].
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