Sunday, 22 July 2007

Fairtrade And The Future

Two strands of the future came together for me this week. On Monday, the BBC business programme ‘Working Lunch’ carried a feature on Divine Chocolate (see news clip). Divine Chocolate is an interesting company. It is a chocolate manufacturer, but with a strong corporate ethos of fairtrade. Not only does it purchase the cocoa from Ghana for a price above the market rate, it also has helped to develop the cocoa producers into a collective body, and gives 45% of its profits to social projects within the producing villages. On the company web site (see site), it states that just under half of the company has been given to the producers.

On Tuesday, I attended a session in London on the ‘Future of Civil Society in the UK and Ireland’, co-hosted by the NCVO (see site) and Carnegie UK (see site), which provided the second strand of the future. It was interesting to meet and listen to a number of people - who are not based in mainstream corporate or governmental bodies – talk about their hopes and aspirations for the future of their work. I will put a fuller review of the day on our Blog later this year, but for now, it is enough to say that the day was quite stimulating in a number of areas. The two futures strands came together in the form of describing the Social Enterprise.

As we move away from Hierarchy World (the economics of scarcity) and towards Network World (the economics of abundance), an interesting paradox is emerging. If you are in the Network World, you create more value for your company by giving it away. Value is enhanced through sharing and co-operation. This is why I always feel uneasy about those Information Age companies who are reluctant to share and co-operate. A good part of the value in Divine Chocolate is because it has given away part of itself.

Why should that be? The chocolate sold by Divine is not a commodity. It is an experience. Not only do the customers buy the chocolate, they also buy the story behind the chocolate. It makes them feel good to eat chocolate and to know that they are contributing to global development in doing so. The experience of Divine Chocolate is an action firmly rooted in the Dream Society, where we no longer buy goods but the stories behind those goods. The act of philanthropy has created the added value within Divine. This is the upside to living in an age of spin.

Does the social enterprise need new forms of corporate ownership? According to the press release issued by Divine on the declaration of the first Divine Dividend (see release), the existing corporate structures work just fine. What is needed more is a willingness to share and co-operate. If, in the West, we do not share and co-operate more, what sort of future can we expect for ourselves?


Erica Kyere said...

Hello Stephen
We were very interested to come across your blog. Thank you for your comments on Divine and what the Divine model means for business practice of the future.
You mention that Divine gives 45% of its profits to Kuapa Kokoo the cocoa farmers' cooperative that supplies our Fairtrade cocoa. This is indeed true, but it's not a donation - Kuapa Kokoo owns 45% of Divine Chocolate Ltd. Kuapa Kokoo uses the social premium which is part of the Fairtrade deal to fund their own community projects, and they will make their own decisions about the profit too.

Best regards, Charlotte Borger, Divine Chocolate Ltd

Charlotte Borger said...

Hello Stephen
It was great to come across your blog, and to see your comments about the Divine business model and its implications for how business could be done in the future.

You mention that 45% of Divine's profits go to Kuapa Kokoo, the farmers' cooperative that supplies our Fairtrade cocoa. This is indeed true, but it's not a donation - Kuapa Kokoo owns 45% of Divine Chocolate Ltd. They use the social premium they receive for their cocoa to fund their own community projects, and will make their own decisions regarding the use of their share of Divine's profits too.
It is an innovative business model and our hope and aim is to make it a feature of the 'futurescape'!

best regards
Charlotte Borger, Divine Chocolate Ltd

Stephen Aguilar-Millan said...

Dear Charlotte and Erica,
I was happy to write about Divine because I believe that it has an excellent business model, and that the model is one which we shall encounter more in the future - particularly as China moves away from Centrally Planned Communism and towards Market Socialism.
I am happy to be corrected about the social premium because it cionveys rights rather than charity. You guys are doing some excellent work, and making great chocolate too!
With best wishes,