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Aims:

• To look at the considerations people make when purchasing a product, in this case, buying a bar of chocolate.
• To explore the marketing strategies used by companies to persuade customers to buy their products.
• To find out about cocoa farming in West Africa (Ghana and Cote D'Ivoire) - methods of growth; collection; marketing.
• To consider the impact of world trade (markets) on the price of cocoa and the effects of the market structure on the farmers and the consumers of chocolate.
• To examine the issues relating to developing ethical trading policies in commercial, complex and highly competitive world markets.

Synopsis:

00.00-00.44
Opening titles.

00.45-01.47
Customer choice - customers in a shop give their reasons for deciding which chocolate bar to buy.

01.48-03.31
Nestlé's marketing department explain the decision-making considerations behind the advertising strategies for different chocolate products.

03.32-05.13
Consumer test - a group of young people are asked to try to identify different chocolate products by taste alone - two are well-known brands and two are lesser-known products.

05.14-06.49
The manufacture of chocolate - Montezuma's chocolate factory in Sussex, a small chocolate-making company that produces high-quality organic chocolate products.

06.50-08.19
An explanation of organic farming methods and their impact on the completed product.

08.20-08.38
Chocolate-making by the three largest companies - Nestlé, Mars and Cadbury.

08.39-09.49
The Cadbury Chocolate Factory in Bournville (now Cadbury Schweppes) and its company philosophy.

09.50-11.13
Chocolate is made from cocoa beans, 70% of which come from Ghana and Cote D'Ivoire, two small West African countries. Cocoa farming in Ghana and Cote D'Ivoire - methods and impact on the farming communities.

11.14-13.26
The price of cocoa and the importance of the world markets - the forces of supply and demand; their impact on price and the complexity of the market.

13.27-16.42
How big companies help the local cocoa farmers and the pitfalls of exploitation (the scandal of child labour in 2001). The difficulties faced by the big companies in monitoring unscrupulous practice.

16.43-17.22
The story of Divine Chocolate in Ghana (The Kuapa Kokoo Co-operative) - a 'fair trade' chocolate company.

17.23-20.17
The benefits of Fair Trade to the local farming community.

20.18-21.09
The availability of 'Fair Trade' chocolate.

21.10-22.38
Day Chocolate Company - the company that makes Divine chocolate.

22.39-23.31
The response of the large companies to the Fair Trade concept - Nestlé is planning to sign an agreement with a Cocoa Co-operative in Cote D'Ivoire.

23.32-end
Closing credits.

Curriculum Relevance:

Citizenship

Knowledge and understanding about becoming informed citizens:

• the opportunities for individuals and voluntary groups to bring about social change locally, nationally, in Europe and internationally.
• the wider issues and challenges of global interdependence and responsibility, including sustainable development and Local Agenda 21.

Developing skills of enquiry and communication

• express, justify and defend orally and in writing a personal opinion about a topical political, spiritual, moral, social or cultural issue.

Consumer rights and responsibilities

Debating a global issue

Global issues, local action

Business Studies

• To develop an appreciation of the responsibilities that businesses face in reacting to environmental and community concerns, especially ethical behaviour, child labour and community involvement.
• To develop an understanding of how businesses analyse and research the market for their products and services.

Background Information:

Cacao
The cacao (cocoa) tree is native to the tropical rainforests of South and Central America. The fruit of a cacao tree is a pod (approx. 20cm long) and the pods grow directly onto the trunk and branches. Each pod contains 30 to 40 seeds that are called beans. The trees grow in lowland areas near to the Equator where the following conditions are found:

• average annual temperatures around 26°C
• regular rainfall totalling over 2000mm a year
• no strong winds that can damage the trees and pods
• deep, rich soil

The mature cacao pods are cut from the trees and split open. The beans inside are embedded in a pulpy mass. They are extracted, spread out on trays and dried in the sun; after which they are packed in sacks ready for the market and before being exported. Cacao trees were introduced and planted in new regions of Africa and Asia and cacao is now a major source of income for 11 million farmers, mainly in South-East Asia, South and Central America and West Africa.

Almost 70% of the world's cacao is grown in West Africa but the main cacao-producing countries are given in the table below:

World cacao (cocoa) bean production 1997 - 98 (million tonnes)

Cote d'Ivoire is by far the world's leading producer - in 1998 it produced 41% (1.1 million tonnes) of the world's cacao beans. Cacao seeds were first brought into Côte d'Ivoire from neighbouring Ghana and cultivation gradually spread westwards right across the country. Most of these are grown on small farms of about 1 to 3 hectares (up to 1100 trees per ha) and there are an estimated 1-2 million cacao farmers in Cote d'Ivoire.

Chocolate
There are four main products from cacao beans - cocoa powder, plain chocolate, milk chocolate and cosmetics. When the cacao beans arrive at the factories they are cleaned, roasted and their hard skins (hulls) removed. The beans are then ground into a paste and the fat (called cocoa butter) is separated out. The remainder is dried into a powder called cocoa. The cocoa butter is used for making cosmetics. The powder, together with the cocoa butter, milk and sugar is used for making chocolate. The steps involved are more or less the same for milk and plain chocolate, with the exception of adding milk.

The beans were first used to make a bitter drink called chocolatl over 600 years ago. J.S. Fry & Sons produced the first 'eating chocolate' and the first milk chocolate was produced in Switzerland in 1875 by adding powdered milk to the cocoa. By the 1930s, companies like Cadbury, Mars and Rowntree were mass-producing a range of chocolate confectionery in the UK.

Organic Farming
Montezuma's chocolate factory in Sussex produces high-quality organic chocolate products.

What is organic farming?
Organic farming depends upon the development of biological cycles using 'natural' methods to grow produce. Crops are grown in rotation and animal manure, compost and natural additives are used to enrich the soil instead of artificial fertilisers and pesticides. Crop yields are lower than intensive farming methods and the prices of the produce are often higher. Environmentally, the organic matter improves the soil fertility and river and drainage pollution is minimised. Birds, insects and wild animals are encouraged in an environment where natural predators will maintain a balanced population. Organic farmers rear animals naturally and with great concern for their welfare. They also help to conserve the wildlife and natural habitats around their farms. Products grown/produced by using organic farming methods are considered to be healthier because medical problems linked with handling farm chemicals are prevented. The absence of chemical residues from fertilisers and additives in processed food makes the products safer to consume.

What is intensive commercial farming?
Intensive commercial farming is structured to give high yields per hectare. The land is cultivated annually, is not left fallow and artificial fertilisers and pesticides are used to maintain (or increase) fertility and to reduce the dangers of blight from insects and 'pests'. Supplies of produce are usually plentiful and prices of produce are competitive.

Fair Trade
The Fair Trade movement gives a commitment to improve the livelihoods of cocoa farmers and their families. The aim is for all farmers to receive a fair return for their cocoa crops - Fair Trade is one way of achieving this goal. Fair Trade buyers pay the farmers promptly and give them a guaranteed price usually higher than the market rate - known as the Fair Trade premium - making their way of life more sustainable. The premium, which is above the minimum or world market price goes into a social development fund run by the cooperative. Farmers collectively are helped to market their produce, which can result in 15-20% increases in producer prices. Ethical working practices are used in which cacao is grown and harvested under internationally acceptable conditions with regard to the use of labour of all ages. In 1993, the Ghanaian state monopoly on the cocoa trade ended, and 22 village societies in Kumasi formed their own co-operative - Kuapa Kokoo.

Today there are about 250 village societies in Kuapa Kokoo. Because the co-op sells to the Fair Trade market, they are guaranteed a price that will not fluctuate with the open market. This Fair Trade premium is used to pay for community projects and to give all members an annual bonus. Fair Trade works best with farms that have access to communications and warehousing facilities and can therefore form cooperatives. The vast majority of cacao farmers (there are over 600,000 small cocoa farms in the Cote d'Ivoire alone) do not have access to this level of infrastructure as many are small family-owned operations in remote areas. As a result they are not part of any cooperative group and they are unable to benefit from the Fair Trade system. The market for Fair Trade cocoa is also relatively small - less than 0.1% of cocoa sold worldwide is through the Fair Trade system.

The principles of Fair Trade can create difficulties for companies that are operating in very competitive world markets. The price of goods in shops will affect a customers' decision to buy a product and companies, in order to maintain (or increase) their share of the market, are always looking to keep down their production costs. If the market price of goods is too high because of the production costs then sales can drop, the share of the market falls and this can affect the value of the company on The Stock Market. Shares fall, the shareholders who have invested in the company are unhappy because the value of their investments will fall. The company directors will then look at ways of reducing costs which could involve cutting back on the supplies of raw materials (the farmers would be immediately affected if the demand for their produce was cut); reducing the company size and making some of the workforce redundant or even closing the factory and relocating to another country where the running costs are cheaper. All this may be an extreme scenario and it is hoped that most companies would wish to avoid unethical, unfair market practices and exploitation of people.

Activities:

1. Working in pairs one person take on the role of a cocoa farmer in either Ghana or Cote D'Ivoire and the other a member of one of the major chocolate making companies (Nestlé; Cadbury or Mars). Watch the video on Consumer Power: Chocolate and note particularly the sections that deal with Fair Trading Policies. For the person whose role you are taking make a list of the benefits and disadvantages of developing a Fair Trading Policy (consider price; competition; jobs; standards of living; markets).
2. a) Describe how Nestlé's or Day's Chocolate's ethical behaviour helps cocoa farmers in Ghana or Cote d'Ivoire.
   b) Working in small groups, try to find information on other businesses that operate in an ethical way. Aim for at least two businesses from each group member.
3. a) Watch the video on Consumer Power: Chocolate and note particularly the section where Nestlé's marketing department explain the decision-making considerations behind the advertising strategies for each product.
   b) Describe the different market segments at which each product is targeted and explain the strategies that Nestlé use
   c) Evaluate the effectiveness of Nestlé's marketing strategies.

Links:

This web page contains links to other websites that are not under the control of and are not maintained by Channel 4 Television. Channel 4 Television is not responsible for the content of these sites and does not necessarily endorse the material on them.

Nestlé Company Official Website
Gives a full description of Nestlé’s policies, responsibilities and products
http://www.nestle.com/

Cadbury Schweppes Official Website
Gives a full description of Cadbury Schweppes’s policies, responsibilities and products
http://www.cadburyschweppes.com/EN/

Mars Company Official Website
Gives a full description of Mars’s policies, responsibilities and products
http://www.mars.com/

The Kids Organic Club
A colourful ‘fun site’ that gives facts about organic farming; an organic farming game, and differences between organic and intensive farming
http://www.kids.organics.org/

Global Eye
An online magazine that gives information on sustainable development, cocoa farming and includes Case Studies on Cote d’Ivoire
http://www.globaleye.org.uk/archive/summer2k/focuson/cam_pt1.html

The Divine Chocolate Company and the Kuapa Kokoo Co-operative
http://www.divinechocolate.com/kuapa.htm

Credits:
Produced by Squeeze Productions in association with IBT for Channel 4

Cocoa programme
Presenter: DJ Rap
Archive: Huntley Film Archive; Channel 4 Television; Financial Times; Bournville Village Trust
Consultant: Adrienne Jones
Archive Research: Georgia Burn
Production Manager: Maggie Swinfen
Graphics Catti Calthorp
Sound: Angus Anderson; Chris Reynolds; Steve Hopkins; Miles Massey
Camera: Will Pugh; Matt Wyer; Keith Massey; Rod Cumberbatch
Dubbing Mixer: Jez Spencer
On-line Editor: Simon McMahon
Off-line Editor: Theo Williams
Producer/Director: Nicci Crowther
Webnotes: John Austin

T-shirts programme
Presenter: DJ Rap
Archive: ITN Archive; Journeyman Pictures Ltd: PAN UK
Consultant: Adrienne Jones
Archive Research: Georgia Burn
Production Manager: Maggie Swinfen
Graphics Catti Calthorp
Sound: Angus Anderson; Mario Sierra; Lauri Kelleher; Steve Hopkins
Camera: Will Pugh; Matt Wyer; David Langan
Dubbing Mixer: Jez Spencer
On-line Editor: Simon McMahon
Off-line Editor: Theo Williams
Producer/Director: Nicci Crowther
Webnotes: John Austin

Mobile phones programme
Presenter: DJ Rap
Archive: arle G.E.I.E; Channel 4 television; Ian Redmond Born Free Foundation; ITN/Reuters; VAT; World Society for the Protection of Animals; with thanks to Gartner Research
Consultant: Adrienne Jones
Archive Research: Georgia Burn
Production Manager: Maggie Swinfen
Graphics: Catti Calthorp
Sound: Angus Anderson; Chris Reynolds
Camera: Sam Gracey; Matt Wyer; Jonathon Marchant
Dubbing Mixer: Jez Spencer
On-line Editor: Simon McMahon
Off-line Editor: Theo Williams
Series Producer: Nicci Crowther
Producer/Director: Emma Wallace
Webnotes: John Austin