Journal Fold
of Agrarian Change, Vol. 2 No. 2, April 2002, pp. 228–247.
NIELS FOLD
Like most global agro-industrial commodity chains today, the global cocoa–
chocolate industry is buyer-driven. However, the chain is characterized by the
lead role of a few transnational companies in two different segments: the grinders
(processors of cocoa) and the branders (manufacturers of chocolate), a structural
pattern identified in other so-called turn-key industries consisting of contract
manufacturers and brand-name firms. The paper examines two important spatial
sub-systems of the chain: the national cocoa bean supply system in Ghana and
the regional cocoa trading–storing–grinding complex in the Zaanstreek,
Amsterdam. The structural patterns and relationships in these sub-systems
suggest that the dynamics of ‘bi-polar’ buyer-driven chains is best comprehended
in terms of various types of containment strategies of the lead firms, i.e. efforts
to defend and improve their positions on the global market by creating competi-
tion among their suppliers and expanding their customers.
Keywords: agro-industrial chains, cocoa, chocolate, Ghana, turn-key
networks
INTRODUCTION
During the 1990s, most state marketing boards dealing with cocoa in West Afri-
can producer countries were dismantled as part of structural adjustment pro-
grammes (SAPs). SAPs aimed at a broad liberalization and privatization of
debt-burdened national economies in Africa, which formerly relied heavily on
the use of state institutions for regulatory and expansionary purposes. Most state
marketing boards (or Caisses de Stabilisation, as they were called in Francophone
countries) operationally covered a majority of the commercial activities linked to
one or more closely related export crops, i.e. supply of inputs for crop produc-
tion, extension services, purchase and transport of harvested crops, storage in
ports, and sale of the crop to importers in the industrialized countries. The
intention of the reforms was that efficient private individuals and companies –
local as well as foreign – would take over those activities considered profitable
after the liberalization of the marketing boards.
Niels Fold, Institute of Geography, University of Copenhagen, Oster Voldgade 10, Copenhagen
DK-1350 K, Denmark. e-mail: nf@geogr.ku.dk
The author is grateful to the editors of this special issue for their valuable comments and suggestions.
throughout the chain. Control starts at buying posts where trained clerks (or
agents) accept beans from farmers only after inspection for dryness, smell, colour,
infestation and size consistency. After weighing and re-bagging into ordinary
sacks, Cocobod’s quality-control division takes samples from piles of 30 bags.
Beans are checked for moisture content, size consistency and for defects by the
cut test. Depending on the extent of mould, slaty (under-fermented) beans and
other defects, beans are graded into two grades and the sacks sealed so that time,
location and grader can be determined at a later stage; beans of substandard
quality are rejected completely. After this, beans are transported to regional
depots from where they are taken to ports at a later stage. Quality control is also
implemented on arrival at ports and again before overseas shipment.
Even though all the key actors support the maintenance of the quality-control
system in principle, movement towards a more flexible and less rigid system
seems inevitable. This is primarily a result of pressure from the LBCs which
wish to speed up circulation time by reducing the number of quality checks
along the chain and to increase the number of licensed quality-control companies
– at present there is only one, namely the Quality Control Division (QCD) of
Cocobod.
Hence, the LBCs seem to be becoming the main movers in restructuring the
domestic part of the chain, although they still operate under the restrictions set
by the CMC. The extent of these restrictions depends on the balance of forces
between, on one hand, the World Bank and bilateral donors’ pressure for full-
scale price competition throughout the chain and, on the other hand, alliances
between domestic and foreign pressure groups to maintain or change only slightly
the present system.
In the liberalization of domestic trade in cocoa beans, the LBCs currently cut
their operating costs by externalizing primary purchasing operations: individual
agents are contracted to supply the companies on a commission basis, i.e. paid a
fixed price per bag of cocoa purchased. Most of the managers of LBCs are
former employees of the Produce Buying Company (PCB), the previously
monopsonistic subsidiary of Cocobod, and the new practice is a result of experi-
ence gained during the 1980s when agents were hired as salaried workers. LBCs
are private companies and the business interests of their owners often extend to
the haulage companies that transport cocoa beans from up-country depots to
ports at pre-seasonal fixed rates. Cocobod’s own PCB is the buyer of last resort
and covers all the cocoa districts in the country, whereas the LBCs can choose
the districts in which they want to buy beans with the proviso that they operate
in a minimum of three regions.
At present, LBCs are pre-financed with loans from Cocobod’s own overseas
borrowing. Access to working capital from domestic banks is otherwise diffi-
cult, and Cocobod loans are also at relatively favourable rates compared to those
of domestic banks. Loans are supposed to be repaid at the end of each season,
and the size of the following year’s loan determined on the basis of past repay-
ment performance and expectations for the next season. Even though complaints
over Cocobod’s pre-finance practices are few, most LBCs would still prefer to
Grinders and Branders in the Global Cocoa–chocolate Industry 233
International Grinders
The Zaanstreek is now the hub of not only European but world cocoa grinding.
The biggest grinders (Gerkens and ADM) each process about 200,000 tonnes per
year. ADM and Cargill are two of the world’s biggest agro-industrial transnational
companies with a broad range of activities in various commodities, most notably
grains, feeds and food ingredients. The much smaller Barry Callebaut factory
grinds about 30,000 tonnes; this company has most of its grinding capacity
located in Belgium and France. Roughly 450,000 tonnes of cocoa beans are
processed in the Zaanstreek/Amsterdam area, constituting about a third of total
European grindings and 15 per cent of world production of intermediate cocoa
products (The Manufacturing Confectioner 2000).
The presence of Cargill and ADM in cocoa is fairly recent. In the early 1980s,
Cargill took over the cocoa trading company General Cocoa and its processing
subsidiary (Gerkens), as well as other related subsidiaries: a compound chocolate
manufacturing company (supplying the food industry) and a vegetable oil refin-
ery. Other Cargill companies in the cocoa chain are processing plants located in
Brazil, Cote d’Ivoire and the USA. Its activities in the USA include a compound
236 Niels Fold
chocolate factory like that in the Netherlands. Output from the Gerkens main
factory is about 10 –20 times bigger than production in plants belonging to small-
or medium-sized chocolate manufacturers. According to the company, Gerkens
has established a good reputation among its customers due to its large and efficient
factory and 20 years of collaborative experience with chocolate manufacturers.
ADM entered the cocoa-grinding business only in 1997 when it acquired the
huge US-owned Grace Cocoa, which came up for sale when the multi-faced
conglomerate it belonged to was unbundled. Grace Cocoa had built up substan-
tial grinding capacity in the USA and Canada, and had acquired a company
resulting from a 1986 merger between Barresfort and Cocoa de Zaan in the
Netherlands, itself the result of a number of earlier mergers involving about 15
smaller companies in the Zaan area. In 1988/9 the Dutch company acquired
another grinding company and a compound chocolate manufacturing company
in Germany, but the latter has since been sold by ADM, which is no longer in
the chocolate business in Europe. In the late 1990s, ADM also bought ED & F
Man’s plants in Hull and Poland. Besides this, ADM has factories in Singapore,
PR China and Brazil, although its former facilities in Ecuador have been sold.
On a global scale, ADM is now the largest grinder, processing about 500,000
tonnes of cocoa annually. Recently, the largest locally owned grinding company
in Côte d’Ivoire (SIFCA) has been taken over by ADM and split into two
different companies, one grinding company and a bean buying and exporting
company (cf. Losch, this issue).
The benefit to Cargill and ADM of locating such large grinding operations in
north-western Europe is their proximity to the major chocolate manufacturers.
It is thus easy to supply blended and treated cocoa products on a JIT ( just in
time) basis. Both companies have separate plants for batch production and for
customized cocoa products. Outsourcing the supply of intermediate products
has become more widespread in Europe than in the USA, just as bulk transport
only takes place to EU ports. Cocoa liquor is also transported over long distances
in Europe. As a corollary, grinding statistics at a national level do not reflect
national market demand, as large volumes of intermediate products are traded on
an intra- as well as inter-company basis.
Barry Callebaut, which resulted from a merger of Belgian and Swiss companies,
is a somewhat different firm, as it is the world’s largest producer of ‘generic’
industrial chocolate in addition to producing its own brands. According to
industry sources, the company’s market share for industrial chocolate is around a
remarkable 50 per cent. It is able to produce more than 1000(!) different types of
industrial chocolate. The product range is also tuned towards smaller quantities,
including chocolate mass for ‘artisanal’ manufacturers of products for luxury
niche markets. Apart from grinding the majority of its own cocoa liquor re-
quirements, Barry Callebaut also buys cocoa butter from the two large grinders
as its demand far exceeds its in-house capacity. The main market remains prod-
ucts destined for mass consumption. The company’s success is to a large extent
related to the surge in consumer preference for sweets and snacks covered with
chocolate during recent decades (see next section).
Grinders and Branders in the Global Cocoa–chocolate Industry 237
Two other, much smaller and more specialized, grinding companies are still
left in the Amsterdam area. Dutch Cocoa (the former Droste chocolate manufac-
turer) is a licensed supplier of cocoa liquor for Mars (25,000 tonnes per year) in
addition to other kinds of ‘toll grinding’ for smaller chocolate manufacturers,
including chocolate sold under the Max Havelaar brand. The company, which
emerged from a management buy-out following the sale of the Droste brand
name to a German company, has invested in new processing equipment. The
other grinding company is Jan Shoemaker, which transforms all kinds of cocoa
waste (imported as well as local) into intermediate goods for the pharmaceutical
and pet food industries.
The large grinders have established an edge in relation to their competitors,
hence a more dominant position within the chain as a whole, on the basis of
taking advantage of economies of scale and scope in different ways:
(1) Their R&D (research and development) and production organization experi-
ence in food ingredients (which is quite different from consumer goods):
large grinders with this expertise have the capability to transfer advances
between technologies, and can also easily transfer process advances in electronic
automation so that their factories run at an almost constant output all year
round.
(2) Using buying power in one business to cross-subsidize supply of technology
to another: for instance, Gerkens worked together with one of the techno-
logy suppliers of Cargill to develop a certain type of equipment for cocoa
processing. A similar type of equipment had been used in another of Cargill’s
business lines (specifics not revealed to the author). This kind of interactive
procedure has also been used in cooperation with a generic supplier of paper,
who developed a new package concept for cocoa powder. In general, joint
ownership of patents and/or exclusionary agreements concerning the use of a
specific type of equipment or intermediate good are increasingly becoming a
standardized way of dealing with global technology suppliers for the agro-
industrial giants.
(3) Access to logistical capacity and expertise developed in other bulk commod-
ity businesses: Gerkens was the first company to introduce trade in bulk
based on Cargill’s experience from the grain trade; the innovative manager in
Gerkens came from one of Cargill’s grain companies in Amsterdam. Previ-
ously, when international flows of cocoa were mainly mediated by commod-
ity traders, beans were usually transported in sacks from producer countries
to warehouses and grinding companies in the North. Containerization of
beans in bulk or sacks was gradually introduced during the 1990s and started
to gain importance on some ‘origin’-destination routes. However, in the
mid-1990s, Cargill adapted their bulk trade logistical systems from grain to
cocoa. Only the largest grinders are able to make use of the resulting bulk
shipments of between 3000 and 10,000 tonnes of beans. Ships go directly to
the quay-side of the factories or beans are transported by barge to avoid
costly road transportation and spillage. The beans are taken by grab from the
238 Niels Fold
hold of the vessel and fed, via gigantic funnels, onto conveyor belts that go
into the warehouses as in grain systems. Hence, synergetic effects are created
on a cross-commodity, intra-company basis.
Together with ED & F Man in London, this is the only specialized trading
company left on the global scene since Andre & Cie of Lausanne went bankrupt
in 2001. Competition is considered stiff and high risks are associated with every
aspect of the trade. However, these two international trading companies have
a reputation for stability, and many big chocolate manufacturers are regular
customers as they acknowledge the need for independent trading companies
with an ability to buy and sell beans in volumes appropriate for their production.
Besides, Continaf also sell beans to large grinders, depending on temporary
demand and supply conditions.
The company has established local export subsidiaries in all the major cocoa-
producing countries (plus Togo) and is one of the biggest buyers from the state
cocoa-marketing company in Ghana. The local companies are set up in rented
buildings and equipped with pre-shipment drying facilities. Beans are purchased
from middlemen or cooperatives, and graded and shipped according to contracts
or stored in warehouses. The company continuously tries to maintain good
relationships with large local suppliers, to whom they offer pre-finance. As mar-
kets are liberalized, however, the value of such personalized business connections
is eroded as a result of daily price movements on the world market. Because of
access to information on those price movements and easy communication with
local exporters via mobile phones, local traders direct their lorry drivers to the
exporters offering the highest price on a given day.
Darnhouwer, another Amsterdam-based international cocoa trading firm, is
owned by the same holding company as Continaf. The company, taken over in
1996, has a long history in the cocoa trade of Amsterdam and Hamburg, but
specializes in trade with so-called fine and flavoured cocoa from Latin America or
the Caribbean. In contrast, Continaf only deals with bulk cocoa (and coffee), the
usual type of cocoa traded internationally. Fine and flavoured cocoa constitute
only about 5 per cent of the total volume of cocoa traded globally, but unit
prices are much higher due to the sophisticated flavour of the resulting cocoa
liquor. Few trading companies are involved in the international trade with fine
and flavoured beans used in chocolate goods destined for the luxury market. In
this line of the cocoa business, access to substantial volumes of capital is necessary,
since small- to medium-sized chocolate manufacturing customers are promised
supplies up to two to four years in advance. Staying in business as a trading
company requires that supplies are stable and price agreements can be made to
‘stick’. Reliable business partners in exporting countries are sometimes helped
financially to buy stocks in order to keep them in business so they can retain
their export licences. The company also organizes bean trading and storing for
Max Havelaar products, but so far this trade is very small in volume terms.
The increasing necessity for smaller international traders to specialize in order
to survive is illustrated by the activities of a third (and independent) company,
Theobroma. This company used to trade primarily in cocoa beans, but its vol-
ume now fluctuates, generally below 50,000 tonnes per year. It now concentrates
its commercial activities in producer countries where it is relatively difficult to
trade, such as Nigeria and Sierra Leone, as well as buying in Côte d’Ivoire. The
240 Niels Fold
company has not invested in financing local export companies, as risks are con-
sidered too high and profits too low. Consequently, its activities are substantially
reduced as there are only small volumes of beans left for traditional trading
companies of this type that do not pre-finance. Instead, Theobroma is focusing
on trading in processed cocoa products, primarily in Europe.
Warehouses
Traditionally, international traders sold cocoa beans to grinders, who contracted
independent warehouse owners to store them on their behalf. Grinders did not
want to store beans on-site because of the risk of infestation of processing plants.
Amsterdam was one of the most important cocoa warehouse centres in Europe,
particularly for cocoa beans from West Africa. Amsterdam is close to industrial
customers and the climate is ideal for storing cocoa beans as the free fatty acid
content in the beans remains at a minimum during storage (bean quality easily
deteriorates in humid tropical climates). Warehouses in Amsterdam handled about
500,000 tonnes of cocoa beans a year during the 1990s, primarily serving the
large grinders in the region, but also grinders and chocolate manufacturers in
Central and Eastern Europe.
In the mid-1990s, the introduction of bulk transportation and flat storage
reduced labour costs tremendously, to around a fifth of the levels associated with
traditional logistical systems. This reinforced the competitive power of the large
grinding companies located at accessible waterfronts, i.e. harbours or river mouths.
In the 1980s, around ten warehouses in Amsterdam were engaged in cocoa stor-
age, but only six of them are now capable of handling bulk cocoa. Bulk cocoa
transport is associated with ‘flat’ storage, i.e. storage in large piles of 10–12 m on
the floor of warehouses (Dand 1999). Flat storage requires less space than storage
of an equivalent volume of bagged beans and is relatively easy to organize with
the use of bulldozers, a practice that shocked many industry observers who were
used to regarding bean handling as a process requiring much more care. Some
warehousing companies chose not to enter the flat storage business and tried to
remain in bag storage. The importance of the latter, however, is rapidly decreas-
ing and is now estimated at only some 5–10 per cent of stored beans. Much of
the ‘open’ trade in bags has disappeared since the large grinders started in-house
sourcing from producing countries. It is expected that within the next couple of
years only three or four warehousing companies will remain. The present three
big companies are Cornelder, Ter Haak and Unicontrol.
Due to new handling equipment and changed work organization, a mega-
bulk vessel now can be fully unloaded in 24 hours. The same volume in bags
previously took about one week, involving about 60 workers. The obvious
result is high labour and time cost-savings. Meanwhile, freight costs remain
almost the same as ten years ago: container vessels (with containers holding
about 16 tonnes of beans) have reduced freight charges to compete with bulk
carriers. But competition for freight between bulk and container vessel complic-
ates the planning for warehouse owners, since they never know in exactly what
Grinders and Branders in the Global Cocoa–chocolate Industry 241
form beans might arrive. Warehouses are on relatively short (one-year) contracts
with grinders, which amplifies the risk of investment in new equipment; for
instance, a new grab is useless for handling containers.
The volume handled by Amsterdam warehouses has decreased lately because
many large customers (particularly grinders) prefer to reduce freight costs by
bulk import of beans in a single vessel. The rapid increase of origin grinding in
Cote d’Ivoire is another reason. The result is a huge overcapacity in storage space
in Amsterdam, particularly at times in-between harvests, and because of increased
competition between the warehouses in Amsterdam and further reductions in
storage charges. In addition, the average length of storage periods has fallen
sharply, to about one year as against about five years in the mid-1990s.
One of the warehousing companies, Cornelder, acquired an approved quality-
control subsidiary when it took over the cocoa section of the international
company SGS. Cornelder tried to establish branches of this subsidiary in pro-
ducer countries, but with mixed results. In Nigeria, the activity was closed
down ‘due to insurmountable problems with domestic politics and corruption’.
In Cameroon, there was not enough cocoa (only 100,000 tonnes) for all the
buying companies present and operations were not profitable for companies
restricted to trade in only one crop. However, Cornelder’s branch in Côte d’Ivoire
is still operating.
In sum, all the dominant companies in each segment of the cocoa–chocolate
chain in the Zaanstreek/Amsterdam area (grinders, international traders, ware-
houses) have established purchasing activities in the major West African pro-
ducer countries, except Ghana, where exports are still controlled by a parastatal
company. The move towards upstream vertical integration seems to be most
successfully implemented by resource-rich grinding companies, whereas only
one of the surviving international trading companies has had the capacity to do
likewise. Warehouses have either closed down their operations or run them at
sharply reduced levels of capacity utilization.
60 per cent (Dand 1999; Rabobank 2000). This degree of concentration of choco-
late production in the EU and in the US, the two major chocolate consuming
markets, is mainly a result of two inter-related factors. Firstly, total market
volume is increasing only slowly and company growth therefore takes place
primarily through mergers and acquisitions of smaller companies with strong
local brands in national markets. The increasing attention to share value –
‘financialization’ (see, for instance, Froud et al. 2000) – leads to management’s
preoccupation with financial performance and cash management. On the one
hand, this may further strengthen the incentive to mergers and acquisitions by
targeting companies whose shares are undervalued relative to their asset values.
On the other hand, the trend has also forced or motivated chocolate producers,
including large brand manufacturers, to reduce their grinding activities and
outsource lower-profit liquor, cocoa butter and even standard (intermediate)
chocolate production to large grinding companies. For example, Nestlé has
sold off or closed grinding operations in Italy, Spain and Portugal. New and
stricter sanitary rules are important for the decision to outsource grinding pro-
cesses, as this allows problems involved in handling beans (dirt, dust) to be
removed from chocolate factories.
There are some notable exceptions to this trend, largely due to considerations
of commercial secrecy about specific recipes for cocoa liquor, and to the nature of
firm ownership. The relative importance and value-orientation of traded share
capital appears to be a crucial factor in company decision making. For instance,
one of the large global players (Ferero, a family-owned Italian company) has
recently invested in in-house grinding facilities near Frankfurt (Germany) with a
capacity of 30,000 tonnes, around the level considered to allow operation on a
break-even basis. Similar strategies have been pursued by other, smaller companies
like the Swiss Lindt & Sprüngli who have also invested in new equipment,
although this relates to grinding for products based on fine and flavoured cocoa.
At the same time, a fear of complete dependence on the large grinders and thereby
vulnerable to take-over attempts is also far more manifest among companies
whose core business is chocolate products. Other companies with a diversified
product range (like Nestlé and Kraft) are not in the same exposed position and
therefore can cut costs by outsourcing suitable intermediate goods production.
A second foundation for outsourcing is that, as a consequence of fierce
competition among the leading global firms, larger investment than hitherto in
product development and brand marketing is needed for chocolate firms to con-
quer or maintain a strong position in consumer markets. According to Rabobank
(2000), the highest growth segment in major markets has been in premium
chocolate products like filled tablets, boxed chocolate, pralines and organic tab-
lets with their imagery of individual expression of consumer taste and ethical
concerns. Hence, there is a current trend towards targeting innovations on
specific groups of consumers, not only stratified by age as previously. Also,
product innovations seek to exploit the increased ‘impulse purchasing’ of snacks
and functional foods with chocolate content (Pullia 1999; Viviano 1999).
Grinders and Branders in the Global Cocoa–chocolate Industry 243
However, lead firms in each segment need the stability and high volume of
supply/demand of the other segment. The delicate balance in the global cocoa–
chocolate chain is only maintained by the enormous cost of crossing the boundar-
ies between existing segments on the basis of mergers and acquisitions; large-scale
‘green field’ investments are out of the question. Nevertheless, there is a struc-
tural imbalance in the chain important for its present dynamics. Because of the
advanced stage of industrial concentration, volume spreading has become
relatively difficult for chocolate manufacturers. The large grinders increasingly
internalize bean purchase through their subsidiaries in the major West African
producer countries, and they control a very substantial share of the market in
intermediate cocoa goods via their investments in grinding in both cocoa
producing and consuming countries. Moreover, the grinders have been able to
expand their customer base by developing various cocoa powder products usable
in all kinds of food products with chocolate ingredients (cakes, biscuits, ready-
made desserts, etc.). This was reflected during the recent economic crisis in
Russia, where consumption of confectionery chocolate declined but demand for
cocoa powder, which can be mixed with cheaper vegetable fats, increased, indic-
ating the appearance on this market of new chocolate-containing food products.
In this situation even the powerful chocolate companies are looking for ways
to avoid dependence, and continuously look for ways to sustain competition and
reduce the oligopolistic power of the contract manufacturers (grinders). One
way is to link up with new, efficient and independent medium-sized grinding
companies by offering them favourable contracts with stable volumes and prices,
although the contractor’s ability to meet environmental and sanitary standards is
crucial for the establishment of these arrangements. This is exemplified by the
relationship between Mars and the new independent grinding company in the
Zaanstreek/Amsterdam area.
Another way to hold the power of the grinding companies in check is to buy
beans from the surviving international traders. Very few trading companies of
international significance are left, though. Concentration in grinding segment
and increasingly widespread outsourcing of grinding, even by small- and
medium-sized chocolate manufacturers, have eroded the market for non-bulk
transactions in beans. In addition, most smaller trading companies have with-
drawn from trade in cocoa beans due to the high risks involved in buying and
holding high volumes in a situation of declining prices. Other larger, more
famous, trading companies with the necessary capacity have closed due to failed
speculative operations in other commodities (e.g. Andre & Cie).
Hence the global cocoa–chocolate chain is essentially buyer-driven in the sense
that agricultural producers are more or less price-takers on the global market.
The dynamics of power within the chain are determined in the buyer segments,
although it is less easy to ascertain the exact locus of ‘driving’. I suggest that the
concept of containment is useful for interpreting the structural coherence and
coordination in bi-polar GCCs like the cocoa–chocolate chain. Lead firms among
the brand-name companies try to find means whereby contract manufacturers
can be blocked from gaining powerful positions within the chain that destabilize
Grinders and Branders in the Global Cocoa–chocolate Industry 245
CONCLUSION
The cocoa–chocolate industry in the Zaanstreek/Amsterdam area and cocoa farm-
ing in Ghana played important roles in the development of the global commod-
ity chain. In the Netherlands, cocoa processing and chocolate production have
been radically concentrated. Due to its history and geography, the Zaanstreek/
Amsterdam area is now a centre of major global importance in the chain because
of the location there of large factories owned by the principal transnational
companies in grinding.
Ghana is the last producer country in which important state regulatory insti-
tutions, including a quality-control system, remain more or less intact. How-
ever, regulation has gradually changed even here over the last decade, and private
buying companies can now operate, albeit not directly nested into the world
market, while cocoa exports are still controlled by the state. The ability to oper-
ate a fixed price system is closely related to the maintenance of a quality-control
system that satisfies the requirements of industrial customers sufficiently to merit
them buying Ghana beans on forward terms.
Despite their obvious specificities, the constituent structures and actors of these
two territorially embedded segments of a global commodity chain open a win-
dow to understanding the dynamics of the latter. A conspicuous feature is the
bifurcation of buyer-drivenness between a small elite of branded manufacturers
246 Niels Fold
controllers might be an option, but the need would remain for state monitoring,
if not operational involvement, in order to secure consistency of bean quality.
The marketing of beans according to previously accepted standards is necessary
if small- and medium-sized international traders and chocolate manufacturers are
to remain as direct purchasers, and hence if the breadth of the demand base is to
be preserved or extended. Moreover, an origin’s reputation for stability of sup-
ply and consistent quality can lead to a resumption of forward sales. This in turn
is a prerequisite for a reformed price system, that on one hand could offer small-
holders some kind of protection from the vagaries of the world market, and, on
the other hand, has the ability to channel gains from price increases to farmers.
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