It’s Quality, Not Quantity
1.36 billion kilos of chocolate are consumed each year in the United States alone. But it is in Europe that per capita consumption is highest, with 16 European countries among the top 20 consumers of chocolate in the world.
The global chocolate industry is valued at nearly 100 billion USD/per year today. It is expected to grow at an annual rate of more than 7% between 2018 and 2022, reaching up to US $ 161 billion.
On the producer side, 70% of cocoa comes from Cameroon, Ghana, Indonesia, Nigeria and Ivory Coast, which alone holds nearly 40% of the world market. The largest importers in the world can be classified into different categories depending on their demand for cocoa beans, cocoa powder or chocolate. Thus, in 2009, the Netherlands was the largest importer of cocoa beans in the world, the US the largest importers of cocoa powder and England the largest importer of chocolate.
The constant increase in chocolate consumption, whose main ingredient is cocoa, the appetite of new emerging countries such as China, India, Indonesia (market share is expected to reach 14.3% by 2026)... encourage price advancement. In Europe, the biggest consumer remains Switzerland with more than 10 kg consumed per year and per capita against about 6 kg for a French. Since 2008, demand has exceeded production, which amounts to about 4.1 million tonnes. This trend will continue as long as prices are not expensive enough for consumption to decline.
This commodity is also subject to strong price fluctuations and the market is ultra-speculative. On the cocoa market, demand is growing at an average rate of 2.5% per year. The cocoa market is therefore jagged, subject to falls as to spectacular ascents. For example, in early 2008, cocoa suffered a deep crisis and recovered in just a few months.
The future of cocoa seems promising according to the specialists. In emerging countries, demand continues to grow. If the growth trend is confirmed, the price of cocoa should be multiplied 5X by the year 2030.
While there is enough cocoa being produced globally, most of it does not meet basic norms of traceability, deforestation and child labour. KKO International offers an ecosystem based around 5 core pillars (as shown in the video below): a fully traceable and quality bean with harvests boosted by irrigation, grafting and use of organic fertilizers.
Growing responsibly using innovation as key driver.
#800,000 cocoa trees, irrigated and grafted
We strongly believe in the growth potentiel of the cocoa sector and the need for a sustainable and traceable product in the years to come. Today, China consumes about 100 grams of chocolate per capita. In comparison, Brazilians consume 2 kg. If the Chinese came to consume, in the coming years, even the Brazilian equivalent, it would represent 3.6 million tons per year, almost the current world production. The demand is likely to greatly exceed supply and chocolate may be a real luxury product in a few years.
Keeping in mind the project ambitions in terms of productivity per tree, it was decided that we would adopt the “Mercedes” variety and engage in a concerted grafting and cloning program to further boost production and ensure homogeneity.
Today, our in-house teams ensure that agronomy tasks like pruning, grafting, weed control, fertilization (organic) and fertigation (chemical) are executed to ensure optimum conditions.
Mixed cropping as foundation for strong biodiversity.
Mixed Cropping Approach
We have adopted a mixed cropping protocol, whereby coffee and teck are used in conjuction with cocoa. The aim is to promote polyculture, also known as inter-cropping, or co-cultivation, which involves planting two or more plants simultaneously in the same field, interdigitating the crops so that they grow together.
By planting multiple non-competing crops, it optimizes land usage since each has different growth conditions. It allows for better usage of OPEX (example team and equipment sharing) as they ripen at different seasons, and provides a wealth of environmental benefits: balance of input and outgo of soil nutrients, suppression of weeds and insect pests, resistance of climate extremes (wet, dry, hot, cold), suppression of plant diseases, increase in overall productivity, and an optimized management of scarce land resources.
Coffee: #100 HA of Arabusta in 2019
Arabusta is a hybrid of Robusta and Arabica strands and was developed in the 1960s in Ivory Coast. The above vareity has been sourced from CCC (Conseil Café Cacao) and will be planted on land that is already under lease.
Following soil analysis established by in-house pedologists, it is not possible to plant cocoa in certain areas due to PH levels, granular nature of the soil and inadequate depth. Coffee is ideally suited for such conditions. With low CAPEX (no irrigation) and OPEX savings (share teams from cocoa operations), use of the high quality blend of Arabusta has strong potential for growth given scarcity of available production (Ivory Coast's Presidential Coffee May Soon Become Extinct).
Teck: end of 2019, we will be at 200,000 trees for Phase #1.
Teak is a precious wood, durable, easy to work and resistant to climatic aggressions, insects and termites. Over centuries, it has gained unmatched reputation and reputation with the first plantations recorded in the 7th century in Indonesia. Since the 17th century, plantations have multiplied successfully in Asia. In the early 20th century, seeds from India and Burma crossed the oceans and allow the development of teak plantations in Africa and tropical America.
Besides being an excellent perimeter crop, making it possible to define the boundaries of our plantation as well as protecting them against bad weather, wind and disease, it is a hardwood tree with long time to ignition and is considered as the best choice for fire prevention. The region is notorious for frequent bush fires (see gallery below) that has led to large scale destruction of flora and fauna. We actively plant teak promote intercropping and to preserve biodiversity.
Our in-house protocols, applied by trained and dedicated teams, use phytosanitary products that are on the list of "certified products". Moreover, plantations are only on delimited areas, avoiding any displacements of population. As growth is slow, it promotes CO2 sequestration and removes greenhouse gases.
Our ambition is 500,000 trees as part of Phase #1 Reforestation Program.