Chocolate industry

1. College : SNJB’s COE, Chandwad.
Class : MBA 1st year.
Guidance By : Hon. Prof. Mr. U. S. Kasar Sir.
Industry : Chocolate Industry.
Presenters : Gaziyani Md. Hasnain
Rahul O. Bhandari
Khushbu Mutha
Bhagyashree Mankar
Abu Swaleh

2. Chapter - 3
External
Environment

3. •The International Cocoa Organization (ICCO) is a global organization, composed of
both cocoa producing and cocoa consuming countries with a membership. Located
in London, ICCO was established in 1973 to put into effect the first International Cocoa
Agreement which was negotiated in Geneva at a United Nations International Cocoa
Conference. There have since been seven Agreements. The Seventh International
Cocoa Agreement was negotiated in Geneva in 2010 and came into force provisionally
on 1 October 2012.
•On 2 November 2005, the total percentage of exporting countries which had acceded to
the Agreement surpassed 80%. Thus, the International Cocoa Agreement, 2001 entered
into force definitively for the first time in the 30 year history of the International Cocoa
Agreements. ICCO Member countries represent almost 85% of world cocoa production
and more than 60% of world cocoa consumption. All Members are represented in the
International Cocoa Council, the highest governing body of the ICCO.
•The two most important breakthroughs of the present International Cocoa Agreement
were the establishment of an explicit mandate on a Sustainable World Cocoa Economy
and the founding of the Consultative Board on the World Cocoa Economy.
Regulatory Bodies
1- ICCO

4. •The Consultative Board consists of fourteen international experts in the cocoa sector, all
from the private sector (seven from cocoa producing Member countries and seven from
cocoa consuming Member countries).
•However, the Board, whose mandate is as extensive as that of the International Cocoa
Council and comprises all aspects of the world cocoa economy, only functions in an
advisory capacity, as all final decisions are taken by the International Cocoa Council.
•The Consultative Board was established in recognition of the importance of the private
sector in the world cocoa economy and of the increasingly important role that trade and
industry have been playing in ICCO.

5. Regulatory Bodies
2- NCA
1. Founded in 1884 in Chicago by representatives of 69 confectionery manufacturing
firms, the National Confectioners Association is one of the oldest trade
associations in the world.
2. It is currently based in Washington, DC. In 2008 it merged with the Chocolate
Manufacturers Association of the USA (now called the Chocolate Council).
3. The association has 700 members, which include domestic and international
confectionery manufacturers and suppliers to the industry.
4. It aims to meet challenges and problems in the confection industry.
5. The NCA offers education and leadership in manufacturing, technical research,
public relations, retailing practices, government relations, and statistical analyses.
6. The NCA sponsors a yearly exposition of candies, gums and other snack foods at
the McCormick Place convention center in Chicago, Illinois, United States. Up to the
year 2009 the event was called the All Candy Expo, but starting in 2010 it will be
called the Sweets & Snacks EXPO. The trade show has hundreds of booths staffed
by representatives of dozens of companies debuting their latest creations.

6. Regulatory Bodies
3- FSSAI
1. The Food Safety and Standards Authority of India (FSSAI) is an agency of
the Ministry of Health & Family Welfare, Government of India.[ The FSSAI is
responsible for protecting and promoting public health through the regulation and
supervision of food safety.
2. The FSSAI has been established under the Food Safety and Standards Act, 2006
which is a consolidating statute related to food safety and regulation in India.
3. The FSSAI is led by a non-executive Chairperson, appointed by the Central
Government from amongst the persons of eminence in the field of food science or
from amongst the persons from the administration who have been associated with
the subject and is either holding or has held the position of not below the rank of
Secretary to the Government of India.Mr. K.Chandramouli is the current Chairperson.
4. The executive head of FSSAI is the Chief Executive Officer .
5. The FDA has itsheadquarters at New Delhi.The agency also has 5 regional offices
located in Delhi, Guwahati, Mumbai, Kolkata and Chennai, 4 referral laboratories and
72 local laboratories located throughout India.

7. ACTIONS By NCA
China to Establish National Standard for Food Grade Paraffin Wax
1. On November 19, the Standardization Administration of China (SAC) announced the
establishment of a national standard
2. with mandatory technical requirements and test methods for food grade paraffin wax.
3. The projected date of entry into force is August 19, 2010. The SAC will be accepting
public comments on the proposed
4. standard until January 19, 2010. The standard’s text, which is currently only available
in Chinese, can be found in China’s

8. India to Impose Trans Fats Limits for Packaged Foods
• According to recent media sources, the Food Safety and Standards Authority of India
(FSSAI) intends to limit the amount of trans fats that may appear in packaged foods.
A draft regulation to this effect is expected to come out some time following a
November 26 meeting.
• An FSSAI spokesperson indicated that the agency would seek to limit trans fats to
two to five percent of total fat in an average diet, in line with international standards.
• FSSAI is increasing its regulation and oversight of the processed foods sector, due to
its belief that increasing incomes have boosted Indian consumption of processed
foods.

9. India Releases Draft Changes to Labeling Requirements
• India’s Ministry of Health and Family Welfare (MHFW) recently published a draft
amendment outlining new labeling requirements and additive limits for various food
products. The draft rule establishes a labeling requirement for every food product that
contains a mixture of acesulfame potassium and sucralose.
• The label must state that the food product contains acesulfame potassium and
sucralose and that it is not recommended for children. The label must also state that no
sugar has been added to the product, or if sugar has been added, the label must list the
quantity (in grams per 100 grams) of sugar added. Other provisos to the amendment
include:
Any food containing polyols must bear a label stating: “Polyols may have a laxative
effect.”
• Modified food starches (derivative starches) may be used in snacks up to a maximum
concentration of 5% by weight.
•Maximum levels are established for hydroxypropyl methyl celluose in snacks and other
products at 1% of total volume by weight.
•Maximum levels were also set for synthetic amorphous silicon dioxide in powder
flavorings at 2.0%.
•Good manufacturing practice (GMP) levels will be required of maltitol and maltitol syrup
in baked goods and other products.

10. Sugarless Gum Included on Brazil’s Proposed Retaliatory Tariffs List
1. Brazil has published a list of U.S. goods on which it is proposing to impose retaliatory
tariffs. This list includes sugarless gum (HS code 2106.90.50), and although specific
retaliation levels are not listed, the regulation indicates that tariffs could be up to
100%.
2. Brazil was given the right to retaliate earlier this year by the World Trade
Organization due to reported unfair U.S. subsidies for cotton, but has not indicated if
and when they will proceed with imposing such retaliatory tariffs. The government of
Brazil has made it clear that they would prefer to resolve this dispute within the
context of the Doha round.
3. Brazil is accepting comments until November 30.
South Korea Proposes Zero Tolerance for Salmonella in Cocoa Products
and Chocolate
• The Korea Food and Drug Administration has notified the World Trade Organization of
a proposed amendment to the country’s Standards and Specifications for food that
would impose a zero tolerance level for salmonella in cocoa products and chocolates

11. Issues Affecting Chocolate Industry
Child Labor
1. Slave traders are trafficking boys
ranging from the age of 12 to 16 from
their home countries and are selling
them to cocoa farmers in Cote
d'Ivoire.
2. They work on small farms across the
country, harvesting the cocoa
beans day and night, under
inhumane conditions.
3. Most of the boys come from
neighboring Mali, where agents hang
around bus stations looking for
children that are alone or are begging
for food.
4. They lure the kids to travel to Cote
d'Ivoire with them, and then the
traffickers sell the children to farmers
in need of cheap labor

12. 5 . The horrendous conditions under which children must toil on the cocoa farms of the
Cote d'Ivoire are even more jarring when the facts are juxtaposed with the idea that
much of this cocoa will ultimately end upproducing something that most people
associate with happiness and pleasure: chocolate.
6 . The connection serves to illustrate that the existence of misery in one part of the
world and joy in another part are no longer divorced as nations are connected
together in a globalized web of trade.
7 . Thus, the pleasure that people from various nations around the world are deriving
from these chocolate confections could possibly be at the expense of child slaves in
Africa.
8 . The problem of child slavery then is not simply a faraway abstraction with no
immediate implications for anybody else except those who are directly affected, but
rather it is an issue that everybody around the world should be concerned about and
demand action to eradicate.

13. Environmental Issues
Deforestation
1. Cocoa farming also contributes to rainforest and old growth forest deforestation.By
clearing land in these forests, farmers decrease the biodiversity and interactions
between the organisms that naturally live in this area.
2. Many wildlife habitats are destroyed and the plant species diversity is drastically
reduced. Nutrients begin to leach out of the soil due to poor irrigation and inadequate
soil protection,which can increase the erosion of the soil.
3. The more intense the farming practices are, the more damaging they are to
the ecosystem. Cocoa farming becomes a destructive circle as farmers wear out the
soils and cut further into the forest to obtain fresh land. All of these processes stress
the Cacao trees and result in lower yields, giving the opposite effect to what the
farmers expect from these practices.
4. Some of the forests in Ghana and other Cocoa producing countries have been
declared protected by the government after observing the Tropical Rainforest
destruction. However, with a shortage of fresh land to plant Cacao trees, some
farmers are beginning to illegally cut down parts of these protected forests. It has
been estimated that approximately 50% of these protected forests have been cut
down.

14. Environmental Issues
Full sun cocoa
1. Cocoa farms are generally small, family owned and operated businesses. There are
approximately 4.5 million cocoa farms around the world. The majority of cocoa farms
are located in Côte d'Ivoire and Ghana. In Ghana, Cocoa contributes 64% of all
exports. Traditional cocoa farms are planted in the shade among other crops and
trees. They are especially found in the Tropical rainforest areas. Farming cocoa
beans is a long process with many factors that can affect the farm's yearly output.
2. Farms' cocoa crop outputs struggle to match the increasing demand for chocolate. It
is estimated that the demand for chocolate will increase twofold by the year 2050.
3. Farmers have shifted towards unsustainable, less environmentally conscious
practices to meet these demands.
4. Some farmers have shifted their crops out of the shade and into direct sunlight. This
practice yields a greater quantity in a short period and at lower quality. Cacao trees
with no shade tend to accumulate more weeds as well as be more susceptible
to diseases such as Witches Broom and Frosty Pod Rot. If the crops begin to
accumulate pests, farmers use large amounts of herbicides to rid the crops of these
pests.The herbicides used damage the land and the health of the sprayers applying
the herbicide. Excessive spraying of pesticides can also cause the weeds and
insects to build up a resistance which will eventually create more harm to the crops.

15. Solutions By Governments
Education
1. Through groups and programs such as the World Cocoa Foundation, Rainforest
Alliance, Roundtable for a Sustainable Cocoa Economy, and activities of regional
NGOs like Conservation Alliance, IITA and Solid aridad cocoa farming can return to
its sustainable roots through education programs and help in finding ecologically and
economically sound resources to further their farming.
2. As a last resort, some programs will help farmers to access pest control products
such as biocides as an alternative to the harmful pesticides being used. Other
programs promote proper irrigation, composting, suitable soil management, and
intercropping, meaning planting other trees and fruit crops in the surrounding land of
the Cacao trees.
3. Some farmers will burn old, fermented pods and place them back on the soil as a
form of composting and fertilizer.[To stop the process of deforestation, it is suggested
that farmers replant on their current land while using the practices.

16. Solutions By Governments
Shade cacao
1. It has been suggested that Cocoa farmers go back to the original and natural ways of
farming, by planting within the natural tree-cover and without cutting down existing
trees. When an area has already been clear cut another possibility exists. Planting
trees, especially fruit trees around and within the plantation, helps with growth of
Cacao plants.
2. These trees can provide shade to the Cacao plants and be a source of
oxygen replenishment to the environment. If the shade trees are fruit-bearing, this
can also provide additional income to the farmer.
3. Shade trees return organic matter to the soil through falling leaf litter and decaying
branches. The shade provided by these trees also helps to keep soil moist in dry
seasons which results in less damaging irrigation practices. Shade trees will raise the
amount of infiltration and slow erosion of the soil.
4. Since shade inhibits the growth of weeds, farmers are able to use less or perhaps no
pesticides which can decrease the occurrences of Witches Broom in these crops.
Cacao plants that grow in the shade provide the environment with more biodiversity,
allowing natural populations and habitats to flourish. Finally, shade can be extremely
helpful in keeping and lengthening the productivity of old growth Cacao plants.