Scenario planning

EXCECUTIVE SUMMARY

This work is about the troubles that Africa is facing and how these ones affect both cocoa supply and production.

Africa is dealing with a political situation. This factor that is the fight between the former and actual President of Ivory Coast, causes a lack of help for the cocoa farms and farmers. The people in Ivory Coast depend on the cocoa business since it’s themain economic input in the country.

Even with this factor, the farmers whom are independent business people, still produces their cocoa beans, but they are not investing in growing more cocoa trees. The trees take around 10 years to produce cocoa beans, and the farmers stopped growing them due to the risk that involves investing nowadays in their farms.

A supply issue is evolving. Ivory Coastis the main supplier in the entire world by far, but with the factors that are affecting them; they are losing their part on the cocoa business.

Not only Ivory Coast is facing with the political situation, they are also facing a social and labor issues. It has been informed that slavery is a fact at the cocoa farms, and with that, the child work abuse is a fact. Children all over the countryare working in these farms, forced by the farmers because they represent a cheap labor force.

Many organizations are trying to solve this problem; many of them are trying to reach the most important companies that use cocoa as a raw material to work together in the eradication of both slavery and child abuse. Nestle as one of the most important companies, and being the first one to get involved,has accepted to label their products with the legend of “free slavery product” in all their different chocolate products.

Ivory Coast is facing three main issues, political, social and labor, but also there are some problems with the growth of the trees, sometimes they get infected and they no longer are productive trees. Many problems are in the cocoa business, and all of them are far to besolved.

Countries in Europe and all over the world have been trying to help the people in Africa, but those efforts have not been enough. Nowadays the slavery and child work abuse is present at the farms, and even that the companies such as Nestle or Hershey’s are working together with some associations, trying to find in their supply chains the origin of the cocoa beans, they have not found theIvory cocoa farms that still work with slavery.

Ivory Coast and Ghana are the two main cocoa suppliers, but since they both are in Africa, they both are facing the same problems. The actual President of Ivory Coast Alassane Outtara, has stopped the exports of cocoa beans because the income of that trade is money that the former President stills get and keep for himself.

Understanding allthese factors, the world is facing a collapse in the cocoa supply and a plan has to be made.

Indonesia holds the number 3 on the cocoa supply business. They have created a plan to become the number 1, and with all the problems that Africa is facing with, it’s not difficult to see this coming.

Indonesia is investing in the growth of cocoa trees and in creating huge cocoa farms, on the oppositeof Africa, since they have stopped the investment or the improvement at the cocoa farms.

All these factors present two different scenarios. One of them is the Collapse of the cocoa supply in Africa, and the second one; The raise of a New cocoa Supplier.

The collapse of the supply is a scenario that is supported by all the factors that Africa is facing nowadays. Ivory Coast is the mainsupplier, but with the lack of investment, the struggle of Presidential power, the slavery and child abuse; Africa is heading to a bottleneck where it seems difficult that they can solve them in a near future.

As a consequence of these factors, many countries will stop dealing with Africa until they solve all their issues. Even if they solve the Political Situation, they will still have the slavery...