cocoa annual report 2018 utz program · global increase of 8% in the number of group members and...

Cocoa Annual Report 2018

UTZ Program

May 2019

Following the 2018 merger of UTZ and the

Rainforest Alliance, the new organization

adopted the Rainforest Alliance name.

The UTZ certification program is now part of the Rainforest Alliance and will continue to run in

parallel with the Rainforest Alliance certification

program until the publication of a new, unified

certification standard at the end of 2019.

2Cocoa Annual Report 2018 - UTZ Program

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Introduction

The main goal of this report is to present the scope and scale of the UTZ cocoa program in 2018 – calendar year. The report is written in order to inform our stakeholders and is part of our commitment to transparency.

The report focuses on the key indicators related to:

• Market uptake: sales of UTZ certified cocoa

• Program reach: UTZ certified cocoa production, premiums being paid and multi-certification of this production

This report is part of the Rainforest Alliance monitoring and evaluation system. Most of the data in this report is collected via our online traceability systems, the Good Inside Portal.

We do our best to make sure that all of the information in this report is accurate and reliable, but as much of the data is collected by third parties, we are aware that there may be some shortcomings.

We look forward to receiving your feedback. For more information, please contact the Farm & Supply Chain Intelligence Department at datarequest@ra.org

Cocoa Annual Report 2018 - UTZ Program

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Summary

In 2018 we saw further strengthening of our existing certified

supply chains. Supply and demand are stabilizing, creating

ideal conditions to push forward with our ambitious plans around the new Rainforest Alliance certification program.

Cocoa Annual Report 2018 - UTZ Program

Reach UTZ cocoa program

Global Sales

Premium

Estimated production

Supply and Demand ratio

Multi-certification

Reach UTZ cocoa program

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Geographical reach

Latin AmericaBrazil

Costa Rica

Dominican Republic

Ecuador

Mexico

Nicaragua

Panama

Peru

AfricaCameroon

DR Congo

Ivory Coast

Ghana

Nigeria

Sierra Leone

Tanzania

Uganda

AsiaIndonesia

Vietnam

*Based on Cocoa Barometer, 2015

The UTZ Cocoa program is reaching 18 countries and more than 800,000 farmers

which represent 15% of the cocoa farmers worldwide*

Cocoa Annual Report 2018 - UTZ Program

9%Relative growth 2017-2018

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Program reach

# of group members

and estates

807,880 # of workers

(seasonal and

permanent)

22,176 Area (hectare)

3,007,123

▪ Number of group members and estates increased by 9%▪ Largest absolute increase is seen in Côte d’Ivoire▪ Largest relative growth is seen in Brazil

2%Relative growth 2017-2018

9%Relative growth 2017-2018

Certified area = Estimated production area Group members as included in group and multi-group licenses - Estates = Number of sites in individual and multi-site licensesWorkers as hired at group level or at estate level

Cocoa Annual Report 2018 - UTZ Program

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Program Reach

Cocoa Annual Report 2018 - UTZ Program

Number of group

members and estatesArea (ha) Number of workers (seasonal and

permanent)

▪ Number of group members and estates increased by 9%▪ Largest absolute increase is seen in Côte d’Ivoire▪ Largest relative growth is seen in Brazil

Relative growth

2017-2018:

+ 9% + 9% + 2%

Certified area = Estimated production area Group members as included in group and multi-group licenses - Estates = Number of sites in individual and multi-site licensesWorkers as hired at group level or at estate level

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Number of producers per country

Producer = holder of a group or individual certificate’Others' includes : Peru, Nigeria, Congo, Dominican Republic, Cameroon, Uganda, Sierra Leone, Nicaragua, Vietnam, Tanzania, Colombia, Panama

▪ Global increase of 13% in the number of producers▪ Largest absolute increase is seen in Côte d’Ivoire▪ Brazil growth thanks to good price incentives for certified cocoa as well as the increase of the

beans-to-bar market

Relative growth

2017-2018:+ 5% - 7%+ 21%+ 95%- 17%+ 15%

Cocoa Annual Report 2018 - UTZ Program

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Number of group members and estates

per country

*’Others' includes : Peru, Ecuador, Dominican Republic, Cameroon, Brazil, Uganda, Sierra Leone, Nicaragua, Vietnam, Tanzania,

Colombia, Panama

▪ Global increase of 8% in the number of group members and estates▪ Largest absolute increase is seen in Côte d’Ivoire▪ Decrease in Indonesia due to decertification of producers and lower demand for certified

cocoa

Relative growth

2017-2018: + 29% - 28%- 48%+ 27%+ 8%+ 28%

Cocoa Annual Report 2018 - UTZ Program

Global Sales

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Global Sales

▪ After the important growth in sales last year (due to low cocoa prices and

changes in our Mass Balance program), an expected decrease and stabilisation

of the demand

‘Global Sales’ are all the confirmed sales from a certified producer to their first buyer. Years are calendar years.

*Based on ICCO estimation for harvest 2017/2018 https://www.icco.org/about-us/icco-news/398-quarterly-bulletin-of-cocoa-statistics-november-2018.html

UTZ certified sales represent about 21% of the global cocoa production*

Cocoa Annual Report 2018 - UTZ Program

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Sales per origin

▪ After the important growth in sales last year (due to low cocoa prices and changes in the Mass

Balance program), a decrease in the demand in 2018 is expected.▪ Certification process for harvest 2018/19 stricter, causing delays in the licensing of producers and in

the registration of sales in the system

Includes all confirmed sales from the producer to the first buyer. *’Others' includes : Peru, Indonesia, Dominican Republic, Congo DR, Brazil, Uganda, Sierra Leone, Nicaragua, Vietnam, Tanzania, Colombia, PanamaCocoa Annual Report 2018 - UTZ Program

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Sales per origin

▪ After the important growth in sales last year (due to low cocoa prices and changes in the Mass Balance program), a decrease in the demand in 2018 is expected.

▪ Certification process for harvest 2018/19 stricter, causing delays in the licensing of producers and in the registration of sales in the system

Relative growth 2017-2018: - 19% - 33% - 4%- 13%

Includes all confirmed sales from the producer to the first buyer. Years are calendar years.’Others' includes : Peru, Indonesia, Dominican Republic, Congo DR, Brazil, Uganda, Sierra Leone, Nicaragua, Vietnam, Tanzania, Colombia, Panama

- 45%- 4%

Most UTZ Cocoa came from Ivory Coast (67%), Ghana (10%) and Nigeria (6%)

Cocoa Annual Report 2018 - UTZ Program

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Market uptake

▪ Italy, United Kingdom and Belgium are the countries with the highest numbers of

new certified supply chain actors

‘Supply Chain Actors’ include traders, grinders and manufacturers

879

1,184

1,387

1,550

2015 2016 2017 2018

Number of certified Supply Chain Actors increased by 12%

Cocoa Annual Report 2018 - UTZ Program

Premium

Cocoa Annual Report 2018 - UTZ Program

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Premium

▪ The UTZ Premium is an additional cash amount paid above the market price for a

similar conventional (non-certified/non-verified) product. It is mandatory

and agreed upon between the certified group or producer and the first buyer

UTZ premium calculations are based on transactions data recorded in the UTZ traceability system.

Values under 10 and above 350 EUR/MT are excluded from 2017 analysis

UTZ average cocoa cash premium is stable

Cocoa Annual Report 2018 - UTZ Program

Estimated Production

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UTZ global estimated production

Estimated production is based on license information from licenses valid on December 31st 2018

Cocoa Annual Report 2018 - UTZ Program

Increase of the estimated production of 10%, mainly driven by Ivory Coast

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UTZ estimated production per origin

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Estimated production is based on license information from licenses valid on December 31st 2018*Others’ includes: Peru, Indonesia, Dominican Republic, Congo DR, Brazil, Uganda, Sierra Leone, Nicaragua, Vietnam, Tanzania, Colombia, Panama

Cocoa Annual Report 2018 - UTZ Program

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UTZ estimated production per origin

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Estimated production is based on license information from licenses valid on December 31st 2018Others’ includes: Peru, Indonesia, Dominican Republic, Congo DR, Brazil, Uganda, Sierra Leone, Nicaragua, Vietnam, Tanzania, Colombia, Panama

Relative growth2017 – 2018:

+ 19% + 19% + 26% - 22% - 14% - 21%

Cocoa Annual Report 2018 - UTZ Program

Supply and Demand ratio

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Supply and Demand ratio

This is based on Producer sales and estimated production 2018. It indicates a trend but not an absolute number.

▪ Supply and demand ratio is going down and stabilizing, sign of a mature program

▪ Decrease in supply-demand ratio linked to a higher increase in certified estimated

volume (+10%) than in producers sales to first buyer (-17%)

Producers sold on average 60% of their estimated production as UTZ.

Cocoa Annual Report 2018 - UTZ Program

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Supply – Demand trend

This is based on Producer sales and estimated production 2018. It indicates a trend but not an absolute number.

▪ Supply and demand ratio is going down and stabilizing, sign of a mature program

▪ Decrease in supply-demand ratio linked to a higher increase in certified estimated

volume (+10%) than in producers sales to first buyer (-17%)

Cocoa Annual Report 2018 - UTZ Program

Multi-certification

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Multi-certification

9% Rainforest Alliance

8% Fairtrade

6% Organic

of the UTZ producers’ groups and estates were certified for at

least one other standard

21%

Multi-certified represents the number of UTZ coffee certificate holders that were also certified for one or more of the following schemes: Fair Trade; Rainforest Alliance; Organic are included in the analysis. Other schemes are included from the total Multi-certification figures. They include Cocoa Practices, Cocoa Life and Global GAP

▪ Double-certification UTZ and Rainforest Alliance is the predominant combination.

▪ Organic: increase mainly due to Indonesia

Cocoa Annual Report 2018 - UTZ Program

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Multi-certification

Multi-certified represents the number of UTZ coffee certificate holders that were also certified for one or more of the following schemes: Fair Trade; Rainforest Alliance; Organic.Other schemes are included in the total Multi-certification figures. They include Cocoa Practices, Cocoa Life and Global GAP

▪ In 2018, 21% of the UTZ producers’ groups and estates were certified for at least

another standard

▪ Double-certification UTZ and Rainforest Alliance is the predominant combination.

▪ Organic: increase mainly due to Indonesia

In percentage of number of producers’ groups and estates

Cocoa Annual Report 2018 - UTZ Program

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