MILAN – We spoke with Kwadwo Boachie-Adjei, Advisor for Urban Afrique and Founder and CEO of Kumbi Cocoa, the first U.S.-based cocoa processing factory to have a direct, equitable relationship with farming cooperatives.
Kwadwo, could you clarify the connection between Kumbi and Urban Afrique? Are they the same thing or is the Urban Afrique project within the Kumbi company?
“Kumbi Cocoa is a Licensed Buying Company (LBC) operating in Ghana, working with farming cooperatives and the Ghana Cocoa Board to source cacao beans. Kumbi’s U.S. operations will leverage access to cacao in Ghana and neighboring African countries to supply a cacao processing factory producing semi-finished cocoa products and chocolate bars. Kumbi has also developed relationships with coffee farmers across Africa.
Urban Afrique is a distributor for African origin products. The partnership between Kumbi and Urban Afrique focuses on the distribution of retail products, such as those from Nzatu.”
How and when did the Urban Afrique project start?
“Urban Afrique’s platform, launched in the U.S. about two years ago, allows farmers, manufacturers, and creatives to access the North American market. They have a partnership with Walmart, selling over 400 different African-sourced products on Walmart.com. This provides foreign partners with direct access to the U.S. market. I serve as an Advisor to Urban Afrique.”
Urban Afrique Project
A concrete example: Urban Afrique had been working with small cooperatives of women farmers from Northern Ghana, the home region of the CEO and Chairman of Urban Afrique, Mr. Deliman Mesuna.
These women have been producing shea butter for generations. Urban Afrique purchases their products and resells them on Walmart. Mr. Mesuna affectionately known to all as Osman, has over 20-years of experience in logistics and transportation.
“When he found out that I was exporting products from Africa, we discussed working together to expand these products to retail channels. We did some research, and realized that it would be a great opportunity to collaborate with suppliers across the entire African continent to help get their products directly to customers abroad. This was one of the many reasons why I introduced Nzatu to Urban Afrique. So, like the women producing shea butter in Ghana, Nzatu and many others now have a direct pipeline for their products to the U.S. retail market.”
How many farmers does it currently involve, are they all small (and how small)?
“Kumbi works with cooperatives comprising about 200,000 farmers out of the approximately two million cacao farmers primarily in Ivory Coast and Ghana. This accounts for about 65% of the world’s production. As an LBC, Kumbi buys beans from farmers and delivers them to the Ghana Cocoa Board, which then sells to the world market. Kumbi also purchases beans from farming cooperatives in Ivory Coast, Cameroon, and Nigeria, selling directly to traders and chocolate manufacturers aligned with our mission.”
How many steps does the cocoa supply chain consist of and how does your company manage to connect the farmers with the consuming countries?
“Kumbi Cocoa is a Licensed Buying Company (LBC) in partnership with the Ghana Cocoa Board. LBCs are tasked with buying beans from the farmers and delivering it to the Ghana Cocoa Board who then sells it on the world markets. Kumbi Cocoa also purchases beans from farming cooperatives in Ivory Coast, Cameroon, and Nigeria and sells directly to traders and chocolate manufacturers. So, we are direct from farmers via the country regulators and end users.”
Economic Sustainability and Fair Practices
Kumbi Cocoa aims to improve farmers’ lives by:
1. Increasing prices paid for beans
2. Expanding bean purchasing throughout West Africa
3. Processing beans into semi-finished chocolate products
4. Sharing added value with farmers
Kumbi will be the first cocoa processing plant with a direct, equitable relationship with farmer cooperatives and the Ghana Cocoa Board. We source directly from farmers we can monitor for unethical practices such as child labor as well as providing insight on more sustainable farming practices such as regenerative farming.
Addressing Price Volatility and Market Challenges
Kwadwo Boachie-Adjei acknowledges several factors contributing to recent price volatility:
– Low investment in the sector due to previously low prices
– Lack of advanced fertilizers and regenerative agriculture practices
– A 40% decrease in crop production last year
– Consistently high and growing demand
Is it true that out of every $1bar of chocolate, only 2-cents goes to the farmer’s pocket? How do these numbers and proportions change with Kumbi Cocoa?
“The majority of the benefit is in the downstream processing of the beans which is very capital intensive. Yes, farmers receive about 2-cents out of every $1 chocolate bar sold. This is totally unacceptable in an industry that generates nearly $200B USD per year. The added value from our U.S. based operations will then be shared with the farmers who supply us with their cacao beans. Urban Afrique’s role will be to help us distribute our production in the US market.”
How do you manage to make the farmers’ lives and also your business economically sustainable, while avoiding exploitation?
“Kumbi Cocoa will also work with Nzatu to adopt more farming cooperatives they have a relationship with to improve their lives through increased prices paid to them for their beans, and Urban Afrique for expanded distribution.”
With record high cocoa prices, how are you reacting to protect your business and those who rely on you for fairer conditions?
“To protect their business and those relying on fairer conditions, Kumbi is participating in the downstream sector in the U.S., the highest demand market with nearly $4 billion of imported chocolate per year.”
Is the cocoa produced by these farmers only premium, or do you also process commercial cocoa?
“We buy our cocoa beans from farmers in Ghana, Ivory Coast, Côte d’Ivoire, Cameroon and Nigeria. In the interim, I use a small factory in Ghana to produce cocoa powder. Eventually all the products from the cocoa beans will be produced in the US.
We will primarily sell the beans to commodities traders, brokers, small chocolate producers who believe in equity especially for high-quality beans. More importantly they believe in a more equitable model absent of exploitation.
Price volatility: Due to many problems that have been exacerbated over the last 10 years… starting with very low prices. The governments have not been able to invest into the sector. They have also not been able to fully incorporate newer more advanced fertilizers, and regenerative agriculture. This all requires capital. In addition, the crop last year was almost 40% less than the typical production and the prices started to jump.
So there were many factors that led to this huge increase in price. A big part of it is also linked to low supply. On the contrary you consistently have high demand which is only growing. The farmers do not see any of that money. However, the traders and intermediates do.”
How many volumes do you manage to transport on average in a year? Where do you have your markets at the moment?
“I have sold varied quantities of beans over the years to the EU, Asia, and the US. Soon I will be selling both beans, semi-finished, and finished cocoa products.“
How do you ensure the traceability of cocoa transported through Urban Afrique, also considering the potential entry into force of the EUDR?
“Urban Afrique is an end distributor. Kumbi will have its own traceability system in place within the next year. Well before the EUDR mandate begins.”
Kumbi plans to implement its own traceability system within the next year, well before the EU Deforestation Regulation (EUDR) mandate begins. The company has sold beans to the EU, Asia, and the U.S., and plans to expand into selling both beans and semi-finished and finished products in the future.
