Kennemer Foods International (KFI)

With demand for chocolate rising in markets like China and India and global production on the decline, experts project a shortage of cocoa by 2020. Major chocolate manufacturers are looking for new sources and making structural changes to their production and procurement practices to make cocoa a competitive crop for small farmers. The Philippines enjoys the right climatic conditions to grow cocoa, but today the country’s contribution to the global supply is miniscule.

In response to this opportunity, Kennemer has created an end-to-end contract farming model that provides farmers with high-quality planting material and technology, training on farming practices, and access to financing and an assured market. The enterprise targets existing coconut farmers who can adopt cocoa as an intercrop in their plantations with minimal investments. A network of Cocoa Doctors – farmer entrepreneurs trained by Kennemer – supervises clusters of farmers, provides technical services and consolidates the cocoa beans for the Kennemer buying programme. Kennemer has established key partnerships to remove barriers and uncertainty for the farmer with Land Bank, a government bank offering long-term agricultural loans, and Mars, a major buyer of Kennemer’s fermented cocoa beans.

Kennemer is self-sufficient, with revenues generated through sales of fermented cocoa beans to global buyers as well as sales of seedlings. In just five years of operations, Kennemer has achieved significant scale, establishing a sourcing network of 10,000 Filipino farmers who can reach an average income increase of 340%. By adopting modern cocoa technology, farmers can experience cocoa yields of four times the national average – increasing incomes of coconut farmers from $555 to $3,300 net of inputs. By 2020, the company aims to integrate 35,000 farmers into its value chain.