It is well-known that farmers get only a small fraction of the full value extracted from a coffee and cocoa bean.
This is the breakdown of the value capture from the cocoa bean supply chain.
The farmer gets just 6.6% of the total value of a chocolate sold. Ivory Coast and Ghana produce two-thirds of the global cocoa beans, but makes just $6 bn in revenues, from a global chocolate industry of $100bn.
This is the cocoa supply chain.
This is the breakdown of the value capture from the coffee bean supply chain.
The farmer gets a mere 1 pence from a £2.50 cup of coffee! In contrast the coffee maker's profits are twenty-five fold higher!
Update 1 (03.06.2021)
Chocolate terms of trade fact of the day,
Of the $130bn global chocolate industry, less than $2bn goes to Ghana. Many farmers live in penury. Some employ children or extend their farms by cutting down forest to make ends meet. Farmers get at most 7 per cent of the chocolate value chain. Those who make, sell and market chocolate grab more than 80 per cent.
Looking it another way, from the perspective of the coffee maker, the fixed costs (staff and rents) is more than 6 times the profits or the variable costs. We could also say that the variable costs are negligible and the margins are wafer thin. That seems to be a very highly leveraged and risky industry similar to aviation.
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