Five Actions to Take Now to Position Liberia to Attract Investment from Premium Cocoa Buyers

Mark Wallace, Loris Shannon, Kim Beevers

Attracting premium cocoa buyers would positively affect the lives of Liberia’s farmers and increase tax revenue generated for Liberia.

Premium cocoa buyers value high quality ingredients, ethical buying, environmental conservation, and sustainable supply chains. In turn, they offer high prices, support sustainability initiatives, help to improve cocoa quality, and provide long-term investment.

Here are five things to do now to attract investment from premium buyers:

1. Build a shared vision for industry development and sector alignment that stakeholders can put resources behind. We need to work together with a common vision and a cohesive approach to develop the industry competitively.
2. Get behind certification. Certification itself unlocks price premiums for all. In order to achieve certification, exporters and cooperatives must meet performance targets such as farmer receipting for traceability and transparency, basic accounting systems, and offer farmer training that improves productivity – lifting performance overall. How much money can be made through the premium market? In October 2019, certified organic cocoa offered $300 per ton premium in neighboring Sierra Leone; Fair Trade offered $240 per ton premium. However, premium buyers that demand special qualifications routinely offer quite a bit more.
3. Establish policies and regulations that encourage and ease investment from premium buyers. Currently there are no policies or regulations that promote premium investment into the cocoa sector. Regulations need to adapt to reflect market opportunities so that the entire country can benefit, including: introducing a special export license for premium buyers, using quality to determine royalty rather than volume (royalty per margin), and using the NIC platform to bridge networks and information gaps locally and globally.
4. Build Liberia’s cocoa brand to signal sustainability and fine flavor. Liberia has an opportunity to differentiate itself from the bulk cocoa suppliers. The brand needs to incorporate single-origin, fine flavor, conservation, sustainability, and quality. These are attributes that are increasingly demanded by the international market. A deliberate brand strategy is needed to reposition Liberia’s cocoa as quality and sustainability conscious in the minds of consumers globally – ultimately translating into higher prices for small farmers.
5. Elevate producers. Premium buyers have to build relationships with cooperatives and Liberian exporters. In order to attract their attention, cocoa producers and exporters must meet basic quality requirements demanded by international consumers. This starts with cocoa farmers. Farmers need help to understand and meet global quality standards through better production and processing practices. Exporters and international buyers also play an important role in supporting farmer organizations to meet business and trade requirements, such as receipting systems and financial records. Producers also need basic market access through better infrastructure that lowers transport costs and timely third-party financing. The resulting shared value from premium pricing means increased revenues for farmers and for exporters.

These steps will help to drive growth through explicitly positioning Liberia for the premium cocoa market. Though we believe these steps are a critical foundation, we also recognize that more will be needed over the long-term. This includes supporting traceability, encouraging transparent contracting, addressing cross-border smuggling, building up vital infrastructure, and addressing pricing inequities. Learn more about these issues and how they challenge Liberia’s cocoa industry and other Insights found here.

About GROW

GROW is business and investment advisory agency and a thought leader in market systems development and investment enabling environment in Liberia. We are working towards achieving sustainable, scalable, and private sector-led growth.

GROW is a focal point for international, premium cocoa buyers interested in investing in Liberia. GROW creates discussion spaces between Liberia’s cocoa industry regulators and stakeholders, and international values-driven investors – like LUSH, a cosmetics company with a sustainable mission. We also work with groups to promote investment and export from Liberia, such as the Dutch agency CBI. Through facilitating interactions between our producers and the international market, we actively promote Liberia’s opportunity in the premium cocoa market.

GROW also works deep within Liberia’s cocoa value chain. We helped to establish new trade relationships and trade agreements between farmers and exporters. We have also supported cooperatives business performance and farmer engagement. We also regularly advise stakeholders on regulatory and process considerations.

Liberia’s cocoa industry has a lot to offer:

• High quality cocoa with large beans
• Interesting flavor from an undiluted genetic strain
• Nearly all farmers are organized into Cocoa Cooperatives
• Traceability of cocoa to the individual farmer household
• Environmental conservation of the intact rainforest
• Zero input cocoa which is easily certified Organic