Login
Cashew nuts are grown in West Africa, transported to Asia for processing and then offered for sale in Europe. What madness!
Seizing the opportunity
The Swiss retailer Coop recognised this too and set itself the goal about two years ago of sourcing more cashews from a sustainable value chain. Specifically, the cashews offered should not only be grown in West Africa, but also processed there and then shipped directly to Europe.
Exactly as gebana has always done. While more and more cashew processing plants in West Africa are shutting down because processing in Asia is a few cents cheaper, we had just invested in building a supply chain from Benin. A first container with processed nuts had already been successfully exported; now we were looking for a long-term partnership. Because the business on site needed to be expanded, but we could not bear the risk of a new company in West Africa alone. In addition, a genuine commitment from the wholesale partners was important to us.
We entered into discussions with Coop. Our concerns aligned, the objectives were the same and thanks to many years of prior cooperation it was soon agreed: together we would found a joint venture for sustainable cashews from Benin.
The deal
For this, gebana not only made an equity investment but also took on the work on site – from purchasing and logistics to export. We also provided the local management, undertook certifications and ensured quality assurance.
Coop, in turn, contributed its know-how in quality assurance and guaranteed the purchase of 50%–75% of the cashews for many years – at a price that matches the market, but may be higher than that of nuts cracked in Asia. By pre-financing half of the agreed order quantities, Coop also provided substantial financial support.
The investments
In addition to the joint venture aimed at bringing cashews directly from Benin to Europe, both companies also agreed to carry out a development project on site. Only with a stable local structure would the project stand on its own feet in the long term.
The focus was on improving local structures. Thanks to these, direct contact with smallholder farmers as well as the implementation of trainings and certifications should be ensured. The activities ranged from introducing a mobile phone app for the central storage of producer information to simple measures such as procuring motorbikes, which allow our agricultural advisors to reach the farmers more quickly.
Coop financed the project with almost half of the funds from the Coop Sustainability Fund. In addition to gebana, IDH, a Dutch organisation for sustainable development, also supported the project financially as well as with know-how and manpower. Two years after the start, the project will be completed as planned in May 2018.
The beginning is the hardest
Unlike the cashew production in Burkina Faso, for processing the nuts in Benin we did not rely on our own factories but used an existing one. This allowed us to start more quickly but also brought difficulties. Our processing partner could not crack the nuts in the quantity and quality we needed. There were also problems in other areas: prices for raw cashew nuts rose disproportionately, which disrupted our calculations. In addition, both the costs and effort for the targeted Bio-Suisse certification were enormous and obtaining the certificate took longer than planned.
But in the end we found a new, more reliable processing partner and were still able to have the first farmers certified according to Bio-Suisse guidelines at the end of 2017. Coop showed patience and perseverance and, despite all difficulties, stuck to its plan to source truly sustainable cashews.
This development shows that with genuine partnerships in which risk and reward are shared and a common vision is pursued, it is indeed possible to make a difference.
UPDATE: An newspaper article about the project was published in Benin.