The agronomist in the cocoa field uses the tablet to inspect the quality of the pods picked.

Traceability Services for Cocoa Production

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Traceability Services for Cocoa Production

Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Beverage
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Agriculture
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
EBITDA: > 25%
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Medium Term (5–10 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
> USD 1 billion
Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.
USD 1 million - USD 10 million
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Life on Land (SDG 15) Decent Work and Economic Growth (SDG 8) Responsible Consumption and Production (SDG 12)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
No Poverty (SDG 1) Climate Action (SDG 13)

Business Model Description

Develop and implement technological solutions for food and agricultural companies to enhance the sourcing of their products, especially cocoa, ensuring compliance with certification standards. Technological services include blockchain traceability solutions, AI-driven platforms to improve supply-chains tracking, and geospatial tools.

Expected Impact

Transform supply chains, ensuring fair wages, reducing exploitation, promoting sustainability, and enhancing market access—driving positive social and environmental impact.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Region
  • Côte d'Ivoire: Bas-Sassandra
  • Côte d'Ivoire: Montagnes
  • Côte d'Ivoire: Sassandra-Marahoué
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Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Food and Beverage

Development need
Agriculture and deforestation driven by agricultural expansion are the primary contributors to greenhouse gas emissions in Côte d'Ivoire. From 2010 to 2022, the intensive cultivation of cash crops (cocoa, rubber, palm oil, and coffee) on forested lands led to the degradation of 11% of the land, resulting in significant productivity losses (1, 11).

Policy priority
The National Agricultural Investment Program II seeks to elevate agriculture as Côte d'Ivoire's economic powerhouse, as Côte d'Ivoire remains dependent on imports to meet its nutritional needs. It targets 7.8% annual growth in agricultural production, supported by new agricultural clusters. In addition, the Pacte pour l'Alimentation et l'Agriculture aims to achieve national self-sufficiency in rice and fish by 2025, improve mechanization, reach 70% of private investment in the agricultural sector, and transform locally half of the crops (4, 8, 16).

Gender inequalities and marginalization issues
Agricultural production, including market gardening, cocoa, and rice, remains male-dominated, with access to land and credit for women remaining difficult. Women are underrepresented among farm owners, representing 10% of the total but accounting for almost 80% of food production. They are often employed as unpaid labor (2, 3, 5).

Investment opportunities introduction
Accounting for 28% of Côte d'Ivoire's GDP, the agricultural sector is one of the driving forces behind the economy. Côte d'Ivoire is the world's largest producer of cocoa and cashew nuts, 5th producer of palm oil, 7th producer of natural rubber and 4th producer of cotton. In addition, agriculture has forward linkages with the manufacture sector by providing inputs, including the agro-industry (e.g. chocolate) and textiles (cotton), thereby playing a key role for structural transformation (7).

Key bottlenecks introduction
Climatic hazards can have a major impact on food prices, as can logistical difficulties. The 2022/2023 season was affected by a rise in fertilizer prices due to the war in Ukraine. The amplitude of variations is set to increase with global warming (9, 17).

Sub Sector

Food and Agriculture

Development need
Climate change poses risks to labor productivity and forest cover, threatening agricultural sustainability, notably cocoa, which contributes 40% to export earnings. Additionally, the degree of transformation is low - over half of cocoa beans are exported unprocessed, while the country depends on imports of fish and rice to cover its consumption (1, 10, 13).

Policy priority
The government aims to increase local processing of key crops (100% of cocoa beans by 2030, 2 MT of rice per year). It supports sustainable production under the National Agricultural Investment Plan II (2017-2025), promoting climate-smart agriculture. In its NDCs, it targets a 30.4% reduction in greenhouse gas emissions between 2021 and 2030 compared to a reference scenario (12, 14, 15).

Gender inequalities and marginalization issues
There are significant spatial inequalities in Côte d'Ivoire, with agricultural districts such as Montagnes having extreme poverty rates largely superior compared to urban areas, such as San Pedro and Abidjan (17).

Investment opportunities introduction
Côte d'Ivoire is the world's leading cocoa and cashew producer, with 2.4 million tons of cocoa to be produced by 2022. However, climate change is likely to cause major disruptions, cocoa production is expected to drop by 30% in the early 2023/2024 season. Further investments in staple food production are needed to reach self-sufficiency (6).

Key bottlenecks introduction
Agriculture requires increasing investment as soils are degraded in many regions, undermining productivity and posing a major environmental problem. In addition, the country's taxation system applicable to agriculture is complex and can inhibit the entry of new players (1).

Industry

Agricultural Products

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Traceability Services for Cocoa Production

Business Model

Develop and implement technological solutions for food and agricultural companies to enhance the sourcing of their products, especially cocoa, ensuring compliance with certification standards. Technological services include blockchain traceability solutions, AI-driven platforms to improve supply-chains tracking, and geospatial tools.

Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Market Size (USD)
Describes the value in USD of a potential addressable market of the IOA.

> USD 1 billion

Although Côte d'Ivoire is leading the sales of certified cocoa globally, including for the Rainforest Alliance, Fairtrade and UTZ certifications, supply chain transparency and traceability market remains largely untapped as no more than 40% of cocoa is directly sourced despite zero deforestation commitments by companies which represent a trade value of USD 3.5 billion out of total exports of about USD 4.47 billion in 2022 (18, 69).

The global market for organic cocoa accounted for USD 8.3 billion in 2022 while sales of UTZ-certified cocoa grow by 21% annually, boosting traceability services. Market studies projected a 7.9% global growth for the testing, inspection and certification market for agriculture and food industry over 2019-2029 (18, 19, 20).

Indicative Return

GPM
Describes an expected percentage of revenue (that is actual profit before adjusting for operating cost) from the IOA investment.

EBITDA: > 25%

FarmForce, an agri-tech software as a service (SaaS) firm offering traceability services for cocoa production in Côte d'Ivoire, has projected EBITDA margin of 35% in 2025 and 53% in 2026 (33).

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Medium Term (5–10 years)

An agri-tech software as a service (SaaS) company that aims at providing first mile traceability solutions for key cocoa producers in Côte d'Ivoire is projected to record positive returns in five years with an investment of USD seven to ten million to scale up operations (19).

Ticket Size

Average Ticket Size (USD)
Describes the USD amount for a typical investment required in the IOA.

USD 1 million - USD 10 million

Market Risks & Scale Obstacles

Capital - Limited Investor Interest

While traceability is largely enforced across the United States and the European Union, traceability services in Africa remains a recent industry, with most initiatives carried out within agri-food companies rather than by contracting outside firms.

Market - Highly Regulated

Traceability services must comply with established guidelines, including ARS 1000 African Standard for a Sustainable and Traceable Cocoa and Regulation EU 2023/115A (40, 41).

Business - Business Model Unproven

Traceability is a rapidly growing but relatively new market, hence the limited perspective on its market potential.

Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

Deforestation for cocoa farming has increased Côte d'Ivoire's vulnerability to climate impacts, affecting rainfall patterns and increasing the risk of desertification in certain areas. Forest loss in Côte d'Ivoire results in a significant carbon footprint, impacting local and global climate (57).

Côte d'Ivoire is the world's largest cocoa producer, yet 54% of cocoa farmers live below the poverty line. Many farmers earn less than USD 1 per day, which affects their families' living standards and access to necessities (60).

Côte d'Ivoire’s high deforestation rate has put biodiversity at risk, affecting wildlife and plant species. According to environmental assessments, Côte d'Ivoire’s deforestation rate is among the highest globally, particularly in cocoa-growing regions (58, 59).

Gender & Marginalisation

Among cocoa producers, women are the most exposed to poverty due to work being often unpaid, limited access to credits and inputs, and a lower representation in community governance (25).

The pandemic has led to an increase in child labour rates, and there is 1.5 million children working in cocoa production in Côte d'Ivoire and Ghana (23).

Expected Development Outcome

Traceability promotes sustainable agricultural practices, such as agroforestry, that help mitigate climate impact by retaining forest cover and enhancing carbon sequestration. This supports climate resilience, benefiting both farmers and the broader ecosystem (61).

Traceability can help ensure fair trade practices, allowing farmers to access markets with better prices for certified, traceable cocoa. This can lead to higher incomes and reduce poverty in rural farming communities (62).

Traceability ensures that cocoa is sourced from approved areas, helping protect the remaining forests and biodiversity. Cooperatives and farmers using traceability systems can be incentivized to maintain biodiversity-friendly practices, preserving ecosystems and native species (61, 62).

Gender & Marginalisation

Traceability ensures compliance with sustainability standards, which include gender-related provisions, particularly regarding equal pay. Traceability allows transparency on the percentage of women producers and landowners.

Traceability at the farm level ensures compliance with labor laws and ethical standards and helps prevent child labor by documenting each stage of the supply chain (55).

Primary SDGs addressed

Life on Land (SDG 15)
15 - Life on Land

15.2.1 Progress towards sustainable forest management

Current Value

The average annual rate of deforestation between 1986 and 2023 is 2.8% (43).

Target Value

The government aims to raise forest cover from 3 currently to 6,5 million hectares in 2030, to reach 20% of the country's superficies (18, 44).

Decent Work and Economic Growth (SDG 8)
8 - Decent Work and Economic Growth

8.7.1 Proportion and number of children aged 5–17 years engaged in child labour, by sex and age

8.5.1 Average hourly earnings of employees, by sex, age, occupation and persons with disabilities

Current Value

The proportion of children aged 5 to 14 engaged in child labor was 25.6% in 2021 (28).

Men's monthly revenues averaged 128,016 FCFA (USD 200) and women 78,541 FCFA (USD 129) in 2019 (21).

Target Value

The global objective is the eradication of the worst forms of child labor by 2025 (45).

N/A

Responsible Consumption and Production (SDG 12)
12 - Responsible Consumption and Production

12.2.1 Material footprint, material footprint per capita, and material footprint per GDP

Current Value

The Ivorian cocoa production emits 3.35 million tons of CO2 annually, or 2.39 tCO2 per ton of cocoa (including transport and logistics), which is sensibly higher than Ghana (1.3 tCO2) (63).

Target Value

In its revised Nationally Determined Contributions, the government aims to reduce CO2 emissions from the agriculture sector by 6.83 million tons by 2030 (-19.76%) compared to baseline scenario (64).

Secondary SDGs addressed

No Poverty (SDG 1)
1 - No Poverty
Climate Action (SDG 13)
13 - Climate Action

Directly impacted stakeholders

People

Cocoa farmers benefit from access markets with better prices for certified, traceable cocoa. This can lead to higher incomes and reduce poverty in rural farming communities.

Gender inequality and/or marginalization

Children and workers benefit from the more ethical sourcing of beans allowed by traceability services, which reduces child labor and supports community welfare and workers' rights.

Planet

Nature and animals benefit from the adoption of sustainable farming practices encouraged by traceability, contributing to environmental conservation and reduced deforestation.

Corporates

Firms benefit from improved supply chain efficiency, enhances brand reputation through sustainable practices, and meets consumer demand for ethically produced goods.

Public sector

The government benefits from reduced deforestation, as climate change will impact public finances, and cocoa production compliance with its main cocoa import partner, the European Union.

Indirectly impacted stakeholders

People

Populations particularly vulnerable to climate change benefit from reduced deforestation and pesticide use. In Côte d'Ivoire, climate change has been associated with real GDP loss, projected increase in poverty levels and faster coastal erosion (23, 51).

Gender inequality and/or marginalization

Women benefit from traceability services through improved pay equity and increased opportunities for sourcing beans from women's cooperatives, helping to address gender inequality and marginalization.

Outcome Risks

Without rigorous monitoring along the value chain, certified and non-certified cocoa could be mixed, affecting the efficiency of the system.

Gender inequality and/or marginalization risk: If the traceability system increases operational costs for small producers without providing proportional benefits (e.g., higher income through premium pricing), it could lead to further income inequality between producers.

Impact Risks

Farmers may prove reluctant in adopting these new farming practices and partner with certification companies, hampering traceability's effectiveness.

Poor infrastructure in rural areas or unreliable internet access could prevent the technology from being effectively deployed, or reduced its effectiveness.

If smallholder farmers, who make up a significant portion of Côte d'Ivoire's cocoa producers, are not adequately included in the development or implementation of the traceability system, their participation could be minimal.

If traceability and certification are not properly monitored, they risk becoming mere business transactions, failing to support environmental preservation.

Gender inequality and/or marginalization risk: If not implemented rigorously, the intended impact on reducing child labor and addressing inequality toward women may not be fully achieved.

Impact Classification

B—Benefit Stakeholders

What

The development of cocoa traceability services would help fight against deforestation and help improve production conditions.

Who

Cocoa farmers and cooperatives would benefit, as well as workers and consumers alongside the positive impact on planet through reduced footprint.

Risk

Potential reluctance of small-scale farmers due to technology adoption barriers, or high costs, may reduce the investment's expected impact.

Contribution

Traceability introduces an added value to cocoa production by boosting transparency, reducing child labor, empowering women, promoting sustainability, and opening premium markets.

How Much

57.7% of deforestation exposure in Cote d'Ivoire is linked to untraced cocoa sourcing, such that traceability could protect up to 813,000 hectares over 15 years (70).

Impact Thesis

Transform supply chains, ensuring fair wages, reducing exploitation, promoting sustainability, and enhancing market access—driving positive social and environmental impact.

Enabling Environment

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Policy Environment

The National Agricultural Investment Program II (Programme National d'Investissement Agricole II or PNIA II) aims to boost agriculture to 9% GDP contribution and achieve 9% annual growth. A key focus is raising awareness among farmers and value chain actors on the importance of traceability, including for export purposes(8).

Cocoa and Forests Initiative (CFI) Action Plan (2022-2025) outlines strategies to combat deforestation linked to cocoa farming. It emphasizes cocoa traceability systems, including farmer identification and plot mapping, to ensure sustainable and deforestation-free cocoa production (67).

The National Development Plan (2021-2025) aims to increase cocoa production and processing, but also to promote deforestation-free cocoa farming, notably through the development of cocoa traceability (12).

Fairtrade Standard for Cocoa: offers guidance on documenting product traceability procedures for cocoa in Côte d'Ivoire. It assists producer organizations in implementing effective traceability systems to meet Fairtrade standards (68).

Financial Environment

Financial incentives: In 2023, the European Investment Bank (EIB) granted a euro 25 million (USD 27 million) loan to financial group Cofina to promote sustainable agriculture in Côte d'Ivoire's cocoa sector, helping meet new EU regulations. To date, 22 cooperatives have received over €2 million in loans (47).

Other incentives: In 2023, a civil society platform was launched to help nearly one million Ivorian cocoa farmers adapt to new traceability standards and meeting European export regulations. The platform aims to reach 100 farmer organizations over the next three years (46).

Other incentives: Launched in 2021, the PROMIRE project in Côte d'Ivoire aims to promote deforestation-free cocoa production, with a USD 10 million budget funded by the Green Climate Fund. Implemented by the FAO over five years, it targets 7,000 hectares and involves 32 villages (27).

Other incentives: Several NGOs are supporting improved traceability, such as Max Havelaar and Nitidæ, offer technical assistance and funding. In 2020, Nitidæ implemented COCOBLOCK, a 80,000 euros (USD 86,500) (project to offer blockchain technology for better cocoa traceability (35).

Other incentives: The ePhyto initiative, launched in 2023 with World Bank support, improves certification efficiency by digitizing export information exchange. It has cut inspection steps from 39 to 18, enabling electronic certification and reducing counterfeit documents (42).

Regulatory Environment

A decree establishing a "national coffee-cocoa traceability system" was adopted by the Council of Ministers in September 2023. It allows computer-based checks of origins and respects of regulations (31).

Regulation EU 2023/115A of the European Union establishes criteria for cocoa products to be imported, which should not contribute to deforestation and respect other standards. It will come into force on 30 December 2024 (31, 41).

Decree No. 2012-1008 outlines the rules regarding the commercialization of coffee and cocoa. It reformed the "Conseil Café-Cacao", the main regulatory body for cocoa production in the country. The entity is in charge of regulating the industry, and it directly impacts traceability by fixing minimum standards (36, 37, 49).

The ARS 1000 African Standard for a Sustainable and Traceable Cocoa, published by the African Organization for Standardization, sets the requirements for cocoa quality and traceability (40).

Marketplace Participants

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Private Sector

Fairtrade Africa, FarmForce, Coopératives exportatrices de café-cacao de Côte d’Ivoire, TraceX Tech, Cargill, Confédération Générale des Entreprises de Côte d’Ivoire (CGECI), Cémoi.

Government

Conseil Café-Cacao, Ministère de l'Agriculture et du Développement Rural, Ministère Environnement, Développement Durable et Transition Ecologique, Centre de Promotion des Investissements en Côte d’Ivoire (CEPICI).

Multilaterals

European Union, African Organization for Standardization, African Development Bank (AfDB), International Plant Protection Convention, World Bank, European Investment Bank (EIB).

Non-Profit

Plate-forme Ivoirienne pour le Cacao Durable, Nitidæ, Max Havelaar, Cocoa & Forest Initiative, World Cocoa Foundation, the Rainforest Alliance, REDD+, Fonds Français pour l'Environnement Mondial.

Target Locations

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country static map
semi-urban

Côte d'Ivoire: Bas-Sassandra

Bas-Sassandra is the district with the highest proportion of cocoa fields, representing 30% of the region's total area. The region is particularly affected by deforestation, with cocoa encroachment into protected areas such as the Niegre national forest (22, 52).
semi-urban

Côte d'Ivoire: Montagnes

4 to 6% of the total area of the Montagnes district is dedicated to cocoa production, it is one of the country's leading regions for cocoa. The district is also affected by deforestation linked to cocoa production, with encroachment of farms in the Mount Peko national park (23, 52).
semi-urban

Côte d'Ivoire: Sassandra-Marahoué

5 to 12% of the district's area is occupied by cocoa plantations, making it the country's second region in production surface and output. The Sassandra forest, a national park located in the district, is threatened by cocoa producers as satellite imaging revealed growing encroachment (23, 52).

References

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