CASE STUDY ONE
Question
1. What are the advantages and disadvantages of committing to 100% sustainably sourced
cocoa? Describe why General Mills would consider this initiative, given its current role in
the market.
2. What should General Mills’ commitment to 100% sustainably sourced cocoa look like?
How could sustainable sourcing of cocoa be implemented? Consider which contingencies,
if any, should be built into such sourcing goals.
3. Should General Mills continue its partnership with Nestl? How does this help or hurt its
sourcing initiatives? Do both companies benefit equally from this partnership?
1. What are the advantages and disadvantages of committing to 100% sustainably sourced
cocoa? Describe why General Mills would consider this initiative, given its current role in
the market.
Committing to 100% sustainably sourced cocoa has many advantages. First, any aid in
attempting to create sustainable sources in cocoa from farmers in Africa helps to reduce
the risk of farmers switching to other more profitable and dependent crops, like corn. By
improving the sustainability and longevity of cocoa farms, more farmers will continue to
farm cocoa which will help with supply to meet future predicted demand increases. By
increasing future supply, prices for cocoa should not be as high with the greater supply
able to help meet increasing demand. The second major advantage is that you improve the
quality of cocoa. If farmers are having trouble growing certain strands of cocoa, they may
switch to a strand that has lower quality but that they can produce in abundance. Demands
may be met by increased supply but the quality of the product is reduced. If efforts to
improve sustainability are made, the supply level would increase for these higher quality
brands which keeps future demand levels continually increasing. The third major
advantage to sustainable cocoa is improving the quality of life for the farmers growing the
cocoa trees. Many of these individuals work for only a few dollars a day and have been
forced to resort to the use of child labor. With an increased effort made for sustainable
sources, their lives could be improved and child labor could be reduced. These factors
would lead to more farmers willing to grow cocoa trees on their farms instead of switching
to another crop.
There are some disadvantages to this commitment to 100% sustainably sourced cocoa. The
first disadvantage is the time it will take to train farmers on their farming techniques to
increase their yields for their trees. Cocoa trees already take four to five years before they
