Enabling Systemic Change in the Chocolate Industry Forever Chocolate Enabling Systemic Change in the Chocolate Industry April 16, 2019 Description: Cocoa farming is facing unprecedented challenges such as poverty, climate change, deforestation, child labor and more. The industry is working together to address these, but there needs to be greater innovation to create systemic change. Barry Callebaut is implementing a new approach in order to create self-sustaining, scalable solutions to essentially change the foundation of cocoa farming via its Forever Chocolate commitment.

Why Systemic Change is Needed Abject Poverty Child Labor Deforestation April 16, 2019 WHY? - Farm size Land Title ownership Inability to invest Lack of diversity at farm level Want and need gap Community mindset & awareness

So that the chocolate we all love will be around We will lead a movement to make sustainable chocolate the norm, So that the chocolate we all love will be around for generations to come. Our mission: We will lead a movement to make sustainable chocolate the norm, so that the chocolate we all love will be around for generations to come. Most importantly, note the phrase – we will lead a movement. I cannot overemphasize that a movement of the entire industry with the support of governments and non-government organizations will be crucial to achieving lasting change for our industry – to guarantee a Forever Chocolate world. We cannot do this alone. April 16, 2019

Driving a movement April 16, 2019 Forever Chocolate has four goals that we want to achieve by 2025 We will lift more than 500,000 cocoa farmers out of poverty We will eradicate child labor from our supply chain We will be carbon and forest positive We will have 100% sustainable ingredients in all of our products

Theory of Change Theory of change: April 16, 2019 Theory of change: Outcomes and Targets stay the same, what we test are the activities to achieve these. And what it all needs, is an enabling env

Testing some of the activities in order to bring learnings to scale Self-driving, self-sustaining scalable solutions = SYSTEMIC CHANGE

Creating a proven business case Farm Development Plans Creating a proven business case Creating self-driving, self-sustaining, scalable solutions

Closing the Need/Want Gap Farm Development Plans Closing the Need/Want Gap Creating self-driving, self-sustaining, scalable solutions Also and enabler to understand the logistical env to deliver against these plans

Financial Institution Support Farm Development Plans Financial Institution Support Creating self-driving, self-sustaining, scalable solutions Close with: FDPs are supported by Farm Services and Farm Finance

Enabling Professional Services - Supporting environment to provide professional services to support the implementation of FDPs based around set packages to include labor contracting for prof pruners, sprayers, replanting pkgs, soil fertility mgmt, diversification on farm Farm Services Enabling Professional Services Creating self-driving, self-sustaining, scalable solutions FDPs are supported by Farm Services and Farm Finance Farm Services = a supporting environment to provide professional services to support the implementation of FDPs based around set packages to include labor contracting for prof pruners, sprayers, replanting pkgs, soil fertility mgmt, diversification on farm, etc. Etc.

Proving the business case Farm Finance Providing working capital loans enable farmers to rehabilitate their farms -- Move from risk taking to a mainstream model – farmers interacting directly with banks Proving the business case Creating self-driving, self-sustaining, scalable solutions

Enabling Non-Cocoa Crops Diversification of Income Enabling Non-Cocoa Crops Creating self-driving, self-sustaining, scalable solutions 35% drop in cocoa price – we need to increase the diversity of income on farm by enabling other crops and other sources of income women’s empowerment – Price risk resilience at farm level Market access for other crops Proven biz case – professionalized systems Productivity increase on half the land for cocoa, other half other crops Examples: mushrooms, chickens, cassava, teak, etc etc

Enabling Access to Markets Diversification of Income Enabling Access to Markets Creating self-driving, self-sustaining, scalable solutions 35% drop in cocoa price – we need to increase the diversity of income on farm by enabling other crops and other sources of income women’s empowerment – Price risk resilience at farm level Market access for other crops Proven biz case – professionalized systems Productivity increase on half the land for cocoa, other half other crops Examples: mushrooms, chickens, cassava, teak, etc etc

Enabling Women’s Income Generation Diversification of Income Enabling Women’s Income Generation Creating self-driving, self-sustaining, scalable solutions 35% drop in cocoa price – we need to increase the diversity of income on farm by enabling other crops and other sources of income women’s empowerment – Price risk resilience at farm level Market access for other crops Proven biz case – professionalized systems Productivity increase on half the land for cocoa, other half other crops Examples: mushrooms, chickens, cassava, teak, etc etc

Creating self-driving, self-sustaining, scalable solutions Empowering Communities Creating self-driving, self-sustaining, scalable solutions How communities take responsibility for behavior change around: Professionalization Child labor topics Deforestation etc

Our Preferred Vehicle to Deliver Forever Chocolate Commitments Scaling Impact | Driving Change Helping to eradicate extreme poverty in cocoa communities where the Foundation works Mission To improve the livelihoods of cocoa farmers and their communities through sustainable, entrepreneurial farming, improved productivity and community development. Our preferred vehicle to deliver upon our commitments is via the Cocoa Horizons Foundation. Launched by us in Sept 2015 to scale impact and drive change in cocoa farming communities. The Foundation funds both productivity and community activities to achieve its mission: to improve the livelihoods of cocoa farmers and their communities. And by doing so, this is the way that we can help to ERADICATE POVERTY, the underlying challenge and root cause of the key problems impacting our sector. The Cocoa Horizons methodology is currently being updated to align with our Forever Chocolate targets, to ensure we first meet these targets in Cocoa Horizons communities. April 16, 2019