Page 4: Chain of production
The supply chain is the sequence of activities and processes required to convert raw materials and components into consumer goods and services and to deliver them to the consumer. For cocoa, the chain is often complex and varies from one country to another. However, a typical pattern would pass through the following stages.
The first stage is to grow the cocoa beans. Often the many small farmers involved will live some distance from the market. They depend on people operating in the tertiary or service sector of the economy to collect, purchase and transport the cocoa product to warehouses. In an exporting country like Ivory Coast, export warehouses are located near one of the country's ports, Abidjan and San Pedro. It is at this stage that companies such as Nestlé play an important role in the supply chain by checking consignments for quality. Nestlé may buy directly from an export warehouse, or it may approach intermediary suppliers who buy cocoa beans in bulk from across the world and arrange shipment to the confectionery manufacturers.
The secondary stage of production is the manufacturing companies . These companies bring together the sugar, cocoa and other raw materials to manufacture the chocolate products we know so well: they convert the beans into chocolate bars and other finished products.
The final stage in the production chain is selling (retailing) to final consumers. Just as Nestlé buys in bulk from exporters and suppliers, retailers buy in bulk from Nestlé. Every Kit Kat or other chocolate product that you buy will have been through all these stages of production.