International Confectionery’s Editor, Kiran Grewal, sits down with Alvin Lee, who was recently made Chairman of the Cocoa Association of Asia (CAA) and who has big plans for the association’s future.
What does it mean to you to be elected chairman of the Cocoa Association of Asia?
It’s humbling and a true personal honour to be elected by my peers, customers and competitors. I’ve been involved in cocoa since the start of my career and fell in love with the industry hard and quick. There are loads of great people in the cocoa and chocolate space and it is always a nice thing to know that you have their trust to lead the association for the next two years.
Having worked in the physical sourcing of cocoa in the Asia-Pacific region – what do you hope to bring to the association as chairman?
I think the association has frankly come a long way in recent years, and being in the last two executive committees as secretary gave me a front row seat to all the good that the association can do. My predecessor Richard Fahey did a great job in modernising the agenda, so now that passes on to me to carry on the good work (and not screw it up).
In all seriousness, I have many hopes for the association and the greater cocoa and chocolate industry here in Asia-Pacific. Firstly at an association level, the first matter of business has been to push for greater inclusiveness and representation. We have successfully passed a resolution to change our constitution’s rules around exco representation for example – going forward from the next elections, we will ensure that each of the core categories of our membership is represented at the exco level – meaning we will always have a member from the FMCG space, the processing space and the tradehouse space. We also have other plans to provide a potential path to exco representation for many of the vital supporting industries to the cocoa and chocolate space like warehousing, banks, surveyors or research houses to name a few.
As an association representing Asia-Pacific, we have a slightly trickier landscape to manoeuvre than say our siblings in the United States or EU given that we’re not one uniform economic union governed by one standard set of rules and regulations. Adding this to the already complicated mix of balancing the many competing interests amongst our members and you get a really complicated minefield to operate as an association in. Coming back to your earlier point of my experience in physical sourcing of cocoa in the region, I’ve definitely had many heart-attack moments when regulations in one country are suddenly introduced that contradict regulations in say another neighbouring market.
“I’ve definitely had many heart-attack moments when regulations in one country are suddenly introduced that contradict regulations in say another neighbouring market”
In many of those times, I’ve definitely wished for some solidarity within the industry in trying to overcome these curveballs. So, that’s another area my exco hopes to help our membership out in. We’re in the midst of establishing three formal committees staffed ably by expert resources from our member companies in the key areas of sustainability, food safety and trade policy.
In short, I’m hoping to see a continuously active and growing membership base during my term and to continue to establish useful long lasting initiatives that bring real value to our members across the region.
How do you look to promote sustainable growth of the cocoa industry in this region?
To have sustainable growth of the industry, we need constantly growing demand for our products and on the other side we need to ensure supply of raw material can keep up with this potential growing demand.
The establishment of the sustainability committee is one initiative that we have to collectively promote the sustainable growth of the cocoa industry in the region. The association to be honest has historically been driven by commercially-trained individuals. I think it is important that we tap the collective expertise of our members and let real professionally-trained experts guide us as an industry in making concrete steps towards sustainable growth.
On the demand side, there are obviously challenges around the perceptions around cocoa and chocolate products. The industry has responded well in introducing higher cocoa content and lower sugar products for example and many of our member companies are at the forefront of continuous innovation of how and what cocoa and chocolate can be put into. I still have hope that cocoa powder wrestling can take off!
What does a typical day as chairman and your responsibilities at Cargill look like?
I’m very fortunate that I have Shirley Choo, our CAA Director of Operations and Marketing, keeping the association running smoothly and coming up with brilliant ideas to help our membership, so all I usually have to do is smile and show up for meetings.
The association work keeps me on my toes daily really (don’t tell my employer that) – we have many stakeholders to interface with to keep things moving and growing. So aside from our membership, we work really closely with Enterprise Singapore who have been very supportive of the CAA for years now as well as partners like SMU and our international sibling organizations like the ECA and CMAA to drive various initiatives.
As Commercial Director of Cargill Cocoa & Chocolate Asia Pacific, I’m responsible for our trading and risk management activities, physical sourcing and product line management teams. I work alongside some of the most talented people in the entire cocoa industry though here at Cargill Cocoa & Chocolate, so despite the wide and complex range of activities, I have really capable teams keeping it all together and it truly has been a blessing to have enjoyed this for the last six years plus at Cargill.
“the first matter of business has been to push for greater inclusiveness and representation”
I’m an extrovert and one of the best things with my role is that it has afforded me the opportunity to meet with so many people from different walks of life – the friendships I’ve made through the years working in this industry and in Cargill really invigorate me as a person.
What is the best piece of advice and experience you have had in your working career?
Professionally as a trader, the most important advice that I was given is to always have an opinion. That has helped me and saved me on many occasions. It was actually the first thing my mentor told me when I started off on the ADM Cocoa desk many years ago.
My old boss in Milwaukee, Bill Lansing, gave me the best experience I’ve had in my working career. It was obviously exciting to be on an overseas assignment and I definitely learnt and grew a lot during those four years I spent in the States. He was always candid, quick to put a reassuring arm around me and gave me an incredible amount of trust and autonomy at a relatively young stage of my career to make big decisions. He taught me the immense value in having a fun and open team environment, and to trust in the value of talented people. Sadly he passed away a day before we were to be reunited at Cargill as colleagues in 2015. I’m forever grateful for his friendship and mentorship and will always be inspired by his memory.
What issues is the cocoa industry facing at the moment?
I think volatility in the cocoa markets is one of the perennial issues that we face as an industry. Cocoa futures which dictate the underlying price are notoriously volatile, being one of the smallest (but liquid) soft ags traded but recently the physical differentials (the underlying premium or discount processors pay for cocoa beans) have become just as if not more volatile. As an industry, we’ve seen one of the sharpest rallies and declines in the differential of beans globally and it has made operating in a pandemic-ridden environment just that little more challenging.
And of course, Covid. That has really decimated many of the channels that cocoa and chocolate products are enjoyed in such as travel retail and food service.
How can we begin to overcome these issues and challenges?
I think with regards to volatility, certainly more collective dialogue will help. Processors and manufacturers need to engage and be engaged by producers to ensure that neither strays too far from economic equilibrium. There may not always be a ready solution or compromise but the less dialogue we have, I think the more likely we end up with exaggerated price moves that ultimately are to the benefit of nobody in the long run.
In terms of Covid, I’m hopeful that a successful vaccine rollout will mean a return to normal sooner rather than later. That return of demand will hopefully bring levels back to where they were before and put us back on a firm trajectory of growth.
What trends are you noticing in chocolate in the Asian market?
I think we’re seeing a far more educated and exposed consumer out here in the Asian market which has led to the overall quality of the offerings across the region improving. We’re also seeing a more adventurous consumer and the growth of chocolate offerings incorporating favourite local flavours like durian or lychee is good testament to that.
What do you see for the future of the cocoa industry?
If it wasn’t bright, I wouldn’t still be here. I think it is a great industry to be in really. You get to work with such an emotive and delicious product that brings delight to so many. It has constantly evolving challenges, so one never gets bored either.
One bet that I have is that sustainability is the future of the industry here in Asia Pacific. It will become table stakes for anyone wanting to play and that excites me as someone who really believes in the importance of having a sustainable future be it cocoa or anything really.
Image credit: Cocoa Association of Asia
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Editor, International Confectionery
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