How we measure success | 2018 AGM
On Saturday 8 September we held our very first Annual General Meeting of shareholders. Thousands of votes were cast electronically ahead of the AGM, and we had more than 100 people attend on the day. We were thrilled with the level of shareholder engagement after investing last November.
The AGM was all about reflecting on our progress so far. In order to do that we had to first ask ourselves, how will we measure success? The OCHO team spent some time reflecting on what success means to us and our core company principles have guided a set of value-based goals.
While we have every intention of creating a profitable business to provide shareholders with a future dividend, making money doesn't sit ahead of all our other goals. We created a report card with eight pillars relating to business, community and the environment. Here is an introduction to these pillars, and our progress on each so far.
Jim O'Malley, Chair OCHO Board of Directors, presenting at the OCHO AGM 2018
1. Broad base of community ownership
In November 2017 we set out to create a socially responsible business owned by the community it operated in. Share prices were set at $100 each so people were not precluded from investing because of the price. In less than two days, OCHO had raised $2 million to fit-out a larger production facility and more than 3,000 people had become OCHO Owners. Investors are from all around New Zealand and the majority voted in the recent AGM taking an active role in helping this company succeed.
2. Retain chocolate industry in Dunedin
Our number one focus this year is to fit-out a larger production space so we can make more chocolate to meet the growing demand for premium chocolate and keep chocolate making skills alive and well in Dunedin. We want our new space within walking distance from the city centre. It will be purpose-built for tours as there is a great demand following the closure of Cadbury World. Currently the OCHO team is small, but we will keep adding to it as demand for our chocolate increases and the tour develops.
OCHO chocolate and raw cacao beans
3. High-quality chocolate
Quality is at the core of what we do. While we will be increasing the quantity of chocolate we produce, quality will never be compromised. We are craft chocolate makers and that is about the values we bring to how we make chocolate and the simple hands-on processes we use. We also want to demystify the chocolate making process by inviting people into our factory and showing them what goes into our chocolate and how we make it. Being open and transparent about what we do and why is the best way to show chocolate lovers why quality is such an important part of choosing which chocolate to try.
4. Be a fair employer
Looking after staff and paying them fairly is an important part of being a good employer. We have received accreditation from Living Wage Aotearoa so all staff are paid a living wage. We also have a pay ratio policy where the salary of the highest paid employee cannot exceed 4.5 times that of the lowest.
5. Maintain a profitable business
We want to take a long term perspective and prove we can be a sustainable and financially profitable business. Rather than relying on further investment to continue to grow we are likely to focus on achieving a healthy cash flow to fund growth.
Cacao farmer Phillip from Sanago fermentary in PNG holding ripe cacao pods
6. Sustainable value chain
As a general guide, 70% of the ingredients in our chocolate is cocoa beans and we can trace the beans we use right down to the farm where they were grown. All of our cocoa beans are sourced from our Pacific Island neighbours. Most of the remaining 30% of ingredients is sugar from Australia, but we'd like to get a bit more specific about that. Next year we'll be doing some research on where exactly it is from and the processes it goes through before arriving at our factory. In our flavoured bars we use butter, honey, bee pollen, horopito and kawakawa from New Zealand. Our vanilla is from Papua New Guinea and puffed amaranth from Peru.
7. Fair sourcing
OCHO travels to the Pacific Islands to source cacao from small farmers and co-operatives. Building relationships there is really important to ensure consistency of supply, and quality product, but also to ensure the growers are getting paid fairly. If we are regular customers they know that the effort they put into growing, fermenting and drying quality beans will pay off.
8. Conscious of carbon footprint
One of the reasons we source our cacao beans from the Pacific Islands is to reduce the distance they have to travel. We are yet to measure our carbon output per unit we produce, but when we do we'll be really interested to see how this stacks up against others in the chocolate industry. In the factory, we are making small practical steps towards reducing waste such as removing single-use plastics from our processes.
Thanks to you
Thanks to our OCHO community we are able to continue to strive to achieve in all of these areas. For those of you who missed out on attending the AGM, you can view the presentation below. A video of the AGM is also available on request, please email contact@ocho.co.nz.