Sustainable Business Management: A Case Study of Haigh's Chocolate

This report analyzes the operating cycle and input-output chart of Haigh's Chocolate, identifying unsustainable activities and proposing a closed-loop production system. It also recommends improvements such as using environmentally friendly packaging and adopting solar panels for power production.

Running head: SUSTAINABLE BUSINESS MANAGEMENT
Sustainable Business Management
September 5
2019

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Table of Contents
Introduction................................................................................................................................2
Overview of Haigh’s Chocolate.............................................................................................2
Operating Cycle of Haigh’s Chocolate..................................................................................3
Input-Output Chart of Haigh’s Chocolate..............................................................................5
Starting with the Bean for Sourcing...................................................................................6
From Bean to Bar...............................................................................................................6
Roasting and Winnowing...................................................................................................7
Milling, Mixing, and Refining...........................................................................................7
The Final Conching and Packaging...................................................................................8
From business to customer.................................................................................................8
Closed-Loop Production System............................................................................................9
Recommendation......................................................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12

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Introduction
Sustainable management is the connection between business and sustainability. It is
considered to be a practice of handling the impact of the business on the three bottom lines
that are people, profit, and planet such that all the three can thrive in the future (Slaper and
Hall, 2011). Sustainable management help in the long-term viability of the business, because
it is defensive in place of reactive. It could take several forms comprising investing in the
product’s fair-trade, decreasing the packaging materials, and confirming humane working
situations at the supplier factories (Hall, Daneke and Lenox, 2010). The aim of this report is
to discuss the Haigh’s Chocolate Company one of the oldest and well-known companies of
chocolate. The paper is presenting the production cycle of the company's product. Besides
this, it is presenting the detailed input-output chart that recognizes every key energy and
resource inputs, pollution, and production output at every stage in the distribution as well as
production system of the company. This chart is supporting in identifying social, cultural,
environmental, and economic unsustainability. In the end, the paper is designing the closed-
loop production system for the company's products and the solution to the unsustainable use
of resources and recommendations for the company to overcome issues.
Overview of Haigh’s Chocolate
Haigh’s Chocolates is the family-owned business of chocolate based in Australia. The
company was established in the year 1915 by the Alfred E. Haigh and today it has its retail
outlets in four states. The company ensures high quality of its chocolates by the use of best
ingredients comprising premium cocoa beans, and use craftsperson skills united with
particular techniques of chocolate making for preparing award-winning chocolate. In addition
to this, the company also focus on the packaging of the chocolates by giving attention to the

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detail and care and its endeavor to deliver the selected product at the specified time anywhere
in Australia (South Australia, 2019).
Operating Cycle of Haigh’s Chocolate
The operating cycle is also known as the cash cycle of a business which is an activity ratio
evaluating the average time period needed for converting the inventories of the company into
cash (Silberschatz, Gagn and Galvin, 2018). This procedure of purchasing inventories,
vending finished products, receiving cash from the consumer and utilizing that cash for the
purchasing of inventories again for the production is said to be a never-ending procedure or
cycle till the business survive (Tuomisto, Hodge, Riordan and Macdonald, 2012).
Raw
Material
Procurement
Work in
Progress
Finished
GoodsReceivabl
es
Cash

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Raw material procurement – It is the initial stage of the operating cycle in which business
procure raw material for the production of their products. Haigh’s chocolate is one of the
well-known businesses of Australia which is famous for offering delicious and high-quality
chocolates among customers. The company procures the raw material and ingredients from
different suppliers of high-quality milk powder, sugar, ad cocoa beans (Stokes, 2012).
Work-in-Progress – This is the second stage of the operating cycle in which business start the
process of converting its raw material into finished goods. The ingredients and raw material
for the manufacturing of chocolate are processed in the South Australian factory of Haigh’s
Chocolate. At this stage, the chocolate is converted into different forms such as solid molded
product, combined with the confectionery products, etc. This step is considered to be very
crucial for the business because if the quality and taste of the products are managed properly
it can result in impacting the image of the business in the eyes of the customer.
Finished Goods – It is the third stage of the operating cycle of the company at which the
business finally gets the output of its input through the processing stage. The company at this
position execute the packaging and labeling of the product and make it ready to sell to the
end-user. The company offers different forms of chocolate to its customers such that it can
attract different types of customers to purchase the product (Sky News, 2019).
Receivables – At this stage, Haigh’s Chocolate provides delivery of its products to the
customer but yet have not received the payment for the same.
Cash – This is the final stage of the operating cycle of the Haigh’s Chocolate in which the
business receives cash for the services or products it has delivered to the customer. At this
stage, the business calculates its sales in order to identify its revenue. At this stage, the
business also plans to invest again the cash in purchasing and acquiring raw material for the
production of its chocolates.

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Input-Output Chart of Haigh’s Chocolate
Haigh’s Chocolate is considered to be the oldest family-owned business of Australia operates
as the chocolate maker. The company price itself for being the experts dedicated to the art of
premium chocolate making (Prosser, 2018). The input-output steps involved in the process
are:
Sourcing of raw Material
Processing of Raw material
Roasting and Winnowing
Milling, Mixing, and Refining
Final Conching and Packaging
Services to Customer

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Starting with the Bean for Sourcing
Like grapes used for the manufacturing of wine with diverse flavors, cocoa beans have
diverse flavor characteristics based on the range of origin area and processing. The business
starts by sourcing high-quality cocoa beans from different regions growing the products all
over the world (Australian Packaging Covenant, 2016). In the year 2014, the company was
the first chocolate manufacturer of Australia to gain the international UTZ certification for
the ethical as well as sustainable use of the farmed cocoa beans. UTZ certification allows
Haigh’s Chocolate Company to be placed at the leading position in terms of sustainable
production with the program that spans the nations involved in the growing of cocoa from
Ghana in West Africa to Peru in South America. Presently, the company source over 80% of
its cocoa raw material from the farms that are UTZ Certified and within two years it is
expecting to make it 100% (Nichole, 2019).
At this stage, the social and economic unsustainable operations conducted by the company
are to offer a low margin of profit to the farmers who offer high quality of cocoa beans to the
company. Offering low prices at the primary stage of sourcing of the high-quality beans
results in impacting the living standard of the farmers. This not just have an impact on the
economic aspect but also the social aspect of the environment.
From Bean to Bar
According to the belief of the company, the high-quality product can be manufactured by the
use of best ingredients due to which the business source its best cocoa beans from the farms
placed across the world. After sourcing, the factory of the company put all the products under
processing in order to convert them from the cocoa beans into delightful liquid chocolate
(Government of South Australia, 2017).

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At this stage, the unsustainable activity that is present in the operation of the company is
losing the vital minerals and vitamins from the cocoa beans. This impacts the health of the
customer in exchange for high prices of the chocolate.
Roasting and Winnowing
The initial step in the processing is the roasting. In the company's Sirocco Kettle roaster,
sources beans are with care roasted at the prescribed high temperature. The heat improves the
flavor as well as color and eliminates moisture. By the use of Winnower, the outer layer that
is husk is broken and then blown away. This results in converting cocoa beans into small
cocoa nibs (The Chocolate Life, 2019).
The roasting and winnowing stage is comprised of consuming high power which is impacting
the environment negatively. In addition to this, this process also results in huge wastage of
water and husk extracted from the cocoa beans that are disposed of in landfills and rivers.
Milling, Mixing, and Refining
The gained cocoa nibs are the processes under the head and the imposed pressure on the nib
results in making a liquid cocoa mass, bitter, and dark. After getting the liquid form of the
beans the processing machine mixes the solution. The cocoa liquid is again processed and
blended with the vanilla, icing sugar, and cocoa butter along with milk powder for making
milk chocolate (Moulis, 2014). This process helps in leaving a chocolate paste that goes
through the sequence of huge stainless steel rollers for refining, decreasing the specific size
and converting the paste in the fine powder. This stage of the process is very crucial because
it assists in getting the chocolate with wonderful smoothness on the palate.
The stage of milling, mixing, and refining, the Haigh’s Chocolate generate high carbon
emission that results in impacting the environment negatively. This leads to climate change
which is considered to be a huge issue in today’s scenario for Australia.

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The Final Conching and Packaging
The conching machine is used by the business which is a huge intense heated vessel of
mixing. Chocolate undergoes in this machine for hours of mixing and aeration. Additional
cocoa butter is then added which turns the chocolate paste into the liquid form and is
compressed for hours in order to bring it in the final stage. It is said to be the correct mixture
of drying, mixing and time that enables the silky texture and flavors for the perfect chocolate.
At this stage, the final smooth liquid chocolate is gained and then converted into different
delicious products (Wedding, 2018). In addition to this, the responsible department gets
involved in the packaging and labeling of the perfect chocolate products in order to offer to
the customer.
At this stage, the use of high heating machines for converting the coca paste into a liquid
form is dangerous not just for the environment but also for the workforce involved in this
procedure. The workforce available at the place of Conching machine they get indulges in the
harmful heat and emission that impacts their health.
From business to customer
The customers are provided with perfect product and services in the retail stores of the
company. They can visit at any of the stores and will get gift wrapping, personalized
attention, and chocolate tasting as part of the company's service (SBS News, 2018).
At the end stage, the company is involved in offering high-quality chocolate to the customer
at high prices that is most of the time is unaffordable for many customers. In addition to this,
the use of petrol and diesel vehicles for the distribution of chocolate products from
manufacturing sites to the retail stores of the company and end-users also results in
decreasing natural resources for the future generation.

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Closed-Loop Production System
This is the closed-loop production system that can be used by Haigh’s Chocolate for reducing
its environmental, social, and economic impact. This process is comprised of five stages
under which all the unsustainable operations of the company can be improved.
Production
Packaging
and
Distribution
Use and
MaintenanceRecovery
Material
Sources

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Material Sourcing – At the material sourcing stage, the business can get involved in adopting
practices of encouraging suppliers for offering fair wages to the farmers such that it could
enhance their living standard as well as the economic system of the country.
Production – The production stage of the company is comprised of roasting and winnowing
and Milling, Mixing and Refining of the cocoa beans for converting into the premium and
perfect chocolate. The company must adopt different monitoring units for the measurement
of consumption of energy and carbon emission. The company must implant the solar energy
equipment such that it can use renewable energy.
Use and Maintenance – At this stage, the company can make use of heat maintenance
equipment within the manufacturing unit such that it does not impact the employees of the
company (Kenné, Dejax and Gharbi, 2012). At this stage, the company can also reduce its
wastage and disposal into the landfills by adopting recycling techniques.
Recovery – At the recovery stage, the waste products can be transferred such that they can be
used again by the business for reducing wastage and minimize environmental impact. The
recycled products can again be used for the production of the chocolate.
Recommendation
The improvements that the company can make into the design of its chocolate are the use of
environmentally friendly products for the packaging. Besides this, the company can
contribute to the development of the society and environment by labeling motivational quotes
for encouraging customers to reduce their negative impact on the environment as well as
society. In addition to this, the improvement that the company can make into its production
system is to adopt solar panels for producing power for the operations of the business.

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Conclusion
The above report has provided a detailed analysis of the operating cycle and input-output
chart of the Haigh’s Chocolate which is one of the tastiest and preferred chocolates in
Australia. The analysis has identified that the business is involved in some of the
unsustainable activities such as wastage, low wages to farmers, carbon emission, and
increasing use of power. Hence, to reduce this the report has designed the closed look
production system that can eliminate these loopholes from the system.

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References
Australian Packaging Covenant (2016) Signatory Name: Haigh's Chocolates [Online].
Available from
https://www.haighschocolates.com.au/wordpress/wp-content/uploads/2014/09/Aust-
Packaging-Covenant-27-April-2016.pdf [Accessed 6 September 2019]
Government of South Australia (2017) Haigh’s Chocolates [Online]. Available from
http://statedevelopment-stage.azurewebsites.net/industry/manufacturing/manufacturing-case-
studies/h [Accessed 6 September 2019]
Hall, J.K., Daneke, G.A. and Lenox, M.J. (2010) Sustainable development and
entrepreneurship: Past contributions and future directions. Journal of Business Venturing,
25(5), pp.439-448.
Kenné, J.P., Dejax, P. and Gharbi, A. (2012) Production planning of a hybrid manufacturing–
remanufacturing system under uncertainty within a closed-loop supply chain. International
Journal of Production Economics, 135(1), pp.81-93.
Moulis, A. (2014) The Easter Rush: Inside Haigh's Chocolate Factory [Online]. Available
from https://www.broadsheet.com.au/melbourne/food-and-drink/gallery/haighs-factory-visit-
adelaide-easter [Accessed 6 September 2019]
Nichole, K. (2019) One journey to ethical certification – an interview with Haighs
Chocolates [Online]. Available from https://ethicalwarrior.com.au/blog/chocolate/one-
journey-to-ethical-certification-an-interview-with-haighs-chocolates [Accessed 6 September
2019]

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Prosser, C. (2018) Haigh's Chocolates opens new factory, hopes to expand around Australia
[Online]. Available from https://www.abc.net.au/news/2018-03-22/haighs-chocolate-
bucking-the-trend/9576738 [Accessed 6 September 2019]
SBS News (2018) We check in with that famous South Australian chocolate brand Haigh's,
who we met back in Season One of Small Business Secrets [Online]. Available from
https://www.sbs.com.au/news/small-business-secrets/article/2018/04/25/small-business-
check-haighs-chocolates [Accessed 6 September 2019]
Silberschatz, A., Gagne, G. and Galvin, P.B. (2018) Operating system concepts 2nd ed. U.K:
Wiley.
Sky News (2019) Haigh's chocolates opens new factory in South Australia [Online].
Available from https://www.skynews.com.au/details/_5758806811001 [Accessed 6
September 2019]
Slaper, T.F. and Hall, T.J. (2011) The triple bottom line: What is it and how does it work.
Indiana business review, 86(1), pp.4-8.
South Australia (2019) Haigh's Chocolates Visitor Centre [Online]. Available from
https://southaustralia.com/products/adelaide/attraction/haighs-chocolates-visitor-centre
[Accessed 6 September 2019]
Stokes, J. (2012) Parkside's Haigh's earns spot in South Australian Food Industry Hall of
Fame [Online]. Available from
https://www.adelaidenow.com.au/news/south-australia/parksides-haighs-earns-spot-in-south-
australian-food-industry-hall-of-fame/news-story/c6bd27f5a62799d4b555e5036fa698b7
[Accessed 6 September 2019]

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The Chocolate Life (2019) Bean To Bar Chocolate Makers [Online]. Available from
https://archive.thechocolatelife.com/community/forums/tasting-notes/319/bean-to-bar-
chocolate-makers [Accessed 6 September 2019]
Tuomisto, H.L., Hodge, I.D., Riordan, P. and Macdonald, D.W. (2012) Exploring a safe
operating approach to weighting in life cycle impact assessment–a case study of organic,
conventional and integrated farming systems. Journal of Cleaner Production, 37, pp.147-
153.
Wedding, N. (2018) Haigh’s Opens a New $15m Factory Just in Time for Easter [Online].
Available from https://www.broadsheet.com.au/adelaide/food-and-drink/article/haighs-
opens-new-15m-factory-just-time-easter [Accessed 6 September 2019]