A small company in a big industry, Taza Chocolate is making a difference

The chocolate industry today is dominated by several large conglomerates like Mars, Hershey’s, Nestle that make up a large portion of the market in North America.  To put it in perspective, nearly 99.4% of snack sized chocolates are produced by the aforementioned companies!  A more recent-growing subdivision of the industry consists of craft chocolate makers.  Many young consumers can’t seem to get enough of it due to its old-fashioned style.  In her article in the Wall Street Journal, Alina Dizik describes it as “earthier, spicier and generally made with less sugar than sweet, creamy, European-style chocolate.”  In the article, Dr. Carla Martin of Harvard and Dr. Bletter, co-founder of Madre Chocolate, both are quoted in saying that the appeal to this type of chocolate is due largely to its adherence to chocolate’s original roots in ancient civilizations (Dizik).  Typically, Craft chocolate makers have company missions that attempt to eradicate some of the issues that exist within the broader chocolate industry.  Many issues regarding economic sustainability and exploitative labor are ubiquitous throughout the industry.  For example, Endangered Species chocolate helps to encourage funding for the animals who serve as their namesake.  A particularly interesting and pioneering bean-to-bar craft chocolate maker is Taza of Somerville, Massachusetts. Taza chocolate attempts to encourage economic and social growth and sustainability in underprivileged areas. Through the creation of the Direct Trade Certification program, Taza has laid a framework to help eradicate significant cacao-industry issues like under-compensation, lack of quality incentives, and exploitative labor practices.

Prior to understanding the ways in which Taza Chocolate has had a positive influence on the chocolate industry, it is useful to understand when and how this trailblazing company came to fruition.  According to Taza Chocolate’s company website, When Alex Whitmore traversed Central and South America he garnered a growing appreciation for both the work of cacao farmers and the incredible products that work could produce – mainly stone ground chocolate.  In Oaxaca, Mexico, Whitmore tasted his first piece of this unique chocolate and it had a tremendous impact on him.  He decided to apprentice at an Oaxaca chocolate factory and learn the ins-and-outs of the business, as he had plans to bring this industry back home to the Northeast.  Just a year later in 2006, Whitmore owned factory space in Somerville, Massachusetts along with a combination of both innovative and old-fashioned style machinery.  As his dream of starting a stone ground chocolate company from the ground up has finally begun to materialize, its success faltered due to a lack of quality ingredients.  While in Mexico, Whitmore tasted some of the most delectable chocolate he’s ever had, but it was difficult to purchase anything of even remotely the same quality on the open market back at home.  Not only were the initial beans not of great quality, most of the money Whitmore paid would end up in the hands of the middleman and not end up with the farmers who worked to create them.  Upon this discovery, Whitmore again made his way south to traverse the land in search of quality beans that would help to better create his product.  Whitmore established and maintained relationships with several cacao cooperatives and paid them a premium above market price for the cacao beans – the beginning of his Direct Trade Certification Program.  With this direct link to his cacao producers, the company of Taza Chocolate bore a mission to “make and share stone ground chocolate that is seriously good and fair forever” (Taza).   Below is a video that help’s to portray Taza’s story:

These values are in accordance with Taza Chocolate and their marketing strategy helps to pass that message along.  As you can see, values aside from profit maximization shine through this promotional video.  It seems as if the company is involved in the chocolate industry simply for the love of the industry.  Taza chocolate is a family business with intentions on creating a quality product that is fair and helpful to everyone.  As aforementioned, some of the major issues that Taza attacks include the unjust compensation for farmers, the presence of exploitative labor practices, and a lack of quality incentives for cacao farmers.

A 2011 study indicated that the average income per capita for a Ghanaian cocoa family household is below $0.30 a day – this is equivalent to just over $120 per year!  Chocolate is a $100 billion annual industry, but consistent cocoa farmer poverty exists in many of the production regions nonetheless.  Below is a map that details data on poverty worldwide.

Poverty

 

It is interesting to look at many of the cacao growing regions like the Ivory Coast, Western Africa, Central America and the northern part of South America. In Africa, Cacao growing regions experience anywhere from 30 to even greater than 60% of the population living below the poverty line.  Similarly staggering are the numbers in Central and Southern America, where many of the Cacao producing regions have 40% of the population living below the poverty line.

Taza Chocolate’s efforts in fighting for farmer compensation through their direct trade system is certainly encouraging, but it isn’t an entirely new idea.  It came in response to the shortcomings of a more ubiquitous and well-known movement known as Fair-Trade certification. Fair Trade, operating under the slogan “Quality Products. Improving Lives. Protecting the Planet.” seeks to help farmers in underprivileged areas build sustainable businesses while fighting for fair prices and wages, a direct trade system, and protection against exploitative labor practices.   Below is an infographic that depicts the results of their efforts in the cacao industry.

Fair Trade

 

While declaring several of the principles I’ve already mentioned, the infographic above also depicts some numeric evidence as to the Fair Trade system’s movement.  While increasing the price to the consumer by just 2%, Fair Trade allows for a 20% producer compensation increase.  Fair trade USA, according to their mission, seeks to foster worldwide change by using “a market-based approach that empowers farmers to get a fair price for their harvest, helps workers create safe working conditions, provides a decent living wage and guarantees the right to organize” (FairTrade).

Despite their company mission and the change they seek, many critics argue that Fair Trade USA has issues that prevents it from realizing its potential as a truly groundbreaking, life-improving operation.  Fair Trade retail sales amount to nearly $3 billion worldwide annually.  Critics say that much of these earnings do not actually reach the developing world, and even less reaches the farmers themselves (Martin).  In addition to this, there is a heavy cost shouldered by the farmers in order to become a certified farm or cooperative that can trade within the Fair Trade market.  Farmers are required to pay hefty certification fees and also pay surcharges for additional profits generated.  Moreover, despite an institutional value of fairness – “We work to create opportunities and extend the benefits of globalization to all people, everywhere.” (fairtradeUSA) -.Fair Trade is exclusionary as individual farmers that cannot afford the certification fees and surcharges are unable to become actors in the market, regardless of the quality of their cocoa bean.  Enter Alex Whitmore and his idea for Direct Trade.  Below is a video in which Mr. Whitmore discusses his journey in establishing Taza as a Direct Trade Craft Chocolate Maker.

In many ways, Taza’s Direct Trade Certification program attempts to build upon some of the shortcomings of Fair Trade.  Essentially, Whitmore explains that the Fair Trade model didn’t make much sense to Taza, especially if trying to adhere to the mission that it markets.   First and foremost, direct trade pays a premium far and above the price in the market from fair trade products.  In addition to this, the limits on participation are significantly mitigated.  Independent farmers are allowed to participate, it is not necessary to be a part of a cooperative.  Additionally, there are smaller fees and surcharges to become part of the Direct Trade Certification program.  There are several reasons for these differences that Whitmore explains.  Often times, due to the lack of capital and profit that actually reaches these farmers, quality of the cocoa produced suffers in an effort to maximize production at a low cost.  However, if more of the returns are actually claimed by the farmer or cooperative, and they do not have to pay significant involvement and certification fees, then ideally funds can be reallocated to preserving and producing high quality cacao.  In addition to improving these quality incentives, paying a larger premium and requiring a lesser fee for participation aids development and poverty in these underprivileged areas.  By encouraging economic growth and fostering sustainability, Taza’s direct Trade Program is helping to eradicate some of the economic issues that exist within the chocolate industry.

In addition to their economic efforts, Taza also prides themselves on being a socially responsible enterprise.  Although striving for economic sustainability is admirable, it ultimately doesn’t solve any of the major social issues that exist within the chocolate industry.  That said, there are two main facets to Taza’s social responsibility – creating and maintaining direct relationships and having a tough stance against exploitative labor.  The Direct Trade Certification program encourages direct communication between buyer and farmer through price negotiation.  They are committed to maintaining these direct relationships – they annually visit each of the cooperatives and farms with which they trade.  Although this is effective, no better evidence of Taza’s social efforts exists than their stance on exploitative labor.    According to research conducted by David McKenzie and Brent Swails at CNN, “child labor, trafficking and slavery are rife in an industry that produces some of the world’s best-known brands.”  The researchers go on to explain that “UNICEF estimates that nearly a half-million children work on farms across Ivory Coast, which produces nearly 40% of the world’s supply of cocoa. The agency says hundreds of thousands of children, many of them trafficked across borders, are engaged in the worst forms of child labor” (McKenzie).  As staggering as these figures may seem, it still hasn’t been enough to pass legislation to help prevent this exploitation.  As a socially responsible enterprise, Taza only buys cacao from farmers and cooperatives that ensure fair and humane labor practices and working conditions.

Currently, Taza chocolate maintains relationships with farms and cooperatives in the Dominican Republic, Bolivia, and Belize.  They are working to help institute quality controls and economic and agricultural sustainability. Through Taza’s vast effort to maintain direct relationships, provide more just compensation, and eradicate exploitative labor practices in these underprivileged areas, they have found a way to efficiently improve the system started by Fair Trade and ensure economic growth and sustainability while simultaneously encouraging a socially acceptable manner of production.  While, Taza’s pioneering efforts in the economic and social spheres of the chocolate industry are certainly impressive, there are certainly limitations as to how much positive impact they can have.  Many of today’s companies, especially those that fiercely dominate the chocolate industry are either involved in Fair Trade, implementing their own different strategy, or don’t participate in any controlled system whatsoever.  Until most of the industry actors are on the same page and are working together to make major social and economic changes, many of the aforementioned issues will persist.  Regardless, Taza is doing what they can to start the process, and it’s pretty impressive.

 

Works Cited

 “Direct Trade Certified Cacao.” Taza Chocolate. N.p., n.d. Web. 29 April 2015.

Dizik, Alina. “Stone-Ground Chocolate Gets Hate Mail and Lots of Love.” Wall Street Journal. Wall Street Journal, 13 Jan. 2015. Web. 01 May 2015.

“Fair Trade USA Mission/Values.” About Fair Trade USA. N.p., n.d. Web. 29 Apr. 2015.

Martin, Carla D. “Alternative Trade and Virtuous Localization/Globalization.” AAAS 119x Lecture 18. Emerson Hall 210, Cambridge. Lecture.

Martin, Carla D. “Modern Day Slavery.” AAAS 119x Lecture 15. Emerson Hall 210, Cambridge. Lecture.

McKenzie, David, and Swails, Brent. January 19, 2012. “Child Slavery and chocolate: All too Easy to find.” CNN.

“The Taza Chocolate Story.” Taza Chocolate. N.p., n.d. Web. 29 April 2015.

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