Theo Chocolate

     Unjust and exploitative labor practices characterize much of the cocoa-growing world, perpetuating not only poverty and inequality but also the legacies of misrepresentation that allow major chocolate companies to keep their prices low while turning a blind eye to the ethics of their products. Small, craft chocolate makers have increasingly stood up to this unfortunate history, pledging to root out exploitative labor in their supply chains while paying a living wage to farmers in the developing world. Theo Chocolate exemplifies this trend, not only by obtaining Fair-Trade certification, but also by providing truthful information about each step in their supply chain. The commitment of Theo Chocolate to pay above market prices to farmers and their transparency in regards to pricing data and sourcing help to fight against unjust labor practices in their own supply chain while also raising awareness about these issues in Western consumers.

Theo Chocolate goes beyond the minimum requirements necessary to obtain Fair-Trade certification, demonstrating an awareness for the fact that Western Chocolate companies have a history of concealing injustice in their supply chain. On their website, they write the following – “Paying premium prices for high quality cocoa beans requires full transparency in our entire supply chain, in order to ensure that farmers are benefitting from these premiums and able to invest in their families and communities.” And while many companies make vague claims about transparency, Theo actually backs up their claims with information about where they buy their beans, and at what prices.

Theo 2014 Pricing Matrix
This page links to an easy-to-find table on Theo Chocolate’s website; a number of factors are listed, including mold, fermentation quality, and coloring, with corresponding prices paid to farmers depending on the measured quality of the beans they produce. With publicly accessible information like this, Theo addresses the issue of lack of transparency that has plagued the chocolate industry for over a century, while also providing incentives to farmers to produce the highest quality cacao.

In addition to their pricing data, Theo Chocolate also provides data about where their beans come from, including the companies they buy from and the locations of their farms. Interestingly, Theo get their beans from three places: Panama, Peru, and the Democratic Republic of the Congo. The detailed information they provide about the cacao collectives that operate in each of these countries gives Theo a high degree of traceability.

CongoImage 1: A cacao farmer in the Democratic Republic of the Congo

The man in the picture above is a farmer on one of the farms in the Eastern DRC from which Theo buys their cacao, and is displayed on the company’s website. The fact that Theo incorporates African beans into what is a relatively high-end chocolate (though not the highest) shows a willingness to fight back against the stereotype of African cacao as conflict-ridden and of a lower quality. Theo Chocolate’s commitment to transparency sets a standard in the chocolate industry and their success will likely encourage others to pursue fair labor practices and look beyond just South American cacao.

The impact of Fair Trade exceeds just the monetary gains made by farmers in developing countries. In addition to these tangible benefits are rewards that are less easily quantifiable but just as important. Neusa Hidalgo-Monroy Wohlgemuth of the University of Toledo carried out a case study on Fair-Trade coffee growing in the state of Chiapas, Mexico, and concluded that the financial gains were only one part of the benefits that farmers received for working with Fair-Trade buyers. “Fair Trade has created democratic producer organizations that are able to benefit from the higher returns and more stable prices. However, non-income impacts are at least as important and with more lasting effects. The social empowerment generated and connections to the alternative markets have brought fundamental changes to the traditional social hierarchies” (67). Wohlgemuth notes that Fair-Trade has encouraged the organization of small farms and NGO’s and has strengthened civil society in Chiapas. While this study centered on organic coffee-growing rather than on cacao, it still serves to demonstrate the positive effect of Fair-Trade on producers, both for its financial and social benefits.

And while benefits for farmers are the most valuable advantage derived from buying Fair-Trade ingredients, there is also the somewhat less obvious advantage of informing consumers in the developed world that issues of labor justice are worth fighting for. Because Fair-Trade requires that companies pay farmers a reasonable wage, the price of a bar of Theo Chocolate or a bar of Green & Black’s chocolate far exceeds the price of a Hershey’s or Cadbury’s bar. However, this price jump for the predominantly Western consumer is not all downside. When a Western consumer sees that a chocolate is priced highly, she will often assume that this is due to the fact that something of value has been added. This could be due to the use of a higher quality bean, or the fact that the chocolate has been hand-crafted, or that farmers have been justly compensated for their work. As Priyanka Parvathi Hermann Waibel explain, chocolate companies like Theo rely on consumers to place value on the ethics of their chocolate. “Under fair trade arrangements, a price premium is paid by the consumers of industrialized countries with a guarantee that this would benefit the poor in developing countries” (311). This whole system creates a positive feedback loop; for Fair-Trade chocolate to exist, there must be demand for ethically sourced chocolate, and the presence of ethically sourced chocolate creates awareness that fair labor practices are an important issue to consider when buying chocolate.

In their book “A True History of Chocolate,” Sophie and Michael Coe explain the importance of chocolate companies taking a leap of faith and moving to Fair-Trade cacao (263). Referring to Green & Black’s decision to pursue Fair-Trade cacao, they write: “Green & Black’s gambled that an increasingly aware chocolate-loving public would be willing to pay extra for a more “ethically correct” product” (Coe and Coe, 263).

Green and Black's

Image 2: Green and Black’s Dark Chocolate Bar

Because of the added costs associated with the Fair-Trade certification, companies take a risk (in the form of higher prices for their products) when they decide to pay their farmers higher-than-market wages. Additionally, many Fair-Trade buyers, including both Green & Black’s and Theo Chocolate, pride themselves not only on their Fair-Trade practices, but also on the fact that all of their cacao is grown organically. Green and Black’s label prominently features the fact that the company produces both Organic and Fair-Trade chocolate. Interestingly, as observed by Rie Makita, organic certification encourages biodiversity by only evaluating the means of production on a farm, while Fair-Trade identifies crops individually as falling under the Fair Trade certification (207). The result is that it can be difficult for farmers to meet both criteria, as farmers are often incentivized to grow a number of different crops when pursuing an organic certification but only one when pursuing a Fair-Trade certification. After all of these factors are considered, it should come as no surprise that the majority of the world’s chocolate is produced without these considerations in mind. When companies like Green & Black’s or Theo Chocolate stand up for organic production and Fair-Trade despite the economic obstacles associated with these practices, they promote a standard of fairness and justice in the food industry.

Theo Chocolate’s commitment to Fair-Trade and their transparency in disclosing information about their supply chain sets a precedent for other chocolate companies to follow. As the Fair-Trade movement gains steam, more and more consumers will realize the value of the ethically-produced food products, and as a result, more and more companies will begin producing their products with the ethics of production in mind. It is this positive feedback that underlies the reason why companies like Theo are so important; as companies like Theo decide that the financial risk of Fair-Trade is worth taking, it will become more alluring for other companies to do the same.

Ben and Jerry's

Image 3: Ben & Jerry’s Fair-Trade Cocoa Advertisement

While this image from Ben & Jerry’s Ice Cream is somewhat fantastical and idealized, I have included it to show that even large and prosperous companies like Ben & Jerry’s are realizing that turning to Fair Trade may not only increase the ethics of their business, but also their profits. Hopefully the momentum generated from companies like Theo will not only encourage companies like Ben & Jerry’s to purse Fair-Trade certifications, but also, like Theo, to present information about their suppliers in a transparent and easy-to-access manner.

List of Works Cited

Coe, Sophie D. (Sophie Dobzhansky). The true history of chocolate. 280 p., [8] p. of plates (2013).

Makita, Rie. “A confluence of Fair Trade and organic agriculture in southern India” Published online: 20 Apr 2011.  /Direct.asp?AccessToken=7DID9TIB3DOMX5XLVDIO5TOXX0MMB9I9IN&Show=Object

Parvathi, Priyanka, and Waibel, Hermann. “Fair Trade and Organic Agriculture in Developing Countries: A Review.” Leibniz University of Hannover, Hannover, Germany Published online: 01 Aug 2013.

Theo Chocolate.

Wohlgemuth, Neusa Hidalgo-Monroy. “Alternatives to Rural Development: Organic Agriculture
and Indigenous Communities in Chiapas, Mexico.” Department of Geography and Planning, University of Toledo.


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Theo Pricing Matrix:

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