Equal Exchange: An Ethical Source of Chocolate

Introduction

If you are one of the millions of people that consume chocolate in the United States every year, the chances are that you are buying from either Hershey’s, Mars, or Nestlé, as they have US market shares of 44.1%, 29.3%, and 4.9% respectively (Statista 2016). However, if you were told that every time you buy chocolate from one of these companies you are contributing to child labor, low wages for farmers, and terrible working conditions, would you believe that?

Most of what one sees when buying from these companies is some charming packaging like chocolate kisses and chocolate hearts. That is because these companies spend significant amount of money on advertising to portray that image to the public. However, the reality is that behind the scenes, these chocolate companies are the complete opposite. They are completely driven by profits, and as a result contribute significantly to a child labor problem in Africa and even though they are aware of it, they do very little to solve it.

The problem

People became aware about the child labor issue in West African cocoa farms in the early 2000s when journalists began focusing the world’s attention to “children who had been trafficked to Ivory Coast to farm cocoa, often from other former French colonies such as Mali and Burkina Faso, and held as slave laborers” (O’Keefe 2016). In a documentary broadcasted by BBC, kids in the Ivory Coast said that they were been forced to work for long hours and frequently beaten for no pay. Subsequently, cocoa farmers in Africa earn less than $2 per day, therefore many farms frequently rely on child labor to maintain competitive prices. Since this young kids are uneducated and enfolded by extreme poverty, they do what they can to support their families and get misled by traffickers saying that cocoa farming pays well. Therefore, instead of getting an education these young people work under very unsafe environments. They have to use machetes to pry the large pods and they are exposed to dangerous chemicals used on cocoa farms in Africa. Since 70%of cocoa production comes from West Africa with 60% coming from Ivory Coast and Ghana, most companies are dependent to that area to fulfill the demands of the public.

Since the issue became public in the early 2000s, the large chocolate companies have spent significant amounts of money to show consumers that they are trying to do something about it, but the truth is that it is not their priority as little progress has been made. The Payson Center for International Development at Tulane University surveyed a comprehensive survey of child labor in the 2013–14 growing season and found that “2.1 million children had been engaged in inappropriate forms of child labor in Ivory Coast and Ghana combined—a 21% increase over the 1.75 million identified in its survey five years earlier. Of those, 96% were found to be involved in ‘hazardous activity.’ The number of children reported to be performing dangerous tasks fell by 6% in Ghana but jumped by 46% in Ivory Coast” (O’Keefe 2016).

 Supply Chain

If those are really the conditions under which cocoa farmers and children work in West Africa, how do these large companies get away with it? The answer is the supply chain of chocolate.

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The above image depicts a simplified version of the supply chain for cacao. “Developing country farmers sell their cocoa beans to an exporter. In many producing countries, some or all of the largest exporters are the multinational processing companies themselves or local companies controlled by them. Once shipped to Europe or North America, the beans will be transformed to cocoa and cocoa powder. The cocoa butter then goes to the chocolate manufacturing companies. In the end of the chain we find supermarkets and smaller specialist outlets who are selling the chocolate” (Gilbert 2006). Since the American companies are so far away from the farmers and have very little contact with them, they are able to blame the child labor and low wages issues to the middle-men.

Solution

To help solve these problems, it is very important that next time when you buy chocolate from a store you are a socially aware buyer. The guide that you will learn to become a socially aware buyer is helpful not only for chocolate, but almost for any product you decide to purchase. All you have to do to become a socially aware buyer is to follow this technique that I learned from Harvard Professor, Carla Martin, which is to closely look at the following information from the company you are buying from:

-Look at the company’s history and mission.

-Look at the packaging (marketing, advertising, etc).

-Representation (of farmers, countries, etc)

-Certification(s)

-Ingredients

This blog post will guide you through this process and will analyze a company that is considered to be part of the solution of the child labor and low wage problems in Western Africa: Equal Exchange. Since we consider this company to be doing everything in their power to achieve fair trade, we strongly encourage you to buy products from them or companies that are in the same path as Equal Exchange.

History and Mission:

The story of Equal Exchange began when the founders, Jonathan Rosenthal, Michael Rozyne, and Rink Dickinson, had a vision of “fairness to farmers. A closer connection between people and the farmers we all rely on.” After they founded the company in 1986, they had a few goals in mind: 1) A social change organization that would help farmers and their families gain more control over their economic futures. 2) A group that would educate consumers about trade issues affecting farmers. 3) A provider of high-quality foods that would nourish the body and the soul. 4) A company that would be controlled by the people who did the actual work. 5) A community of dedicated individuals who believed that honesty, respect, and mutual benefit are integral to any worthwhile endeavor (Equal Exchange).

Equal Exchange’s mission is “to build long-term trade partnerships that are economically just and environmentally sound, to foster mutually beneficial relationships between farmers and consumers and to demonstrate, through our success, the contribution of worker co-operatives and Fair Trade to a more equitable, democratic and sustainable world.”

For over 25 years the company has done an incredible job and understands that they have a long way to go to help achieve their goal of fair trade. They are aware that “the acceptance of large plantations and corporations such as Nestlé into the Fair Trade labeling system calls into question the very underpinnings of the certification system” (Equal Exchange). However, they are willing to challenge them and do their part so that fair trade is truly achieved.

Packaging, Advertising, and Representation (farmers)

The video made by Equal Exchange summarizes the issues that the chocolate industry is facing, as only 5% of the world’s chocolate is fairly traded. It is clear, that they want to educate people and promote a more fairly traded cacao. Below is also the packaging from one of their chocolate products, which not only helps farmers get their fair share, but also attempts to educate people that see their packaging.

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Even though in this chocolate bar they are specifying that the cacao they use is coming from Latin America, the company has experienced significant growth in the last years and has begun to expand to Africa as well. It is clear after watching their packaging that they produce an organic and fairly traded chocolate bar. They educate the consumer that there is a problem and provide the picture of a farmer and what they are trying to achieve: “Small farmers. Big change. By choosing Equal Exchange fairly traded products, you support a food system that builds stronger farming communities, creates a more equitable trade model, and preserves our planet through sustainable farming methods.” There’s many ways Equal Exchange could’ve used that space, but their goal is fair trade and not only profit, which is why they use this unique packaging strategy.

Certifications:

Another factor that it is important to look at when making a decision to what product to buy is the certifications. There are many different certifications, fair trade certifications, organic certifications, direct trade certification, among many others. However, not only because the product has a sticker with some sort of certifications means that the product is not contributing to problems like child labor or unfair trading. It is important to look a little bit into the organization to find the truth. There is no perfect world, but some are definitely better than others.

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There are three main areas of sustainability: economic, environmental, and social. None of the labels achieve all three. For example, The Rainforest Alliance label “is about quality of life, protecting wildlife, the environment, workers, and the larger communities…’Organic,’ refers to strict adherence to environmental and processing requirements…’Fair Trade’ is a common chocolate label, guaranteeing that a fair price was paid to local farmers for the cacao beans” (Shanker 2013). However, getting certified costs the farmers thousands of dollars that could’ve been spent otherwise like for employees or land, which just adds “more links to the chain between the bean and the customer (Shanker 2013).

It is very important to look deeper to a certification company to get an idea of what exactly is it they are doing. One example of a certification organization is Fair Trade USA (Fair Trade Certified on the above picture), a non-profit organization that audits and certifies transactions between U.S. companies and their international suppliers to promote sustainable livelihoods for farmers and workers and at the same protect the environment. They are a recognized company that has had a positive impact. However, according to Equal Exchange, “Fair Trade USA has slowly, but steadily chipped away at our principles and values, only recently taking the final steps in building their strategy…proceeded to leave the International Fair Trade System, lower standards, eliminate farmers from their governance models, and invite large-scale plantations into coffee and all other commodities.” All of this doesn’t mean Fair Trade USA is a bad organization, however, it might be less worthy than what it might appear in the first place.

For that reason, Equal Exchange created their own model: Authentic Fair Trade. They “joined a growing movement of small farmers, alternative traders, religious organizations, and nonprofits throughout the world with like-minded principles and objectives.” The way farmers benefit from the Equal Exchange model is by cutting out the middlemen and paying the farmer more. They help “provide health care, education and technical trainings for farmers, workers, and artisans around the world” (Equal Exchange).

Ingredients:

The process for making chocolate is very complex because a small variation can change the end product significantly. Every step of the process is extremely important, from harvesting the cacao pods, extraction of seeds and pulp, fermentation, drying, sorting and bagging of the beans, to roasting, winnowing, grinding, pressing, and conching all play a fundamental part in the taste, texture, and aroma of the end product. However, the chocolate people consume includes more than just cocoa liquor, cocoa powder, and cocoa butter. The quality of the non-chocolate ingredients, including milk, sugar, vanilla and stabilizers, also affects the quality of the finished chocolate product. Pure flavorings and natural ingredients, rather than artificial flavoring, produce the best-quality chocolate candy. Chemical preservatives also affect the flavor and quality of the finished product. Top-notch chocolate products use the simplest, purest ingredients so the true flavor shines through” (Warrell 2017).

Equal Exchange plays close attention to the production of their chocolate in every step of the way, guaranteeing the best quality. They also have a special Chocolate Tasting Panel, which meets weekly for “intense product evaluation.”

Conclusion

There is a large problem in West Africa in terms of child labor and cocoa farmers getting really low wages. Most of the big companies like Hershey’s Mars, and Nestlé contribute to these issues and are doing very little to solve them. There has been very little improvement since people start becoming aware of the issues in the early 2000s. For that reason, it is important that chocolate buyers become socially-aware and try to do everything they can to do their part. The main way to accomplish this is to buy from companies that are trying to solve the issue, like Equal Exchange.  By doing that, you will join a movement of people that are trying to make the food-system “better for farmers, consumers, and the earth” (Equal Exchange).

Works Cited

“Building a Vibrant Community.” Equal Exchange. N.p., n.d. Web. 05 May 2017. <http://equalexchange.coop/&gt;.

Equal Exchange. “Why Fair Trade Chocolate Matters.” YouTube. YouTube, 22 Sept. 2015. Web. 05 May 2017. <https://www.youtube.com/watch?v=lnpsFRcsnE0&gt;.

Gilbert, C.L., (2006), Value chain analyses and market power in commodity processing with application to the cocoa and coffee sectors, 14 Mar. 2008. Web.

HERSHEY’S Spreads Ad With Tara Sharma. Perf. Tara Sharma. Hershey’s, 08 Dec. 2016. Web. <HERSHEY’S Spreads Ad With Tara Sharma>.

Martin, Carla (2017). “Lecture 10: Alternative trade and virtuous localization/globalization”

O’Keefe, Brian (2016). “Inside Big Chocolate’s Child Labor Problem.” Fortune. N.p., 01 Mar. 2016. Web.

Shanker, Deena (2013). “A Guide to Ethical Chocolate.” Grist. N.p., 19 Feb. 2013. Web.

The Cocoa Supply Chain. 2006. Value Chain Analyses and Market Power in Commodity Processing with Application to the Cocoa and Coffee Sectors, n.p.

Warrell (2017). “Find Out How To Tell The Difference Between Good and Bad Chocolate!” The Warrell Corporation. N.p., 25 Jan. 2017. Web.

(2016) “U.S. Market Share of Chocolate Companies, 2016 | Statistic.”Statista. N.p., n.d. Web.

 

 

 

 

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