Madécasse: Conscious Chocolate for a Better Madagascar

One of the most pressing ethical issues concerning the chocolate industry is the poverty suffered by many cacao farmers around the world. Cacao farmers in Ghana, for example, generally make less than $2USD per day, which is insufficient for farmers to feed themselves and their families, even though the cost of living in Ghana is much lower than in the United States and other Western nations (Leissle 2018). Farmers also rarely have any control over the price of their cacao, as large corporations, weather, and politics all exert a large amount of influence on the price of cacao beans. Furthermore, this economic poverty is only amplified by the environmental degradation that often accompanies large amounts of agriculture. Recently, there has been a movement among chocolate companies, facilitated by consumer demand, to produce chocolate using ethically-sourced cacao in order to mitigate the destructive forces of capitalism in the Global South. One company working in this realm is Madécasse. By facilitating close relationships with cacao producers in Madagascar, Madécasse demonstrates how chocolate companies can work to provide better pay and living conditions for cacao farmers and invest in an environmentally sustainable enterprise – all while making chocolate that tastes great.

Madécasse was founded in 2008 by two Americans, Tim McCollum and Brett Beach, who had both previously served on the Peace Corps in Madagascar (Madécasse LLC 2019). This experience prompted McCollum and Beach to want to do more to help the people of Madagascar, and thus Madécasse was born. On the Madécasse website, their mission is stated as “a journey to flip the chocolate world right-side up” (Madécasse LLC 2019). This suggests that their purpose is revolutionary, and that in their view, the chocolate industry is in need of serious reform. Their stated mission is two-fold: first, to make the best-tasting, highest-quality chocolate from organic, “heirloom cacao” from Madagascar, and second, to remove middlemen from the chocolate production chain (Madécasse LLC 2019). One of the biggest problems in the chocolate industry that they aim to tackle through their business is “the thousands of miles and layers of middlemen” that separate farmers from chocolate producers and consumers, and they do this by conducting every stage of the chocolate production chain in Madagascar itself (Madécasse LLC 2019). 

One major way in which Madécasse is working to create a better Madagascar is by implementing business processes that work to ameliorate the poverty suffered by farmers in Madagascar. This is incredibly important, as Madagascar is considered one of the poorest countries in the world today, with 90% of people living on less than $2 USD per day, and 62% of the population living below the extreme poverty line, which is defined by the International Monetary Fund as an income that is less than what it would cost to consume 2,100 calories per day (Engstrom et al. 2015). Additionally, approximately 80% of the population lives in rural areas, and most of these people rely on subsistence farming to make a living. 

The cacao industry in Madagascar is also relatively small compared to that of nations such as Côte d’Ivoire and Ghana, as Madagascar produces less than 1% of the world’s cacao (Schatz 2016). However, Malagasy cacao is very highly-valued among Western chocolate companies, because it is genetically distinct and has a unique flavor (Watkins 2012). Combined with the high poverty in Madagascar, the value of cacao has led people to start stealing it (Katz 2014). The photo below depicts a cacao producer who keeps a gun at his desk to deter thieves. This display highlights not only how valuable cacao is to the farmers that grow it in Madagascar, but also how desperately poor so many Malagasy people are. 

Photo by Giulio di Sturco. From: http://time.com/3809538/madagascar-cocoa-chocolate-war-giulio-di-sturco/

But despite how coveted cacao is as a primary product, cacao farmers globally tend to only receive an extremely small proportion of the profits from sales of chocolate. In the diagram below from Make Chocolate Fair!, a European organization that advocates for fair trade in the chocolate industry, cocoa producers on average only receive approximately 6.6% of the profits from chocolate. 

Additionally, prices for primary agricultural products such as cacao tend to have the most volatile prices. Prices are not determined by typical supply and demand processes, rather, these products are treated as investments, and prices are determined by investor speculation (Sylla 2014). Both the low share of the profits from chocolate given to farmers and the unstable prices contribute to the economic inequalities between the Global North and South. However, there has been a growing movement to correct these issues and achieve greater equity in global trade. As a result, a few different strategies have been implemented, with the goal of correcting the trade injustice that leads to the majority of the profits going to the company, while farmers live in poverty. One of the most well-known of these initiatives is Fairtrade.

Fairtrade is a label overseen by Fairtrade International, a non-profit organization that oversees third-party labelling of products that confirms that both companies and farmers are complying with specific trade terms (Leissle 2018). Fairtrade has several requirements, including that producers must practice environmentally sustainable farming, and that they adhere to International Labor Organization rules for hired workers, including protecting children from the worst forms of child labor. Fairtrade producers also receive a minimum price for their cocoa, as well as a price premium for upholding Fairtrade policies, which both serve to protect producers from price volatility. The major benefit of Fairtrade is that this labelling helps to make consumers more aware of where their food is coming from, which can create greater accountability among consumers when they are choosing which products to buy.

However, Fairtrade is not a perfect system. For example, producer organizations are required to pay a fee to be certified, which can add to the financial challenges that producers of agricultural products already face (Leissle 2018). It becomes increasingly problematic because this cost is not passed on to consumers through, for example, making Fairtrade chocolate more expensive. This is done to keep Fairtrade chocolate competitively priced. Furthermore, the price floor set by Fairtrade International is still quite low, at around $2000 USD per metric ton of cacao (Leissle 2018). While this prevents cacao prices from dropping below that value, it does not incentivize chocolate companies to pay any more for their cacao, and thus the Fairtrade price of cacao has remained fairly stagnant. Finally, Fairtrade labelling can have the negative side effect of decreasing transparency among major players in the chocolate industry. While the increase in demand for ethically-sourced cacao has pressured major chocolate producers to communicate more information about the sources of their cacao, some companies like Cadbury have opted to use internal certification schemes, which are difficult to assess the robustness of (Leissle 2018). 

According to Madécasse, Fairtrade is simply a label that allows large chocolate companies to remain disconnected from cacao producers, but to still indicate to some unspecified extent that they are ethically sourcing their cacao (Madécasse LLC 2019). Madécasse is not Fairtrade certified; rather, they are Direct Trade certified, and they believe that this distinction not only makes their operations more transparent to consumers, but also allows them to do a better job than other companies of improving conditions for cocoa farmers.

In contrast to Fairtrade, which is basically just a labelling system, Direct Trade actually alters the structure of the commodity chain in chocolate production. Essentially, Direct Trade removes middle men from the commodity chain (Leissle 2018; Madécasse LLC 2019). Companies buy directly from farmers, which increases the amount that farmers can make for their products. In her book, Cocoa, Kristy Leissle describes the process of Direct Trade with the example of Taza Chocolate. Taza’s goal is primarily to source the highest-quality cacao, but in order to do that, they are willing to pay a higher price for the beans (Leissle 2018). For example, Taza paid cacao suppliers Maya Mountain Cacao and Cacao Verapaz over 75% more than the 2015 average price of bulk cacao. Not only does Taza pay more, but they pay farmers directly, and this also allows them to invest resources to help producers maintain a high standard of quality of their cacao. 

Similarly, Madécasse emphasizes the importance of maintaining close relationships with cacao farmers in Madagascar and paying producers more than average for their cacao. On the company website, Madécasse emphasizes that they are fully integrated into communities in Madagascar, and it is this close connection with the local people that allows them to make a positive impact. One way in which Madécasse has contributed to growth of the cacao and chocolate industry in Madagascar is by providing farmers with the infrastructure to ferment and dry cacao beans themselves so that they can sell dried cacao beans instead of wet ones, which allowed farmers to increase their income by 60% (Madécasse LLC 2019). Dry beans are much more profitable than wet cacao beans because they have gone through the extra processing steps of fermenting and drying (Leissle 2018). By providing Malagasy cacao farmers with the equipment to begin the processing of cacao, Madécasse has made an investment that will help cacao farmers begin to make more money for their product in the long term. 

Furthermore, Madécasse is unique because they have pledged to make chocolate where it is grown in Madagascar. To date, they have made over 4 million chocolate bars in Madagascar (Madécasse LLC 2019). By integrating cocoa farmers and the Malagasy people into the commodity chain of chocolate production, it gives them more agency over the final product. Additionally, it helps to expand the chocolate market beyond just Western nations. For example, South African consumers have expressed a demand for chocolate made in Madagascar (Watkins 2012), which indicates that high-quality chocolate can be made in Africa, and the demand for it does exist. 

However, the work that Madécasse is doing in Madagascar is not without its challenges. One major issue is scaling the business up in order to meet increasing demand, as Madécasse chocolate can now be found in Whole Foods stores in the U.S. (Schatz 2016). The challenges with producing chocolate in the country where it is grown are exemplified in the graph below, from the Madécasse website, which depicts the proportion of their chocolate that is made in Madagascar. 

From: https://madecasse.com/made-at-the-source/

In the initial years of the business, 100% of their chocolate was produced in Madagascar, but as demand increased, Madécasse elected to move a large percentage of their production outside of Madagascar (Schatz 2016). Madécasse states that they are committed to eventually moving 100% of their production back to Madagascar in the next few years (Madécasse LLC 2019). However, the necessity of moving production outside of Madagascar until factories have the capacity to produce a sufficient volume of chocolate highlights one of the major issues with the ethical, bean-to-bar chocolate business model, which is that making a tangible difference for cacao farmers and their families requires well-developed infrastructure that many cacao-producing countries simply lack. Therefore, the challenge of scale is one that small chocolate companies like Madécasse must address going forward. 

A second problem that Madécasse is becoming increasingly involved in helping to fix is deforestation and biodiversity loss in Madagascar. Madagascar is home to a large number of endemic species – over 85% of the animals on Madagascar are unique to the island – and over 90% of those species depend on the forest as their habitat (England, Ratsimbazafy, and Andrianarinana 2017; Harper et al. 2007). Furthermore, between 1950 and 2000, Madagascar lost 40% of its already-diminishing forest cover, and much of that deforestation can be linked to subsistence farming (Harper et al. 2007).

Madécasse has become increasingly vocal about environmental issues in Madagascar; the company recently published a report on their environmental impact, based on work with local people (England, Ratsimbazafy, and Andrianarinana 2017). This report demonstrated that cacao farms are actually a common habitat for many of Madagascar’s endemic species. This discovery led to a partnership with Conservation International and the Bristol Zoo to research the lemurs that live in the cacao forests. The importance of conservation in the company’s values is reflected in their packaging. As of 2016, Madécasse has redesigned their logo to include a lemur holding a cacao pod, which signifies that the company is aware that their business is tightly intertwined with the ecosystem of Madagascar. Furthermore, this packaging signals to consumers that Madécasse is interested in working to save and expand habitats for endangered species in Madagascar. Indeed, in an interview with Forbes, Madécasse co-founder Tim McCollum says that the company hopes to reforest an entire valley to use as a habitat for rescue lemurs (Schatz 2016). This is possible, he says, because the increased value of their cacao has allowed some farmers to replant old rice land, previously used for subsistence farming, into cacao forests. Thus, Madécasse is aware that their business’ positive impact on the people of Madagascar can also extend to the island’s ecosystem. 

Madécasse is thus an exceptional model for other chocolate companies. The goal of making chocolate from start to finish in the places where it is grown provides companies a great opportunity to make a positive impact on cacao farmers who today often barely make enough income to feed their families. Maintaining close relationships with cacao farmers and providing them with the resources to earn a sustainable, higher income is beneficial for the cacao farmers, chocolate producers, chocolate consumers, and for the environment as a whole. The result of business practices, such as those applied by Madécasse, is a high-quality product that consumers can feel good about purchasing and that truly makes a difference for those involved in every stage of its production.

Works Cited

England, Kate, Hajaniaina Ratsimbazafy, and Sitraka Andrianarinana. 2017. “Madécasse Impact Report.” Wildlife Returns. https://madecasse.com/wp-content/uploads/2016/09/Made%CC%81casse-2017-Impact-Report.pdf.

Engstrom, Lars, Patrick Imam, Priscilla Muthoora, and Alex Pienkowski. 2015. “Republic of Madagascar: Selected Issues.” 15. IMF Country Report. Washington, D.C.: International Monetary Fund.

Harper, Grady J., Marc K. Steininger, Compton J. Tucker, Daniel Juhn, and Frank Hawkins. 2007. “Fifty Years of Deforestation and Forest Fragmentation in Madagascar.” Environmental Conservation34 (4): 325–33. https://doi.org/10.1017/S0376892907004262.

Katz, Andrew. 2014. “Dark Gold: Giulio Di Sturco Goes Inside Madagascar’s Cocoa War.” Time. May 27, 2014. http://time.com/3809538/madagascar-cocoa-chocolate-war-giulio-di-sturco/.

Leissle, Kristy. 2018. Cocoa. Cambridge: Polity Press.

Madécasse LLC. 2019. “Madécasse – Direct Trade Chocolate and Vanilla.” 2019. https://madecasse.com/.

Schatz, Robin D. 2016. “Can A Brooklyn Chocolate Maker With A Social Mission Stand Out From The Crowd?” Forbes. April 25, 2016. https://www.forbes.com/sites/robindschatz/2016/04/25/can-a-brooklyn-chocolate-maker-with-a-social-mission-stand-out-from-the-crowd/.

Sylla, Ndongo S. 2014. The Fair Trade Scandal: Marketing Poverty to Benefit the Rich. Athens, Ohio: Ohio University Press.

Watkins, Tate. 2012. “Cuckoo for Cocoa Processing: Making Chocolate—Not Just Picking It—Helps Madagascar Develop.” GOOD. February 9, 2012. https://www.good.is/articles/cuckoo-for-cocoa-processing-making-chocolate-not-just-picking-it-helps-madagascar-develop.

Multimedia Sources

“Cocoa Prices and Income of Farmers.” 2013. Make Chocolate Fair! August 13, 2013. https://makechocolatefair.org/issues/cocoa-prices-and-income-farmers-0.

Katz, Andrew. 2014. “Dark Gold: Giulio Di Sturco Goes Inside Madagascar’s Cocoa War.” Time. May 27, 2014. http://time.com/3809538/madagascar-cocoa-chocolate-war-giulio-di-sturco/.

Madécasse LLC. 2019a. “Made At The Source.” Madécasse(blog). 2019. https://madecasse.com/made-at-the-source/.

———. 2019b. “Madécasse – Shop Direct Trade Chocolate.” Madécasse(blog). 2019. https://madecasse.com/shop/.

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