Fair Trade Certified: Can Ethical Consumption Save the Chocolate Industry?

The history of chocolate stretches back thousands of years in time to the first time that humans entered came to North America and discovered the cacao plant. The history of the chocolate industry is much shorter, but even more complex. From its inception, the chocolate industry has been mired in dubious practices, ethical violations, and questionable labor practices that are harmful to the farmers who harvest cacao and the environment writ large. Many of the worst practices have continued into modern times, and even intensified as the industry struggles to meet never-ending global demand.

The fair trade movement seeks to change things by giving consumers more information about how their chocolate was produced to spur companies to improve their practices. The question many are asking now is simple: will it be enough to undo centuries of malpractice? Is the future of chocolate simply the past — or something worse? Or can people continue to love and eat their favorite treat, now without guilt? In this blog post, I will explore these questions and examine the impact fair trade chocolate has had so far.

A History Dipped in Controversy

For many centuries chocolate product was inextricable with chattel slavery in North and Central America, as Spanish colonizers imported slaves to run their cacao plantations and exported the harvests back to Europe. Then, as technological innovations at the turn of the 19th century increased chocolate demand to all time highs amongst Western consumers, the production base of chocolate shifted to Western Africa and the entire industry boomed as the economy began to globalize. Today most people assume that this violent and bloody history of chocolate is behind the industry that creates so much love out of brands like Hersheys or Nestle. However, modern chocolate production continues to have many negative effects on the farmers in Western Africa who are often overworked and underpaid. Worse, child labor and forced labor remain common practices, constraining many from opportunity for social mobility in those societies.

Slaves working to process sugar. While technology has improved, similar labor practices are in use today in modern chocolate production.

While commercial chocolate production stretches back to the time of Cortes, the chocolate industry as most people know it today really began to form in the late 1800’s. Glenn Brenner’s book, The Emperors of Chocolate: inside the Secret World of Hershey and Mars, chronicles the rise of now household names in the chocolate industry like Mars Bars or Hershey’s Kisses. The founders of these companies capitalized on new technology and innovations in candy to produce hallmark products still eaten today (Glenn 2000). However, as these chocolate startups scaled into multinational brands, they strained the suppliers of cacao beans needed to make the delicious treats.

Since the establishment of Hershey and Mars, the chocolate industry has developed a global supply chain to sustain itself. A vast network of middlemen and trading organizations separate the Hershey Bar sitting in your local CVS from the raw materials that make it up. These layers of providers allow Hershey’s and other chocolate giants to purchase vast quantities of chocolate such that they can satisfy the insatiable demand of the public. The average American eats 10 pounds of chocolate each year, much of it from relative cheap candies picked up at the grocery store.

Global supply chains keep prices cheap, but they have another important benefit for chocolate companies: obfuscation. Because there are so many businesses between Hershey’s and the farmers who harvest cacao beans, Hershey’s has plausible deniability about their involvement in practices like child labor. Because of this, it can be tough for consumers to know where their chocolate has come from — and who suffered to get it to their door. It was this situation that spurred the creation of the Fair Trade Movement in the 1990s.

The Fair Trade Movement

The Fair Trade Movement started with a simple, yet incredibly ambitious goal: reverse the current fortunes of the independent farmers who harvest cacao in Western Africa and South America. Currently these farmers are probably in the lowest position in the entire totem pole of the cacao supply chain. Corrupt government bureaucracies and trading cartels sit above them and seek to siphon off as much of the profit as possible. In addition, competition can lead to a race-to-the-bottom situation, where less scrupulous farming operations who use slave and child labor in conjunction drive prices down and make it harder for ethical farmers. The fair trade movement, since its inception in the 90’s, has sought to change this by increasing transparency into the industry and helping farmers organize for better conditions

Cacao producers have begun to band together in order to secure more profits and better living standards for themselves.

The fair trade movement is fundamentally economic in its ideology. Its response to global capitalism is to work within the system as a reformer, not outside it as a revolutionary. The basic principle the movement operates under is actually the same of the large chocolate companies that it is opposed to in so many ways: The Customer is Always Right. The fair trade movement seeks to educate consumers on how exactly the global chocolate industry works, and provide choices to consciously support farm practices that are fair to workers and also sustainable for the environment. Consumers, the theory goes, will aim to support these ethical practices out of a sense of moral duty, same as why people are altrusitic at all.

The fair trade movement in chocolate is emblematic of a larger debate around capitalism being waged in academia, media, and politics. In the United States, for the first time since Eugene Debs in the 1910s, candidates who openly identify as socialist are running for the office of president, such as Bernie Sanders. Many are starting to question whether capatalism can support ethical labor practices at all. Fair trade movements rely on consumer interest in supporting ethical practices, and there is not exactly a large base of evidence that that is the case.

There are numerous injustices that persist in our supply chains. from factory farming, to greenhouse gas emissions, to human trafficking. None of these causes are conspiracy theories: there is plenty of information public about these problems, and most are tacitly endorsed by governments and institutions. Consumers theoretically could revolt against them: if everyone tomorrow decided to not eat any meat if it came from a factory farm, then factory farming would soon cease to exist.

And yet, it seems vanishingly unlikely that consumers would revolt like this. In fact the trend has to been towards both increased meat consumption and increased factory farming to meet this demand. Consumers, in many ways, have driven these labor practices that have driven price down so far, and the same consumers have benefited tremendously from this with low prices for food. It seems dubious that consumer interest will be the tool to effect change in the same way you can’t dig yourself out of a hole with the shovel that was used to dig the hole.

Another important factor in evaluating the dilemma of the fair trade movement is the problematic racial connotations of the modern chocolate industry. Chocolate advertisements and branding play on colonialist stereotypes of Africans as either “dangerous” or “exotic” (Leissle 2013). These racist stereotypes translate into misguided and incorrect assumptions made by western consumers about the condition of the cacao farmers. The stereotypes can lead to a dehumanization of the African workers and a repudiation of their struggle. Considering the reliance the Fair Trade Movement has on the sentiment of western, mostly white, consumers, these racist dynamics are concerning for the case that the Fair Trade movement has a decent shot at catalyzing real change.

The fair trade movement has grown from its origins to becoming a real part of the industry. Fair trade labels tell consumers in countries like the United States whether different chocolate bars and products were grown in sustainable and humane conditions. Consumers are increasingly aware of unethical practices, and now have options for purchasing products that are good for the world — if they are willing to pay a premium. In the next section, I will explore the impact the Fair Trade movement has had on the chocolate industry, and what the future looks like for chocolate growers and eaters

Fair Trade’s Impact

The impact of the Fair Trade movement on global chocolate consumption is complicated and uncertain. On one hand, there has been impressive growth in the share of chocolate consumption that comes from Fair Trade origins — from a little over 200 millions euros at the turn of the century, to five times that only 6 years later.

Sales volume of Fair Trade Chocolate (source: threefolding.org)

However the total chocolate industry is humungous, and the majority of chocolate continues to come from non-fair trade origins. A study of Belgian chocolate consumers found evidence that only a relatively small minority of the population is willing to pay the premium for fair trade chocolate. Belgium is an especially interesting country to study as it is 1) relatively wealthy, with a high GDP per capita 2) a huge consumer of chocolate, both imported into the country and made natively in the country. Surveys of Belgians show that the highest premium on average they are willing to pay for Fair Trade chocolate is 10%, when in reality the premium is 27%. It turns out that only 10% of Belgians are willing to pay 27% more for chocolate in exchange for ethically grown chocolate. 10% market share is enough for Fair Trade chocolate to have a presence in the economy, but not enough to accomplish the movements ambitious goals of abolition of child labor and improved worker prosperity in the supply chain.

Evidence from the related fair trade coffee movement backs this conclusion up. In Fair trade slippages and Vietnam gaps: the ideological fantasies of fair trade coffee, Gavin Fridell makes a compelling argument that the fair trade movement is as much about social signaling as it is about ethical consumerisms. Specifically, the fair trade movement often focuses more on promoting ideas and fantasies than it does improving the lives of workers. Combine these limitations of western movements in truly empowering African communities with the already marginalized place it has with consumer’s interests and it becomes obvious that the Fair Trade movement is fundamentally limited (Fridell 2014).

Conclusion

The global chocolate industry is humungous and loved by consumers across the world. People love eating chocolate, and love getting it at low prices. However, those low prices don’t come without cost: farmers in South America and Western Africa often have to resort to poor working conditions and exploiting workers. Forced and child labor are commonplace and loosely regulated. Executives and shareholders of western chocolate companies get rich off of chocolate demand, but it does not trickle down to all the workers who make it possible for our candy stores to be lined wall to wall with solid bricks of delicious chocolate.

The Fair Trade movement is a step in the right direction, bravely running counter to the prevailing trend of soulless capitalism and globalism that has pervaded society over the past 8 decades. However, empirical evidence shows that it is insufficient as a solution to problem of ethics in supply chains. The mechanism the movement relies on, moving consumer sentiment through education, is not powerful enough to truly pivot the market. Other solutions must be explored by activists who want to truly improve the social justice of chocolate. Whether that is new technology or new economic structures, more radical actions are needed to effect real change.

Citations

Brenner Joël Glenn. The Emperors of Chocolate: inside the Secret World of Hershey and Mars. Broadway Books, 2000.

De Pelsmacker, P., Driesen, L., & Rayp, G. (2005). Do consumers care about ethics? willingness to pay for fair-trade coffee. The Journal of Consumer Affairs, 39(2), 363-385. doi:http://dx.doi.org.ezp-prod1.hul.harvard.edu/10.1111/j.1745-6606.2005.00019.x

Fridell Gavin (2014) Fair trade slippages and Vietnam gaps: the ideological fantasies of fair trade coffee, Third World Quarterly, 35:7, 1179-1194, DOI: 10.1080/01436597.2014.926108

Leissle, Kristy. “Invisible West Africa: The Politics of Single Origin Chocolate.” Gastronomica, vol. 13, no. 3, 2013, pp. 22–31. JSTOR, http://www.jstor.org/stable/10.1525/gfc.2013.13.3.22.

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