Tag Archives: fairtrade

Lotte Confectionary – Creation of Chocolate based holidays in East Asian Markets

 

Lotte is a huge conglomerate based in Japan/South Korea that has easily dominated the East Asian market for mass produced chocolate (Yonhap news). They are equivalent to Hershey’s in the states and recently solidified their global standing in the chocolate market by partnering with Hershey’s to dominate the chocolate market in China (Reuters). They are not only a company that produces chocolates, but many other chocolate related products in Asia along with being a conglomerate that has ventures in hospitality, technology and e-commerce.

Initially they began their marketing of chocolate in Japan, with what is called Ghana Chocolate.

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The name was derived from the source of their chocolate manufactures, they were marketed with “extra cacao for the extra rich taste” and with an “authentic” twist, as they were sourced directly from Africa. But much like their global competitor Hershey’s, they do not follow the recent model of “fair source” or “fair trade” chocolate. Unlike many of the local chocolatiers, they are anything but transparent in how their chocolate is sourced and conceived. Because they are a huge conglomerate, and because of lack of competition through artisanal and locally sourced chocolate in Asia, they feel no pressure to publicly release their sources and the treatment of the workers of their chocolate sources.

So why is this such a big deal? We’re familiar with the idea of bigger corporations buying out and hiding such information from us. When companies hide information from us in this day and age, more and more, we instead choose to make more educated choices when it comes to our purchasing of chocolate and spreading awareness. However, to understand why Lotte feels no pressure despite the spread of awareness and information to change, we have to go back a bit to understand the backstory of Lotte Corporation and a bit of Asian culture and history.

White Day, Black Day & Pepero Day

November 11 is just another day here in America. So is March 14 and April 14th. The only real “holiday” that America associates with chocolate is Valentine’s Day (February 14th). So why is it that the chocolate markets in Asia see such a huge increase in consumption and sales of chocolate during these seemingly random days?

In East Asia, particularly China, Japan and South Korea, being a “couple” is the trendy state to be. Rather than embrace your independence, many things in East Asia are catered towards couples and pairs. So, why is this important? This is because Lotte Confectionary has monopolized this mindset and effectively marketed various “holidays” and traditions that cater to this.

Aside from Valentines Day, East Asian cultures also celebrate what has been marketed to be “White Day” (March 14th) ,“Black Day” (April 14th) and Pepero Day (November 11th). In their culture, Valentines Day isn’t just a day for couples to exchange chocolate, but it is a day for women to gift different types of chocolate to various men in their life. There are 3 different types of chocolate that are sold and catered just for this day: Friendly Chocolate, Premium Chocolate and Hand-Made Chocolate. Friendly Chocolate is chocolate given to friends of the opposite sex that you are grateful to have in your life. Premium Chocolate are for the people in your life you are very grateful for but do not fit in a Friend or Lover category (ie. family members or best friends). The “Hand-Made” chocolate are the ones you carefully craft on your own after buying all the necessary ingredients and they are to be given to one person only – the person you love or would like to start a relationship with. This is important because on White Day, March 14, the men who have received these chocolates from women are expected to reciprocate and gift them with chocolate of their own. Of course, the same rules apply. And in April 14th, the lonely people who were unable to receive any Hand-Made Chocolate are expected to gather together and eat dark colored food (Smithsonian.com). Lotte has obviously used this to their advantage to market “bitter” dark chocolate and wallow in their sorrows until next year’s Valentines/White Day. Of course, Lotte has different types of chocolate at various price points to market and cater to all these buyers.

Pepero day (November 11) is yet another chocolate related holiday in where people give their significant others and people in their life Pepero. Pepero (or Pocky, as it is more commonly known here in the states) is a thin unsalted pretzel stick dipped in various flavored chocolate and different types of nuts for extra texture and flavor. Lotte Confectionary, a subsidiary of Lotte Corporation, is credited with the creation and marketing of this easy to chocolate dipped stick. Using clever marketing and visual cues, they have successfully branded this day as Pepero Day and the purchases of pepero on these days skyrocket. The day comes from looking like a Pepero Chocolate (11/11) and is also smart marketing on Lotte’s end.

pepero.jpg

All of the chocolate that is produced my Lotte plays up on this cultural aspect of Asia where being single is considered “lonely” and “unsatisfying. As you can see in this Commercial for Ghana Chocolate, they prey on the couple aspect and the happiness that one would receive from being gifted these chocolates. Of course, it is no secret that they have their hands on non-chocolate related couple items as well.

Sex Sells – Celebrities

Now, this still doesn’t full explain why Lotte is one of the the biggest producer of chocolate related products in Asia. Yes, they’ve used their marketing tools to play up the couple oriented culture in Asia and used words like “Real Cacao” to get the unsuspecting consumer to believe that the product they are purchasing are of the highest quality.

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(It may also help that Asian Countries aren’t as stringent like the US FDA to release all their ingredient info)

But it is their usage of sexualization and celebrity endorsements when it comes to these Chocolate related products. As you have seen in the above commercial, almost all chocolate advertisements in Asia are like that. While this is also a common tactic in the US, the celebrities in Asia are idolized (they are actually called Idols) and children from the age of 8 to adults well over 25, follow and almost worship these celebrities. By using them and showing that this is their preferred brand of chocolate, the consumers do not ask questions of the source of these products, but instead buy them in bulk hoping to be more like them.

However, through clever marketing platforms and excessive usage of monetary funds (They are the 5th biggest conglomerate in Asia), they have made it that being the face of a Lotte Chocolate brand is the biggest achievement a celebrity can receive. This is why the previous faces of their brand have been celebrities like Mao Asada, Lee Hye-ri and Park Bo-gum. To understand the power of these celebrities, all three of them have been featured on Korea/Japan’s Top 100 power celebrity lists year after year.

Purchase of Guylian – Belgian Chocolatiers

Now, with all these pseudo-holidays that pop up consecutively over the months, along with the traditional holidays of Valentines Day, Christmas, Anniversaries and Birthdays, Lotte has created a market where they can offer anything from cheap go-to chocolate bars to high end European designer chocolate. Their chocolate markets continue to boom through the usage of celebrity endorsements, and ongoing advertisements for the necessity of their chocolate.

And now, with the purchase of Guylian, a high end designer chocolate maker based in Belgium, Lotte has been able to set a landmark and a path into Europe to even further their holding in the chocolate industry (Justfood.com, forbes.com). The most interesting part of this acquisition is that Guylian, on their website, claim that all their chocolate is humanely sourced from West Africa with their manufacturer guaranteeing the safety of the food (Guylian.com). Their website goes on to display their numerous awards and their guarantee of authentic and 100% cacao bean usage in all their chocolates.

Guylian is a company with origins in the art of haute-couture chocolate, with renowned chocolatiers within their starting ranks that have received certifications from famed confectionary and chocolatier schools. Through this purchase, Lotte has also been able to rebrand themselves into an even more sought after and cultured variation of chocolate. Rather than being just a consumer friendly chocolate company with “higher end” products, they have been able to include a Belgian based chocolatier that is famed and well known around Europe with their Guiness Record (Guiness) in chocolate making and patented praline chocolates.

Now, why is it that their parent company, Lotte Confectionary/Corporation, is not held to the same standard? Nowhere on Lotte’s website is there a link to the source or the location of their chocolate, nor how it is manufactured. The closest we can get to is that their chocolate is in majority sourced from West Africa (Ghana) and that they use “real cacao beans” to make their chocolates.

Why Should We Care?

Fair trade law, one that we are so familiar with in America and thanks to our class, is something that is still in its infancy in Asia (koreanherald.com). Despite Lotte being such a huge conglomerate that holds stake in almost everything you can think of (Technology, Hospitality, Food, Wine, etc.), because the Fair Trade Act isn’t a widespread knowledge and notion in Asia, ultimately the consumers do not care.

They do not check the sources of their products, they only care to purchase the “prettiest packaged products” to give to their significant others. The Fair Trade Certifications we discussed in class do not apply to the Asian Market, despite the chocolate being consumed in these areas have consistently risen (Financial Times). With Asia looking to be the next big market in chocolate that these conglomerates can get their hands on, shouldn’t Fair Trade be a priority?

However, through the usage of fancy terminology like “Real 100% Cacao” and “Chocolatiers”, Lotte manages to bypass all the Fair Trade knowledge that we have learned through class. The most important thing we should demand from this corporation is what we demand from every company these days – transparency.  Yet, because the economic and trade laws that encompass Asia are mostly focused towards fair trade within their borders, how their products are received in Asia do not really matter, it only matters how we treat our workers and crops within the continent of Asia itself.

As of right now, Lotte chocolates aren’t a major player in the United States. Other than a handful of Asian Markets that carry their brands, their reach to the United States is limited by global competitors like Hershey’s. However, with their recent joint-venture with Hershey’s in China and their merger with Guylian chocolates in Belgium, it is only a matter of time before they take over the global market, just like how they did in Asia. Because the idea of fair trade is still in its infancy in Asia, this can be a major issue to the chocolate markets and cacao farms across the world.

Because they are headquartered in South Korea and Japan, they do not feel the pressure that a lot of US companies do when it comes to Fair Trade in Chocolates. The labor laws directed at South Korean citizens state that the minimum wage to work a full time job (40 hours a week) in South Korea as of now is 15 and they may work a part time job (20 hours a week) at the age of 13 (DOL). If this is the law that they have on their own citizens, why should they really consider the dangers of child labor laws when it comes to foreign countries?

This isn’t to cast a bad light in Asian working culture, but to show the vast difference in culture and the importance of a global policy when it comes to these matters. When Lotte tries to break their way into the US market, we should be more aware of what they are offering and put the same amount of pressure on them as we are to Hershey’s and other global chocolate corporations. Because ultimately, fair trade chocolate is the best tasting chocolate we can have.

Works Cited:

“Chaebol Rankings Seesaw over 2 Decades.” Yonhap News Agency, english.yonhapnews.co.kr/news/2017/11/01/0200000000AEN20171101003000320.html.

Department of Labor. “Laws Governing Exploitative Child Labor.” http://www.dol.gov/sites/default/files/research/southkorea_CL.pdf.

“History.” Guylian Belgian Chocolates, http://www.guylian.com/us/history/#history.

Just-food.com. “SOUTH KOREA: Lotte to Buy Chocolate Firm Guylian.(Reprint).” Just-
Food.com, 2008, pp. just-food.com, June 25, 2008.

Kim, So-Hyun. “Fair Trade Finds Feet in Korea.” Korean Herald, 10 May 2013, http://www.koreaherald.com/view.php?ud=20130510000757.

Kwok, Vivian Wai-yin. “Korean Confectioner Takes A Bite Of Europe.” Forbes, Forbes Magazine, 19 June 2013, http://www.forbes.com/2008/06/23/guylian-lotte-confectionery-markets-equity-cx_vk_0623markets03.html#47c47be64320.

Martin, Carla.“Alternative trade and virtuous localization/globalization”, Harvard University, (2018).

Martin, Carla.“Haute patisserie, artisan chocolate, and food justice: the future?”, Harvard University, (2018).

Smith, K. Annabelle. “Korea’s Black Day: When Sad, Single People Get Together And Eat Black Food.” Smithsonian.com, Smithsonian Institution, 13 Feb. 2013, http://www.smithsonianmag.com/arts-culture/koreas-black-day-when-sad-single-people-get-together-and-eat-black-food-16537918/?no-ist.

Soyoung, Kim. “Lotte, Hershey Launch China Candy Venture.” Reuters, Thomson Reuters, 29 Jan. 2007, http://www.reuters.com/article/us-lotte-hershey-china-idUSSEO22724620070129.

Terazono, Emiko. “Asian Chocolate Demand Set to Outstrip Global Growth.” Financial Times, Financial Times, 4 Oct. 2017, http://www.ft.com/content/3cb2e488-a8f8-11e7-ab55-27219df83c97.

“Valentine’s Day.(Chocolate Purchases)(Brief Article).” Journal of Property Management, vol. 71, no. 1, 2006, p. 9.

 

*thank you again for the extension on my paper regarding personal matters. I really really appreciated the extra time. Thank you!

 

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The Sticky and Complicated Future of Chocolate

the modern mocha is a bittersweet concoction of imperialism, genocide, invention, and consumerism served with whipped cream on top.”[1] ― Sarah Vowell

Humorist Sarah Vowell captures much of the history of chocolate (and coffee) in this little quip. However, the history of chocolate is long and its social, economic, and political implications are vast. Putting the positive impacts of invention aside, the negative impacts of imperialism and consumerism more than linger. They have resulted in gross economic inequities and lasting environmental and social damage, particularly in the production end of the cocoa supply chain. It’s going to take the force of consumerism and capitalism to right these inequalities and bring about sustainability.

Approximately 70% of the world’s cocoa is produced in West Africa by small farms spread out across the area. In the 1980s cocoa farmers received approximately 16% of the chocolate profits, today this percentage has been greatly reduced to 3%.[2] Cocoa farmers are not organized and have little bargaining power against more organized buyers.

Profit shared on cocoa supply chain
Figure 1: Farmers share of chocolate profits is small and has been in decline since the 1980s when global cacao prices were regulated. In the 1980s farmers were receiving around 16% of the chocolate profits. Martin, Carla D. “Introduction.’” Chocolate, Culture, and the Politics of Food. Harvard Extension School: Cambridge, MA. 24 Jan. 2018. Class Lecture. [3]
The 2018 Cocoa Barometer highlights the many challenges for cacao farmers, including volatile pricing. From September 2016 – February 2017, farmers experienced a 30%-40% decline in income (Ghana farmers were protected by this price drop through government subsidies). Although prices are on the rise again, the overall trend the past 60 years is a decline in prices (see figure 2). With farmers having little, to no, protection from their governments they are hardest hit by market fluctuations, while others on the value chain will see an increase of their profit margins, even if only temporary.[4]

2018 Cocoa Barometer Long-term cocoa price trends
Figure 2: The average production of Ivorian cocoa in the seasons 2010/11, 2011/12, 2012/13, 2013/14, 2014/15 and 2015/16 was around 1,600,000 metric tonnes (mt). Cocoa production in 2016/17 and 1017/18 is around 2,000,000 mt, an increase of about 400,000 mt. (ICCO Quarterly Bulletins) The overproduction in 2016/17 was around 300,000 metric tonnes, according to the ICCO Quarterly Bulletin, Volume XLIV no 1, page 50, table 1.[5] Fountain, A.C. and Hutz-Adams, F. Cocao Barometer Report. 2018.http://www.cocoabarometer.org/Cocoa_Barometer/Download_files/2018%20Cocoa%20Barometer%20180420.pdf
Farmers in West Africa make well below a living wage of $2.51 per day, averaging $0.78 per day (FairTrade).[6] The Cocoa Barometer asserts that the price drops are directly related to improved production due to new farming areas created from deforestation. More than 90% of West Africa’s original forests are gone.

An estimated 2.1 million children work in West African cocoa fields. Structural issues such as poverty, lack of schools, and infrastructure also contribute to the high levels of child labor.[7] Efforts in the past few decades to end child labor, preserve the environment, and to balance these inequities have been challenging and difficult to measure. Currently, third party certification bodies have been the only levers toward implementing and measuring sustainability efforts as well as signals to consumers as to where, and how, their chocolate products are sourced.

Major Certification Bodies
Three major certification bodies associated with cocoa. Note Utz and Rainforest Alliance has merged and will announce new standards in late 2019 for the New Rainforest Alliance.

The three main certification entities are Fairtrade, Utz and the Rainforest Alliance. Fairtrade Standards are designed to support the sustainable development of small producer organizations and agricultural workers in the poorest countries in the world.[8] Similarly, Utz certification was created to show consumers that products were sustainably sourced. Rainforest Alliance certification meant farmers met rigorous environmental and social standards.[9] In January 2018, Utz merged with the Rainforest Alliance. The New Rainforest Alliance plans to publish a singular program at the end of 2019.[10]

Certification and bean-to-bar efforts in the specialty chocolate market have many success stories, but compared to the global consumption of chocolate, these efforts have only made a dent.[11] The Fine Cacao and Chocolate Institute (FCCI) reports, with caveats intended to illustrated the challenges of obtaining this data, that there are 481 specialty chocolate makers and manufacturers worldwide that represent approximately 6% of the annual global production of cacao.

International Cocoa Organization, ICCO, ultrapremium cacao, fine cacao, bulk, certified
Figure 3: Ultrapremium fine and Fine cacao comprises 246,000 tonnes (6%) of the 4,031,200 tonnes of cacao produced annually (ICCO 2015). [12]
The FCCI defines this market segment as those chocolate makers and manufacturers that choose to purchase specialty cacao at a premium price for purposes of taste quality and/or sustainability reasons.[13] Within this small group, sustainability is but a factor in paying the price premium, but not necessarily a primary factor. In order for sustainability initiatives to have any meaningful impact to cocoa farmers the major chocolate manufacturers need to take the lead and invest in best practices throughout their supply chain that address the environmental, social, and economic challenges their farmers face.

Cocoa Barometer, Certified Cocoa, 2017, Mondelez International, Nestle, Mars, Hersheys, Ferrero, Lindt und Sprungli
Figure 4. Data kindly provided by the companies. Fountain, A.C. and Hutz-Adams, F. Cocao Barometer Report. 2018. http://www.cocoabarometer.org/Cocoa_Barometer/Download_files/2018%20Cocoa%20Barometer%20180420.pdf

Recent Commitments by the Majors / Certifications & Goals

Mondelēz International (a subsidiary of Kraft)
Chocolate Brands: Cadbury, Alpen Gold, Côte d’Or, Toblerone, etc.
Certification provided by FLOCERT through a private labeling partnership.

In 2012 Mondelēz International invested $400 million to create its Cocoa Life program. The program plans to empower 200,000 cocoa farmers and one million community members by 2022. In April 2018 Mondelēz International reported that they have reached 120,500 cocoa farmers, in a variety of programs and they reached 35% certified cocoa.[14]

Mondelēz  International, Cocoa for Life, 2017 Progress
Figure 5: Cocoa Life infographic showing Mondelēz 2017 Progress in Numbers. Includes increases in sustainably sourced cocoa and reach to farmers and communities from previous year.[15]
Cocoa Life is tied to the UN Sustainability Development Goals (SDGs), with an emphasis on Goals 1 (no poverty), among others. Cocoa Life has partnered with local governments and NGOs to build community-centric Child Labor Monitoring and Remediation Systems (CLMRS), which educate farming communities on the dangers of child labor, identify children at risk, and remediate cases with its local partners. Cocoa Life CLMRS programs have started in Ghana and continue to increase. Roll out of CLMRS in Côte d’Ivoire will begin in 2018. Nestlé has also implemented CLMRS program into its sustainability programs.[16]

Mondelēz, CLMRS, 2017
Figure 6: Child Labor Monitoring and Remediation Systems (CLMRS) deployed by Mondelēz International in 2017 with plans to ramp up in 2018.[17] Mondelēz International. Cocoa Life 2017 Progress Report: From Cocoa Farmers to Consumers Connection Both Ends of the Supply Chain. P. 21. April 2018. Web. April 2018. https://www.cocoalife.org/~/media/CocoaLife/en/download/article/Cocoa_Life_Progress_Report_2017.pdf

Nestlé
Chocolate Brands: Smarties, Nestlé Crunch, Butterfinger, KitKat, etc.
Certifications: Utz and Fairtrade

In their detailed, first report (2017), co-authored with the International Cocoa Initiative (ICI), Nestlé asserts that certification is not enough and that additional support for the farmer is needed. In fact, Nestlé asserts that certification drove the issue of child labor “underground” as farmers would hide any child laborers when inspectors came around.[18] While Mondelēz set up CLMRS in Ghana, Nestlé set up its CLMRS in Côte d’Ivoire and report a 51% reduction of child labor in a recent sample of 1,056 children over a two-year period. [19]

Nestle, Child Labour, Child Labor, 2017 Corporate Responsibility Report
Figure 7: Nestlé targets child labor by its Child Labor and Monitor Remediation Systems (CLMRS) in Côte d’Ivoire. Nestlé hopes to scale the successful parts of the program to meet the goals of its Cocoa Plan.[20]
Nestlé is also investing in Community Liaison People (CLPs) to educate the community of the dangers of child labor. They are targeting women and mothers as they are more likely to invest their income and education into their family. The CLPs are local young people who are paid to train and the cost of the CLPs are split between Nestlé and the farmer. Remediation is highly individualized, but these activities are ones Nestlé continues to invest.[21] Nestlé hopes to scale their more successful initiatives to meet the goals of its Cocoa Plan, which is set to reach 57% cocoa certification by the end of 2020.

Nestle, CLMRS, Child Labour Monitoring and Remediation System, ICI, International Cocoa Initiative
Figure 8: An overview of how Nestlé’s Childe Labour Monitoring and Remediation System (CLMRS) works by engaging the community, assigning monitors, monitoring, reporting, validation, analysis, recommends remediation, remediation carried out by partners, monitoring continues ensure remediation is carried out.[22]  Nestlé. Nestlé Cocoa Plan Tackling Child Labour 2017 Report. Web. P.23 April 2018. https://www.nestlecocoaplanreport.com/sites/default/files/2017-10/NestleCocoaPlanReport2017_EN_0.pdf
Nestle, Cocoa Plan, CLMRS, Certified Cocoa
Figure 9: Infographic on Nestlé Cocoa Plan Challenges and Ambitions in CLMRS program reach and tonnes of certified cocoa.[23] Nestlé. Nestlé Cocoa Plan Tackling Child Labour 2017 Report. Web. P.49 April 2018. https://www.nestlecocoaplanreport.com/sites/default/files/2017-10/NestleCocoaPlanReport2017_EN_0.pdf

Ferrero
Chocolate Brands: Ferrero Pralines, Nutella, Kinder Chocolate
Certification is conducted by Utz, Fairtrade, and Rainforest Alliance.[24]

According to its 2016 Social Responsibility Report Ferrero has made a commitment to 100% certified cacao by 2020 and 75% by the end of 2018.[25]

Ferrero, Sustainability Report, Certified Cocoa
Figure 10: Ferrero touts its success toward reaching its certification goals.[26] Ferrero. Sharing Values to Create Value Corporate Social Responsibilty Report 2016. Ferrero. Web. P. 170 https://s3-eu-west-1.amazonaws.com/ferrero-static/globalcms/documenti/2807.pdf
In its April 2018 Cocoa Barometer reports Ferrero is 70% certified (figure 4), and by its own reporting, on track to meet its goal of 75% cocoa certification (figure 10).

Ferrero reports partnerships with cacao cooperative ECOOKIM, the largest in Côte d’Ivoire, which takes part in the Fairtrade Africa program “It Takes a Village to Protect a Child.” Similar to CLMRS, the program establishes a Child Labor Committee to raise awareness about child labor, create child protection policy, and monitor activity at the community level. Ferrero reports that 9,413 children benefitted from this program. [27]

Ferrero also works with Save the Children to work toward ending child labor. It reports 1.2 million children are forced to work in hazardous conditions, however, Ferrero has set relatively modest goals of reaching 500 children, 7,500 members of 10 communities, and 100 representatives of local institutions.[28]

Ferrero, Save the Children, Cocoa, Sustainability, Community Development
Figure 11: Ferrero reports modest results on in their efforts to address child labor.[29]   Source: Save the Children, December 2016 – Protection des enfants vulnérables dans les communautés productrices de cacao dans le département de Soubré en Côte d’Ivoire – Ajournement pour Ferrero. Ferrero. Sharing Values to Create Value Corporate Social Responsibilty Report 2016. Ferrero. Web. P. 182 https://s3-eu-west-1.amazonaws.com/ferrero-static/globalcms/documenti/2807.pdf
In January Ferrero announced it planned to acquire Nestlé’s U.S. confectionary business for $2.8 billion in cash making Ferrero the third largest confectionary company in the U.S.[30] It is anticipated that Ferrero will realign their sustainability goals after the acquisition of Nestlé, but their goals are currently similar.

The Hershey Company
Popular Chocolate Brands: Hershey’s Chocolate Bar, Cocoa, Kisses, and Baking chocolates, Kit Kat, Almond Joy, Mounds, Reese’s, York.
Certification is conducted by Utz, Fairtrade, and Rainforest Alliance.[31]

Hershey, Open source map, cocoa farms, sustainability, transparency
Figure 12: Hershey Source Map for Reese’s Peanut Butter Cups. Pictured above is a zoomed in version of W. Africa. Users can zoom in and view the name of Cocoa Coop, educational location, or an area they obtain cocoa. The map also shows locations around the world for ingredients such as milk and sugar, plus other sources of chocolate in South American. Hershey also has a source map for its Hershey’s Milk Chocolate with Almond Bars. [32] https://open.sourcemap.com/maps/589e10c1e4bac0b357bc3d5f
Hershey, Sustainablity Goal
Figure 13: Hershey reports its on track to reach its goal of 100% certified cocoa by 2020.[37]   The Hershey Company. 2016 Corporate Social Responsibility Report. 2017. Web. April 30, 2018. p. 27. https://www.thehersheycompany.com/content/dam/corporate-us/documents/csr-reports/2016-hershey-csr-report.pdf
In its 2016 Corporate Social Responsibility Report, The Hershey Company highlights progress in their Learn to Grow agriculture and empowerment program, serving 48,300 farmers in West Africa.[33] The report also highlights its Energize Learning program, which provides Vivi energy bars to students improving overall nutrition. The program is a partnership with the Ghana School Feeding Program and Project Peanut Butter and 50,000 kids in Ghana receive 50,000 Vivi bars every day.[34] Hershey also partnered with The World Cocoa Foundation’s (WCF) Climate Smart Cocoa Program to address climate change impacts to cocoa growing regions. The partnership will pilot a series of programs to develop “climate-smart” best practices to inform the Learn to Grow curriculum and through Hershey’s CocoaLink program knowledge sharing between farmers will be allowed via low-cost mobile technology.[35] Hershey’s report indicates that it is on schedule to reach its 100% certified goal by 2020.[36] In April 2018 the Cocoa Baramoter reports Hershey reached 75% (see figure 4). Also in April 2018, Hershey announced the creation of its Cocoa for Good sustainability programs

Beyond certification, Cocoa for Good seeks to address the most pressing issues facing cocoa-growing communities. The strategy is to target four key areas: increase family access to good nutrition, elimination of child labor and increase youth access to education opportunities, increase household incomes for women and men, zero deforestation and increased agroforestry. The announcement came with a $500 million commitment by 2030 and like Mondelēz International and Mars, aligns its strategy to contribute to the goals of the United Nations Sustainable Development Goals.[38]

Mars
Chocolate Brands include: M&M, Snickers, Twix, Dove, Milky Way, etc.
Certification is conducted by Utz, Fairtrade, and Rainforest Alliance.

In September of 2017, Mars announced its Sustainable in a Generation Plan, with a pledge to invest $1 billion over the next few years to address threats such as climate change, poverty in its value chain, and scarcity of resources.[39] This is across all their raw products, not just cocoa. Oxfam will serve as an advisor to their Farmer Income Lab, which aligns with the United Nations Sustainability Development Goal 1 (no poverty). The Farmer Income Lab will seek to create solutions through research for farmers working in Mars’ supply chain in developing countries.[40] Other actions include improving cocoa farming methods, pests and disease prevention, and unlocking the cocoa genome.[41] Engagement with others actors in the cocoa industry is also key, such as the World Cocoa Foundation and CocoaAction. Mars’ Chief Sustainability & Health and Wellbeing Officer, Barry Parkin, also serves as Chairman of World Cocoa Foundation.

Mars, Cocoa Sustainability
Figure 14: Mars identifies that 5 million cocoa farmers are impacted, but focuses mainly on addressing technology issues in farmer in a belief it will fix the social challenges that farmers face, such as a extreme poverty, child labor, and infrastructure concerns included in other sustainability plans.[47]
Mars may lay claim as the first major chocolate company to commit to 100% certified chocolate by 2020, but its progress has lagged, reporting 50% of their cocoa being certified in 2016[42] and the same percentage being reported by the cocoa barometer in 2018 (figure 4). During this same time frame Ferrero and Hershey have demonstrated increases in certification of cocoa reporting 70% and 75% certificated cocoa, respectively (figure 4).[43] Their website lacks a corporate social responsibility report and the information available on their site appears to be written in 2016, except for recent press releases and Income Position Statement.[44] For example Mars’ claim to be the only major manufacturer to work with all three major certification organizations Utz, Rainforest Alliance, and Fairtrade International is outdated.[45] Hershey and Ferrero include these bodies in their 2016 sustainability reports.

Until the recent announcement of Sustainable in a Generation Plan, Mars’ approach, as described on their website, leans more toward improving farmer yield through technology (fertilizer, farming techniques, mapping the cacao genome) than increasing living wages and address child labor. A press release by Frank Mars in April 2018 urges collaborative scientific approach and extolls their work on breeding higher yield cocoa plants for improving farmer incomes.[46] However, higher yields do not always improve farmer incomes. As previously mentioned, the recent Cocoa Barometer report suggests that higher production results in driving down price, thus less income for farmers. Perhaps Mars’ real progress is tied to the progress of the World Cocoa Foundation.

World Cocoa Foundation (WCF) and CocoaAction

CocoaAction is a voluntary industry-wide organization that aligns the world’s leading cocoa and chocolate companies, cocoa producing governments, and key stakeholders on regional priority issues in cocoa sustainability run by the World Cocoa Foundation (WCF). The WCF member companies committed to CocoaAction include Mondelēz International, Nestlé, Ferrero, The Hershey Company, Mars, Incorporated, among others.[48] In November of 2017 a Framework of Action was announced by the WCF with the governments of Côte d’Ivoire and Ghana and major chocolate and cocoa companies to end deforestation, restore forest areas, and accelerate investment in long-term sustainable production of cocoa, and the development and capacity-building of farmers’ organizations and farmer’s income. Commitments also include participation of policy creation by farmers and extensive monitoring and reporting. The Framework of Action involves governments and companies that represent 80% of the global cocoa production and usage.[49] If implemented correctly, these commitments should go a long way in repairing the deforestation in West Africa. 

The Future of Chocolate

These efforts are welcome and it is promising that the majors can successfully  collaborate with governments, NGOs, and each other in the important effort to secure the future of chocolate and those that produce it. It is also encouraging to see the major manufacturers release sustainability reports, however, as barometer.org reports, many of their commitments fall well short compared to the actual scope of the problem. The commitment to reach 400,000 children by 2020 would only impact 18% of children in need (figure 15). Similarly meeting commitments to help farmers in CocoaAction would only reach 15% of farmers in need (figure 15). Regarding living income, farmers are only making $0.78 per day, 31% of the living wage of $2.51 per day (figure 15). The Cocoa Barometer report stresses that a living wage, among other factors, is a major component that these initiatives must include in their sustainability initiatives. From available data, all reports aspire to improve farmer income, either by improving productivity or identifying additional income generating activities. However, these plans do not set a living wage as a goal. As mentioned earlier in this article more production doesn’t always result in more income.

Cocoa Barometer, Scale of solutions vs problem, Cocoa Sustainability, CLMRS, CocoaAction, Cocoa Farmer
Figure 15: Scale of solutions vs. scope of the problem. The data for this infographic was publicly available in the case of CocoaAction and Fairtrade. The International Cocoa Initiative graciously provided their data. The authors of the Barometer do not wish to imply that these organisations are doing an insufficient job, but simply that the scale of the interventions chosen by the sector as a whole are dwarfed by the size of the challenges.[50]   Fountain, A.C. and Hutz-Adams, F. Cocao Barometer Report. 2018. http://www.cocoabarometer.org/Cocoa_Barometer/Download_files/2018%20Cocoa%20Barometer%20180420.pdf
The future of chocolate depends on the fate of cocoa farmers and their fate relies on untangling a mess of social and economic issues caused by imperialism, and exacerbated by free market capitalism and consumerism. The goals set forth in these reports are generally headed in the right direction, but their success is dependent on their ability to make their initiatives successful, then scale up on that success. Accountability and transparency among the industry and at the government level is also paramount to measure the effects of these initiatives. Consumers also have a role in making responsible purchases and applying pressure on corporations and governments to minimize inequality in the supply chain and certification plays an important role. If farmers continue to be marginalized, then there will be little incentive for a younger generation of farmers to take up the trade and chocolate may become a rare treat indeed.

 

Works Cited:

[1] Vowell, Sarah. The Partly Cloudy Patriot. Simon & Schuster. New York, New York. October 2002. p. 42

[2] Martin, Carla D. “Introduction.” Chocolate, Culture, and the Politics of Food. Harvard Extension School: Cambridge, MA. 24 Jan. 2018. Class Lecture.

[3] Ibid.

[4] Fountain, A.C. and Hutz-Adams, F. Cocao Barometer Report. 2018. Web. p. 11. April 2018. http://www.cocoabarometer.org/Cocoa_Barometer/Download_files/2018%20Cocoa%20Barometer%20180420.pdf

[5] Ibid. p. 52.

[6] Ibid. p. 6.

[7] Ibid. p. 3.

[8] Fairtrade. Aims of Fairtrade Standards. Web. May 8, 2018. https://www.fairtrade.net/standards/aims-of-fairtrade-standards.html

[9] The Rainforest Alliance. What Our Seal Means. Web. May 8, 2018. https://www.rainforest-alliance.org/

[10] Utz. Joining Forces: Utz and the Rainforest Alliance. April 24, 2018. Web. May 9, 2018. https://utz.org/merger/#QA_merger

[11] Fountain, A.C. and Hutz-Adams, F. Cocao Barometer Report. 2018. p. 6. http://www.cocoabarometer.org/Cocoa_Barometer/Download_files/2018%20Cocoa%20Barometer%20180420.pdf

[12] Martin, Carla. “Sizing the craft chocolate market.” Fine Cacao and Chocolate Institute (blog). August 31. 2017. Web. April 25, 2018. https://chocolateinstitute.org/blog/sizing-the-craft-chocolate-market/.

[13] Ibid.

[14] Mondelēz International. Cocoa Life 2017 Progress Report: From Cocoa Farmers to Consumers Connection Both Ends of the Supply Chain. P. 2. April 2018. Web. April 2018. https://www.cocoalife.org/~/media/CocoaLife/en/download/article/Cocoa_Life_Progress_Report_2017.pdf

[15] Ibid. p. 5

[16] Ibid. p. 21

[17] Ibid. p. 21

[18] Nestlé. Nestlé Cocoa Plan Tackling Child Labour 2017 Report. Web. P.24 April 2018. https://www.nestlecocoaplanreport.com/sites/default/files/2017-10/NestleCocoaPlanReport2017_EN_0.pdf

[19] Ibid. p. 22

[20] Nestlé. Introducing our first report on tackling child labour in cocoa. Web. April 2018. https://www.nestlecocoaplanreport.com/

[21] Ibid. 37

[22] Ibid. p. 23

[23] Ibid. p. 49

[24] Ferrero. Sharing Values to Create Value Corporate Social Responsibilty Report 2016. Ferrero. Web. P. 171 https://s3-eu-west-1.amazonaws.com/ferrero-static/globalcms/documenti/2807.pdf

[25] Ibid. p. 170

[26] Ibid. p. 170

[27] Ibid. 175

[28] Ibid. p. 181

[29] Ibid. 182

[30] Ferrero. Ferrero to Acquire Nestlé’s U.S. Confectionary Business. January 16, 2018. Web. May 9, 2018. https://www.ferrero.com/group-news/

[31] The Hershey Company. Our Certified Ingredients. Web. April 30, 2018. https://www.thehersheycompany.com/en_us/responsibility/good-business/responsible-sourcing.html

[32] Hershey. Hershey’s Milk Chocolate with Almonds Open Source Map. Zoom View. Web. April 2018. https://open.sourcemap.com/maps/589e10c1e4bac0b357bc3d5f

[33] The Hershey Company. 2016 Corporate Social Responsibility Report. 2017. Web. April 30, 2018. p. 11. https://www.thehersheycompany.com/content/dam/corporate-us/documents/csr-reports/2016-hershey-csr-report.pdf

[34] Ibid. p. 23

[35] Ibid. p. 12

[36] Ibid. p. 27

[37] Ibid. p. 27

[38] Hershey. Hershey Announces Cocoa For Good, the Company’s Half-billion Dollar Sustainable Cocoa Strategy. April 4, 2018. Web. April 30, 2018. https://www.thehersheycompany.com/content/corporate/en_us/news-center/news-detail.html?2340764

[39] Mars. Unveiling Our Sustainble in a Generation Plan. Sept. 5, 2017. Web. May 9, 2018. http://www.mars.com/global/press-center/newsroom/newsroom/unveiling-our-sustainable-in-a-generation-plan

[40] Farmers Income Lab. Challenges. Web. May 9, 2018. https://www.farmerincomelab.com/

[41] Mars. Income Position Statement: The Current Situation. Web. May 9, 2018. http://www.mars.com/global/about-us/policies-and-practices/income-position-statement

[42] Mars. Caring for the Future of Cocoa Out Approach. 2016. Web. April 2018. http://www.mars.com/global/sustainable-in-a-generation/our-approach-to-sustainability/raw-materials/cocoa

[43] Fountain, A.C. and Hutz-Adams, F. Cocao Barometer Report. 2018. http://www.cocoabarometer.org/Cocoa_Barometer/Download_files/2018%20Cocoa%20Barometer%20180420.pdf

[44] Mars. Caring for the Future of Cocoa Out Approach. 2016. Web. April 2018. http://www.mars.com/global/sustainable-in-a-generation/our-approach-to-sustainability/raw-materials/cocoa

[45] Ibid.

[46] Mars. Frank Mars Calls for the Cocoa Industry to Take a Collaborative Scientific Approach to Cocoa. April 26, 2018. Web. May 9, 2018. http://www.mars.com/global/press-center/newsroom/frank-mars-cocoa-collaboration

[47] Mars. Cocoa: Caring for the Future of Cocoa, Our Approach. Web. April 2018. http://www.mars.com/global/sustainable-in-a-generation/our-approach-to-sustainability/raw-materials/cocoa

[48] CocoaAction. World Cocoa Foundation. Web. April 2018. http://www.worldcocoafoundation.org/about-wcf/cocoaaction/

[49] World Cocoa Foundation. Two-thirds of Global Cocoa Supply Agree on Actions to Eliminate Deforestation and Restore Forest Areas. Nov. 2017. Web. April 2018.

[50] Fountain, A.C. and Hutz-Adams, F. Cocao Barometer Report. 2018. http://www.cocoabarometer.org/Cocoa_Barometer/Download_files/2018%20Cocoa%20Barometer%20180420.pdf

The Ethical and Economic Rationale for Selling Fair Trade Chocolate

The sale of chocolate is big business. According to the National Confectioners Association, chocolate sales totaled $21.1 billion in the United States in 2014. (Franchise Help). Despite the significant size of the market, growers responsible for cultivating cocoa do not always share the benefits. The Fair Trade movement attempts to address this imbalance and improve the economic plight of cocoa growers. This ethical movement has resonated with consumers, and there is well-documented consumer demand to purchase Fair Trade items. Despite the ethical and economic rationale for selling Fair Trade chocolate, cocoa sold with the Fair Trade label accounts for a very low 0.5% share of the global cocoa market, according to International Cocoa Organization. Based on the ethical and economic benefits companies will attain from distributing Fair Trade products, a strong case can be made for retailers to offer a larger selection of Fair Trade chocolates.  

Despite the significant global demand for cocoa products, producers struggle with economic deprivation & human rights abuses. As a result of oversupply and fluctuating commodity prices, many cocoa growers live below the global poverty line, and earn less than $2 a day (ILPI 14). In addition to the struggle to afford basic life necessities, many cocoa growers are unable to hire sufficient labor and are forced to rely instead on having family members farm, including children who might be pulled from school. Even worse, other children are trafficked as low-salary laborers or even slaves, and forced to work on some cocoa plantations. There are an estimated 880,00 child laborers in Ghana, and 1,150,00 children working in Côte d’Ivoire (ILPI 31). Many of these children work in hazardous conditions, including operating heavy machinery, applying pesticides to foods, and using dangerous tools to harvest cacao pods.

In order to improve economic and human rights conditions, Fair Trade organizations have developed systems that organize cocoa growers to sell their goods as part of collectives which increases their bargaining power and reduces layers of middlemen. Cocoa growers receive a guaranteed minimum price for their goods which allows them to earn a living wage. This helps ensure that cocoa growers have a safety net when cacao falls below a sustainable level as a commodity. This is valuable to the cocoa growers because cocoa prices can be volatile and can move in a wide range, thereby creating uncertainty in the price that the cocoa growers will receive for their crop. 

Cocoa com
Cocoa prices

 

The Fair Trade organization consults producers, traders and other stakeholders and to determine a fair price for cocoa. The cooperatives also receive an additional “Fair Trade premium” where members have discretion to spend the funds in order for the benefit the cocoa growers and their communities. The Fair Trade premium for standard quality cocoa is $150 / ton. (International Cocoa Organization) and the Minimum Price including the Fair Trade Premium is $1,750 / ton. In return for these economic benefits, cocoa growers agree to comply with the organization’s labor standards which prohibit child labor and protect against other human rights abuses. Additional standards include environmental protections. 

Producers of goods that purchase from Fair Trade providers display logos on their products which inform consumers the food was produced under Fair Trade standards. Consumers who purchase these items can be confident that they are supporting the Fair Trade system. 

Fair Trade orGANIZATIONS
Fair Trade logos

 

While there is a strong ethical case to be made for the sale of Fair Trade items, the question remains as to whether consumers are interested in purchasing them. Numerous academic studies have been conducted to investigate the amount of consumer interest in Fair Trade goods.

The first question a retailer should consider is whether or not consumers are interested in buying Fair Trade products and the amount they would be willing to pay. A survey posed to American consumers the questions of whether they value Fair Trade products and how much more they would be willing to pay for Fair Trade coffee. The results of this survey indicated that Americans are interested in Fair Trade products and would to be willing to pay $0.22 /lb. more for Fair Trade coffee than for the non-Fair trade equivalent. (Carlson 5)

Researchers at the Stanford Business School set up an experiment to determine whether coffee carrying a Fair Trade label sold better, equally, or worse than identical coffee not labeled. The results showed that the Fair Trade label had a substantial positive effect both on the quantity sold as well as the price it was able to command. Researchers found that sales rose by almost 10% when a coffee carried a Fair Trade label as compared to the same coffee carrying a generic placebo label. A second study found that demand for Fair Trade coffee was inelastic; sales of the Fair Trade labeled coffee remained fairly steady when its price was raised by 8%. In contrast, coffee without the Fair Trade labels experienced a 30% decline in sales after a similar price increase (Hainmueller et al 2).

In another study, titled “Are Consumers Willing to Pay More for Fair Trade Certified Coffee?” the author looked at items that went through Fair Trade certification and compared the price consumers were willing to pay for the same item before and after the item received its Fair Trade certification. The conclusion was that “consistent with prior work… (the study) finds that Certification has a large positive effect on the price of coffee”, although this paper determined that the premium consumers were willing to pay for Fair Trade certification was smaller than previous studies. (Carlson 16)

Fair Trade labeling produces a measurable response in the brain. Researchers from the University of Bonn conducted a two part study to discern the neural effects of Fair Trade labels. In the first part of the study, subjects were shown pictures of 80 different products, 40 with the Fair Trade emblem, and 40 identical items without the emblem. They were then prompted to choose how much they were willing to pay for each item. Not only were customers willing to pay more for each Fair Trade object, but fMRI scans revealed that while ‘buying’ these objects, the activity of the reward section of the subjects brains increased when the subjects were buying Fair Trade labelled items. For the second part of the study, a conventional chocolate bar was broken up into pieces for every participant and then equally distributed on two small plates. While the chocolate on the two plates were identical, scientists told subjects that one plate contained conventional chocolate, while the other was Fair Trade certified chocolate. When eating what they believed to be Fair Trade chocolate, fMRI scans showed “increased experienced taste pleasantness and intensity for the [Fair trade] label” (Enax et al 11)

At least some of the demand for Fair Trade chocolate can be attributed to positive, albeit unsubstantiated, perceptions that Fair Trade chocolate is healthier than non-Fair Trade chocolate. The ‘Halo Effect’, is a well known psychological phenomenon in which a singular good trait of a person or object leads people to apply additional good traits to the person or item. Companies can often be seen taking advantage of the halo effect by promoting organic, non-GMO, and locally grown products. Likewise, Fair Trade goods also tend to be perceived as having superior characteristics when compared to non-Fair Trade goods. In one study, subjects were given a description of a brand of chocolate. The control group was given no information about the chocolate, while the other group was it was told it was a Fair Trade product produced by a manufacturer that pays cocoa growers “50 percent more than the standard market price for cocoa, to ensure that the growers receive a fair wage for their efforts.” When the participants were later asked whether they believed the chocolate they had been presented with contained more, equal, or fewer calories compared to other brands, those who had been told that the chocolate was Fair Trade perceived it as lower-calorie than other brands. (Jacobs 1).

The moral arguments for Fair Trade products resonate with consumers. Numerous studies conclude because of the ethical considerations, consumers are interested in buying Fair Trade products. Selling Fair Trade chocolate makes sound economic sense and there is a demand for Fair Trade products. Are Fair Trade products readily available for purchase by American consumers? In order assess the availability of Fair Trade chocolate products I conducted a survey of five retailers: Whole Foods, Trader Joe’s, CVS and Rite Aid drugstores and Key Food supermarkets to determine the extent of their Fair Trade chocolate selection. Whole Foods and Trader Joe’s were chosen because they are two out of the three retailers listed on the Fair Trade America’s website. CVS and Rite Aid were chosen as representative of chain drug stores. Key Food was chosen as representative of a neighborhood supermarket. The survey was conducted the week of May 6, 2018. In order to correct for variations in offerings and out of stocks at different locations, two locations for each retailer were surveyed.

Whole Foods
Whole Foods is a supermarket chain with 470 stores, primarily in North America (Securities and Exchange Commission). Whole Foods has a strong history and association with social responsibility. As part of the Core Values listed on the website, Whole Foods highlights “We practice win-win partnerships with our suppliers”, a notion highly aligned with Fair Trade philosophy.  Each of the Whole Foods surveyed had an extensive selection of Fair Trade chocolates which comprised nearly all of the chocolate items for sale. The stores surveyed had approximately 100 different Fair Trade chocolate products for sale, from 16 companies. 

Brand 95 East Houston St. store  4 Union Square store
365 house brand 4  –
Alter Eco 4 5
Barethins 4
Divine 11 8
Endangered Species 11 10
Equal Exchange 4 4
Green & Black 9 7
Jelina  – 4
Lake Champlain 7 9
Lilly’s 9 8
Madecasse (Direct Trade) 7 7
Taza (Direct Trade) 5 5
Theo Chocolate 13 13
Unreal 5 5
Vosages 7
Whole Foods – private label 4 8
Total 97 100
Whole Foods FT chocolate
Whole Foods Fair Trade chocolate offerings (photo taken by author)

Trader Joe’s

Trader Joe’s is a supermarket chain with 474 stores nationwide (Trader Joe’s). The company does not highlight social responsibility, but rather “innovative, hard-to-find, great-tasting foods… that cut our costs and save you money.” While the company does not position themselves as placing a high value on socially responsible products, they do maintain lists Vegan, Gluten Free, and Kosher products.  Based on the “Halo Effect” described above, this might lead some customers to make the association with selling Fair Trade items as well. The Trader Joe’s stores surveyed had a very limited selection of Fair Trade Chocolates. 

Brand 14th St. store 31st Street store
TJ Batons 3 3
TJ Fair Trade Organic 1
Total 3 4
Trader Joes FT chocolate
Trader Joe’s Fair Trade chocolate offerings (photo taken by author)

CVS / Rite Aid

CVS is a pharmacy/convenience store chain with 8,060 stores and Rite Aid is a chain similar to CVS with 2,550 stores (Securities and Exchange Commision) CVS and Rite Aid cater to a much broader demographic than either Whole Foods or Trader Joe’s. Of the stores surveyed, the number of Fair Trade chocolate products were far below those sold at Whole Foods, and sold a similar number of Fair Trade chocolate items to Trader Joe’s. 

CVS

Brand 500 Grand Street store 253 1st Ave. store
Chauo 3
Endangered Species 1
Total 4 0
CVS FT chocolate
CVS Fair Trade chocolate offerings (photo taken by author)

Rite Aid

Brand 408 Grand St. store 81 First Ave. store
Bark Thins 3 2
Rite Aid FT chocolate
Rite Aid Fair Trade chocolate offerings (photo taken by author)

Key Food

Key Food is a cooperative of independently owned supermarkets located in the Northeast. Of the two stores surveyed, one sold no Fair Trade items while the other sold considerably more than CVS, Rite Aid or Trader Joe’s.

Brand 43 Columbia St. – store 52 Ave. A – store
Divine 11
Endangered Species 6
Green & Black 5
Total 0 22
Key Food FT chocolate
Key Food Fair Trade chocolate offerings (photo taken by author)

 

Despite the sound ethical and economic reasons for retailers to sell Fair Trade chocolate, cocoa sold with the Fair Trade label still captures a very low share of the cocoa market. Research indicates that consumers are interested in purchasing Fair Trade products and are willing to pay a premium. Whole Foods has tapped into this demand and demonstrates that it is possible for a retailer to offer an extensive selection of Fair Trade chocolate items. They however seem to be more the exception rather than the rule. If other retailers tapped into the demand and offered a more extensive selection of Fair Trade chocolate, it is likely that more Fair Trade chocolate would be purchased and more cocoa suppliers would share the benefits of Fair Trade.

 

Works cited

Cameron. “KEEP CALM AND ONLY EAT FAIR TRADE CHOCOLATE.” Keep-Calm-o-Matic, Keep Calm Network Ltd., http://www.keepcalm-o-matic.co.uk/p/keep-calm-and-only-eat-fair-trade-chocolate/.

Carlson, Adam P. Are Consumers Willing to Pay More for Fair Trade Certified Coffee? Are Consumers Willing to Pay More for Fair Trade Certified Coffee?


“Child Labour in the West African Cocoa Sector.” International Law and Policy Institute, 26 Nov. 2015, ilpi.org/wp-content/uploads/2015/11/20151126-Child-labour-in-the-West-African-Cocoa-Sector-ILPI.pdf.


“Chocolate Industry Analysis 2018 – Cost & Trends.” Franchisehelp.com, www.franchisehelp.com/industry-reports/chocolate-industry-analysis-2018-cost-trends/.


“Cocoa | 1959-2018 | Data | Chart | Calendar | Forecast | News.” Trading Economics, TRADING ECONOMICS, tradingeconomics.com/commodity/cocoa.


Enax, Laura, et al. “Effects of Social Sustainability Signaling on Neural Valuation Signals and Taste-Experience of Food Products.” Frontiers in Behavioral Neuroscience, vol. 9, 2015, doi:10.3389/fnbeh.2015.00247.

“Fairtrade Certified Products – Fairtrade America.” Fair Trade, Fair Trade, www.fairtradeamerica.org/Fairtrade-Products.


“Fair Trade Labels.” A Fair Trade Place, WordPress,

afairtradeplace.files.wordpress.com/2012/02/fair-trade-logos3.jpg.


Hainmueller, Jens, et al. “Consumer Demand for the Fair Trade Label: Evidence from a Field Experiment.” The Review of Economics and Statistics, vol. 97, no. 2, Feb. 2014, pp. 242–256., doi:10.2139/ssrn.1801942.


“International Cocoa Organization.” International Cocoa Organization, www.icco.org/about-cocoa/chocolate-industry.html.


Jacobs, Tom. “’Fair Trade’ Chocolate Perceived as Healthier.” Pacific Standard, Pacific Standard, 5 Jan. 2012, psmag.com/economics/fair-trade-chocolate-perceived-as-healthier-38894.


“Jens Hainmueller: Will People Pay More for Fair Trade Products?” Youtube, Stanford Graduate School of Business, 18 Feb. 2015, www.youtube.com/watch?v=fMiy1Y55DLA.


United States, Congress, Washington, D.C. “Edgar .” Edgar , SECURITIES AND EXCHANGE COMMISSION, 17 Nov. 2017.

www.sec.gov/Archives/edgar/data/865436/000086543617000238/wfm10k2017.htm.


United States, Congress, Washington, D.C. “Edgar.” Edgar, SECURITIES AND EXCHANGE COMMISSION, 14 Feb. 2018. www.sec.gov/Archives/edgar/data/64803/000155837018000707/cvs-20171231x10k.htm.


United States, Congress, Washington, D.C. “Edgar.” Edgar, SECURITIES AND EXCHANGE COMMISSION, 26 Apr. 2018. www.sec.gov/Archives/edgar/data/84129/000104746918003207/a2235393z10-k.htm.


“What Is Fair Trade.” Youtube, FairtradeANZ, 12 July 2017, www.youtube.com/watch?v=JoIZWd2q2Ec.


“WHERE IN THE DICKENS CAN YOU FIND A TRADER JOES.” http://www.traderjoes.com, www.traderjoes.com/pdf/Trader-Joes-Stores.pdf.

TAZA CHOCOLATE: HOW A SMALL COMPANY IS MAKING A BIG DIFFERENCE

Taza5


TAZA CHOCOLATE

HOW A SMALL COMPANY
IS MAKING A BIG DIFFERENCE


taza_chocolate_mission_large

In its origins, cacao relied heavily on the slave trade to fuel its ever-increasing demand (Martin, 2018). Despite the abolition of slavery in the mid 19th century, the modern day chocolate industry is still riddled with inherent ethical issues. In response to the persistent pervasiveness of injustices within the industry’s process, bean-to-bar brands have proliferated as a potential solution with a commitment to both the ethicality and culinary aspects of chocolate production; Taza Chocolate in Somerville, Massachusetts typifies one of these companies striving to produce delicious chocolate through ethical practices and a high degree of production transparency. Founded in 2005 by Alex Whitmore and Kathleen Fulton, Taza Chocolate produces “stone ground chocolate that is seriously good and fair for all” (Taza, 2017). Taza acts as an all-around ethical, socially-conscious and purpose-driven business.

Taza’s company culture is driven by its founder, who prior to opening his own company “apprenticed with Mexican molineros, learning their ancient chocolate-making secrets” (Taza, 2017). Taza offers an easy application process opening up more opportunities in making an effort to get natives from the countries that it sources its cacao from involved in its business processes.

Taza1
Owner Alex Whitmore carving patterns into a stone for grinding chocolate

Taza, meaning “cup” in Spanish, is reminiscent of the way Aztecs ritualistically consumed chocolate in liquid form using specially designed cups or vessels for this purpose (Coe, 1996). A nod to its rich history is also found in its design and packaging displaying a cacao pod and its signature mold in the form of the Mexican millstone, a stone that is traditionally used to grind chocolate.

“Taza founder Alex Whitmore took his first bite of stone ground chocolate while traveling in Oaxaca, Mexico. He was so inspired by the rustic intensity that he decided to create a chocolate factory back home in Somerville, MA. Alex apprenticed under a molinero in Oaxaca to learn how to hand-carve granite mill stones to make a new kind of American chocolate that is simply crafted, but seriously good. In 2005, he officially launched Taza with his wife, Kathleen Fulton, who is the Taza Brand Manager and designed all of the packaging.

Taza is a pioneer in ethical cacao sourcing. We were the first U.S. chocolate maker to establish a third-party certified Direct Trade Cacao Certification program. We maintain direct relationships with our cacao farmers and pay a premium above the Fair Trade price for their cacao. We partner only with cacao producers who respect the rights of workers and the environment.” (Taza, 2017)


THE CHOCOLATE SUPPLY CHAIN

BUYING AND SELLING CACAO


 

Taza2.jpeg
A traditional metate

Millions of hands spanning multiple continents are responsible for the production of the key ingredient in this beloved treat, but most consumers don’t have a sense of the complex intricacies of the supply chains involved in chocolate and the economic realities of the farmers who grow the crop.

The chocolate supply chain begins with the cultivation of cacao pods. After cacao cultivation, the pods are harvested and the seeds and pulp are separated from the pod. The cacao seeds are fermented and dried before being sorted, bagged, and transported to chocolate manufacturers. The cacao beans undergo roasting, husking, grinding, and pressing before the product undergoes a process called “conching,” in which the final flavors develop (Martin, 2018). Differences in the execution of each step influence the ultimate taste and consistency of the chocolate product.

Taza4

Today, approximately two million independent family farms in West Africa produce the vast majority of cacao. Each farm, between five to ten acres in size, collectively produce more than three million metric tons of cacao per year (Martin, 2018). While some of the farms grow crops like oil palm, maize, and plantains, to supplement their income, the average daily income of a typical Ghanaian cacao farmers is well under $2 per day.

The commercial process of purchasing cacao usually involves the farmers selling to intermediaries, who subsequently sell to exporters or additional  intermediaries. With each middle-man adding their own profit layers, the supply chain lengthens as well the opportunity for the corruption and exploitation of the growers and farmers.

In response to the social and economic injustices associated with the cacao supply chain, various organizations have been established with the common mission of improving ethical and corporate responsibility of global cacao practices. Many of these organizations have established criteria for certifications with the goal of enticing companies to comply with specified ethical requirements in exchange for public acknowledgement for doing so.

“Fair Trade,” a designation granted by the nonprofit of the same name, stands out as a recognizable stamp on many shelf-brands. Self-defined as an organization which “enables sustainable development and community empowerment by cultivating a more equitable global trade model that benefits farmers, workers, consumers, industry and the earth,” Fair Trade certifies transactions between U.S. companies and their international suppliers to guarantee farmers making Fair Trade certified goods receive fair wages, work in safe environments, and receive benefits to support their communities (“Fair Trade USA,” 2017).

Yet, while in theory Fair Trade seems to address many issues the cacao farmers face, critics of the certification point out there exists a lack of evidence of significant impact, a failure to monitor Fair Trade standards, and an increased allowance of non-Trade ingredients in Fair Trade products (Nolan, Sekulovic, & Rao 2014). So, while in theory certifications like Fair Trade offer the potential to improve the cacao-supply chain by ensuring those companies who subscribe to the certification meet certain criteria, the rigor and regulation of the criteria remains heavily debated.

 


FAIRER THAN FAIR-TRADE

BEAN-TO-BAR AND DIRECT TRADE


 

Taza6.jpeg

In contrast to Fair Trade, an alternative type of product sourcing that is growing in popularity and reputation is that of Direct Trade. Different from the traditional supply chain process, ‘bean-to-bar’ companies offer this as a potential solution for the injustices in the cacao industry. By cutting out the middle-men and working directly with cacao farmers, these small chocolate companies commit themselves to the highest ethical standards and quality (Shute 2013). The goal is that this bean-to-bar “pipeline will make for more ethical, sustainable production in an industry with a long history of exploitation” (Shute, 2013).

While providing some oversight on ethical practices, Fair Trade’s supervisory capacity does little to create a relationship between the farmers and the ultimate producers or to eliminate extraneous intermediaries diluting profit from both parties. Additionally, achieving a Fair Trade certification costs between $8,000 and $10,000, whereas Direct Trade costs the chocolate bar producer nothing.

This direct connection, allows the buyer and farmer to communicate fair prices, ensuring that the cacao farmers receive fair wages, working conditions, and support (Zusman, 2016). Furthermore, the transparency associated with the bean-to-bar process motivates the companies to keep up to date on ethical practices, and encourages the cacao farmers to take extra care the cultivation of their beans.

Taza sources its cacao from its “Grower Partners” in the Dominican Republic, Bolivia, and Haiti. Taza provides a detailed profile for each of its cacao producers which features information including the country region, number of farmers, duration of partnership, tasting notes which contribute to the terroir of their chocolate, history of the region, and pictures of the farmers with Taza employees. The thorough information Taza provides truly puts faces to the names of the farmers and displays Taza’s direct and personal engagement with their cacao producers.

 


THE TAZA DIFFERENCE

TRANSPARENCY AND DIRECT-TRADE SOURCING


 

Taza3.jpeg

Alex Whitmore, an innovator of the bean-to-bar movement founded Taza with a commitment to “simply crafted, but seriously good chocolate,” and as “a pioneer in ethical cacao sourcing” (Organic Stone Ground Chocolate for Bold Flavor, 2017).

The mission of Taza Chocolate is “To make and share stone ground chocolate that is seriously good and fair for all” (Taza, 2017). In the dual parts of their mission: “seriously good” and “fair for all”, Taza has become a leader in using the quality and ethicality of their products to empower and respect those often overlooked workers at the very front of the supply chain. Looking first at quality, Taza has seen success as a maker of “seriously good” chocolate (Taza, 2017). Their products are now available all over the country and internationally, in specialty, natural and gift stores. Fine restaurants have used Taza Chocolate in their kitchens and numerous major food publications have featured the company. But these are just outward indicators of what goes on behind the scenes. For one thing, their “seriously good” chocolate seeks to remain true to its cacao origins and acknowledge where it comes from through proper and authentic taste. While other chocolate makers may do as they please to conform to the tastes of the consumer masses, Taza Chocolate caters to the genuine recipes and processes of the geography and culture within which it was conceived.

In addition to publishing their Direct Trade Program Commitments, Taza provides access to their transparency report, cacao sourcing videos, and their sustainable organic sugar.  Seemingly, Taza exemplifies the archetype bean-to-bar company.

Taza chocolate products carry five certifications to ensure safe labor practices as well as organic ingredients, whose integrity is guaranteed by having their “five Direct Trade claims independently verified each year by Quality Certification Services, a USDA-accredited organic certifier based in Gainesville, Florida” (Taza, 2017).

“Taza is big on ethical cacao sourcing, and is the first U.S. chocolate maker to establish a third-party certified Direct Trade Cacao Certification program, meaning, you maintain direct relationships with your cacao farmers and pay a premium above the Fair Trade price for their cacao.” (Taza, 2017)

In its Transparency Report displayed below, Taza even discloses what it pays for its cacao beans. 

Taza_DT_WebGraphics_KPIs_2017_1024x1024

Bean-to-bar chocolate companies appear to be a viable potential solution, albeit slow and on a more micro level, to addressing the issues in the cacao-chocolate supply. Because currently the consumer base does not seem to possess a critical awareness of different certifications, the bean-to-bar companies must continue to pioneer more moral standards until enough customers catch up and until demand forces the bigger chocolate vendors to take a similar approach. Until then, tackling the exploitation embedded in the cacao-supply chain falls exclusively on the shoulders of the chocolatiers equally loyal to both chocolate and social responsibility.

Taza Chocolate is undoubtedly making large efforts to be a part of the solution rather than a part of the problem. Rather than allowing consumers to blindly focus on the end product of the chocolate itself, Taza encourages consumers to acknowledge the environment and culture from which the chocolate originates. Often forgotten farmers and food artisans are brought to the forefront instead of being relegated to the archives of unseen histories. Indeed, Taza gives growers “an alternative to producing low quality cacao for unsustainable wages” (Taza, 2017). Taza’s operations may still be in its nascent stages, but it is exciting to see even a small company lead the entire chocolate industry towards a more ethical and sustainable future.

 


References


 

Coe, Sophie D., and Michael D. Coe. The True History of Chocolate. New York: Thames and Hudson, 1996. Print.

Fair Trade USA. N.p., n.d. Web. 03 May 2017.

Martin, Carla. “Modern Day Slavery.” Lecture, Chocolate Lecture, Cambridge, March 22, 2017.

Martin, Carla. “Alternative Trade and Virtuous Localization/Globalization.” Lecture, Chocolate Lecture, Cambridge, April 04, 2017.

Martin, Carla. “Slavery, Abolition, and Forced Labor.” Lecture, Chocolate Lecture, Cambridge, March 01, 2017.

Nolan, Markham, Dusan Sekulovic, and Sara Rao. “The Fair Trade Shell Game.” Vocativ. Vocativ, 16 Apr. 2014. Web. 03 May 2017.

“Organic Stone Ground Chocolate for Bold Flavor.” Taza Chocolate. N.p., 2015. Web. 08 May. 2018. <https://www.tazachocolate.com/&gt;.

Shute, Nancy. “Bean-To-Bar Chocolate Makers Dare To Bare How It’s Done.” NPR. NPR, 14 Feb. 2013. Web. 03 May 2017.

Taza Chocolate. “Sourcing for Impact in Haiti.” Vimeo. Taza Chocolate, 03 May 2017. Web. 03 May 2017. Video

 

Zusman, Michael C. “What It Really Takes to Make Artisan Chocolate.” Eater. N.p., 11 Feb. 2016. Web. 03 May 2017.


Media


Taza Chocolate. (2018) Header Image

Taza, Chocolate. (2018). “Stone Ground Chocolate”

Chocolatenoise.com (2018).  “Alex Whitmore”

Chocolatenoise.com (2018).  “A traditional metate”

Chocolatenoise.com (2018).  “Taza chocolate making process”

Chocolatenoise.com (2018).  “Whitmore with farmers”

Youtube. (2012).  Taza on fair trade

Chocolatenoise.com (2018).  “Rotary stone”

Taza, Chocolate. (2018). “Direct trade”

Vimeo.com. (2006). Taza Chocolate “Bean to Bar”

Nestle Cocoa Plan: Not Quite Enough

Child labor in the cocoa industry has long been a hot topic embroiling nations, big chocolate companies, consumers, and more. Although some children may simply be assisting their family financially, many are victims of what the International Labor Organization defines as the “Worst Forms of Child Labor,” which includes work that is “likely to harm the health, safety or morals of children.” (ilo.org) In an effort to source sustainable cocoa and end the use of child labor in the cocoa industry, some big chocolate companies have devised their own plans and certification programs meant to indicate their commitment to the cause. The Nestle company in particular has branded itself as the big chocolate company that is doing the most to eliminate child labor (Nestle Tackling Child Labor report).  

Screen Shot 2018-05-03 at 1.33.32 PM.png

 

 

 

(http://www.childlaborcocoa.org/images/Payson_Reports/Tulane%20University%20-%20Survey%20Research%20on%20Child%20Labor%20in%20the%20Cocoa%20Sector%20-%2030%20July%202015.pdf)

Despite the recent efforts, the problem of child labor has actually gotten worse. In a study that was conducted in 2013 and 2014, the number of children aged 5 through 17 years who worked in dangerous conditions on cocoa farms in Côte d’Ivoire grew by 260,700 in just 5 years (Tulane Report). While Nestle has made a comparatively thorough analysis of the problem of child labor in their supply chain through the creation of their own independent certification plan, the Cocoa Plan, many of their methods are opaque or inadequate; therefore, the plan may vindicate Nestle to the public, but does not go far enough to actually eliminate child labor.

Recent outrage over the issue of child labor on cocoa farms can be partially traced to the 2000 film Slavery: A Global Investigation that details the dangerous working conditions on Côte d’Ivoire cocoa farms (True Vision). After the release of the film and “following pressure and outrage from civil society groups and media outlets, large chocolate and cocoa corporations –– including Nestlé –– responded by claiming that they did not know about the situation and, like the public, were concerned.” Despite this supposed outrage, “For the past 15 years, Nestle and its partners in the Cocoa Industry have been intensely resisting government regulation regarding eliminating WFCL in their global cocoa supply chain” (Wood 4). In this context of mixed signals and discrepancy between Nestle’s actions and what they publicly displayed,  Nestle launched their Cocoa Plan in 2009. The plan is both an initiative and certification program that aims to improve farmer training, plant propagation, and improve work conditions, especially for children (Nestle “The Cocoa Plan” 2009)

Screen Shot 2018-05-03 at 1.34.50 PM

(http://newspapers.digitalnc.org/lccn/sn92074055/1910-07-29/ed-1/seq-2/)

One part of the Cocoa Plan that is honorable, and stands in contrast with how Cadbury handled slave labor in its supply chain during the early 1900’s, is that Nestle clearly and quickly acknowledges that child labor is present in its supply chain. Nearly a century before the outrage that prompted Nestle to create its Cocoa Plan came concern that slave labor was present in the Portuguese West African cocoa farms that Cadbury sourced from. In response, Cadbury hired Joseph Burtt to investigate the issue. However, “Burtt’s report…appeared more than six years after Cadbury Bros. first learned that slave labor was used in the growing of cocoa beans in Sao Tome and Principe and four years after the company decided to hire an agent to visit Portuguese West Africa” (Satre 98). Cadbury and another chocolate firm, Rowntree, were concerned about the implications of releasing such a report that indicated their use of slave labor. Therefore, it took an unusual amount of time for Cadbury to publish its findings and admit to the problem. Even with the evidence, William Cadbury remained skeptical of the scope of the issue and “while he was against the use of slave labor, he did not equate the labor of Sao Tome to that of other forms of slavery reported in Africa” (Satre 19).

 

//players.brightcove.net/2111767321001/default_default/index.html?videoId=4780236677001#t=2m27s

(http://fortune.com/big-chocolate-child-labor/)

Rather than withholding the truth or questioning the reality of labor conditions in West Africa, Nestle admits in the Cocoa Plan that “We know there are children working on farms in Cote d’Ivoire in areas where we source cocoa. No company sourcing cocoa here can guarantee they’ve eliminated the risk of children working in their supply chain” (Nestle Cocoa Plan Better Lives). As the Fortune video indicates, big chocolate companies often claim plausible deniability when it comes to child labor since there are many middlemen that stand between them and the actual laborers. As Brian O’Keefe acknowledges in the video, consumers are now demanding that big chocolate companies like Nestle take responsibility (O’Keefe). Therefore, Nestle sets itself apart from other chocolate companies and appeals to consumers’ desire for transparency by admitting to the issue. However, even in their statement admitting responsibility, Nestle still inserts a phrase that absolves them from any actual wrongdoing. By claiming that there is no company sourcing from Cote d’Ivoire that can ‘guarantee’ that there is no child labor in their supply chain, Nestle admits to the problem, but does not admit to guilt. Nestle’s Code of Conduct prohibits child labor and Nestle’s Executive Vice-President for Operations admits that “The use of child labour in our cocoa supply chain goes against everything we stand for” (Clarke, Nestle Cocoa Plan Better Lives). Despite their adamant position against child labor, Nestle continues to source from areas where it is endemic. While the effectiveness of boycotts is debated, still sourcing from areas with areas known for child labor indicates that Nestle adheres more to its moral mission in speech than it does in action.

Screen Shot 2018-05-01 at 1.03.38 PM.png

(https://www.nestlecocoaplanreport.com/sites/default/files/2017-10/NestleCocoaPlanReport2017_EN_0.pdf)

 

Nestle’s methods in its child labor monitoring and remediation program are inefficient and the scope of the program is relatively minimal. Nestle advertises in its Cocoa Plan that “In 2017, 51% of children identified are no longer in child labour” (Nestle Cocoa Plan 2017). While this initially seems like a significant improvement, it is important to distinguished how and how many children are ‘identified.’ The method in which child laborers are identified is outlined in Step 2 of the remediation program: “A child is spotted (or self-declares) engaging in a hazardous activity” (Nestle Cocoa Plan 2017). This is an extremely inefficient method since spotting child laborers requires a large number of personnel traveling from farm to farm observing practices. Self-declaring is also an unlikely occurrence as some children may not know the dangers associated with their labor and if they did, they may be too scared to report anything as it might implicate their family. Therefore, the number of children actually identified by Nestle is likely relatively low when compared to the true number. The lack of detailed information in the Cocoa Plan around this issue was picked up by an investigative report from the Watson Institute at Brown University, which states that “The researcher is unable to decipher what proportion of Nestle’s co-ops have Child Labour Monitoring and Remediation Systems. This is problematic because it serves as a barrier to criticizing Nestle for not taking enough action” (Wood 10). Essentially, Nestle provides vague information to indicate that it is taking some degree of action, but the extent of its action and operations remains a mystery. Furthermore, The Cocoa Plan itself hardly covers a majority of Nestle’s Cocoa. In fact, only “Around a third of Nestlé’s total global cocoa supply is currently bought from producers covered by the Nestlé Cocoa Plan” (Wood 10). Therefore, it can be estimated that the areas covered by this child labor monitoring and remediation program are a similarly small proportion. Even cocoa that is completely certified under the Cocoa Plan is not a guarantee that it has not been produced using child labor. Nestle admits that “7,002 Children [were] identified working on farms or in communities covered by the Nestlé Cocoa Plan” (Nestle Cocoa Plan 2017). This strips the certification program of clarity and even some of its legitimacy when it comes to child labor, as Nestle wishes to eliminate child labor, but still allows cocoa made with it to pass their certification.

One strong aspect of the Cocoa Plan is its analysis of the barriers children in cocoa growing regions face in receiving an education. While education is certainly important to the well-being of the children, it is still not the most effective way to end child labor. Nestle began its school building program in West Africa in 2011 and has since built or refurbished over 42 schools (Nestle Cocoa Plan Better Lives). While this is certainly a laudable achievement, Nestle also recognizes that children face far more nuanced obstacles than simply not having a school building. One such obstacle for girls in particular is that “Many schools in Côte d’Ivoire do not have toilets. Girls find this particularly difficult as they have to go further into the bush to relieve themselves. There, they are at greater risk of being bitten by snakes or insects, and there have also been cases of girls being harassed” (Nestle Cocoa Plan 2017). The lack of toilets may cause girls to miss school more often and may negatively affect their performance when they are in school. Another key obstacle that Nestle identifies is the “lack of a birth certificate, which is compulsory for entry to secondary education. Since the start of the programme we have enabled 4,517 children to continue their education by providing them with a birth certificate” (Nestle Cocoa Plan 2017). Therefore, Nestle shows that they have a more in depth and comprehensive understanding of and action plan when it comes to education. They both address the lack of physical buildings, while also addressing challenges to attending school in the first place. However, one important statistic that is tucked away in the Cocoa Plan report is that 17.5% of children who attend schools in Cote d’Ivoire also participate in child labor versus 23.4% of children who do not attend schools (Nestle Cocoa Plan 2017). This is a relatively minor decrease and indicates that access to an education is not a panacea for preventing children from working. The children who go to school still have to work face a serious burden, indicating that child labor is not just a result of a lack of alternatives, but is a result of greater challenges.

The Cocoa Plan lacks a plan to implement a crucial method to ending child labor: ensuring that the parents can earn enough to support their family. A March 2018 report by Stop the Traffik notes that while Nestle provides farmers with training and help improving productivity, it “Has yet to commit to paying farmers more for their cocoa and does not currently have any long-term plans for a living income” (A Matter of Taste). Writer Beth Hoffman argues in her Forbes article, 4 Reasons Why Nestle Cocoa Plan is Not Enough, that “The only way to truly ensure children can go to school is to guarantee their parents a living wage” (Hoffman). Thus, Nestle has outlined an elaborate plan that helps farmers and childrens in a myriad of ways, except for perhaps the most effective way. While they publicize that they are committed to eliminating child labor, their actions again indicate that their words do not match their actions.
ChocolateCertifications

(Lecture Slides)

Another flaw of the Cocoa Plan is the fact that it is a certification program in the first place. Fairtrade, another certification that sets various environmental and social standards and aims to pay growers a higher premium for their crops, has high levels of trust and recognition among consumers in Europe and the USA (Globescan). Consumers may not readily understand or recognize the Cocoa Plan in the same way. This may complicate decision making for consumers who may simply begin to overlook certifications in general. Beth Hoffman argues that “With more than 200 “ecolabels” now available on products, it is impossible for consumers to know (let alone verify) that every seal or logo claiming sustainability is actually making a clear difference in the world” (Hoffman).  This issue of verification is important. Although Fairtrade has its own flaws, the fact that it is a 3rd party certification gives it legitimacy and a reputation as unbiased, which builds trust among consumers that the chocolate will actually benefit growers instead of just big chocolate companies.

In an economic system where companies sometimes have just as much agency and ability as a country to enact social and economic change, it is honorable to see the Nestle Company acknowledge the problem of child labor in the cocoa that it sources and outline steps it is taking to eliminate it. Although the Cocoa Plan may sound adequate to the general public, looking at its nuances reveals how some parts may be flawed, misleading, or incomplete. Overall, the Cocoa Plan does not seem to go far enough as it does not include some of the most effective ways of ending child labor. As the Nestle Cocoa Plan plays out, the ability for profit driven companies to effect social change will be put to the test.

Works Cited

2013/14 Survey Research on Child Labor in West African Cocoa Growing Areas. Report. School of Public Health and Tropical Medicine, Tulane University. July 30, 2015. Accessed May 1, 2018. http://www.childlaborcocoa.org/images/Payson_Reports/Tulane University – Survey Research on Child Labor in the Cocoa Sector – 30 July 2015.pdf.


A Matter of Taste. Report. STOP THE TRAFFIK Australia Coalition, 2018.


“Better Lives.” Nestle Cocoa Plan. Accessed May 01, 2018. http://www.nestlecocoaplan.com/better-lives/.


Clarke, Joe Sandler. “Child Labour on Nestlé Farms: Chocolate Giant’s Problems Continue.” The Guardian. September 02, 2015. Accessed May 01, 2018. https://www.theguardian.com/global-development-professionals-network/2015/sep/02/child-labour-on-nestle-farms-chocolate-giants-problems-continue.


Globescan. “High Trust and Global Recognition Makes Fairtrade an Enabler of Ethical Consumer Choice.” News release, October 11, 2011. Globescan. Accessed May 01, 2018. https://globescan.com/high-trust-and-global-recognition-makes-fairtrade-an-enabler-of-ethical-consumer-choice/.


Hoffman, Beth. “Love Chocolate? 4 Reasons Why Nestlé’s Cocoa Plan Is Not Enough.” Forbes. May 22, 2013. Accessed May 01, 2018. https://www.forbes.com/sites/bethhoffman/2013/05/22/4-reasons-why-nestles-cocoa-plan-is-not-enough/1.


Nestle. “Nestlé and Sustainable Cocoa ‘The Cocoa Plan’.” News release, October 2009. Nestle.com. Accessed May 1, 2018. http://www.nestle.com/asset-library/documents/media/news-and-features/2009-october/the-cocoa-plan.pdf.


O’Keefe, Brian. “Inside Big Chocolate’s Child Labor Problem.” Fortune. March 01, 2016. Accessed May 01, 2018. http://fortune.com/big-chocolate-child-labor/.


Satre, Lowell Joseph. Chocolate on Trial Slavery, Politics, and the Ethics of Business. Athens, OH: Ohio Univ.Press, 2005.


Slavery: A Global Investigation. Directed by Brian Woods and Kate Blewett. True Vision, 2000. Accessed May 1, 2018. https://truevisiontv.com/films/details/90/slavery-a-global-investigation.

Tackling Child Labor. Report. 2017. Accessed May 1, 2018. https://www.nestlecocoaplanreport.com/sites/default/files/2017-10/NestleCocoaPlanReport2017_EN_0.pdf.

Wood, Madeleine. An Investigation Into Nestle’s Efforts To Establish Credibility In Its Global Cocoa Supply Chain. Master’s thesis, Brown University, 2015. Watson Institute. 4-10.

“Worst Forms of Child Labour.” International Labor Organization. Accessed May 01, 2018. http://www.ilo.org/ipec/facts/WorstFormsoffChildLabour/lang–en/index.htm.

The cacao production workforce in Ecuador throughout history

For its historical role in the growth and agrarian features of the country and its print on the national culture, the production of cacao constitutes without a doubt a relevant subject with regards to the Ecuadorian economy and society. As central to the nation as the cultivation of cacao can be, it seems however that this has not been reflected on the life conditions of its main producers.

treasure

***

The origin – 3300BC

As explained by Professor Martin, Carla D. from Harvard University, the cacao tree (Theobroma cacao L.), is native from the Amazonian basin on the foothills of the northern Andes, a region that spreads on what are now Ecuador and Colombia. A ceramic pottery dating 3300BC and found in Ecuador’s southern Amazonian region of Zamora Chinchipe, contained microscopic remnants of cocoa, suggesting that cocoa beans were being harvested and consumed there more than 5,000 years ago.

 

The beginning of the colonial period (1530- 1750)

Cacao production became a business under the colonisation of the territory by the Spaniards. «Around 1600, the collection and exploitation of the cacao beans constituted one of the most important activities of the old province of Guayaquil. Almost 9 boats were leaving annually the port transporting cacao» (Chiriboga, 2013: 27).

The agrarian structure then developed trough the system of Encomiendas, large land concessions (Haciendas) received by the colons with a right of serfdom over the native population. Theoretically they were in charge of educating and baptizing the Indians under their guardianship, in practice they were reducing them to slavery through the necessary tribute (gold, chicken, maize, cacao and other foodstuffs) as well as through services of personal nature. Thousands of Indians died. In 1600 there were approximately 500 Encomiendas in Ecuador.

Meanwhile, the trade of slaves had started in the middle of the XV century in Spain. Slaves were brought by the colons mainly as workforce for the agricultural labour. In fact, native populations (often coming from the highlands) were not considered as performant for such hard labour under the hot and humid climatic conditions of the coastal area where most of the cocoa cultivation was taken place. Mortality rate amongst slaves was high and average life expectancy extraordinarily low. Approximately 30% of the slaves died in the process of adaptation to their new life (environment, diseases) therefore the system of control and repression was extremely hard as it had to face rebellions and escapes from the slaves.

 

The First Cacao Boom (1779-1842)

Following the Bourbon reforms, the departure of the Jesuits and the authorisation in 1789 by the king Charles IV to cultivate and export cacao from the region, the food crops and tobacco plantations turned into cacao plantations (in high demand in Europe). Cacao production then spread all over the country and the first large cacao Haciendas were born. Exports went from 5,600 metric tons (MT) to 15,700 MT in 1843. Spain was the first market, then England and Germany.

The cacao crop did not require year-round attention and it was often just as profitable for an owner to let his slaves buy themselves and then hire them to work for wages during the high-season. It is estimated that between 1780 and 1820 several hundred slaves took advantage of this new reality.

More details on the slavery and manumission in Ecuador are available in the following article:

http://www.elcomercio.com/tendencias/esclavitud-manumision-tierras-ecuatorianas-ideas.html

This first boom, led by the exports to foreign markets, was also achieved through the movement of the workforce from the highlands. Indeed, an important migration of the native people from the highlands to the coastal area took place that was entirely related to the cacao production. Around 1830 there were many more day laborers than small landlords/producers on their own piece of land.

 

The second cacao boom (1870-1925)

During the Second Cacao Boon the production increased consistently up to 100,000 MT annually and Ecuador became the first world producer supplying 15 to 25% of the international demand.

Soon appeared a reduced group of 20 families that controlled more than 70% of the producing area. These Hacendos were known as the « Gran Cacao » and accumulated land that were initially acquired by indigenous people during the colonial period. These appropriations – often dishonest –concentrated power and created an even bigger contrat between this new oligarchy and the workforce made of farmers brought from the highlands and former slaves (abolition of slavery was in 1861).

elgrancacao

Source: Anecacao website (Asociación Nacional de Exportadores de Cacao – Ecuador)

 Indeed, the « Gran Cacao » enjoyed the increased world demand, high prices but above all, the cheap domestic workforce that were scarcely remunerated and submitted to high debts.

« Indians and negros of Ecuador do the work of cacao and other plantations. These unfortunate creatures are slaves. They are not called slaves. Slavery is not permitted by the constitution of the Republic. […] The explanation is very simple: every plantation worker must buy what he needs at the plantation store. He is given credit and encouraged to get into debt. Once in debt, he is a slave. He has no hope of clearing his debt. » (People of All Nations: Their life today and story of their past, J.A. Hammerton P.1627)

In this context, arose new popular revendications and the first workers associations and syndicates were created.

 

The cacao crisis (1920)

The increase of the world production in the new colonies such as Ivory Coast or Indonesia as well as in Brazil (trees had finally reached maturity) and the start of the First World War led to a market saturation, lower demand and falling prices. Finally, an outbreak of Monilia and Witches’ Broom diseases (1915-1920) finished to depress the cacao industry locally. The production dropped to 15,000 MT in 1930 and soon plantations were abandoned by their owners.

 

The current model (since 2000)

Nowadays the country is a major player in the international cocoa market not due to volumes but to quality. The demand for specialty cocoa is growing and outweighs supplies which creates a very attractive niche market. Ecuador’s cacao annual production is above 230,000 MT since 2013 and continues rising:

https://www.statista.com/statistics/497880/production-of-cocoa-beans-in-ecuador/

Ecuador counts approximately 100,000 cacao producers (not always exclusively), out of which 85% cultivate less than 10ha, 15% between 10 and 20ha and 5% more than 20ha.

The increasing demand for organic and Fairtrade cocoa also helps to improve small producers’ income. A survey made with a representative group of cocoa producers in the Manabí province showed that 69.8% produced or have produced at one point with a Fairtrade label.

However, one of the representatives of the Kallari association (https://www.kallari.com.ec/), explained that the annual cost, some non-adapted procedures and the lack of selling premium were the reasons why they stopped their Fairtrade certification. Hence extent of Fairtrade certification locally is not necessarily representative of the actual treatment of the producers. What is more representative is the rise of producers’ associations, sometimes establishing their own bean to bar transformation and selling onto the domestic or foreign market. As such they control the whole value chain and ensure fair revenues for the whole community. One representation of this trend on the domestic market is Kallari, composed of 850 producers (mainly Quechua families) from 21 communities of the Tena region in the Ecuadorian Amazon:

https://www.aljazeera.com/video/news/2017/04/ecuadors-cocoa-farmers-making-fair-trade-chocolate-170410145552552.html

 

 ***

Although slavery and forced labour constitute a large part of the history of the commercial cacao production in Ecuador (for 3 centuries), Ecuador’s cacao industry has taken a drastic turn in the last 100 years placing it in the top 10 world producers targeting the niche market of specialty cacao produced mainly by small farmers more and more organised into producers associations that allow them to capture a fairer revenue for their cacao beans or a bigger part of the value chain through transformation of the raw products and marketing of the bars.

 

 

Works Cited

Martin, Carla D.“MesoAmerica and the « food of gods »”, Harvard University, AAAS E-119, 2018

Martin, Carla D.“Slavery, abolition and forced labour”, Harvard University, AAAS E-119, 2018

Chiriboga, Manuel (2013). Jornaleros, grandes propietarios y exportación cacaotera 1790-1925. Quito: Universidad Andina Simón Bolívar.

Vassallo, Miguel Diferenciación y agregado de valor en la cadena ecuatoriana del cacao / Miguel Vassallo. — 1ª. ed. — Quito: Editorial Instituto de Altos Estudios Nacionales IAEN, 2015

Wilmer S. Sepúlveda, Irinuska Ureta, Claudia Mendoza & Louiza Chekmam (2017): Ecuadorian Farmers Facing Coffee and Cocoa Production Quality Labels, Journal of International Food & Agribusiness Marketing, DOI: 10.1080/08974438.2017.1413612. P 7

Radi y Martínez, 2008: 4.

Melo & Hollander, 2013

 

Web Sources

https://gain.fas.usda.gov/Pages/Default.aspx

http://www.bbc.com/news/world-latin-america-22733002

 

 

 

Chocolate Lessons: Knowledge Gleaned from Chocolate Bars Sold in the Natural Foods Aisle

On average, Americans consume 12 pounds of chocolate per person each year or a little less than a quarter pound of chocolate per week. A typical chocolate bar ranges from 1.5-3.5 ounces. Therefore, 12 pounds of chocolate equates to enjoying 55-128 chocolate bars (depending on its size) per year! It is safe to say, for better or for worse, chocolate has become an integral part of the American diet.

Historically, chocolate was consumed for medicinal purposes, primarily as a source of nourishment and energy. Today, the developed world struggles with being simultaneously over nourished and malnourished from an imbalanced diet. Nevertheless, chocolate health claims persist, usually in reference to darker chocolates. Beneficial properties of cocoa include antioxidant, cardiovascular, and psychological enhancement, which are linked to its polyphenol, flavanol, and caffeine content (Castell, Pérez-Cano, and Bisson, 2013). These health claims are not present on chocolate bar labels, though.

In the last couple of decades, food packaging has actually become quite informationally dense. How can you sift through all of the information on chocolate labels to know what’s really important? Additionally, what can we learn from a chocolate bar’s packaging, besides its nutritional content? The goal of this blog post is to help decipher the various symbols, certification meanings, and key words that appear on chocolate wrappers.

Ultimately, you, as the consumer, have to decide what is important to you and what you are looking for in your chocolate purchases, not only in terms of taste but also social responsibility. Equipping yourself with the knowledge to know what to look for, and what symbols, certifications, and other words on chocolate packages mean, makes informed chocolate purchases a much smoother process and ensures you have the best chocolate buying experience possible. Before chocolate tasting can become embodied knowledge, it requires repetition in order to pick up on flavor nuances of single origin chocolate or to be able to tell if a chocolate bar was made with over-roasted cacao beans. In the same way, learning the stories and processes behind the chocolate you are eating requires some research, occasionally beyond the label itself.

I studied the chocolate bars in the natural foods aisle of a Stop & Shop grocery store in the greater Boston area to see what information could be gleaned from the chocolate labels within this section. I did not include enrobed chocolate candies within this aisle, “regular” chocolate bars (i.e., Hershey’s) in the main candy aisle or those present in the checkout lanes. I chose to focus on the chocolate bars within the natural foods aisle because, typically, these brands offer more information and stories about cacao procurement, processing, and its impact on people or the environment, whereas chocolate produced by most Big Five brands only provide nutritional information on the back of the wrapper. The Big Five chocolate brands include well-known companies: Hershey, Mars, Cadbury, Nestle, and Ferrero (Allen, 2010).

The type of consumer who shops for chocolate in the natural foods aisle is most likely not just looking for a sugar fix because there are cheaper ways to meet that need. The intended audience includes individuals who may be interested in supporting social or environmental causes, and who are probably health conscious, even though it is still chocolate. Additionally, he or she may have a sophisticated or informed palate, and prefer quality chocolate with nuanced flavors. The natural foods aisle typically offers products that are slightly more expensive than its conventional counterparts, so the consumer is not making his or her choice of chocolate based solely on price point. Rather, the consumer possibly has a higher disposable income and is able to spend two or three times as much money on a chocolate bar from this section than on chocolate from one of the large chocolate corporations previously mentioned.

The natural foods aisle in Stop & Shop offers eight different brands of chocolate bars: Chocolove XOXOX, Green & Black’s, Divine, Theo, TCHO, LILY’s, Endangered Species Chocolate, and Alter Eco. These bars are being sold for $2.50-$3.99, with Chocolove XOXOX being the cheapest because it was on sale. Divine, LILY’s, and Alter Eco lands at the upper end of the options. The TCHO 70% dark chocolate bar usually retails for $4.29, but happened to be on sale. Still, these are moderately priced “good” chocolate bars compared to other specialty chocolate companies and retailers who sell their bars for about double the price. The juxtaposition of these brands, with a $1.00 (or less) Hershey’s chocolate bar, provides an interesting comparison in both price and taste.

The eight brands offer bars in a variety of flavors ranging from 34% milk chocolate to 85% dark chocolate with the option of added fruit or nut pieces. The white chocolate selection was nonexistent in this section at this particular grocery store. However, just for informational purposes, one brand (outside of the eight focused on here) does contribute a white chocolate peanut butter cup.

Just a few of the brands provide chocolate bars made from single origin cacao, which might be a more common provision at specialty retail stores. Both TCHO and Divine use Ghanaian cacao, and Alter Eco sources its cacao beans from Ecuador. Chocolove XOXOX states on the back of the wrapper that their Belgian chocolate bars are crafted with African cocoa beans. This somewhat vague statement only alludes to the fact that their beans do not come from Central or South America, or Southeast Asia but could be sourced from one or more of the cacao producing countries within the large continent of Africa. Additionally, Green & Black’s credits Trinitario cacao beans for giving their chocolate a rich and unique flavor profile. Trinitario cacao beans are thought to embody the best qualities of its genetic parents, the Criollo and Forastero varieties, with the hybrid cacao being both hardy and possessing a nice flavor profile (Prisilla, 2009). Likewise, the purpose of brands specifying single origin or the use of a single cacao variety suggests an increase in quality or flavor characteristics that add value to the end product. Thus, the price of these types of bars is usually slightly higher compared to mixed bean origin or variety, and especially compared to bulk cacao.

There are a few things that stand out upon taking a closer look at the packages. First, Alter Eco is the only brand that uses a cardboard packaging to house its chocolate. All of the other brands wrap their bars in a glossy paper. In both cases, the chocolate is likely sealed in foil before receiving either the glossy paper or cardboard outer wrapper. While the outer cardboard layer looks visually appealing and feels nice to the touch, it also makes the bar appear larger than it actually is. The 2.8 ounce Alter Eco chocolate bar looks bigger than the 3 ounce LILY’S bar sitting next to it on the shelf, as the image shows below. Thus, most consumers probably believe they are purchasing a larger chocolate bar if they do not read the front of the package and realize the chocolate bar is smaller by weight than some other options.

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Alter Eco 2.8 ounce chocolate bar

Like several other brands, Theo includes a brief description about the company and their procurement and processing practices on the back of the package. Here, Theo shares it is a bean to bar chocolate company, which means the company purchases the fermented and dried cacao beans, and then carries out each of the remaining processing steps (about 10) from roasting to packaging, according to their unique preferences. Thus, the company oversees the entire chocolate making process and can tweak each batch according to its needs and the desired outcome, making it a true craft.

Green & Black’s label does not readily offer information about the company’s processing practices other than it uses fair trade and organic ingredients. Interestingly, the backside of the label does say Mondelez Global LLC distributes Green & Black’s chocolate bars. Mondelez is one of the largest global snack food companies and now owns Cadbury, one of the Big Five chocolate companies. Last year, Mondelez even attempted to acquire the Hershey Company, but Hershey declined the offer (Bukhari, 2017). Thus, Mondelez is a significant player within the global food system. This association alone may deter some consumers from purchasing Green & Black’s chocolate.

Another unexpected but perhaps pioneering find is LILY’s, whose chocolate bars are sweetened with the natural sweetener, Stevia, and erythritol, a sugar alcohol. Additionally, LILY’s adds inulin, a fiber commonly used as a bulking agent. These are not traditional chocolate bar ingredients, but perhaps the fewer calories and grams of sugar allow individuals with specific dietary restrictions to still purchase fair trade chocolate. The bar also boasts that it is still “100% indulgent.”

Before dissecting the chocolate bars’ various certifications, I want to look at Divine’s commitment to its producers. In the West, chocolate consumption has long been feminized, associated with temptation and indulgence (Robertson, 2009). Women are important as both chocolate consumers and producers, something Divine has recognized. The two images above depict Divine’s pledge to support the female cacao farmers within Kuapa Kokoo (cocoa co-operative) in Ghana and make sure their voices are heard. In doing so, these female business owners are positioned as powerful actors within the cacao and chocolate industries, rather than being viewed as exploited workers in an underdeveloped country (Leissle, 2012). This has significant implications not only for the female producers, but also culturally, and for future standards within the chocolate industry.

This final section includes a brief discussion on food certifications. Fair trade certification is the most popular certification that the eight brands feature. Other certifications that appear on the chocolate wrappers include USDA Organic, Non-GMO Verified, Certified Gluten-Free, Certified Vegan, Kosher (dairy), Fair for Life, and rBST free. I was surprised I did not find the UTZ Certified symbol on any of the chocolate bars, since UTZ is the most common cacao certification related to sustainable farming practices.

Fair trade certifications can be represented in a variety of ways depending on the party providing the certification. The images above show several different certifications present on the different brands’ packaging that symbolize the employment of fair trade practices. In order for a product to be labeled “fair trade,” all members of the processing chain (including producers) must pay into the fair trade system. As a result, producers are promised better trading conditions including long term relationships with buyers, garner presumably higher wages, have better working conditions, and live overall improved lives. However, many question whether this system is as transformative as it claims to be. The terms “fair trade” and “sustainable” have become ubiquitous, and the commodification of the terms also threatens their legitimacy (Sylla, 2014).

When thinking about food certifications, it is important to remember these certifications are neither all encompassing nor meant to solve all social or environmental issues with one label. Companies are now starting to launch their own certifications rather than going through a third party certification. It will be up to the individual company to define the criteria for “fair” or “sustainable,” or any new term it deems important. Whole Foods already uses its “Whole Trade Certified” label. Consequently, continuing to be an educated consumer will be extremely imperative in order to know what the certifications represent and what the companies stand for. It is unclear whether these self-certifications will be viewed as legitimate certifications or just add to the confusion many consumers feel when reading food labels.

While the objective of self-certification is to offer more affordable fair trade items to consumers, it raises the question of whether that should be the ultimate goal of selling fair trade products, and what the tradeoffs are for making fair trade more affordable and part of the mainstream? If large food conglomerates begin to self-regulate certifications, rather than paying third party companies, who is to say the consumer will actual benefit from the money saved? Historically, when the price of goods has dropped, large corporations scoop up the difference and pocket the extra profits, rather than decreasing the cost for the consumer (Albrittion, 2013). However, consumers still have the power to vote with their dollars.

The next time you peruse the chocolate selection within a store, feel empowered to study the information provided on the packaging (and conduct further research if needed) rather than being overwhelmed by various symbols and industry jargon.

 

**All images were taken by the author

 

Works Cited

Albritton, Robert. 2013. “Between Obesity And Hunger: The Capitalist Food Industry”. In Food And Culture: A Reader, 3rd ed., 342-352. New York: Routledge.

Allen, Lawrence L. 2010. Chocolate Fortunes: The Battle For The Hearts, Minds, And Wallets Of China’s Consumers. New York: American Management Association.

Bukhari, Jeff. 2017. “Why Investors Are Bingeing On Snack-Maker Mondelez”. Fortune.Com. http://fortune.com/2017/02/22/why-investors-are-bingeing-on-snack-maker-mondelez/.

Castell, Margarida, Francisco Jose Pérez-Cano, and Jean-François Bisson. 2013. “Clinical Benefits Of Cocoa: A Review”. In Chocolate In Health And Nutrition, 1st ed., 265-276. Humana Press.

Leissle, Kristy. 2012. “Cosmopolitan Cocoa Farmers: Refashioning Africa in Divine Chocolate Advertisements.” Journal of African Cultural Studies 24 (2): 121-139. http://dx.doi.org/10.1080/13696815.2012.736194

Prisilla, Maricel E. 2009. The New Taste of Chocolate: A Cultural and Natural History of Cacao with Recipes. 1st ed. Berkeley: Ten Speed Press.

Robertson, Emma. 2009. Chocolate, Women, and Empire: A Social and Cultural History. Manchester: Manchester University Press.

Sylla, Ndongo Samba. 2014. The Fair Trade Scandal: Marketing Poverty To Benefit The Rich. 1st ed. Athens, Ohio: Ohio University Press.

Chocolate as a Device for Inequality

It is easy to think of chocolate as a sweet treat that stirs up fond memories of a happy stomach. Yet, there are further issues involving the nature by which we view chocolate as a society. We are going to think critically and assess the inequality and more problematic elements in the production and sales end of chocolate. Chocolate, as a commercialized product, is not only an exploitative product by nature, but it also in several ways serves to exacerbate race and age disparities in our communities through its marketing strategies.

Exploitation

Big chocolate companies present several problematic elements through their exploitation of not only the cacao farmer, but additionally through their exploitive marketing strategies.

Ethically Sourced Cacao

Chocolate has a long history of using forced and coerced labor for its cultivation: “…abuses…have been well-documented for much longer, even if the use of coercion has not been consistent across cocoa production globally and throughout time” (Berlan 1092). However, it is not widely known that our consumption of  chocolate is still based off of the exploitation of others. Even now, big chocolate companies exploit cacao farmers through multiple venues. First, cacao labor is extremely laborious and often farmers are not supplied with the right facilities: “Farm workers often lack: access to bathroom facilities, filtered water, clean spaces for food prep, lesser exposed areas to res/cool down” (Martin Lecture 3/22). Additionally, farming cacao is associated with a very volatile income. Cacao farmers are not paid in wages or salaries, as cacao is a commodity with a fluctuating price in the world economy. This irregular source of income leads to an unstable source of livelihood for cacao farmers and their families: “and yet almost every critic of the industry [chocolate industry] has identified the key problem: poverty among the primary producers” (Off 146). Historically, the exploitation of the laborer exacerbated racial distinctions and categories: “Overall, both Rowntree and Cadbury adverts created a world of white consumers in which the black producers of cocoa beans and the black consumers of chocolate were at best pushed to the margins, if not excluded completely” (Robertson 54). Yet, there is even a further subcategory within the Ivory Coast cacao farmers that is subjected to the chocolate industry’s exploitation. Child labor is often used on cacao farms: In a 2000 report on human rights in Cote d’Ivoire, the US State Department estimated, with startling candor, “‘that 15,000 Malian children work on Ivorian cocoa and coffee plantations…Many are under 12 years of age, sold into indentured servitude…’” (Off 133). The International Labor Organization has explicitly defined the worst forms of child labor. It is universally accepted that not only is child labor unethical, but further, that coerced child labor is morally wrong. Yet, the alarming part is not that child labor is being utilized in cacao farming, but rather, the extent to which children are being exploited: “‘15,000 Malian children work on Ivorian cocoa and coffee plantations…Many are under 12 years of age, sold into indentured servitude…’” (Off 133). Cacao has become a product tainted with coerced and unethically sourced labor. In doing so, chocolate, itself, becomes an exploitative product.


This graph featured above is from Alders Ledge. It shows the primary cacao producing countries in the “Gold Coast” of West Africa. The graph shows that about 71% of the world’s cacao is sourced using child labor and 43% uses forced labor.


Marketing and Advertisement in the Chocolate Industry

Chocolate companies additionally manipulate their consumer base through their marketing strategies. First, chocolate companies have chosen to market specifically to children. Companies target the vulnerabilities of children through specific practices. For example, “until the age of about 8, children do not understand advertising’s persuasive intent” (Martin Lecture 3/29). Chocolate companies manipulate children through advertisements on television, packaging, and social media. Companies are now spending billions of dollars to manipulate children and maximize their profits: “Companies spend about $17 billion annually marketing to children, a staggering increase from the $100 million spent in 1983” (Martin Lecture 3/29).


The advertisement, featured by Kinder, depicts a smiling (happy) young boy on a delicious looking candy bar. The bottom reads “Invented for Kids Approved by Mums”, thereby playing off children’s vulnerabilities and telling them that this bar was specifically made for them.


In addition to chocolate companies’ manipulation of children, their advertisements of chocolate have also been used to dehumanize blackness: “The use of black people in advertising has a long history” (Robertson 36). However, there is some sort of logic to using blackness and black people to represent products like chocolate: “…products made available through the use of slave labor such as coffee and cocoa, often used, and many still use, images of black people to enhance their luxury status” (Robertson 36). Yet, does the logic of its representation make it any less inherently racist? The presentation of blackness and the use of that exploitation of coerced labor to maximize profit is morally incorrect. The imperial history of cacao and slavery make the use of its laborers as an advertising tool even more ethically wrong. Yet, we have historically, and still do, use blackface and such caricatures to represent chocolate products.

dunkin-donuts-blackface-hed-2013


This is an advertisement by Dunkin’ Donuts in Thailand. It features a smiling woman in blackface makeup holding a charcoal (chocolate) flavored donut. The slogan “Break every rule of deliciousness” is featured next to the blackfaced woman. Not only is this an example of linking chocolate to blackness in advertising, but it also links chocolate and subsequently blackness to sin.


Yet, even when companies attempt to manipulate their consumer base by marketing themselves as leaders of fairly sourced cacao, they do not always succeed. In Cosmopolitan Cocoa Farmers: Refashioning Africa in DivineChocolate Advertisements, Kristy Leissle describes Divine Chocolate’s ad, featuring female Ghanan cacao farmers as a “positive contribution” (Leissle 123) to the depictions of Africa in British culture. However the way that Divine Chocolate depicts these women with their products seems detached from reality: “Divine Chocolate expends considerable effort to make Kuapa Kokoo farmers – and Ghana as a cocoa origin site – visible to Britain’s chocolate shoppers…Divine Chocolate and St. Luke’s supplied the women’s outfits and gave them a stipend to have their hair styled for the shoot…” (Leissle 124). I would argue that if Divine Chocolate had really wanted to showcase the cacao farmers, not only would they have included the male farmers, but they wouldn’t have expended resources to change the women’s outward appearances. Further, much like the popular Western chocolate ads, Divine Chocolate’s ads sexual and objectify women. Divine Chocolate is seeking to maximize both sales and profits from the chocolate industry and are playing off of what they think the consumers want to see. Rather than this advertisement being associated with an educational or philanthropic aura, I would argue that this ad, in reality, fetishizes these female, African cacao farmers. Additionally, the advertisement validates and reinforces stereotypes regarding Africans. Thus, because of its manipulative nature, cacao, as a commodity, becomes an exploited commodity.

Linguistic Tool

Chocolate has become a linguistic tool that exacerbates not only racial distinctions but also racial tensions.

Colloquial Context

Chocolate has become a euphemism for sin; while it’s counterpart vanilla has become linked to purity. Through this symbolism, a standard of uncleanliness versus cleanliness is created. This leads one to wonder if the basis for linking chocolate to blackness is purely based on skin color, or rather does it have a deeper, race related background? In Slavery & Capitalism (1940), Eric Williams argues that racism is a byproduct of slavery and not the cause of slavery (Martin Lecture 3/1). Perhaps chocolate is commonly related to black people because of its historical exploitation of forced labor in the “Gold Coast” of West Africa? Or rather, is the fact that chocolate is also associated with dirtiness and sexuality a factor? Are these racist notions of uncleanliness associated with chocolate and blackness because of our inherent racism towards those that we previously subjugated?

Chocolate as associated with blackness becomes marginalized in society. The Western ideals reign supreme: “The commodity chain model is not ideal, then, creating a progress narrative in which western consumption is prioritized as a symbol of economic development and modernity” (Robertson 4). The association comes through the means by which cacao is cultivated. And in part stems from the inequality in the sourcing, in terms of workers: “The history of chocolate corresponds to some extent with the more well-documented histories of tea, coffee and sugar: notably in the early dependence on coerced labor, and in the transformation of the product from luxury to everyday commodity…Chocolate has been invested with specific cultural meanings which are in part connected to such conditions of production” (Robertson 3). Yet, this relation between chocolate as a symbol for black people and vanilla, seen as the opposite, for white people, creates yet another barrier of difference. And in doing so further paints black people as “othered”.

However, it is important to note, that the relation between chocolate and race is not entirely detrimental. In several contexts, the link and its subsequent meaning have been reappropriated to carry a more positive connotation. For example, “chocolate city”, referring to cities with a very large black population, has become more of a term of empowerment, rather than one of subjugation. Additionally, the book featured below, I’m Chocolate, You’re Vanilla, uses blackness as related to chocolate as merely a term to describe two halves of the same being, just different flavors. Thus, while the initial linking of blackness to chocolate may or may not come from racist and subjugated origins, the term is not entirely negative.


The book by Marguerite Wright, I’m Chocolate, You’re Vanilla is meant as a teaching tool to help parents guide their children as a minority in the community. In this context, chocolate as a euphemism for blackness is not necessarily racist nor prejudice. However, the fact that the parallel between race and chocolate exists at all, and the connotations of the parallel are inherently racist.


But…

One Could Argue that Free Trade is the Issue

However, one could argue that the problem of exploitation is not applicable just to the chocolate industry; rather, it is an issue with free trade and the laissez-faire economy itself. One could argue that the exploitative nature of the commodity and the exploitation by which it is cultivated is really a break down of fair trade. Fair trade is supposed to regulate the working conditions yet, in The Fair Trade Scandal, Ndongo Sylla argues that “…Fair Trade is but the most recent example of another sophisticated ‘scam’ by the ‘invisible hand’ of the free market” (Sylla 18). Sylla would argue that the system itself is at fault for the worker’s exploitation, rather than the companies employing them: “In the West African context where I worked, Fair Trade was barely keeping its promises. For older producer organizations, there were initially significant benefits; then, hardly anything followed. Newcomers to the system were still waiting for promises to come true. For those who wanted to join the movement, it was sometimes an obstacle course” (Sylla 19). One could also use Marx’s notion of the exploited worked and the systematic oppression involved in capitalism as the issue at hand. One could use Marx’s theory that the sole purpose of capitalism is to exploit the worker and estrange him from not only the commodity that he produces, but further from the capitalist and the land itself. Thereby showing that the exploitation involved in the chocolate industry is not only applicable to other commodities, but this exploitation is also a natural progression in a capitalistic society. The argument that the system is, in actuality, at fault for the exploitative nature of the product is valid. However, this still does not discount the racialized slurs that are a product of this estrangement and exploitation. The free market itself is problematic; but my argument here, is that chocolate is an exploitative product and it can be improved, even if the market is inherently compromised. This is a critique of the system and the mindset that this exploitation creates in society; rather than an essay that provides the means by which we can implement a long-term systemic change.

Conclusion

Chocolate through its advertisement and forms of cultivation becomes an exploitative commodity. Further, the means by which it is cultivated leads society to provide specific and racialized associations with chocolate. Thereby allowing chocolate to exacerbate race and age gaps in society.

Work Cited

Academic Sources

Berlan, Amanda. 2013. “Social Sustainability in Agriculture: An AnthropologicalPerspective on Child Labour in Cocoa Production in Ghana.”

Leissle, Kristy. 2012. “Cosmopolitan cocoa farmers: refashioning Africa in DivineChocolate advertisements.” Journal of African Cultural Studies 24 (2): 121139

Martin, Carla. Lectures (3/1, 3/22, 3/29).

Off, Carol. 2008. Bitter Chocolate: The Dark Side of the World’s Most Seductive Sweet.

Robertson, Emma. 2010. Chocolate, Women and Empire: A Social and Cultural History.

Sylla, Ndongo. 2014. The Fair Trade Scandal.

Multimedia

Beaut.ie. “Maeve and Her Tiny Babies: Ads That Drive Me Crazy!” Beaut.ie. Beaut.ie, 12 May 2013. Web. 04 May 2017.
Jones, Jane. “The Taste of Inequality: Chocolate Is Too Expensive for Many Cocoa Farmers to Eat.” Ravishly. N.p., n.d. Web. 05 May 2017.
Lee, Jack. “Alders Ledge.” Guilt Free Chocolate. N.p., 30 Oct. 2013. Web. 04 May 2017.
Stanley, T. L. “Dunkin’ Donuts Apologizes for Blackface Ad, but Not Everyone Is Sorry.” – Adweek. Adweek, n.d. Web. 04 May 2017.
Wright, Marguerite A. I’m Chocolate, You’re Vanilla: Raising Healthy Black and Biracial Children in a Race-conscious World. San Francisco, CA: Jossey-Bass, 2000. Print.

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.

 

 

 

 

A comparison of Taza and Alter Eco: two companies seeking to create good chocolate in an ethical way

Ethical chocolate can come in different shapes and sizes. What ethical means to various chocolate companies can be very different, from fair work conditions, to organic ingredients, to environmental sustainability. Taza Chocolate is a company that boasts chocolate that is “seriously good and fair for all,” given their bold flavor and direct trade practices (“About Taza,” 2017). Alter Eco is a company that creates chocolate and other foods and aims to nourish “foodie, farmer, and field” with their sustainable food (“Our Story,” 2017). This post will explore the similarities and differences between Taza Chocolate and Alter Eco, two ethically minded chocolate producers, and how they portray themselves in order to appeal to consumers. Exploring their trade relationships, environmental impact, and community impact, it becomes apparent that Taza Chocolate has a main focus on fair and ethical trade as a means for driving improved conditions for farmers, whereas Alter Eco has a greater emphasis on sustainability and positive environmental impacts.

About the Companies

Taza

Taza Chocolate is a company founded in 2005 and based in Somerville, MA that creates stone ground chocolate. The stone ground beans create a unique coarse texture unlike most mass-produced chocolate on the market today. Besides the flavor, Taza Chocolate prides itself on its role as a “pioneer” in ethically sourced cacao. They are Direct Trade certified, holding them to standards of fair pay and partnerships with cacao farmers who respect workers’ rights and the environment (“About Taza,” 2017).

Alter Eco

Alter Eco is a food company in the business of chocolate and truffles as well as quinoa and rice with a focus on sustainability and fair practices. Their mission is to create a global transformation through ethical relationships with farmers and a focus on sustainability in their supply chain (“Our Story,” 2017). The company puts an emphasis on the benefits and social and environment changes that can be made through their practices.

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Trade Relationships

Taza stands apart from other chocolate companies because of its Direct Trade. Direct Trade is a third-party certification program that Taza has established that ensures cacao quality, fair labor, and transparency. Direct trade means what it sounds like – direct trade and relationships between cacao farmers and the company. Taza establishes relationships with cacao farmers in countries like the Dominican Republic, Haiti, and Belize, having yearly visits to the farms and staying knowledgeable and transparent about where their beans are coming from (“Transparency Report,” 2015).

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Maya Mountain Cacao Farmers in Belize, a partner with Taza Chocolate

Direct trade is based on five key commitments (“Our Direct Trade Program Commitments,” 2017). The first is to develop direct relationships with cacao farmers, which they do by visiting their partners at least once per year. The second commitment is to pay a premium price for cacao of at least $500 above market price per metric ton of cacao beans, with a price floor of $2800. Their third and fourth commitments are to sourcing the highest quality beans, with an 85% or more fermentation rate and 7% or less moisture, and USDA certified organic beans. The fifth and final commitment is to publish an annual transparency report, which displays details of the visits to partner farms in various countries, as well as prices paid and amounts of cacao beans purchased. The key aspects of the Direct Trade certification that set it apart from others are the high premium paid for chocolate, which exceeds that set for Fair Trade certification, as well as the transparency report.

Direct Trade beings benefits to farmers in the form of a monetary premium paid for their beans, and it brings benefits to consumers with the transparency report that keeps consumers informed about the chocolate’s origins. However, Direct Trade can in some ways still fall short of being a wide-reaching solution to problems in the cacao-growing world. Direct Trade relationships can be fragile, and if Taza Chocolate were to go under, the partners would lose a key purchaser of their beans. Despite this, Direct Trade has economic benefits for the producers that cannot be discounted.

Alter Eco is Fairtrade certified. Fairtrade is a much more widespread certification, with 1226 Fairtrade certified producer organizations worldwide (“Facts and Figures about Fairtrade,” 2017). Fairtrade sets a price floor as a Fair Trade Premium that companies must pay for the products, so for organic cacao beans currently have a price minimum of $2300 per metric ton, and companies pay an additional premium of $200. This Fair Trade Premium is for investment in social, environmental, and economic projects, such as education or technology, which the producers decide upon. Alter Eco attributes their social impact to the effects of their Fair Trade contributions.

Comparing Direct Trade and Fair Trade, we can see that Direct Trade demands a higher price for cacao than Fair Trade, though both require premiums above the market price. Fairtrade sets aside premiums into a fund for investment into the community, whereas Direct Trade has buyers pay more for the beans, resulting in profits that could be used to invest in the community.

Environmental Impact

Sustainable farming practices have been on the rise over time, as international buyers have become more demanding about production practices. These practices can require a lot more hard work and labor, and require farmers to learn new processes, but they can be essential in order to survive long term as demand grows (Healy, 2002). A commitment to environmental sustainability is important to restoring or preserving nature’s biodiversity and preventing damage from industrial farming practices.

Taza Chocolate is committed to making an environmental impact through their use of USDA certified organic beans. Organic farming involves using practices that maintain or improve soil quality, conserve wetlands, woodlands, and wildlife, and do not use synthetic fertilizers, sewage sludge, irradiation, or genetic engineering (“About the National Organic Program,” 2017). By only purchasing USDA certified organic beans, Taza is supporting farms that comply to these standards set to protect and preserve the environment.

Alter Eco, on the other hand, takes sustainability and environmental impact to the next level. Not only do they purchase organic cacao, but also they have a focus on their carbon footprint in the supply chain and take active steps to minimize it. Working with the PUR Project and the ACOPAGRO cacao producers, Alter Eco supports an effort to reforest the San Martin region in Peru, which had suffered from severe deforestation in the 1980s. From 2008 to 2015, they planted 28,639 trees through this initiative, improving biodiversity, restoring soils, protecting wildlife, and providing necessary shade for cacao (“Impact Report,” 2015). In addition, they are a partner of 1% for the Planet, with which they commit to giving at least 1% of their sales to nonprofits aimed at protecting the environment.

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PUR Project farmers carrying saplings

Furthermore, Alter Eco seeks to be a carbon negative business, net reducing more than they emit, though this goal is still far-reaching. They post a yearly carbon report that breaks down consumptions of water, waste, and energy in chocolate production and approximates greenhouse gas emissions. In 2014, chocolate production directly or indirectly resulted in a little over 2,400 tons of CO2. Alter Eco uses its tree planting initiative as its efforts to offset CO2 emissions, and between 2008 and 2014 they had offset 7,690 tons of CO2 (“Yearly Carbon Report,” 2014). All in all, the transparency that Alter Eco provides about their environmental impact and their efforts to reduce it are satisfyingly informative. Though it can feel like their claims about sustainability are mainly a marketing ploy or way to make consumers feel good about their purchase, it is reassuring to have the information that allows consumers to be informed and hold Alter Eco accountable if they really wish to do so.

Community Impact

Taza and Alter Eco both make an impact on the communities of producers that they work with. Both companies have direct relationships with the farming cooperatives that they purchase cacao from, involving in-person visits to the partners. They build deep, trusting relationships with their partners that bring an extra level of support to the community. However, while Taza’s relationships appear to be mostly business, Alter Eco shows a commitment to community development. Alter Eco also boasts 48 development programs that they are involved in (“Socially Just,” 2017). They are also a certified B Corp, recognizing their social and environmental performance and transparency. Alter Eco uses Fairtrade premiums as their main way of supporting community development. It is important to note that this method of supporting developing is not a solution to large problems in poor regions, but it can have an impact in small ways by better stabilizing income (Sylla, 2014). Analysis of the impact that Fairtrade has on producers has pointed to a slight impact that is “all but exceptional” and is something that can better protect farmers from extreme poverty rather than lift them out of poverty (Sylla, 2014).

It is important to note that though Alter Eco does a good deal more marketing their positive impact on community development through their development programs and Fairtrade premiums, Taza still pays more per metric ton for their cacao. The difference between the two is that Alter Eco prioritizes their funds supporting community and environmental development projects, whereas Taza pays the money to farmers which is then theirs to use.

Conclusion

Both companies make a commitment to transparency in their chocolate. Taza produces a transparency report each year detailing the company’s purchases, prices paid, and visits to various cacao farms. Alter Eco lists details of each chocolate bar’s cacao origin, cocoa content, organic ingredient content, and fair trade certified ingredient content on their website. These added details, way beyond which the average consumer would demand of a Hershey bar, give these Taza and Alter Eco bars a story for the consumers to follow and a justification of the ethical nature of the purchase. Small scale chocolate companies often find success in the education of their consumers of things like single origin cacao and fine cacao flavors, as it gives them an edge on industrial chocolate which dominates with marketing and low prices (Williams and Eber, 2012). By emphasizing transparency and providing detailed information about cacao sources and flavor notes, Taza and Alter Eco are leveraging this.

Furthermore, Taza and Alter Eco market their products in a way to make the consumers feel like they are making an impact. Advertisements need to show images that make the viewer feel good, or at least good enough to buy chocolate, a luxury item (Liessle, 2012). By emphasizing the ethical nature and the social benefits of their products, these companies play up the consumer’s feelings of being altruistic by purchasing the chocolate bars. These companies may be flaunting their ethical practices as a marketing strategy, but if they are making a real, positive impact for the cacao-producing community or for the environment, then it is a win-win situation for the companies and the farmers.

Taza Chocolate and Alter Eco are both chocolate-producing companies that are ethically minded, where Taza has a large focus on direct trade partnerships with cooperatives, and Alter Eco has some focus on fair trade but a greater emphasis on environmental sustainability. These companies demonstrate how ethical practices in the chocolate industry can have different implications, whether they be for farmer compensation, farmer community development, greenhouse gas emissions, reforestation and biodiversity, amongst many others. What is important to take away is that some companies may focus on some impacts more than others, and it is important as consumers to be educated and to know what impact you believe is the most important to make.

References

“About the National Organic Program.” (2016, November). Retrieved from https://www.ams.usda.gov/publications/content/about-national-organic-program

“About Taza.” (2017). Retrieved from https://www.tazachocolate.com/pages/about-taza

“Annual Cacao Sourcing Transparency Report.” (2015, September). Retrieved from https://cdn.shopify.com/s/files/1/0974/7668/files/Taza_Transparency_Report_2015.pdf?10448975028103371905

“Facts and Figures about Fairtrade.” (2017). Retrieved from http://www.fairtrade.org.uk/en/what-is-fairtrade/facts-and-figures

Healy, K. (2001). Llamas, Weaving, and Organic Chocolate: Multicultural Grassroots Development in the Andes and Amazon of Bolivia. 123-154

“Impact Report.” (2015). Retrieved from http://www.alterecofoods.com/wp-content/uploads/2016/05/AE-ImpactReport-RF4-Digital.pdf

Leissle, K. (2012). “Cosmopolitan cocoa farmers: refashioning Africa in Divine Chocolate advertisements.” Journal of African Cocoa Studies 24(2): 121-139

“Our Direct Trade Program Commitments.” (2017). Retrieved from https://cdn.shopify.com/s/files/1/0974/7668/files/Taza_DT_Commitments_Aug2015.pdf?2533070453853065353

“Our Story.” (2017). Retrieved from http://www.alterecofoods.com/our-story/

“Socially Just.” (2017). Retrieved from http://www.alterecofoods.com/sustainability/socially-just/

Sylla, N. (2014). The Fair Trade Scandal.

Williams, P. and Eber, J. (2012). Raising the Bar: The Future of Fine Chocolate. 141-209.

“Yearly Carbon Report.” (2014). Retrieved from http://www.alterecofoods.com/wp-content/uploads/2016/02/AlterEco-Carbon-Report-2014_v2.pdf

Multimedia Sources

Dark Super Blackout Bar. [Image]. Retrieved from http://www.alterecofoods.com

Maya Mountain Cacao. [Image]. Retrieved from https://www.tazachocolate.com/pages/maya-mountain-cacao

Taza Chocolate From Bean to Bar. [Video] Retrieved from https://vimeo.com/33380451

Tree Saplings. [Image]. Retrieved from http://www.alterecofoods.com/environmentally-responsible/