Chocolate is so much richer than what the label may portray, pun intended. For my final post I have decided to use the chocolate shelf in the candy isle of Harvard’s local Target to tell a story about the product being sold. At first glance we see a colorful, aesthetically pleasing array of some of the most popular chocolate brands in the U.S. What can we decipher beyond the label, beyond the product itself? What does the pricing tell us? Are there ethical concerns behind the production and history of the chocolate? This blog post aims to explore these questions and take the readers on a journey through which these tasty treats reach our shelves.
Hershey’s Kisses, M&M’s, Ghirardelli squares, Reese’s Cups, Snickers, Dove milk chocolates, Lindor truffles. Some of the most recognizable and notable chocolate brands in the United States. When looking through the local selection at Target, these chocolate brands line the shelves. Holding the largest market shares in the country, it is no surprise that you see these chocolates literally everywhere. They are household names. Hershey, Mars, and Lindt. These are the titans behind our favorite chocolate brands here in the United States. The analysis of this blog will structure around these three brands and what their product selection in Target tells us about our three critical questions.
Right when you walk into the candy isle of the Target in Central Square, you immediately see Hershey’s Kisses, Reese’s Peanut Butter Cups, and the classic Hershey Milk Chocolate Bars before anything else. Hershey’s holds the largest market share in the United States, estimated around 44% (Hershey 2018). The Hershey Company was founded by Milton Hershey in 1894, and is one of the largest chocolate producers in the world. Milton S. started off from humble beginnings, unknowing that he would start a revolution of chocolate mass production. He put years of time and effort into achieving the perfect chocolate recipes, constantly tweaking the smallest inputs to optimize the product. After tireless trial and error, a man named John Schmalbach helped Hershey create the perfect condensed milk that would accept all other chocolate ingredients smoothly and could be stored for long amounts of time without spoiling (D’Antonio 2006). In 1894, Hershey started his confectionary company that boomed and grew quickly. In 1900, Hershey decided to sell the caramel company and focus solely on chocolate. He took his production to Pennsylvania, where the famous Hershey community sits today. The Hershey Company has a rich history and even richer products. How much do these products cost?
One Hershey’s Milk Chocolate Bar will run you 89 cents at the local target. One pack of Reese’s Peanut Butter Cups also costs 89 cents. A classic bag of Hershey’s kisses will cost you $3.59. This may seem relatively cheap to what most food stuffs cost in the Unites States, yet Hershey has confirmed that it will raise its prices over the next couple years to keep up with increasing commodity and shipping costs (Hershey 2018). Chocolate prices are pretty volatile and have been at the mercy of fluctuating supply and demand. Typically, small-holder cocoa growers have a tough time managing their production to meet the fluctuations in demand experienced worldwide (Chocolate 2003). Being that these cocoa growers make up a majority of the world’s cocao production, this creates surplus or shortages that affect the equilibrium prices of chocolate. Hershey’s and other big producers deal with this situation by hedging and futures contracts. Essentially big chocolate companies like Hershey and Mars hedge against price fluctuations to smoothen out their cash flow (Leissle 2018). How it works is that these large producers will estimate, or rather guarantee by being conservative, how much of an input like cocao over a certain timeline. So they will agree to acquire that amount of input through the futures market. This allows them to lock in their price of that input regardless of what happens to the market prices over time. So what can these price tags on our Hershey products tell us now? Hershey will raise its prices in accordance to commodity and shipping costs as mentioned before. However most of this is due to the shipping factor. The U.S. economy has created an atmosphere in which producers like Hershey have to compete with other buyers for a capped shipping capacity. So although Hershey can hedge against changing commodity prices, it cannot do much for the consumers when it comes to shipping prices. Now that we have dissected the price points of our favorite Hershey products, we can discuss any ethical concerns behind these treats.
Big producers like Hershey and Mars need to source their cocao from somewhere. The cocao bean primarily grows in the tropical climates of Latin America, Western Africa and Asia (Leissle 2018). Western African countries supply more than 70% of the world’s cocao, and is purchased by large chocolate producers (Child 2019). This also means that the labor indirectly going into chocolate production is outsourced to these countries. That is where the issue lies, as several journalists and researchers over the years have uncovered the widespread use of slavery and even child labor on many of these cocao farms. Cocao is a commodity crop, meaning that it is primarily grown for export to other countries. The Ivory Coast alone realizes almost 60% of its export revenue from cocao exports alone (Child 2019). As chocolate continues to become more popular around the world and big producers continue to grow, the demand for chocolate increases. This means that the supply must also increase to keep up with demand. When supply and production need to increase, so does labor. Sadly in the case of cocao, this usually means an increase in forced and child labor (Higgs 2012). Many of the children that are put into cocao farming do it because they are forced by poverty, not only physically. It becomes a means to help support their families and livelihood. Without sufficient infrastructure combined with widespread corruption, many local governments actually support forced and child labor. They reap the benefits of the increased exports and have even gone as far to enact violence on those trying to expose and stop the child labor. In 2004, the Ivorian first lady had her entourage kidnap and kill a journalist reporting on the government’s corruption. Six years later three more journalists were kidnapped after publishing an article on the cocao sector corruption (Child 2019). Although Hershey does not partake in any of the forced child labor occurring in these countries, most of the controversy centers around the indirect support of this corruption through the purchase of the cocao. Two separate lawsuits had been filed against Hershey over the past few years. One in 2015 on behalf of the state of California, and one in 2018 on behalf of the state of Massachusetts, where our local Target resides. The lawsuits claimed that Hershey did not disclose its knowing use of child labor in its supply chains. Both cases were dismissed on account that Hershey did not deceive in either case. The law has spoken, but it still remains an ethical debate whether or not it is okay for big producers to supply from places where slavery and child labor is used. As a consumer we purchase these products, so does that mean we support it once-removed as well? Food for thought… Now that we have looked into Hershey products, what else lines the shelves of our local Target?
M&Ms, Snickers, Milky Ways and Dove chocolates. Some of the delicious and tasty treats created by chocolate titan Mars. Mars is the sixth largest privately held company in the US according to Forbes, and is headquartered in Virginia. It holds about 30% of U.S. market share, making it the second biggest chocolate producer in America behind Hershey. Frank Mars, the founder, contracted polio at an early age and surrounded himself with the science of cooking. Particularly, he was fond of candy and the many processes that went into making them (Brenner 1999). Mars began as the Mar-O-Bar Company in 1911. Over the next decade Frank quickly grew the company. In 1920, Frank Mars created two of the most famous chocolate bars in the U.S., the Snickers bar and the Milky Way bar (Brenner 1999). Fun fact, the Snickers bar actually started off as only the middle of the modern bar we know today. There was no chocolate coating. In 1940 Frank’s son Forrest Mars founded the M&M brand we know and love today. The M&M brand was actually created to strategically solve the problem of chocolate storage over the summer. When the temperatures increase, retailers purchase less chocolate because storing the chocolate becomes more of a challenge. Especially back circa 1940. Forrest manufactured these chocolates in a sugar shell specifically to solve that problem. It was genius! Forrest quickly capitalized on the idea, and it was a huge success. Mars went on to battle with Hershey throughout the 70s and 80s to be the biggest chocolate giant in the United States. Since then, the two titans have created several brands that encompass America’s favorite chocolate candies. Now that we know a bit about the history of chocolate giant Mars, we can dive into the pricing behind Mars.
One box of M&Ms cost 99 cents, One Kit-Kat bar costs $1.49, one Snickers bar costs 89 cents. Looking at the price and the amount of chocolate you get per package, these price points reign true to competitor Hershey. Especially the Snickers bar, which is the exact same cost and very similar volume of chocolate to the 89- cent Hershey bars. Also very similar to Hershey, Mars is raising its prices by about seven percent (Reports 2019). They claim that this is also in accordance with increasing production costs as well as shipping. Although Mars can control for price fluctuations using futures and hedging as discussed with Hershey, there are still variable costs that cannot be accounted for and must be put onto the consumers, us. With every chocolate titan comes issues regarding the ethics behind their supply chains.
The same class action lawsuit that was brought against Hershey was brought against Mars by the same court. The suit alleges that Mars has violated the Massachusetts Consumer Protection Act, which essentially indicates deception (Child 2019). Mars actually does have a reputation of being very secretive and clandestine. Yet just as the case had been dropped by the court against Hershey, Mars got off scot-free on the basis that no actual deception was intended or committed. Most of the court cases brought against Mars and similar producers have been on the basis of deception. Most of the time it is found that these chocolate producers haven’t actually committed any wrongdoing by not deliberately disclosing child labor and slavery on their labels. In the opinion of this blog, it again becomes an issue of how far removed you are from the actual problem. When the origins of a company’s supply chain are tainted by unfair labor practices, does this make the company itself corrupt? Are chocolate giants supporting unfair labor practices by purchasing inputs from where they are readily available? What about us as consumers? All important questions to ask when considering this delicate ethical crossroads.
The chocolate isle at Target may be a pretty fun and simple place. In reality it really is just the very tip of the iceberg that is the chocolate industry. One small finished product above the waterline while there are years of rich history, complicated economics, and important ethical concerns lurking beneath the surface. There is so much more to chocolate than what the finished product may show, and this blog post was intended to give you a glimpse into what that world is all about.
“2018 Market Share.” Produced by myself.
“Child Labor and Slavery in the Chocolate Industry.” Food Empowerment Project, 2019. foodispower.org/human-labor-slavery/slavery-chocolate/.
“Close-up Bunch of Chocolate Bars Isolated over the White Background.” Shutterstock.com, 21 Jan. 2013, www.shutterstock.com/image-photo/closeup-bunch-chocolate-bars-isolated
“Reports and Financials – Investor Relations.” Mars One, 2019. www.mars-one.com/investor- relations/reports-and-financial-calendar.
The Hershey Company. “The Hershey Company Fact Book.” The Hershey Company, Sept. 2018.
Brenner, Joël Glenn. The Emperors of Chocolate : inside the Secret World of Hershey and Mars. 1st ed., Random House, 1999.
“Chocolate Prices Are on the Rise. (Consumables).” Chain Drug Review, vol. 25, no. 3, 2003, p. 12.
D’Antonio, Michael. “Hershey : Milton S. Hershey’s Extraordinary Life of Wealth, Empire, and Utopian Dreams.” Simon & Schuster, 2006.
Higgs, Catherine. “Chocolate Islands :Cocoa, Slavery, and Colonial Africa.” Ohio University Press, 2012.
Leissle, Kristy. 2018. Cocoa. Cambridge: Polity Press.