Tag Archives: Socially Conscious

The old, the new, and the fight against injustice

Since chocolate was first discovered and loved by the Europeans, slave labor has been used to grow and harvest cacao. Slaves had to deal with horrific working conditions, malnourishment, and poor treatment from their owners—which caused life expectancy to be incredibly low. Even though slavery was abolished across the globe, many issues of forced labor and child labor still exist today. Cocoa farmers, especially in West Africa, have been depicted as either the exploiters—through their use of child labor and slavery like conditions—or the exploited—by big chocolate companies and the global market (Martin, Lecture 7 slide 23). For example of the exploiters, in Bitter Chocolate, the author points out that “Macko learned of another category of labour that he couldn’t quite fathom. What his informers described sounded a lot like slavery, and what made the stories even more horrifying was that it seemed the slaves were children” (Off 120). In regards to the exploited, when talking about the villagers who farm cacao, the author claims that “their primary activity here is to produce cocoa for the international market. As such, they earn just enough money from cocoa sales to pay for rice and cooking oil. There’s usually nothing left over” (Off 5). However, neither depiction is entirely accurate. There are much deeper issues than this simple binary suggests. According to Video 1 below, the number of child laborers more than doubled in Côte d’Ivoire from 2010 to 2015 to 1.6 million, and the government and big chocolate companies’ efforts to curb the issue have not worked. Also, as is seen in Figure 3, farmers in Côte d’Ivoire and Ghana receive only $0.50 and $0.84 per day, respectively—showing a huge divide between the compensation of the farmers and the profit of large chocolate companies. As is evident from these passages, there are major issues that surround the current marketplace for cacao. But, as consumers become more and more socially conscious about what they buy, some chocolate companies—and world organizations—have made it their mission to protect workers, pay them properly, and give their customers an ethically sourced and delicious product.

CACOCO

One such company is CACOCO, a Santa Cruz, California based drinking chocolate company, started in 2014, that has made it their mission to provide ethically sourced chocolate to its customers, and to protect and help the Earth in the process. According to their website, “CACOCO is the purest form of cacao directly sourced from beyond-organic farms, that not only improve the health of the environment but produce a chocolate that showcases the finer nuances of well-maintained soil and cultivation and highlight the terroir of the region” (“About Us”). It is their stated mission to “source the Earth’s purest ingredients from regenerative food systems, provide customers healthy, safe and delicious products with uncompromised quality, service and integrity, [and to] create and implement the most sustainable methods and systems for our organization” (“About Us”).

In this course, we have raised many questions regarding the ethics of cocoa production. One of the main things we talked about is that some companies don’t know where exactly they are getting their cacao from, so they have no idea whether or not their product is ethically sourced. This means that they could be getting cacao from farms who use child labor or slave labor to grow and harvest their product. To counter this, all of CACOCO’s cacao is currently sourced from organic and regenerative farms in Ecuador (“About Us”). This way, they are able to know exactly where their product comes from, and they can more easily make sure that all of their cacao is produced and harvested the right way. Another main issue we discussed  was fair and steady compensation. It is no secret that a very small portion of the profit from a chocolate bar goes to the farmer, but as Figure 2 shows, it is actually the smallest share overall at only 3%. To make matters worse, as the price of cacao—a commodity—fluctuates, so does the income of farmers, meaning a drop in the price of cacao can have a drastic impact on the farmers and their families.

Fortunately, CACOCO’s cacao is Fair Trade Certified, which means that, according to Fair Trade USA, “producers and businesses we work with adhere to strict labor, environmental, and ethics standards that prohibit slavery and child labor and ensure cocoa growers receive a steady income, regardless of volatile market prices” (“Where to Buy”). Thus, given their certification, CACOCO checks the boxes for all these criteria—meaning that our worries of slavery and child labor, as well as unstable and unsustainable income that we discussed in class, are nothing to worry about when purchasing chocolate from CACOCO.

CACOCO even goes a step further in their efforts for ethically and sustainably sourced cacao by trying to help the Earth in the process, as all of their packaging is compostable and made from 100% recycled materials (“About Us”). Their website even claims that “each purchase you make of CACOCO Drinking Chocolate directly supports the vision of a planet where natural ecosystems are managed intelligently, resources are utilized respectfully, and people are treated well at each step of the process” (“About Us”). CACOCO is also working with Terra Genesis International (TGI) “to build a regenerative network of businesses committed to rebuilding supply chains based on regenerative principles” (“About Us”). Thus, CACOCO seems to be doing all it can to create an ethically and sustainably sourced chocolate product.

GHIRADELLI (LINDT)

On the other hand, some companies have been slow to change—or have yet to change much at all. One such example is the Ghirardelli Chocolate Company, which is now owned by Lindt & Sprüngli. I want to specifically name Ghirardelli inside of the Lindt umbrella in order to emphasize how close to home these problems are—because Ghirardelli chocolate is everywhere in the US, especially in retail stores. According to Lindt & Sprüngli’s 2017 annual report, Ghirardelli ranks No. 3 in the US in terms of dark chocolate sales (Lindt). Ghirardelli also became the No. 2 baking brand in the United States in 2011 (“About Ghirardelli”). Thus, it is important to emphasize that when I discuss Lindt & Sprüngli, I am also discussing Ghirardelli (and vice versa).

Ghirardelli Chocolate Company was founded in 1852 in San Francisco, California. In 1865, “a Ghirardelli employee discovers that by hanging a bag of chocolate mass in a warm room, the cocoa butter drips out, leaving a residue that can be processed into ground chocolate. This is known as the Broma process and produces a more intense chocolate flavor than other techniques” (“About Ghirardelli”). Shortly thereafter, the company expanded their business from the western United States to the eastern United States, China, Mexico and Japan (“About Ghirardelli”). In 1965, Ghirardelli Square became an official city landmark, and later received National Historic Register status—solidifying itself as a staple of the Bay Area (“About Ghirardelli”). It has also partnered with Disney to create a Disney Studio Store in Hollywood, and continued to innovate with their famous Ghirardelli Squares—turning classic treats into best-selling holiday and dark chocolate candies (“About Ghirardelli”). They were acquired by Lindt & Sprüngli in 1998 (“About Ghirardelli”).

Ghirardelli chocolate, over the past one hundred and fifty years, has become an American staple in the chocolate industry. However, they have been slow to fight the injustices of the chocolate supply chain. They claim to “comply with high standard of ethics and sustainability in the procurement of our raw materials and in their processing into high-quality LINDT chocolate” (“The Commitment”). However, contrary to CACOCO, Lindt has no fair trade or labor certifications as of 2017 (Figure 1). Instead, they are “self-certified.” Although this beats no certification, their self-certification doesn’t hold them to the rigid standards of Fair Trade Certifications, and they aren’t accountable to anyone outside of themselves. But, in their defense, Lindt has instituted a program called the Lindt & Sprüngli Farming Program, which aims to “to trace ingredients back to their origin and support farmers according to their specific needs” (“Sustainably”). This program supports local farmers and helps them to apply “good agricultural, social, environmental and business practices in the management of their farms” (“Sustainably”). This allows Lindt to also verify social and environmental practices of the farms within the program in order to make sure their cacao is ethically and sustainably sourced (“Sustainably”). Lindt also aims to limit intermediaries—or “middle men”—between themselves and the farms to make sure they receive fair payment for their product (“Sustainably”).

According to their website, “over 85% of Ghirardelli cocoa beans are sourced through the Lindt & Sprüngli farming program” (“Sustainable Cocoa”). And, as of 2017, 79% of Lindt’s cocoa was certified (Figure 1). Although these numbers are higher than some chocolate companies, that means that 15% of the cocoa beans Ghirardelli gets have unknown origins (at least based on their website, which has no further mention of where the other 15% of cocoa beans come from) and 21% of Lindt’s total cacao in 2017 went uncertified. CACOCO sources 100% of their cacao beans from regenerative and organic farms in Ecuador—meaning none of the cacao’s origins are unknown. Thus, Ghirardelli doesn’t know whether or not some of their cacao comes from farms with poor working conditions, slave and child labor, or unfair wages. However, Lindt has made it their goal to go to 100% certified cacao by 2020—which would be a major step towards fixing issues of the cacao supply chain (Figure 1).

In addition to Lindt’s farming program, they have also introduced the Lindt & Sprüngli Suppler Code of Conduct Agreement and the Lindt Cocoa Foundation. The Code establishes “minimum standards, such as requirements regarding industrial wastewater treatment, air emission and environmental reporting” while also prohibiting the use of “corruption, bribery, discrimination and child labor” (“Sustainably Sourced”). The Code also “insists on freely chosen employment, fair compensation and working conditions, as well as freedom of association and obligates suppliers to pass these principles on to sub-suppliers” (“Sustainably Sourced”). Any purchase order made by Lindt requires the supplier to sign the Code of Conduct Agreement, and failure to uphold these obligations results in termination of the supplier contract (“Sustainably Sourced”). Secondly, the Lindt Cocoa Foundation’s job is “ to work towards achieving social and ecological sustainability in the cultivation, production and processing of cocoa and other ingredients used in chocolate production” (“Sustainably Sourced”). Thus, with these two initiatives, Lindt is trying to fix many of the issues that plague their cocoa supply chain—although without outside certification, it is harder for consumers to judge the strength and reach of these initiatives. Although this is a step in the right direction, Lindt has a lot more to prove to consumers that want to hold them accountable—and it starts with some sort of third-party certification, such as a Fair Trade Certification, and meeting their goal of 100% certified cacao by 2020.

Conclusion

Both companies are running initiatives to try to combat the problems of the cacao supply chain. CACOCO is a relatively new company that epitomizes the direction of which consumers are heading in regards to socially and environmentally conscious consumption. CACOCO is Fair Trade Certified, provides zero waste packaging, and preaches the importance sustainability, responsibility, and health—all in an effort to maximize consumer and producer happiness. Ghirardelli, on the other hand, is not Fair Trade Certified, but they are fighting injustice in other ways. Their farming program, along with the Lindt Cocoa Foundation and the Supplier Code of Conduct Agreement, are making steps towards a more transparent and equitable growing and harvesting environment in their cacao supply chain. With the completion of their goal of 100% certified cacao by 2020, they too would be well on their way towards creating a better, more equitable, and safer world in cacao farming.

As consumers, it is our duty to be as conscious as we can in order to create change. Companies that are doing the right thing, that are fighting the injustices of the cocoa supply chain, are the ones that should receive our money. As more and more issues are brought to light, it is up to us to hold these companies accountable for their sourcing of raw materials, and to make sure it is done as sustainably, and equitably, as possible—because we have as much of a duty to make a difference as they do.

Figure 1
SOURCE: Martin, Carla. “Lecture 1: Chocolate Politics.” AFRAMER 119X: Chocolate, Culture, and the Politics of Food, 30 Jan 2019, Harvard College. Microsoft PowerPoint Presentation (slide 7).
Figure 2
SOURCE: “Is There Child Labor in Your Halloween Candy? Chocolate Scorecard Identified Good, Ghoulish Companies.” Green America, Green America, 11 Oct. 2018, http://www.greenamerica.org/press-release/there-child-labor-your-halloween-candy-chocolate-scorecard-identified-good-ghoulish-companies.
Figure 3
SOURCE: Martin, Carla. “Lecture 1: Chocolate Politics.” AFRAMER 119X: Chocolate, Culture, and the Politics of Food, 30 Jan 2019, Harvard College. Microsoft PowerPoint Presentation (slide 8).
Video 1
SOURCE: Riggs, Ayn. “CREER-Africa Is Featured on News Story about Child Labor in the Cocoa Sector.” YouTube, Aljazeera, 12 Nov. 2015, http://www.youtube.com/watch?time_continue=64&v=2lk_OMPDlJc.

Works Cited

Scholarly

  • “About Us.” CACOCO, CACOCO, drinkcacoco.com/pages/about.
  • Lindt & Sprüngli. Annual Report 2017 NAFTA Markets. Kilchberg, Switzerland: Lindt & Sprüngli, 2017. Lindt & Sprüngli. Web. 2 May 2019.
  • Martin, Carla. “Lecture 7: Modern day slavery.” AFRAMER 119X: Chocolate, Culture, and the Politics of Food, 27 March 2019, Harvard College. Microsoft PowerPoint Presentation.
  • Off, Carol. 2008. Bitter Chocolate: The Dark Side of the World’s Most Seductive Sweet.

Multimedia

  • Martin, Carla. “Lecture 1: Chocolate Politics.” AFRAMER 119X: Chocolate, Culture, and the Politics of Food, 30 Jan 2019, Harvard College. Microsoft PowerPoint Presentation (slide 7).
  • Martin, Carla. “Lecture 1: Chocolate Politics.” AFRAMER 119X: Chocolate, Culture, and the Politics of Food, 30 Jan 2019, Harvard College. Microsoft PowerPoint Presentation (slide 8).

Theo Chocolate: Trendsetters and Pioneers for Bean-to-Bar Companies and Socially Conscious Consumers Alike

Theo Chocolate is the first bean-to-bar chocolate company that is an organic fair trade-certified and GMO-free cocoa producer in the United States. Based out of Seattle starting in 2006, Theo Chocolate is a pioneer of a shared value for-profit company.  By expanding economic value and social value simultaneously to the cost of the goods they are selling, they are an exemplary leader of how companies can be more socially and environmentally responsible. When they first were founded, they applied creative entrepreneurial solutions to capture a small share of a large market and ultimately forever influenced the way consumers interact with the products they choose to purchase. Consumers of Theo Chocolate better understand the supply chains of the product they are consuming, naturally develop loyalty to brands they trust and faithfully believe in, and shape market perceptions of the fundamental value of chocolate by increasing demand (Butcher 2014). This paper is an ethnographic analysis of Theo Chocolate that will examine their mission as an ethical and sustainable chocolate maker, how that has changed since conception, and how successful the company has been on the basis of their own metrics.

This first section will discuss their founding and original mission statement to focus on their social and environmental success since conception. Theo Chocolate was founded by Joe Whinney, when he wanted to fundamentally challenge the answer to two questions: do chocolate manufacturers bear responsibility for producers of cocoa beans? And do they bear responsibility for how they are produced? As Carol Off describes in her publishing Bitter Chocolate: The Dark Side of the World’s Most Seductive Sweet, responsibility regarding who should monitor farming practices has traditionally been pushed around between chocolate companies, large corporations, and even the US and African governments where the beans were being produced (Off 2008). There was no general consensus as to how far the orgins of the cocoa bags of beans should be monitored and tracked. Whinney wanted to break this cycle and take on this responsibility while still being a for-profit company. Whinney’s first founding mission was that “the finest artisan chocolate in the world can and should be produced in an entirely ethical, sustainable fashion”(Butcher 2014). His initial aims were to more concretely improve the growing conditions for farmers and to promote fair trade practices for cocoa bean farmers.

Social Work and Responsibility

With regards to the farmer’s role in the chocolate supply chain, he wanted to make sure they were environmentally and sustainably creating higher quality, larger yields, while also raising the farmers standard of living. Whinney after doing much market research felt that the key to higher quality chocolate was the fermentation of the beans. Fermentation removed the acids and tannins that created bitterness. He felt strongly that the farmers should understand and be educated on the role of fermentation. Consequently, he worked side by side with the farmers to help them adopt the best fermentation practices (Butcher 2014). Not only was it beneficial for Whinney to be able to develop a reliable relationship with farmers that were loyal to the quality he wanted, but it also economically was efficient because the higher percentage of beans that were correctly fermented, the higher prices the farmers were able to demand. Selling beans at higher prices meant that the farmers collected more money to sustain their livelihood. It was a welfare-enhancing transaction for both Whinney as well as the farmers, what he referred to as “enlightened capitalism”. Whinney hoped in the future of sustainable and modern cocoa production, the farmers would take on more of a responsible role controlling the quality of their beans, as well as marketing their own cocoa. He believed that if the farmers could adopt this commanding mentality, their livelihoods wouldn’t be so subject to the prices negotiated by larger chocolate companies.

Whinney was a huge contributor to helping develop price transparency. He established a pricing grid which provided complete information for consumers of the chocolate, the retailers selling the chocolate, but most importantly the bean farmers as well. Educating the farmers about prices allowed them to understand what factors are key determinants to price input. It was essential the farmers understand that when they can utilize proper quality tests and post-harvest practices, they create independent value for themselves as well as Whinney. Theo Chocolate reported that in 2009 when most bulk cocoa was selling for $2,000 a metric ton, they were willing to pay $3,600-$6,000 a metric ton for quality beans, which at this time was highly unpopular (Butcher 2014). Theo Chocolate prided themselves on the high quality of organic and fair trade cocoa they brought in and believed it provided real incentivization for farmers.

Interview of Co-founder Debra Music about Theo Chocolate values

Theo Chocolate wanted to ensure that their business reflected their social responsibility, not only to the farmer but toward the consumer as well. They used only organic ingredients, green energy sources in their operations, as well as sustainable wrapping. Theo Chocolate often donated many of their proceeds towards notable causes that aligned with their company’s values. For example, in 2010 after an earthquake in Haiti, a certain portion of chocolate proceeds were donated to CARE, a relief organization fighting global poverty. With the proceeds, CARE delivered 600,000 water purification tablets to make contaminated water drinkable (Butcher 2014). Additionally, Theo Chocolate had a signature Cherry and Chili Bar, whose proceeds were donated to PCC Farmland Trust, the local food co-op where the cherries and chilies were grown in Washington state. Theo’s World Bicycle Relief Sea Salt Bar was created with the proceeds going towards the World Bicycle Relief Program, who donated bicycles to health care workers in Africa. Two featured bars displayed the Jane Goodall stamp. The stamp was a signal that the bars were an ethically and quality produced product coming from the developing world, and the proceeds promoted forest conservation through the Jane Goodall foundation. Finally, it is notable that locally Theo wanted to help the community whom it hired from and interacted with (Butcher 2014). The company often used the factory store as an events space to help support local businesses, hunger, and other community initiatives.

Entrepreneurial Strategy: Owning the Chocolate Niche

Theo Chocolate developed a unique business marketing and entrepreneurial strategy to generate profits. Their first success as a company came when they understood the market they were dealing with and saw the unrealized opportunity. Whinney observed very early on that they were in a growing market, and that high-quality product would be the future for profits. In 2010, premium chocolate sales, premium chocolate being chocolate that sold for more than $.50/ounce, were about $2.1-2.4 billion total (Butcher 2014). From 2006-2009, the sale of premium chocolate had grown 5 times the rate compared to regular chocolate, and in the US market, there were not many players. When Theo Chocolate was founded there were only approximately only 15 chocolate producers. Most were confectioners who purchased blocks of chocolate and remelted it to make their own chocolate products (Butcher 2014). No bean-to-bar chocolate maker had ever been Fairtrade, organic, and non-GMO. Theo’s quality was certainly the finest as well as the most socially responsible. Whinney was able to recognize many changing chocolate trends and take advantage of them at the forefront. He implemented exotic flavors, savory inspired flavors, raw cocoa, and upscale packaging to be at the forefront of the changing market.

Whinney was a firm believer that chocolate needed to taste extraordinary or else nobody would buy it the second time: “Without having amazing products nothing else matters” (Butcher 2014). His chocolate bars had higher quality cocoa percentages and while expensive to produce, the quality was uncontested. A huge competitive advantage that Theo Chocolate had being a bean-to-bar company rather than a confectioner was full control over the quality. They essentially had full vertical control of the entire chocolate making process from bean sourcing to the chocolate manufacturing. This was essential to keep up with the fast-paced consumer preference changes and trends, allowing them to flexibly adapt to their consumer demand.

Examples of their current, more non-traditional seasonal flavors

Theo chocolate did something never before done in chocolate wrapping marketing in the United States at the time, they received multiple certifications and displayed them on the wrapping of every chocolate bar. Theo Chocolate was the first bean-to-bar company to do this. Currently, on their website, they promote 4 certifications: USDA Organic, Fair Trade for Life, Star-K Kosher Certification, and Non-GMO (Theo Chocolate 2019). Theo Chocolate states on their website: “Trust is fundamental to every relationship, including our relationships with our customers and suppliers. We believe transparency is an important component of trust and employ third-party verification for the claims we make” (Theo Chocolate 2019). Since conception, they have held true to this honest standard, and were the first ones to adopt using this marketing strategy for being fair trade and organic simultaneously. These certifications symbolize that Theo Chocolate prioritizes holding themselves to the highest standard and wants to foster such accountability towards their customers. They also demonstrated by their popularity that the marketing model works, as many more chocolate companies have sought out these very same badges.

Finally, Theo Chocolate is at the forefront of distribution. Premium chocolate has historically been and still is, sold through company-owned stores, specialty stores, and websites. However, they foresaw that organic food would become more sought after in the mid-2000s and correctly predicted there would be more demand for grocery stores that stocked organic chocolate. Theo Chocolate, in as early as 2008, partnered with Whole Foods to provide chocolate bars in their grocery stores. It has been a symbiotic relationship with the two companies because Whole Foods needs suppliers whos incentives aligned to provide the same quality products. According to Whole Foods, “Organic products have grown on average more than 20% per year over the last 7-10 years, making it the fastest growing segment of agriculture”(“Whole Foods UK” 2019). In many ways, Whole Foods acts as a middleman that is able to efficiently match the product produced to the consumer’s growing need. Theo Chocolate positioned themselves strongly within the growing Organic Industry, as well as in the responsible gourmet chocolate industry to catch two rising trends simultaneously and significantly boost demand for their product.

All of these marketing strategies are an indication that Theo deeply understood the new audience they were working with and trying to cater towards. On one hand, they pioneered the socially responsible chocolate, which you now see today in marketplaces as being much more commonplace. On the other hand, they also changed the way consumers think about responding to social responsibility, by developing this consumer consciousness in the typical millennial that is now commonplace. Theo Chocolate created unprecedented change on both the supply, as well as the demand side of organic fair trade chocolate.

Theo Chocolate and the Future

What does the mission statement look like today? Has it changed or strayed from its original intentions? Currently, they proclaim: “As a company rooted in cocoa, our mission is to create a more beautiful, compassionate, and enduring world by responsibly making delicious and inspiring products for everyone” (Theo Chocolate 2017). They are aware of the success their chocolate has received globally. Currently, they are now focusing on further developing the existing built connections between entities and people to make them stronger. One way they are doing this is by turning toward their internal operations to care for the employee base. Theo Chocolate has a strong commitment to developing their employees professionally but also educating them about the strength of social responsibility so each employee can hopefully go out one day and make a substantial impact one way or another.

Video of employees reflecting on company values

Ultimately I conclude that not only are they exemplary at the amount of social impact they have effectively brought about, but Theo Chocolate is one of the first shining examples within the American chocolate industry that could generate outstanding profits because they marketed such social responsibility. They sold America not only their product but their vision. Theo Chocolate made being a bean-to-bar company trendy while also on the consumer-facing side making socially conscious purchases trendy and feel good. Their small share in the chocolate market has set a rippling precedent for American markets to promote corporate social responsibility on any level of scale.

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Works Cited

Butcher, Alva Wright, and Paula A. Wilson. “Theo Choloclate-Doing Well By Doing Good.” Journal of Case Studies 32, no. 1 (2014): 19-36.

Off, Carol. 2008. Bitter Chocolate. New York: The New Press.

“Our Certifications – Theo Chocolate”. 2019. Theo Chocolate. https://www.theochocolate.com/blog/our-certifications/.

Tedxseattle – Debra Music & Joe Whinney – 4/16/10. 2010. Video. https://www.youtube.com/watch?v=IQUaUirxnwo.

Theo Chocolate Values. 2019. Video. https://vimeo.com/235404979.

“Whole Foods UK”. 2019. Wholefoodsmarket.Com. https://www.wholefoodsmarket.com/mission-values/organic/growth-organics-industry.

2018 Heart Of Seattle Winner – Swanson’S Nursery. 2019. Image. https://vimeo.com/265462272.

2019. Image. https://www.theochocolate.com/product/lemon/.

2019. Image. https://www.theochocolate.com/product/grapefruit-ginger/.

Exploitation or Smart Marketing? Comparing and Analyzing the Business Practices of Hershey’s and Divine Chocolate

Are chocolate companies exploiting workers when they use a values-based approach to promote sales? Although some companies are clearly exploiting its workers, there is a difference between exploitation and smart marketing. 

Let’s compare the practices of Hershey’s Chocolate and Divine Chocolate to illustrate this point: The elements of exploitation exist in the practices of Hershey’s because they are advertising falsehoods and treating their workers as the opposite of what they market; Divine Chocolate is the polar opposite of Hershey’s in this manner because they market values that they  actually practice, making them smart marketers – not exploiters.

Defining Exploitation

Is Divine Chocolate being exploitative? Exploiting in itself is deriving full use of something or someone unfairly (Alberts). Let’s first define exploiting for our own terms when it comes to thinking about chocolate companies – Exploiting is the act of a chocolate company using an element to maneuver, outrank, increase sales, or brand the company in a certain way without giving fair benefit to the people that they are using to achieve these goals.

Exploiting also has the following connotations when it comes to chocolate companies such as (but not limited to) when it comes to what they do; this will be used as our litmus test to determine whether or not true exploitation is at play:

Workers that are a part of a minority, less powerful group (women, international students, children, members of the economic lower class)

Not fairly paying workers for their work

Misrepresenting benefits to workers

Misrepresenting a situation to consumers

Using workers to promote ideas/situations that are not actually occurring within the company (i.e. the idea of gender equality when women may get paid less than men)

Branding the company in a way that promotes an idea to sell product but using opposite means to get there (i.e. the idea of fair trade but using a farm/manufacturing factory that does not promote fair trade)

*Not giving the same rights and privileges to workers that are granted to consumers (this may come in the form of cacao workers cultivating and being a part of the process of making chocolate but actually never tasting chocolate in its final form themselves; this is an industry norm that happens more often than most consumers would think)

Hershey’s Chocolate

Before we analyze the possibility of Divine Chocolate being exploitative, let’s analyze a company that passes the litmus test for exploitation – Hershey’s Chocolate.

By analyzing their pictures in advertisements and their marketing and comparing it to the real picture of the company, we can certainly see how Hershey’s Chocolate is being exploitative.

Hershey’s history of exploitation goes back essentially since the beginning of the start of the company; the company often used farms and factories that did not pay its workers a fair wage, lowered the standard of living, and took part in the enslaving of workers by providing unsafe conditions (Anti-Given that, one would think that the company would have “changed its tune” so to speak. However, Hershey’s has not done so and has continued to abuse their power as a top-tier chocolate company. It has been proven that Hershey’s is still taking part in these kinds of practices, which has been noted by researchers on international student workers that took part in a foreign exchange program in the United States with Hershey’s as their sponsor. According to the New York Times:

The students, who were earning about $8 an hour, said they were isolated within the plant, rarely finding moments to practice English or socialize with Americans. With little explanation or accounting, the sponsor [Hershey’s] took steep deductions from their paychecks for housing, transportation and insurance that left many of them too little money to afford the tourist wanderings they had eagerly anticipated (Preston).

How can Hershey’s not be an exploiter if international student workers, who are usually unfamiliar with the United States, cannot afford to even travel to the places that they wanted to see; these international workers took the job with Hershey’s in order to site-see in exchange for work, and Hershey’s is essentially taking that element away from them. Further, the promises that Hershey’s made to the students regarding a certain amount of money given to them was understood by the company to be separate from the housing, transportation, and insurance. Clearly, Hershey’s is exploiting the international workers by lowering their wages in order to get labor in the form of the cheapest way possible; these deductions would not even begin to cover a legal and livable way or manner if an American had this job. Thus, Hershey’s found a way to bypass the legal system in order to get cheaper labor – in the form of exploited international students.

Additionally, one cannot even argue that Hershey’s has learned its lesson on this front – despite the media attention, public outcry, and protests from students alike, Hershey’s is still running this program; imagine the kind of exploitation that could be occurring in more vulnerable areas if this kind of company if this type of exploitation is happening in the United States. If the plant in Pennsylvania is seeing these kinds of abuses, it is safe to assume that the exploitation along the Ivory Coast and the Americas are seeing abuses that are hidden away from the public.

Now, let’s take a look at the advertisements in Hershey’s pictures that are quite different than the actual reality of the company. For instance, in Figure 1, we see how Hershey’s is advertising itself as a chocolate that is a part of “shared goodness:”

 

images

(Figure 1. Hershey’s Community Archives)

 

This advertisement, at first glance, may not seem like a direct link to exploitation, but the company is promoting itself as a brand that is values-based. It draws upon the picture of a happy family and talks about how Hershey’s “good business” practices translates into better chocolate for the family, resulting in a “better life and bright future.” However, just from the proven evidence discussed regarding the student workers, the reality of Hershey’s is very different than what it is advertising. Clearly, Hershey’s is branding itself as a business that is “good,” however, it is not actually being a “good” business with values.

This type of misrepresentation marketing is all throughout many of their advertisements throughout the years. For example, Figure 2 tells another compelling story about how Hershey is actually promoting diversity when it is really not:

1986_hersheys_mini_ad

(Figure 2. Hershey’s Community Archives)

In this picture, children of different ethnicities and races are being shown; Hershey’s is advertising themselves as a company that promotes inclusiveness across all kinds of ethnic and racial divides. For instance, it talks about how it puts different kinds of candies for all kinds of kids. However, the example of exploitation of its international student workers tells a very different kind of a story. How can a brand that claims to be “inclusive” not be inclusive to its international workers? How could a brand that would never be able to legally get away with reductions in paychecks and amenities for American workers be so inclusive if it takes a legal loophole to do so for its international workers? Clearly, it can be seen how just this one type of exploitation is being used in full force, which passes our litmus test on essentially all fronts. It has abused a sensitive group, misrepresents benefits to workers and unfairly promises them lies, and then brands the company in a way that misrepresents the brand to the consumer, whom otherwise would think that Hershey’s has excellent values just from looking at their advertisements; Hershey’s, knowing that most targeted and loyal consumers are not going to search for their name on the Internet every time they want to buy a bag or piece of chocolate, use this to their advantage.

 

Divine Chocolate

Now let’s compare how Divine Chocolate uses certain advertisements to help attract consumers, but is not being exploited in their efforts, which is the polar opposite of what Hershey’s is doing:

Divine Chocolate, according to Sam Binkley employed a values-based marketing strategy in order to justify their price:

Divine has moved on from selling mainly on the basis of the solidarity value of its product to material use value taste. [Divine Chocolate] still is slightly more expensive as it must, other than the likes of Nestle and Kraft, fulfill its double bottom line of economic and social viability. So while the product is competitive on a level of quality, its price still needs to be justified in terms of justice or solidarity. In order to go beyond this, Divine [needed] to add symbolic use value to its brand, engage in consciously designed commodity aesthetic in order to push into unchartered mass markets (Binkley).

 

Divine Chocolate, like Hershey’s, desired to push even further for profits for their already-successful companies so it could stay competitive; however, what makes it different than other companies is that it is a specialty type of chocolate in a specialty kind of market. In order to be competitive within those specific markets, Divine Chocolate desired to break and expand into the mass markets by justifying their price to those kinds of consumers. In turn, it created the Women’s Empowerment Campaign, which promotes the equality of women chocolate workers, in order to attract consumers (Divine Chocolate).

 

But how is Divine Chocolate, unlike Hershey’s, not being exploitative if they are using mass marketing strategies in the form of women’s empowerment campaigns to sell their product? The difference here is that Divine Chocolate is actually doing what they say and promote in terms of their campaign to sell product.

 

The women’s empowerment campaign is real because it is empowering women in ways that they have never been empowered before. For instance, Divine Chocolate started their journey to change conditions when they gave 44 percent equity to Kuapa Kokoo, the largest shareholder of the company’s assets; this co-operative represents 85,000 farm members across 1,257 villages, and is now the largest co-operative in the world; it is credited with the rise of female cacao ownership of at least 20 percent (Leissle, Wiego). Divine allows women farmers to take a special part in an ownership that no other chocolate company has seen before; clearly, it is empowering women in a way that not only represents them as true stakeholders, but brings positivism to an industry that can be quit laborious, abusive, and depressing for other workers who are not afforded such basic rights. Further, approximately 2 percent of the turnover from Divine is specifically used to promote programs to help farmers gain more skills such as good governance programs, literacy programs, and model farming lessons. Thus, Divine not only gives more than fair equity to its workers (the largest of its kind in history), but invests even more money from their profit to ensure that their workers are gaining life skills to use both inside and outside the farm; by bringing in educational and quality of life programs, Divine is sending an authentic message with real action to the female farmers of Ghana: Divine wants to support you and your work by uplifting you and the community.

By examining the advertising campaigns of Divine Chocolate, we can see a message of solidarity and unity that runs throughout its campaign. For instance, in Figure 3, Divine Chocolate uses a picture of an attractive, healthy-looking female worker to get their message across loud and clear:

2015-04-01-aaas-e119-lecture-9-race-ethnicity-gender-and-class-in-chocolate-advertisements-goo-copy-version-2

(Figure 3. Divine Chocolate)

Many critics may charge that because the woman is attractive, dressed nicely, and looks happy, Divine Chocolate is exploiting its female workers because it promotes “sexuality” and an “untrue side of the chocolate industry”. However, this picture of the woman is an accurate picture because Divine Chocolate helps uplift women to give them the lifestyle that can afford many of these luxuries; with their fair payouts and fair trade program, Divine Chocolate can accurately use this advertisement as an authentic way to attract consumers. When looking at this advertisement, most consumers, on first glance, would think of Divine Chocolate as a chocolate brand that is an “equality treat” – because it is. They further humanize the female chocolate worker, who is actually a co-operative co-owner, by putting her name on the advertisement; the consumer will be led to think that when they buy a bag or piece of Divine Chocolate, the benefit will be going to female workers like Beatrice – and rightfully so because it actually is doing that. That, in itself, is not exploitation but a smart marketing scheme that is a “win-win” for both Divine Chocolate and female workers like Beatrice. All in all, Divine Chocolate has gone out of their way to make this picture a reality – their own values-based version of the chocolate industry.

In Figure 4, we can see how this values-based campaign continues throughout many of their packaging:

108567_divine-web

(Figure 4. Divine Chocolate)

In their designs, Divine Chocolate presents itself as a champion for women by placing designs that are aesthetically pleasing to many females and placing a message on top of the packaging reading “Empowering Women Cacao Farmers.” Like in the picture above, some critics may think that by putting this packaging out in this manner, Divine Chocolate is exploiting women workers because they are using designs that attract consumers to think that they are helping women workers. However, like stated in the previous discussion, they actually are helping women. Further critics may charge that this is being used for International Women’s Day to “cash in” on the holiday, but that charge only further hones in on the point that Divine Chocolate is not being a champion of women just on Women’s Day but essentially every day.

 Just because a company uses an element of their system (which, in this case, is championing the female worker) to sell product does not mean that they are being exploitative. On the other hand, if Divine Chocolate was using the same business practices as Hershey’s and using this campaign, they would then be exploitative. But Divine Chocolate is simply promoting the ideas and concepts that they have actually put into practice.

If these points did not already answer the question of whether or not Divine Chocolate is being exploitative for you, let’s take a direct look back at our litmus test for exploitation

Litmus Test: Is Divine Chocolate partaking in any of the following?

Workers that are a part of a minority, less powerful group (women, international students, children, members of the economic lower class)

Not fairly paying workers for their work – No, workers are granted an excellent amount of equity

Misrepresenting benefits to workers – No, workers are actually being empowered by the company

Misrepresenting a situation to consumers –No, the women’s empowerment campaign is authentic

Using workers to promote ideas/situations that are not actually occurring within the company (i.e. the idea of gender equality when women may get paid less than men) –No, the women’s empowerment campaign is helping women

Branding the company in a way that promotes an idea to sell product but using opposite means to get there (i.e. the idea of fair trade but using a farm/manufacturing factory that does not promote fair trade) –No, ideas like fair trade and empowerment are involved

*Not giving the same rights and privileges to workers that are granted to consumers (this may come in the form of cacao workers cultivating and being a part of the process of making chocolate but actually never tasting chocolate in its final form themselves; this is an industry norm that happens more often than most consumers would think) –No, workers are a part of the brand name but also benefiting from the marketing taking place since they get a higher amount of equity, which equals and translates into improved working conditions and lifestyles

Clearly, unlike Hershey’s, Divine Chocolate does not pass the litmus test for exploitation; the Women’s Empowerment Campaign is a real campaign, which Divine Chocolate uses for smart marketing and true empowerment.

 

References

Alberts, Heike. “Using Cocoa and Chocolate to Teach Human Geography.” Journal of Geography, 2010.

Binkley, Sam. “Cultural Studies and Anti-Consumerism.” New York: Routledge, 2011. Print.

Case Study: Women Cocoa Farmers in Ghana. Wiego. <http://www.wiego.org/wiego/case-study-women-cocoa-farmers-ghana&gt;

Divine Chocolate. <http://www.divinechocolate.com/us/&gt;

Hershey’s Community Archives. <http://blog.hersheyarchives.org/category/hershey-chocolate/marketing/&gt;

Leissle, Kristie.  “Cosmopolitan cocoa farmers: refashioning Africa in Divine Chocolate Advertisements.” Journal of African Studies, 2012.

Preston, Julia. “Pleas Unheeded as Student’s U.S. Jobs Soured.” New York Times, 2011.

The Cocoa Industry in West Africa. Anti-Slavery International, 2004. <http://www.antislavery.org/wp-content/uploads/2017/01/1_cocoa_report_2004.pdf&gt;

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chocolate: Caloric Convenience or Conscientious Confection

Buying chocolate in America can be much like any other purchase in terms of the shockingly wide range of options, flavors, and price points made available to the consumer.  There are basic candies and bars that will satisfy a craving and there are expensive treats that claim to be so luxurious they go so far as to hint at the possibility of providing for a longer life (https://www.theochocolate.com/product/158).  All of these options are available under the name of chocolate and convenience.  This essay will focus on comparisons between only two candy aisles at two stores:  CVS and Whole Foods; both Fortune 500 companies, neither of which are confectioneries or chocolate houses.

CVS

CVS is a $117.4 billion (according to Forbes.com) drug retail company.  Not only are they the biggest retailer of prescription drugs and the second-largest pharmacy benefits manager in the U.S., but they also provide healthcare services through medical clinics and diabetes care centers.  In addition, they also sell chocolate.

True to their origins as a pharmaceutical vendor, when one walks into a CVS, it has a compact, efficient, and even slightly clinical look and feel.  The open space is brightly lit by overhead fluorescent lights, large red tags indicate where items can be found, and special offers and discounts are loudly displayed and announced overhead.  Even the retail staff members are dressed in white lab coats lending to the authenticity of a doctor’s waiting room.

This store prides itself on health, but also low prices and convenience.  It is open 24 hours a day, seven days a week and offers weekly and even daily special discounts.  The candy aisle is located at the front of the store near the entrance, across from toys and other fun, spontaneous, instant-gratification type items and extras.  Additional chocolate items are lined up under a selection of gum at the register for last-minute impulse purchases, with sale prices highlighted to focus attention on the discount provided.

CVS counter
Display at the CVS checkout counter. Candy bars, placed under the gum, are all on sale for $0.88 or buy one and get the second one at a 50% discounted price.

As one walks to the candy aisle, the packaging and marketing materials (mostly plastic) are immediately noticeable in bright colors, bold fonts, and large labels.  The branding, for most American customers, would be quickly recognized as all belonging to the “big chocolate” brands:  Hershey’s, Ferrero Rocher, Nestle, Mars, and Cadbury (Martin, “The rise”).

There are bars of chocolate, but the majority of products offered are blended with, or provide a shell coating over, less expensive products.  The iconic milk chocolate Hershey’s bar is showcased in the middle row at eye-level, sharing the shelf with Nestle Chunky bars (a chunky-shaped candy bar with milk chocolate, California raisins, and roasted peanuts). Nips (a hard candy, some of which contain a chocolate-flavored filling), Dove chocolate bars and Cadbury Dairy Milk bars are above.  Below are larger packages of bars, including:

  • Hershey’s Special Dark (a semi-sweet chocolate bar)
  • Hershey’s Cookies ‘n’ Creme (a white candy bar with pieces of chocolate-flavored cookies interspersed)
  • Reese’s Peanut Butter Cups (large chocolate coated peanut butter confections)
  • York Peppermint Patties (dark chocolate-covered soft peppermint disks)
  • Hershey’s Mounds (a dark-chocolate covered center made from shredded coconut)
  • Hershey’s Almond Joy (a milk chocolate-covered coconut-based center topped with almonds)
  • Mars Snickers (a milk chocolate-covered nougat topped with caramel and peanuts)
  • Mars Milky Way (a chocolate-covered chocolate malt flavored nougat with caramel)
  • Nestle Butterfinger (a chocolate-toffee-covered bar with a flaky, crisp, peanut butter-flavored center)

These items can be purchased individually; however, the majority of the products are in gradually increasing sizes and quantities with prices ranging from $0.39 to $0.89 an ounce.  While no great mention or display is made with regard to the ingredients, origin, manufacturing practices, ethical concerns, or quality of cacao in these products, three of the four Dove chocolate bars are stamped with the Rainforest Alliance certification.

CVS aisle
CVS aisle stocked mostly with large-packaged chocolates.

Based on the selection provided:  the absence of cacao mentioned, the presence of larger size packages, the heavy focus on additional ingredients such as nuts, fruits, and/or confections, and lower bulk prices that accompany them, etc., we learn that the CVS’s targeted audience has limited time and money to spend.  The intention is “caloric consumption,” grab and go convenience, a meal substitution or perhaps simply to ease a craving.

Whole Foods

Whole Foods is an $18.8 billion (according to Forbes.com) supermarket chain that claims to be “America’s Healthiest Grocery Store” (www.wholefoodsmarket.com).  Their goal is to sell the healthiest foods possible and offer products that are free of artificial preservatives, colors, flavors, sweeteners, and hydrogenated fats.  There is a welcoming feel to the expansive space.  The lighting is warm without being harsh, the walls are lined with soft wood, posted signs are in uniformly calming tones, and helpful employees all wear green aprons.  It has the look and feel of an up-scale farmers market.

Whole Foods aisle
Candy aisle at Whole Foods.

One can find the candy aisle located next to the produce section, across from organic baby foods, and adjacent to a beautiful display of organic “Whole Body” healing bath salts and soaps.  The chocolate bars (mainly bars and mostly dark, only a few milk chocolate or blended confections are offered) are wrapped in expensive papers and foils featuring endangered species, philanthropic organizations and specific causes, picturesque scenes or artistically created designs.

There are no “big chocolate” products to be found.

Each bar appears to have been hand-selected from a variety of artisanal chocolatiers.  Some are smaller than others, but all promise their own unique look, feel, story, and taste.

Instead of being recognized and advertised by known “big chocolate” brand names, these brands chose to focus instead on highlighting select ingredients and percentage of cacao.  Each bar clearly calls out the selected ingredients, origin and percentage of cacao as well as the origin and processing of any included ingredients.  Some examples include:

  • 45% cacao milk chocolate with Congo coffee and cream
  • 55% dark chocolate with chilies and cherries
  • 57% organic dark chocolate with sea salt and caramel
  • 60% dark stone ground chocolate with toffee almond and sea salt
  • 65% dark chocolate with forbidden rice
  • 70% organic fair trade dark chocolate with cherry almond
  • 70% dark chocolate bar with ancho chile, cinnamon, and orange
  • 72% cacao organic dark chocolate, cardamom, cinnamon, and chili
  • 88% cacao – extreme dark
  • 99% cacao

Whole Foods_chocolate
Some of Whole Foods’ chocolate selection.

Ethical, health, and religious concerns are also addressed through seals of (sometimes multiple) certifications on each chocolate bar, such as: Demeter, Whole Trade, Fair Trade, Fair for Life, Direct Trade, Non GMO Project Verified, Oregon Tilth, Certified Gluten-Free, Rainforest Alliance, Taza Chocolate Direct Trade Certified Cacao, Dairy-Free, Soy-Free, Vegan, Kosher Dairy, and USDA Organic. If additional information is desired, the store has also placed a display rack at the entrance to the aisle featuring a free publication titled, “For a Better World, Issues & Challenges for a Just Economy.”  It even includes a reference guide to fair trade and worker welfare programs provided to educate customers and raise awareness levels of labor practices.

Whole Foods_chocolate2
Whole Foods’ chocolate selection.

Whole Foods_magazine
Fair World Project free magazine provided to customers at Whole Foods.

The price points reflect the additional information, attention to detail, and more expensive packaging.  Costs per ounce range from $0.59 to $3.85.  Not only are costs higher than CVS, but even the cost differential within Whole Foods’ offerings are significant.

Errol Schweizer, executive global grocery coordinator for Whole Foods Market, stated that “The fair trade chocolate category in our grocery departments has grown by more than 350 percent over the past five years. That’s a true indicator that ourshoppers are really making a positive impact on the lives of cocoa growers in developing countries” (Martin, “Alternative trade”).

The intended audience has time and money to spend.  Whole Foods has created a shopping experience that intentionally targets the “conscientious consumer,” someone who is educated on agricultural sourcing and labor practices – or would at least like to be.

These high-end chocolates are being provided for someone who wants to treat themselves to something delicious and feel good about it; a way of thinking that their self-indulgence (via the chocolate and price point) is making a positive impact on the world around them.

Ultimately, both stores sell chocolate while focusing on “health” and “healthier living”, albeit through very different lenses.  CVS provides chocolate and chocolate-coated items intended for mass consumption at a lower price point – making the process as quick and efficient as possible through placement and known brands.  Whole Foods provides high-end, more artisanal chocolates intended for indulgence at higher price points.  Their goal is to provide their customers with a buying experience – chocolate is located in the middle of the store (not as convenient for quick shops) and intended to have time to browse, read, and learn about different products and practices as part of a shopping routine.

 

Works Cited

Fair World Project. “For a Better World:  Issues & Challenges for a Just Economy.” Issue 12 Spring 2016.

Forbes.  The World’s Most Valuable Brands. http://www.forbes.com/companies/cvs-health/.  N.p. N.d. Web. 11 May 2016.

Martin, Carla D. “Alternative trade and virtuous localization/globalization.” Chocolate, Culture, and the Politics of Food. Harvard Extension School: Cambridge, MA. 6 Apr. 2016. Class Lecture.

Martin, Carla D. “Haute patisserie, artisan chocolate, and food justice: the future?” Chocolate, Culture, and the Politics of Food. Harvard Extension School: Cambridge, MA. 27 Apr. 2016. Class Lecture.

Martin, Carla D. “The rise of big chocolate and race for the global market” Chocolate, Culture, and the Politics of Food. Harvard Extension School: Cambridge, MA. 9 Mar. 2016. Class Lecture.

Mintz, Sidney. 1986[1985]. Sweetness and Power: The Place of Sugar in Modern History. New York: Penguin Books.

Theo Chocolate, Inc.  Chocolate Bars. https://www.theochocolate.com/product/158. N.p. N.d. Web. 11 May 2016.

Whole Foods Market.  http://www.wholefoodsmarket.com. N.p. N.d. Web. 11 May 2016.

Love chocolate? Then love paying more for it.

 

What’s the problem?

Currently, chocolate farmers are not being paid fair wages. Oxfam’s pie chart below illustrates that farmers only receive 3% of the profit from each chocolate bar.oxfam-chocolate-bar-share_large

This means that chocolate farmers can earn less than $2 per day (Oxfam 5). In Ghana and Côte d’Ivoire, for example, some cacao farming households only make $0.50 – $0.80 per day and 60-90% of their income is dependent on cacao (Martin lecture 1 slide 6; Cacao Barometer 1). This results in many illiterate and malnourished chocolate farmers who live in poverty and are without health care, to the extent where it will take farmers in Ghana and Côte d’Ivoire 341% and 1608% of their current income, respectively, to reach the poverty line, as illustrated below in Figure 1.

IMG_3522

However, this huge percentage increase in income will still only allow such farmers to reach the poverty line. Providing farmers with fair living incomes and wages requires more than simply bringing them out of poverty. Farmers ought to be able to afford clean drinking water, sanitation, decent housing, adequate clothing and footwear, nutritious diets, social security, and basic social services (Cacao Barometer 44-45). Therefore, a lot of change and action is required since chocolate farmers are far away from escaping poverty, let alone earning a sufficient income to be able to live healthy lives.

 

Fairtrade

Fairtrade is one attempt that has been made to tackle this injustice. Fairtrade aims to help farmers build sustainable businesses and improve their quality of life by selling products that are fairly priced (Fair Trade USA). After the Second World War and during the 20th century missionaries and humanitarians began North America’s oldest Fair Trade Organisations (Fair Trade Resource Network 1). Ndongo Sylla claims that since then Fair Trade has significantly impacted some regions of the world; however, the injustice towards farmers is complex and Fair Trade faces difficulties of its own (16, 63). Firstly, while Fair Trade chocolate is more expensive than regular chocolate, not much of the Fair Trade price goes back to the farmers (Martin lecture 10 slide 10). Since farmers sell their cacao beans to middle men who then sell it on, the middle men absorb the price increase. Secondly, the cost for certifications, like Fair Trade certification, is expensive and is an ongoing cost as products have to be continually re-certified (Martin lecture 10 slide 10). And farmers bear the cost of certification. Therefore the cost of certification may be greater than the profit gained from having products certified. Thus, chocolate farmers may lose money by having their products certified, which defeats the purpose of certification and Fair Trade. Furthemore, because certification is costly, Fair Trade is advantageous for wealthier farmers who can afford certification but disadvantageous for poorer farmers who cannot. Therefore Fair Trade promotes even greater inequality between chocolate farmers, which moves us away from our goal of eliminating farmer inequality. Thirdly, both consumers and farmers may lose incentive to participate in Fair Trade’s system because of quality concerns. Certified high quality cacao beans are priced the same as certified low quality cacao beans. Therefore, as explained in the video below, farmers are not rewarded for producing higher quality beans and therefore may be incentivised to sell their beans directly to a more profitable specialty market than have their beans certified with Fair Trade.

Additionally, consumers and farmers may also lose incentive to continue with Fair Trade due to ethical concerns in the media. Fair Trade are often secretive about the true value and gains that Fair Trade offers in comparison to regular chocolate. For example, from 2:23 onwards in Fair Trade Foundation’s marketing video below, Fair Trade is advertised as “a system that pays extra money and that extra profit comes back to us workers”; however, they do not explicitly state quantitative values for how much “extra money” and “extra profit” is earnt (Fair Trade Foundation).

Even on Fair Trade’s website page titled “Impact Research and Evaluation Studies” under the section “The Impact of Our Work” explicit figures are not specified. They make generic statements like: “findings illustrate the real difference that certification and sales have made to farmer organisations and living conditions” where “the real difference” is not clearly explained or supported with figures (Fair Trade Foundation). And in the video below, from 0:55 onwards, even the President and CEO of Fair Trade explicitly states that regular “farmers get 8% of export price” but generically compares that to Fair Trade farmers who “get a higher price”.

Lastly, consumers may be discouraged to buy Fair Trade products because Fair Trade is just one certification body out of many, such as UTZ certified and Rainforest Alliance, which all have different standards. And even within the Fair Trade organsation policies and methods are inconsistent. Fair Trade USA has different policies, standards, and management from Fair Trade UK. Therefore, though certifications such as Fair Trade aim to provide chocolate farmers with fairer wages, there are many flaws in the system and it is mostly definitely not a perfect solution to providing farmers the income they need and deserve.

 

Direct Trade

Direct Trade certification also aims to help chocolate farmers receive fair wages, and it addresses Fair Trade’s flaws and improves upon them (Martin lecture 10 slide 17). Unlike Fair Trade, Direct Trade rewards quality products and pays higher premiums for higher quality cacao beans. Direct Trade also limits the cost of certification, which helps prevent farmers from losing money from paying the cost of certification and it does not disadvantage the poorer farmers, in fact, Direct Trade allows for smaller farms. But Direct Trade’s most distinctive feature is that they promote direct communication and price negotiation between consumers and farmers. This is their most valuable practice because the direct communication increases the opportunity for farmers to receive fair wages and is a more effective method as it eliminates the middle men that absorb the price increase. Taza Chocolate based in Boston and Dandelion Chocolate based in San Francisco are two examples of companies that partake in Direct Trade. They are also the most transparent chocolate companies. Each year they release a transparency report explicitly detailing where their money goes, how many cacao beans they buy, and the origin of their cacao beans.  Figure 2 below is an example taken from Taza Chocolate’s 2015 transparency report to show how remarkably transparent the information they provide the public with is. Such transparency is extremely rare in chocolate companies.IMG_3523Figure 2.

However, even the most transparent companies cannot guarantee that the farmers receive the money that chocolate companies pay for their beans. For example, Taza explicitly states that in 2015 they paid $869,000 for 223 metric tons of beans purchased; however, there is no guarantee that there are not middle men absorbing the payment as the chocolate supply chain is complex and ensuring the money goes directly to the farmer is often out of chocolate companies’ power (Taza 2). Therefore the Fair Trade and Direct Trade certification system and increased transparency is not enough to ensure that farmers are receiving fair wages.

 

Craft Chocolate

Craft chocolate makers present a hopeful future for farmers and fair living wages. Craft chocolate makers are able to source the origin of the cacao beans they use, take raw ingredients, and complete the whole chocolate manufacturing process: roasting, winnowing, tempering etc. by themselves, and thus make chocolate from “bean-to-bar”. Since craft chocolate makers produce on small scale, are independent, and make their chocolate and their company from scratch, the origin of the beans they used are known and they can purchase those beans via direct trade relationships with the farmers. This enables the farmers to be paid much more for their cacao beans. The cacao is also grown under good labour conditions, which is a bonus as this is another one of Fair Trade’s aims and initiatives (Martin lecture 13 slide 31). Farmers are able to be paid much more for their cacao not only because of the direct relationship and direct purchase used, but also because craft chocolate is not certified. So, farmers do not bear the cost of certification. Therefore farmers that work with craft chocolate makers are hugely better off.

The high cost of a craft chocolate bar is the trade-off now that farmers are being paid higher and fairer prices for their cacao, despite their products being non-certified. Farmers are no longer the persons paying for their fairer wages through certification. Now consumers cover farmers’ labour costs by purchasing more expensive chocolate bars. Though some farmers greatly benefit from this shift, the majority of farmers continue to suffer because few consumers are willing to pay for higher priced chocolate bars. For example, craft chocolate such as Potomac Chocolate and Dick Taylor cost $8 and $9 per bar, respectively, whilst an average Hershey’s bar costs only $2. Thus, the majority of chocolate consumers would rather purchase a cheap $2 chocolate bar than an $8 or $9 craft chocolate bar. Furthermore, research has shown that regardless of a consumer’s personal financial fluctuations, they remain willing to only spend $3 or $4 per chocolate bar (Ahren). Therefore currently few farmers benefit from such ethical schemes, like craft chocolate, because there is not a large consumer audience who are willing to pay $8 and $9 for a chocolate bar.

 

Conclusion

There is a clear relationship between the fairness of a farmer’s wage and the price of a chocolate bar. An average unethical chocolate bar, such as Hershey’s chocolate, costs a mere $2 (Hershey’s). Though Fair Trade has some flaws and may not always ensure that farmers’ receive a higher wage, it is more ethical and farmer-friendly than an average chocolate bar. A Fair Trade chocolate bar such as Cadbury’s costs $4.29 for 6.5oz, which is more expensive than an average chocolate bar (Target). Then a Direct Trade chocolate bar such as Taza chcoolate, which offers farmers a better price for their cacao since they have direct communication with their farmers, costs $5 for 2.7oz, which is much greater than a Fair Trade bar (Taza). Finally, the most expensive is a craft chocolate bar such as Dick Taylor’s, which offer farmers much more for their cacao, costs $6.80 for 2oz (Dick Taylor). Therefore, because the more a chocolate bar provides farmers with fairer wages the more expensive it is, in order to help farmers receive fairer living wages, consumers must be prepared to pay more for chocolate bars.

 

Paying more

Though Ahren’s research has shown that chocolate consumers are only willing to pay $3 or $4 for a chocolate bar, there is hope that people will be willing to spend more and that chocolate farmers can have fair wages. Craft chocolate is a relatively new concept and trend. During the 1980s and 1990s there was an increase trend in single origin chocolate and the purity of tracing the origin of cacao beans (Martin lecture 13 slide 20). During the 2000s there was a birth of new craft chocolate producers, and over the past six year, during the 2010s, there have been over 150 bean-to-bar craft chocolate makers (Martin lecture 13 slide 20). Therefore, there is a growing movement and increase in consumer demand for craft chocolate, since this increase in supply could not occur without it. However, fair farmer wages is not the only reason why craft chocolate makers pay farmers much higher cacao prices. Craft chocolate makers pay more because they are purchasing higher quality beans. The concern is that the current consumer demand growth for single origin chocolate may be due to consumers’ desire for higher quality chocolate and not consumer consciousness. If consumers’ willingness to pay extra for chocolate is solely due to their desire for high quality chocolate, it is unlikely that many more farmers will be able to benefit from fair chocolate products such as craft chocolate bars. The number of chocolate consumers who desire high quality chocolate will plateau as the majority of chocolate consumers simply view chocolate as an easy delicious snack and do not care for its quality. Hence big leading chocolate companies today like Hershey’s are able to sell poor quality chocolate for just $2. Therefore it is promising that there is a trend and increase in chocolate consumers who are willing to pay for more expensive chocolate bars; however, in order for more farmers to benefit from fairer wages, consumers must be willing to purchase expensive chocolate due to consumer consciousness and not simply for higher quality chocolate.

Furthermore, craft chocolate is not the perfect solution to chocolate farmers being underpaid. Craft chocolate makers often neglect West African cacao, where farmers’ wages are the lowest. Therefore it should not be advocated for all chocolate consumers to switch to craft chocolate bars. Rather, chocolate consumers should use craft chocolate as a scenario where the products are expensive but the makers pay their farmers much more for their cacao. Thus, craft chocolate is an example that should encourage chocolate consumers to be willing to pay more for chocolate so that chocolate farmers can receive fairer wages and a better quality of life.

 

 

Non-hyperlinked Figure Sources

Figure 1. “Equality for Women Starts with Chocolate.” Oxfam. Retrieved from: https://www.oxfam.org/sites/www.oxfam.org/files/equality-for-women-starts-with-chocolate-mb-260213.pdf  May 4, 2016

Figure 2. “Annual Cacao Sourcing Transparency Report.” Taza. Sept 2015.  Retrieved from: https://cdn.shopify.com/s/files/1/0974/7668/files/Taza_Transparency_Report_2015_v10_spreads__1.pdf?7651569415208703683  May 4, 2016

 

Works Cited

Ahren, Dan. “Investing in Vice.” 2004. St. Martin’s Press, New York. Print

“Annual Cacao Sourcing Transparency Report”. Taza Chocolate. September 2015. Retrieved from: https://cdn.shopify.com/s/files/1/0974/7668/files/Taza_Transparency_Report_2015_v10_spreads__1.pdf?7651569415208703683 May 4, 2016

“Brief History of Fair Trade.” Fair Trade Resource Network. Retrieved from: http://www.fairtraderesource.org/uploads/2007/09/History-of-Fair-Trade.pdf May 4, 2016

“Cocoa Barometer 2015.” 2015. Retrieved from: http://www.cocoabarometer.org/Download_files/Cocoa%20Barometer%202015%20Print%20Friendly%20Version.pdf May 4, 2016

“Dick Taylor Craft Chocolate.” Dick Taylor. Retrieved from: http://www.dicktaylorchocolate.com/shop/?category=Chocolate+Bars May 4, 2016

 

“Impact Research and Evaluation Studies.” Fair Trade Foundation. Retrieved from: http://www.fairtrade.org.uk/en/what-is-fairtrade/the-impact-of-our-work/impact-research-and-evaluation-studies May 4, 2016

Martin, Carla. “Chocolate, Culture, and the Politics of Food Lecture Slides 2016.” 2016. Retrieved from: https://drive.google.com/folderview?id=0B_kGt6Sj1X5bYUY0UWg0Y1h2TTA&usp=sharing May 4, 2016

— “Lecture 1: Introduction to Chocolate, Culture, and the Politics of Food.” 2016.

— “Lecture 10: Alternative Trade and Virtuous Localization/Globalization.” 2016.

Oxfam Media Briefing. “Equality for women starts with chocolate”. Oxfam. 2013. Retrieved from: https://www.oxfam.org/sites/www.oxfam.org/files/equality-for-women-starts-with-chocolate-mb-260213.pdf May 4, 2016

“Products.” Hershey’s. Retrieved from: https://www.hersheys.com/fundraising/products/ May 4, 2016

“Shop.” Target. Retrieved from: http://www.target.com/#?lnk=icon_t_spc_1_0 May 4, 2016

Sylla, Samba Ndongo. “The Fair Trade Scandal.” Ohio University Press. 2014.

“Taza Chocolate.” Taza. Retrieved from: https://www.tazachocolate.com/collections/see-it-all/products/super-dark May 4, 2016

“What is Fair Trade?” 2016. Fair Trade USA. Retrieved from: http://fairtradeusa.org/what-is-fair-trade# May 4, 2016

Fair Trade, Direct Trade, and The Relationship Model: Millennials Changing The Ethically Sourced Market

We’ve heard a lot about our generation, the famed “millennials.” Often stereotyped as lazy, selfish and entitled, it doesn’t seem like we’re doing much for the world besides trying to build the next great “Angry Birds” app. However, there is an important part of our generation that is not talked about as much, that we are the “do well while also doing good” generation. Our generation wants to see contributions as investments in causes that we care about instead of solely a donation or charity. In finance, there is something called sustainable and responsible investment and “ESG,” which stands for environmental friendliness, social responsibility and corporate governance. This form of investing is known as impact investing, a strategy for investing in companies that do something good for humanity, yet also do well for portfolios.

Impact investing in the US has grown 76% from 2012 to 2014, in only two years (USSIF). Why is this? Because millennials are entering the marketplace and demanding more ethically sourced goods and ethically responsible companies. Although millennials currently may only account for a small percentage of investing, as we age and come into money that we want to invest for our future, we will be a significant driver of impact investing growth. This investment perspective is important for understanding millennial consumption habits, especially in regards to the future consumption of goods and products that have a history of bad ethics and poor social responsibility, such as characterized in the production of chocolate and coffee.

Our generation is extremely influential in its current and potential buying power, and it has a handle on the limitless potential of social media to address issues and be a voice for causes like no other generation before it. As our generation increasingly enters the marketplace, there will be increasing scrutiny of where we invest our money and what good it is doing in the world. There will be increasing scrutiny on transparency, on getting to the bottom of the supply chain, where much, much more of every dollar we spend gets back to the producer, the farmer. I mention these economic and finance terms as a way to frame the importance of understanding what is happening in the marketplace to inform chocolate companies of the coming conscious consumer and how we will see certifications such as Fair Trade and Direct Trade face increased scrutiny, and companies like Taza Chocolate as pioneers in the marketplace grow in popularity.

In its latest annual study, Nielsen revealed that almost two thirds (66%) of consumers are willing to pay extra for products that come from companies who are committed to positive social and environmental impact (Nielsen). This percentage represents a large jump from 55% last year and 50% the year before. Interestingly, willingness to pay more is consistent across income groups. The study also revealed that almost three-quarters of millennials (ages 20-34) claimed they would pay more for sustainable products, up from about half last year. One of the most fascinating parts of this study was that female millennials, in particular, were willing to pay more at 75% (Nielsen). These trends towards more conscious consumption are something chocolate companies should be paying attention to. While at the moment we are most familiar with Taza Chocolate as a pioneer in the Direct Trade chocolate market, I believe we will be seeing more companies and brands come into the Direct Trade ethically sourced market to capitalize on the millennials that will be looking for such differentiated products in the marketplace. As we discovered in class, women buy the bulk of chocolate products, and if millennial women are the most inclined to pay more for an ethically sourced product, it is good news for the ethical chocolate market and for companies like Taza, who have to charge a premium to maintain their Direct Trade business. According to Steve Polski, senior director of responsible supply chains and sustainability at a top consumer company observes, “Businesses today are looking at sustainability differently than they were even a few years ago.” Polski continues, “It’s an exciting time to be working on supply chain sustainability and I think we’re approaching an inflection point among consumers as well” (Mcavoy).

Nielsen-Paying-Premium-Sustainable-Products-Oct2015

Chart showing the incredible rise in millennials being willing to pay a premium for sustainable products – this is good news for ethically sourced chocolate and coffee companies that must charge a premium to stay committed to their ethical sourcing and be willing to cover the high price of maintaining an ethically sourced company with a high quality, pricey product. 

I have had my own first-hand experience with the issue of supply chain sustainability and the new millennial market that I will discuss further. First, however, I will begin by highlighting the difference between Fair Trade and Direct Trade using Taza Chocolate as an example, and then discuss my own experience creating an ethically sourced coffee company without certifications of any type, a trade model I call the “Relationship Model,” or the one-to-one model. There is much to be explored on the topics of ethically sourced chocolate and coffee and many difficulties of supply-chain management. Yet, as noted earlier, the economic trends and research data tells us that the consumer of the future will increasingly demand ethical products, particularly those transparent as to source, and be willing to pay more for these products – the chocolate market needs to think about how to adapt to these trends and answer millennial questions on sourcing.

We have discussed and explored in depth the various issues with the Fair Trade and Direct Trade certifications in the chocolate world. Fair Trade USA promises “the money you spend on day-to-day goods can improve an entire community’s day-to-day lives” (Fair Trade USA). While this goal is promising, taking a closer look at Fair Trade USA’s standards reveals that this certification is not enough to directly impact cacao farmers (Martin). There is no guarantee that money from the purchase goes directly to the farmers’ pockets. Instead, farmers must shoulder high fees, pay premiums, and other charges that come with the Fair Trade certification (Martin). This furthers the sad reality that very little, if any, money actually goes the farmers at the origins of the supply chain. Fair Trade USA promises a fair minimum price for cocoa, but in reality it “barely differs from the current world market price” (Leissle). Ultimately, the research tells us that that Fair Trade USA’s promises and commitments are misleading, and “lack of evidence of impact” makes its certification less appealing to informed consumers seeking ethically sourced products, particularly among millennials (Martin).

By contrast, Direct Trade moves beyond Fair Trade USA’s standards to create a clearer connection between cacao farmers and chocolate makers, or coffee farmers and coffee makers. Direct Trade hopes to go further than Fair Trade USA and be the solution that “make[s] for more ethical, sustainable production in an industry with a long history of exploitation” (Shute). Direct Trade tries to realize this benefit by eliminating the “middleman,” allowing chocolate makers and coffee makers to speak and interact directly with the farmers at the beginning of the supply chain to negotiate prices for the beans. Such direct negotiation, eliminating the cost and burden due to the middleman, should make it possible to compensate farmers at a “premium price they should earn for the high quality cacao they produce” (Taza Chocolate). In addition, Direct Trade eliminates the fees that come with Fair Trade USA certifications. The direct interaction between the farmers and chocolate and coffee makers means the farmers and farms are not obligated to be a part of cooperatives and can thus earn even more (Martin). These structural details of the Direct Trade process make it a better solution than Fair Trade USA for consumers seeking truly ethically sourced products and who want to see more of their money getting back to the farmer and making a difference. Importantly, those who seek ethically sourced products are growing in numbers and are mostly made up of millennials, whose purchasing power is only increasing. Now is when the Direct Trade market can do well while also doing good in the world. As millennials, we care about where the products we eat come from and that the money we spend is going to a good cause, thus enabling companies to charge a premium to make sure that their products are up to our new millennial standards and be assured that these premium prices will not hinder the profits of their business.

Taza Chocolate marketing labels showing their “Direct Trade” icon and their marketing slogan, “seriously good and fair for all.” We should question what these labels mean and recognize the vague notion of “Direct Trade” and the lack of standards it implies. 

While the Direct Trade model eliminates most of the issues buyers have with the Fair Trade USA certification system, certain problems of inconsistency arise due to the lack of set standards for Direct Trade. Buyers who directly source from farmers can have different standards when it comes to what a so-called “premium price” actually represents, what “quality cacao” means, and what the expectations are for farms with “fair working conditions” (Martin). Taza Chocolate maintains that they have “direct relationships with cacao producers,” and pay a set “premium price” to cacao producers and continues to “purchase high quality beans” but does not offer too much into detail of where exactly the money from the premium pricing goes (Taza Chocolate).

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Screengrab of Taza Transparency Report meant to highlight that the transparency reports do not detail the amount of money received by individual farmers or the “premium” paid – it seems as if these “Transparency” reports are no more than a marketing scheme to appear transparent. The details of the economics of the cooperatives and the income of the farmers is left out. 

Taza’s particular company-developed souring transparency also brings forth concerns about inconsistencies in Direct Trade’s more general, less specific standards amongst other producers claiming to source their products via Direct Trade.

As a millennial, I know how difficult it is to be a conscious consumer. Until a few years ago I was unaware of the struggles farmers faced in their supply-chains and how little income farmers were able to make by selling to conventional markets or to big companies. It was only when a started a coffee company myself was I able to truly understand how difficult it is to create a great company with a great product, how difficult it is for the farmer to reap the benefits while also being able to make a profit to sustain a business. But the success of the business is a real case study in changing consumer habits and of the new supply chains consumer changes are causing. In 2011, I visited the Ngorongoro Crater in Tanzania, Africa. There, I met Paskali Gwandu, our guide in the crater for a week and a wonderful horticulturist. He introduced my family to the most wonderful coffee we had ever tasted, grown and roasted right on his farm in his village down the road from the campsite. Over the course of the week my family drank his coffee and explored the crater. At the end of the week we exchanged email addresses so we could send some photos we had taken and keep in touch about his horticulture studies. In a couple of emails, my family asked about his family and his great coffee, which led to him sending us his coffee beans, rare Tanzanian Peaberry, for a small money transfer of $50, as a thanks for him sharing his knowledge with us. To our surprise, the coffee arrived in just over a week, wrapped in beautiful Tanzanian stamps and with a gift of a blanket interwoven with exotic cowrie shells and with my own name, “Catherine” on it – a thank you from Paskali’s wife and family.

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My brother (on left) with Paskali Gwandu, the talented horticulturalist and coffee farmer. Evidence of direct relationship. 

We continued this email exchange and money transferring to receive his amazing coffee every few weeks. After a while, friends and extended family began asking about Paskali and the coffee and started buying it through us. For my senior multimedia project, I decided to build a website for Paskali as a way for it to be easier for both customers and Paskali to order coffee, naming it “Gwandu Coffee.” Since that point, I have been trying to help Paskali and his family by marketing Gwanducoffee.com and learning about the complex coffee business in Africa. The small amount of coffee we have sold has changed Paskali’s life, allowing him to earn tuition to send his children to school and invest in new coffee plants, things that Paskali never thought were possible before.

Screengrabs from GwanduCoffee.com, the website I made in my multimedia class. Fully functional credit card processing and order transfer to Paskali’s email at the village computer which he checks daily. 

I discovered that by selling this coffee direct from Tanzania to the consumer via the internet, Paskali could get $4 per pound, compared to max $.50 per pound he would get at the markets. I have seen first hand what transparency can do for both the consumer and the farmer. Paskali’s coffee is of highest quality, and he takes deep care of his coffee because he knows he is sending it directly to the consumer’s doorstep and getting paid a premium to care for the consumer and the coffee.

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From GwanduCoffee.com, our simple infographic showing the supply-chain from farm to consumer. 

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A screengrab of my research slide detailing the current issues with the coffee market in Tanzania and how GwanduCoffee.com is a solution to those problems. Detailing the significant price change to the farmer. 

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A screengrab from GwanduCoffee.com showing again the supply chain as direct from farm to consumer, truly “Direct” trade, no middlemen (buyers, sourcers, packaging, etc. – such as Taza must use)

Here, my model goes one step further, in what I like to call the one-to-one or Relationship Model of trade. In this model, you, the consumer, know the exact farmer and farms where your coffee is grown and roasted and can directly witness the impact you make. You know that this coffee is from Paskali Gwandu, not from just from farms in a region or a cooperative. A common question that comes up from people is, “Is this coffee Direct Trade or Fair Trade” and this is where I have to tell them no, it’s much more than that. It’s a relationship trade with Paskali, his family, his village, the coffee and the consumer. It was clear that people knew about fair trade but were unaware of what it did or what it did not do for farmers.

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Straight from GwanduCoffee.com website under the “The Company” tab. Gwandu gvies all the credit to Paskali Gwandu and makes sure to give background to him and the company. Pictured below the information is a photo of Paskali Gwandu himself. 

These new ways of trade and sourcing chocolate and coffee beans leaves more questions to be asked pricing, quality control, marketing, and the disruption of old supply chains, and whether consumers may be exploited from labels and buzzwords, but that is a larger conversation. The important conclusion is that millennials coming into the marketplace and demanding more ethically sourced products, and willing to pay more for them, bodes well for the positive future of farmers and chocolate and coffee businesses.

Even further than the Relationship Model I propose, is a relationship much like World Vision, a charitable organization in which a specific child or family is sponsored over time by a contributing family. Perhaps in this extended relationship model, a farmer could be supported by multiple families or people over a longer period of time, to make a real difference and receive high quality coffee or chocolate. This may be wishful thinking for the future of coffee, but we must continue to think of new ways to innovate the supply-chain and how to increase transparency.

relationship-trade-icon

It is advised to avoid all certifications on packaging to not stray consumers with false advertising, but this is an example of a possible relationship model trade icon, if the market demands such labeling. 

Of course, not every person has access to a coffee or chocolate farmer and can create a company, but consumers can take control of their knowledge and quickly identify which companies are doing good for humanity. Something as small as a chocolate bar or a cup of coffee in the morning can change the life of a farmer half way across the world. As a millennial, I believe the market place will start to make this form of conscious consuming more available to us, as companies will want to capitalize off our changing concerns about where our food is from and where our money is going to support. Companies like Taza Chocolate and Gwandu Coffee are not only paving a new path for companies of the future, but also serving as a contrast to present company ethics and serving as a way for consumers to question current supply-chain practices. Our generation can and will create real positive change in the chocolate and coffee industry. I feel honored to be a part of this change and look forward to the future of an industry so marred with a dark past and even a dark present.

 

Works Cited:

Leissle, Kristy. “What’s Fairer than Fair Trade? Try Direct Trade with Cocoa Farmers.”YES! Magazine. YES! Magazine, 04 October 2013. Web. 02 May 2016.

Mcavoy, Kaitlyn. “Ethical Sourcing: Do Consumers and Companies Really Care?” Spend Matters. N.p., 15 Feb. 2016. Web. 2 May 2016. <http://spendmatters.com/2016/02/15/ethical-sourcing-do-consumers-and-companies-really-care/&gt;.

Martin, Carla. “Alternative Trade and Virtuous Localization/globalization.” AAAS 119x Lecture. CGIS South, Tsai Auditorium, Cambridge, MA. 6 Apr. 2016. Lecture.

Nielsen. “GLOBAL CONSUMERS ARE WILLING TO PUT THEIR MONEY WHERE THEIR HEART IS WHEN IT COMES TO GOODS AND SERVICES FROM COMPANIES COMMITTED TO SOCIAL RESPONSIBILITY.” Nielsen. Nielsen Press Room, 17 June 2014. Web. 2 May 2016. <http://www.nielsen.com/us/en/press-room/2014/global-consumers-are-willing-to-put-their-money-where-their-heart-is.html&gt;.

Nielsen. “Sustainable Selections: How Socially Responsible Companies Are Turning a Profit.” Nielsen. Nielsen Press Room, 12 Oct. 2015. Web. 2 May 2016. <http://www.nielsen.com/us/en/insights/news/2015/sustainable-selections-how-socially-responsible-companies-are-turning-a-profit.html&gt;.

Shute, Nancy. “Bean-to-Bar Chocolate Makers Dare to Bare How It’s Done .” NPR: The Salt. NPR, 14 February 2013. Web. 02 May 2016.

REPORT ON US Sustainable, Responsible and Impact Investing Trends 2014. 02 May 2016

“Taza Chocolate Direct Trade Certified Cacao.” Taza Chocolate. Taza Chocolate, 2015. Web. 02 May 2016.

 

Images:

Nielsen chart: http://www.marketingcharts.com/traditional/will-consumers-pay-more-for-products-from-socially-responsible-companies-60166/

All Gwandu Coffee Images are from author and from Gwanducoffee.com website.

“Relationship” icon: http://blog.seattlecoffeeworks.com/in-the-news/introducing-relationship-trade/

Taza Direct Trade and Taza Chocolate: Via Taza Chocolate website

 

Better than Your Average Chocolate Company

Dandelion Chocolate: A New Kind of Chocolate Company

Dandelion, a bean to bar, small batch chocolate company based in San Francisco, is a socially conscious company who focuses on making a quality product, that not only benefits the company and consumers, but ensures that the producers and farmers also receive fair treatment. Within the chocolate and cacao market, there are many issues with the chain from the cacao bean to the chocolate bar. For example, farmers receiving little pay, child labor, slavery, high certification costs, etc… Dandelion Chocolate is a company that works to combat these issues within the cacao supply chain by transparency and open communication throughout the process, direct sourcing, and the eradication of certifications on their products. Dandelion Chocolate is not labeled Fair trade, or Organic, but in their own way, they are able to create a brand with quality ingredients and  Through these tactics Dandelion has created a meaningful, quality and sustainable brand that has sought to continually learn about and better the cacao supply chain.

By analyzing the Dandelion Sourcing book from 2015 I will highlight the mission of Dandelion Chocolate and how they are focused on not just creating a quality product that sells, but they are interested in “good business practices [that] can foster positive social, environmental, and economic change.” (Gore) Also if we compare Dandelion Chocolate to Big Five Chocolate companies or other Fair Trade or organic companies we are able to see that Dandelion is truly taking an approach that is solving these cacao supply chain issues.

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This is a picture of the Dandelion Chocolate store in San Francisco. From the start of your visit, they want you to know that they have a simple recipe, made with high quality ingredients. 

image found from: http://www.shipstation.com/stories/dandelion-chocolate/

Exploiters and the Exploited

Big Five chocolate companies such as Hershey, Mars, and Cadbury buy bulk cacao. This bulk cacao is not sourced directly or through fair trade, meaning there are no social regulations on the farms that they buy their cacao from. Often, there is this notion that the Big Chocolate companies “exploit” West African cacao farmers. For example, someone observing the workers noted, “the villagers seem to make everything for today, living hand to mouth with little remaining for tomorrow… their primary activity here is to produce cocoa for the international market. As such, they earn just enough money from cacao sales to pay for rice and cooking oil. there’s usually nothing left over.” (Off, pg. 5) Furthermore, These companies do not practice transparency in their sourcing and because of this it is likely that they are buying from places who have child labor, slavery and are receiving wages that are hardly survivable on. The farmers are trying to make money by harvesting cacao but this ends up in them exploiting members of their communities and families. For example, another observation noted, “Mack learned of another category of labor…What his informers described sounded a lot like slavery, and what made the stories even more horrifying was that it seemed the slaves were children.” (Off, pg.120) The Big Chocolate companies are buying this cacao and there is no security for these farmers in what they receive from the sales of the cacao they harvest.

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This is a picture of child slavery. Larger companies such as the Chocolate Big Five do not practice transparency in sourcing cacao. Meaning, it is likely that thier products come from farms where they practice child slavery.

 

image found from:http://www.foodispower.org/slavery-chocolate/

Cacao Sourcing Transparency

Dandelion makes it a goal to have transparency through their whole process of sourcing. This company is clearly making an effort to allow their customers to learn about their process and how they source their cacao. Publishing and uploading their “2015 Dandelion Sourcing Book” is something that opens the conversation for consumers to see their ethics in sourcing. Consumers are able to see where and who Dandelion trades with, also, consumers are able to see how much Dandelion pays for their cacao in comparison to how much other companies pay for cacao. This detail allows the consumer to know what their money is going towards and and ensure that the farmers and producers are being justly compensated. Dandelion says, “We pay as much as two times the world market price (and sometimes more) for the beans, providing a premium between seven and seventeen times greater than the Fair-trade standard of $200 per tonne.” (Gore) This compensation not only gives the consumer peace of mind, it also helps to guarantee a better quality cacao bean. Paying a higher amount for cacao helps to reinforce the farmers and producers incentive for harvesting better beans.

Chocolate makers like us are willing to pay far more than the world market price for high quality beans, which means the price we pay for cacao is completely detached from the volatility of the world market price. Instead, what we pay depends upon the quality of the cacao, what the farmer believes it is with and what our customers will pay for a finished chocolate bar. (Gore)

For Dandelion Chocolate, it is not just about creating a chocolate bar that sells, they are socially conscious and take into account all the people involved in the process. They practice transparency so that every step in the bean to bar supply chain is open and people know what their money is going towards.

Fair Trade Critiques

Fair trade is a great thing. “[Products] that bear [this] logo were made with respect to people and planet. Our rigorous social, environmental and economic standards work to promote safe, health working conditions, and protect the environment…When you choose products without eh Fair Trade label, your day-to-day purchases can improve an entire community.” (Fair Trade USA) The overall mission of Fair Trade is to help these farmers that companies source from receive fair treatment and fair payment. Though these ideals seem as if they will benefit the farmers, there are a few critiques of the Fair Trade industry.  Though fair trade aims for fair treatment and fair compensation for all parts of the cacao supply chain, critiques show that farmers still receive little compensation, there is a lack of evidence that fair trade actually helps, and the fair trade certification is very expensive. Dandelion Chocolate works to combat these issues and critiques of Fair Trade by ensuring quality products without the certifications. The certifications are so expensive that it is hard for the farmers to get in the first place, and then they have to be renewed every few years. For example, “in Tanzania, it costs $8,000 just to get the organic certification auditors to visit a farm.” (Gore) Fair Trade also has not been shown to have evidence of results. For example, a report from the Institute of Economic Affairs states, “Even analysts sympathetic to the movement have suggested that only 25 per cent of the premium reaches producers. No study ever produced has shown that the benefit to producers anything like matches the premium paid.” (Wallop). Dandelion’s lack of certifications does not mean that they have a product of lesser quality. They directly source their cacao from farms and visit these farms throughout the year. They believe that “the burden of proof is their responsibility” (Gore) so they go to the farms themselves if they want to see the cacao production ethics and quality. This is a way in which they are able to guarantee quality of the cacao they source while avoiding the steep certification costs. 

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These are workers from Dandelion Chocolate, who are traveling to cacao farms. They are ensuring ethical practices and quality cacao beans. 

Image found from: https://www.dandelionchocolate.com/category/industry/

Dandelion: An Environmentally Friendly Company

Dandelion claims to use only two ingredients in their chocolate, “cacao beans and cane sugar.”  The cacao beans they source are directly sourced and use ethical treatment of the farmers. As I mentioned, they pay more for their cacao to incentivize ethical practices on the farms they receive it from, as well as better quality cacao. Not only does Dandelion practice good relationships with the people they work with and the farmers they source from, Dandelion practices and fosters a sustainable and nurturing approach to sugar cane farming. Their sugar is bought from “Native Green Cane Project” where “the project aims to replace traditional sugarcane farming methods that ravage natural ecosystems with new methods that return the land closer to it’s natural state.”(Gore) The land is an important part in producing materials for Dandelion’s chocolate and they are making sure that they are using environmentally friendly methods to produce these ingredients. So far, with the “Ecosystem Revitalizing Agriculture” system there is “23x more biodiversity than conventional sugarcane farms… a 20-30% increase in yield per hectare, and the drastic reversal of the operation’s carbon footprint.” (Gore) Dandelion has really made an effort to be transparent in all parts of the cacao supply chain. With this transparency, we are able to see the steps Dandelion Chocolate has taken to fight issues displayed in the cacao supply chain by Big Five Chocolate companies and Fair Trade Certifications.

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Dandelion makes a product, socially and environmentally friendly. They travel to different cacao farms to ensure quality and ethical practices and source  their sugar from an environmentally friendly farm.    

Image found from: http://www.davidlebovitz.com/2013/02/dandelion-chocolate-san-francisco/

Conclusion

Dandelion is not a perfect company, however they make a really good effort to be better for the environment, farmers, customers and everyone they work with. With their transparency and 2015 Sourcing Report we are able to learn where they get their materials and ingredients from, how much they pay them, the ethics and methods they use, etc… This transparency shows initiative and an earnest attempt to combat the issues with the cacao supply chain.

Works Cited

Gore, Molly. Dandelion Small Batch Chocolate 2015 Sourcing Report. Rep. San Francisco: Dandelion Chocolate, 2015. Web.

Wallop, Harry. “Fair Trade Does Not Help the Poorest, Report Says.” The Telegraph. Telegraph Media Group, 4 Nov. 2010. Web. 02 May 2016.

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

Fair Trade USA.” What Is Fair Trade? Fair Trade USA, n.d. Web. 02 May 2016.

Gore, Molly. “Dandelion Chocolate.” Dandelion Chocolate. Dandelion Chocolate, n.d. Web. 02 May 2016.