Slave free chocolate, global value chains and delicious ‘Chocolonely’
Slave labour is still part of some global value chains. Chocolate is an example. It can be shown and measured that in such a case but also in other cases increases in trade can actually lower production and income for countries lower in the chain. Take cocoa farmers who are forced to use extensive imported inputs. But can trade however also be beneficial for suppliers? Alternatives are possible. Chocolonely – an extremist, perfectionist, consumer and producer oriented as well highly succesful producer of slave free chocolate – tries to show this is possible. Using the latest production technology and marketing gimmicks. From the annual report (which contains much, much more information which, by the way, makes you doubt the wisdom of TTIP treaties):
Principle: Follow the cocoa bean
Traceability is an essential step in order to generate real and lasting impact. Almost no chocolate brand in the supermarket knows exactly where, how and by whom their cocoa is produced. And that’s crazy, because it holds true for the vast majority of certified and sustainable cocoa. If you know where cocoa comes from and who made it, you also feel responsible for the circumstances under which it’s made and then you act accordingly.
We set up a wholly segregated cocoa supply chain for our cocoa mass. So it can be done! For three years running we have bought steadily an increasing volume from our partners. In 2015 this was more than 700,000 kilos! That’s no pile of beans anymore, that’s one true cocoa mountain! Of course it doesn’t happen on its own. The previous years proved challenging especially because of unstable supply from Ghana. There were fewer containers and they came later than planned. This was in large part due to problems between the farmers and the local merchant. In response, during the summer of 2014 we started working with a new trader. In 2015 we grew so quickly as a company that the farmers couldn’t deliver enough beans! As a result in 2015 we had to make a large part of our dark bars with mass balance cocoa. We’re taking big steps to prevent this in the future.
Currently about 9% of the retail price of our bars benefits the cocoa farmer. We do that by direct payments, and also with support for the farmers cooperatives and through projects of the Chocolonely Foundation. From an ordinary, uncertified chocolate bar, the farmer gets about 3 to 5% of the value of the bar for his unprocessed cocoa beans. The farmers get more from us, yet still not enough. We pay Tony’s extra premium only for the traceable cocoa beans that go into our cocoa mass (in 2015). The cocoa butter is still untraceable. As soon as we can arrange that, the farmers who supply beans for the traceable cocoa butter will get an additional premium. The additional costs associated with cocoa beans go to local and international traders, taxes, transport and storage. About 18% of the costs go to processing the raw ingredients; cocoa beans, sugar, milk powder and sometimes other surprising inclusions, into our tastiest chocolate bars. About 53% of the total price is split between Tony’s Chocolonely and the reseller. Resellers are our customers; like the grocery store and the coffee bar where you find our chocolate bars. … Our costs go to personnel costs, developing new flavors, taxes and investments into new markets. 3% of the retail price of a Tony’s chocolate bar was our net profit last year. … We believe that every chocolate maker should work towards building long-term relationships based on equality. Farmers can only take out loans and make investments for better harvests if they have faith in the future. Unfortunately, it’s not the normal way of working in the markets where the chocolate giants buy their cocoa. A direct and long-term relationship allows chocolate makers to invest in productivity and quality together with farmers. Together social conditions can be created that eliminate child labor. The impact of this approach is apparent. Training, change of culture, and also the cultivation of cocoa trees; it all takes years. So yes, we understand that this is a lengthy process … it’s just difficult to hear, because impatience is a big part of who we are.