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The silent majority: Chocolate players outside top six getting a ‘free ride’ on cocoa sustainability?

By Oliver Nieburg+

23-Feb-2016
Last updated on 24-Feb-2016 at 12:17 GMT2016-02-24T12:17:54Z

Cocoa processors must enage chocolate firms sourcing the bulk of cocoa to step up on sustainability, says Tony Lass. Photo: iStock - imaqs
Cocoa processors must enage chocolate firms sourcing the bulk of cocoa to step up on sustainability, says Tony Lass. Photo: iStock - imaqs

Chocolate companies outside the top six need to up their games on sustainable cocoa to help bring millions of cocoa farmers in West Africa out of poverty and secure the crop’s future, says Cadbury’s former head of cocoa sourcing.

Speaking at Chocoa 2016 in Amsterdam this month, Tony Lass, director of Fox Consultancy, and head of Cadbury’s global cocoa supplies from 1967 to 2004, said that while the top six chocolate companies had come together to address their cocoa supply chains under initiatives such as CocoaAction , these firms account for just 35% to 45% of the world’s annual cocoa output.

"What about the remaining 55% to 65%?" Lass asked. “Perhaps they're not engaged at all and perhaps they're getting a free ride on the energies and efforts being made by the users of the 35% to 45%.”

“They are actually the silent majority.“

Cocoa processors can engage majority, says Lass

He said traders and cocoa processors such as Cargill that are handling this tonnage must engage dormant chocolate companies.

Willem Zimmerman, a trader at Cargill also present at the conference, said: "There's not only a role for processors - but I think it's as well with the consumer that in the end demands more products.

"I consider the processors a vehicle to basically address the situation and to work on the ground on behalf of our consumers,” he said.

From the audience, Antonie Fountain, managing director of advocacy group the VOICE Network, accused Zimmerman of shifting the responsibility to consumers and said since Cargill dominated so much of the cocoa processing market it should be the one taking responsibility.

"I’m not pointing responsibility at the consumer,” Zimmerman responded. “It's a shared responsibility.”

Cargill Cocoa Promise

Cargill said in a press release last week that Ivorian cocoa farmers received more than €7m ($7.7m) in premium payments under Cargill’s Cocoa Promise, its own sustainability program.

In the release, Cargill said 30% of the beans it sources are third-party certified sustainable, either from its Cocoa Promise or from third-party certifiers, which it claimed was “ahead of the overall industry average”.

Around 16% of global chocolate sales in 2015 used certified cocoa, according to the latest Cocoa Barometer.

Eighty cents a day: Can that be sustainable?

Tony Lass said West African cocoa farmers were typically within the UNDP’s poverty scale, earning around 80 US cents a day and trying to support their families. (See image below for his calculation.)

“Can that be considered as sustainable? Not in my view,” he added.

Tony Lass speaks at Chocoa 2016

The former Cadbury cocoa chief said an ageing farmer population - typically 55 to 65 years olds  - had limited finances to entice the young to grow cocoa.

"No-one aspires to be a cocoa farmer in West Africa. Today many do it because they have no alternative,” he said. "We need an improved cocoa supply chain."

Mondelēz Cocoa Life update

One of the industry’s largest players, Mondelēz International, said its Cocoa Life program covered 21% of its cocoa supply by year-end 2015. In its first progress report for the program, it said Ghanaian farmers’ income increased 49% and their cocoa yields had grown 37% since being part of Cocoa Life.

Missing voice? Farmer inclusion

He said there was lots of collective action such as the World Cocoa Foundation’s CocoaAction, efforts to eradicate child labor under the International Cocoa Initiative, and ongoing work on an International Organization for Standardization (ISO) standard on sustainable cocoa, which “can’t be a bad thing”.

“But that can only really work with farmers' groups,” he said, who are often excluded.

The International CoCoa Farmers Organization (ICCFO) - a Dutch-based group representing 600,000 farmers across the globe - has been fighting to sit on the boards of the International Cocoa Organization (ICCO) and the industry-led World Cocoa Foundation (WCF).

The ICCO says it hopes to remain independent but adds that Toussaint N'Guessan, chairman of World Cocoa Producers Organization (WCPO), is a member of its industry and civil society Consultative Board on the World Cocoa Economy.

WCF says it is considering ICCFO’s proposals.

Certification not the whole solution: Lass

Mars, Hershey and Ferrero have made commitments to source 100% certified cocoa from organizations such as Fairtrade, Rainforest Alliance and UTZ Certified by 2020

Lass said certification was a step, but not the whole solution as cocoa farmers still need to find buyers for their certified produce.

"Otherwise the farmer pays all the upfront costs and then gets no benefit."

Lass said consumers' desire for “cheap food” was a challenge, particularly given the rise of discount retailers.

"I believe consumers are going to have to accept the prices for the foods they love will increase,” he said.

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