Fairtrade cocoa supply can support chocolate brand switch, FLO

By Jane Byrne

- Last updated on GMT

Related tags: Fairtrade cocoa, Fair trade, Chocolate, Fairtrade certification, Fairtrade

There is enough volume of Fairtrade cocoa available to supply more large brands switching product lines to Fairtrade, according to the Fairtrade Labelling Organizations International (FLO).

In addition, said a spokesperson for the FLO, confectionery manufacturers can more easily secure large volumes of Fairtrade cocoa by offering Fairtrade cooperatives a long-term commitment and pre-financing.

"This helps Fairtrade cooperatives to have the funds available to pay farmers immediately upon buying the cocoa from farmers, which builds trust between the cooperative and farmers and strengthens farmers’ commitment to sell their cocoa to the cooperative,”​ the FLO spokesperson told ConfectioneryNews.com.

Sales of Fairtrade certified products increased 15 per cent in 2009, according to data from the organisation.

It said that sales of Fairtrade-certified sugar and cocoa saw the biggest sales increases last year, as several major confectionery manufacturers made commitments to source fairly traded ingredients, including Cadbury Dairy Milk, Nestlé’s Kit Kat, and Green & Black’s, as well as the ice cream maker Ben & Jerry’s.

Fairtrade cocoa sales were up 35 per cent in 2009, while Fairtrade sugar sales grew by 57 per cent.

Brand certification

Richard Watts, campaign manager at UK based advocacy group, Sustain told this publication previously that Fairtrade certification of products is good news for a lot of people in the developing world but he questioned why a company would seek Fairtrade certification for only one of its brands.

“We would like to see companies like Cadbury and ​Nestlé give a wholehearted commitment to Fairtrade and seek certification for all their chocolate brands. If they can do it for one chocolate bar, why not across the rest of their range,”​ he argues.

Speaking to this publication last year, a spokesperson for Nestlé UK said it intended to continue to explore the role certification should play in its plans for other brands:

“Fairtrade certification of Kit Kat in the UK and Ireland is one example of how individual markets intend to support Nestlé’s global Cocoa Plan.

“The Cocoa Plan is not just about certification, though that it’s an important part, it’s about a collaborative approach to supporting farmers from the moment they plant a tree through to giving them a market for high quality beans,” ​added the spokesperson.

Fairtrade premium increase

Meanwhile, last week the FLO said that as of January 1 next year, cocoa farmers will earn US$200 in Fairtrade Premium to invest in business and community projects for every metric tonne (MT) of cocoa they sell, up from US$150/MT.

A hike in US$50 in the Fairtrade premium per MT of cocoa should encourage investment in sustainable cocoa initiatives and better farming practices, claims the group behind the standard.

The organisation said that: “The decision to raise the Fairtrade minimum cocoa price was part of a scheduled review by the FLO standards committee. It carried out extensive research with cocoa growing cooperatives in 14 countries, as well as with a wide range of stakeholders in the cocoa supply chain, to determine the level of increase required.”

The group maintains that when market prices are above the Fairtrade Minimum Price, Fairtrade buyers must pay at least the market price. But as cocoa prices drop, Fairtrade farmers have the security of a minimum price floor below which their income cannot fall.

“Though world market prices reached an all-time high in January, they have begun a potentially dangerous downturn,”​ stresses the FLO.

With this higher Fairtrade Premium and a rapidly growing Fairtrade cocoa market, FLO said it expects cocoa farmer organizations will earn at least US$10m in 2011 for development projects they choose as priority.

Related topics: Commodities, Cocoa & Sugar

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