Sustainability

Big chocolate makers still falter in holistic sustainability, says Green America in annual chocolate scorecard

By Kristine Sherred contact

- Last updated on GMT

Sustainability has been integral to the mission of most smaller brands from their advent, earning them top marks from Green America, but global players lagged behind.
Sustainability has been integral to the mission of most smaller brands from their advent, earning them top marks from Green America, but global players lagged behind.

Related tags: Guittard, Alter Eco, Theo Chocolate, Mars, Hershey, Mondelez, Nestlé, Godiva, Cocoa sustainability, Cocoa supply chain

Nestlé, Mars, Hershey and Lindt earned C-level ratings in the organization’s chocolate scorecard, while Mondelēz and Godiva fared worse. Smaller players including Alter Eco, Endangered Species, Theo and Tony’s Chocolonely again received top marks in the fourth annual accountability assessment.

Green America analyzed how effectively 15 chocolate companies are addressing sustainability​ and human rights in their supply chains. This year, the nonprofit adjusted its approach: Instead of considering commitments and certifications only, it also dissects each company’s plan to connect more directly with cocoa communities.

Guittard, which is celebrating its 150th​ anniversary this year, was perhaps the largest chocolate maker to snag an above-average rating with a B+.

Divine Equal Exchange

Divine, Equal Exchange and Shaman were the only other brands to earn A’s, in addition to the aforementioned top marks. Tony’s, of course, has staked its brand​ on achieving ‘slave-free’ chocolate.

These smaller players were largely founded with farmer livelihood at top of mind, said Todd Larsen, who co-leads Green America’s consumer and corporate engagement. “The larger brands have only agreed to address issues like child labor, farmer poverty, and rampant deforestation due to pressure from the public, media, and Congress. They are taking steps, but the actions they have taken are nowhere proportional to the problem,”​ he told ConfectioneryNews.

Acknowledging that chocolate companies have improved their sourcing, Green America emphasized that farmer income remains low and child labor pervasive – issues the major players have inadequately tackled, agreed Charlotte Tate, labor justice manager at Green America.

“Big brands must do more to tackle these issues and buying ethically sourced chocolate is one way for consumers to put pressure on brands to change their practices,”​ she said.

Thus, the 2019 scorecard (now in its fifth year) also takes into account what specifically the companies have done to improve farmer livelihoods​, promote sustainable agriculture and ‘specifically address’ child labor.

“Companies publish reports and web content that emphasizes the programs they have in place to address social and environmental issues, but it is important for everyone to focus on what companies are actually achieving through these programs and initiatives." – Green America's Todd Larsen

Incremental improvements, despite big plans for cocoa supply chain

The shift in metrics boosted Hershey, which last year earned a C- with 70% of its cocoa certified compared to 80% in 2019. The Reese’s maker pointed ConfectioneryNews to its ‘substantial’ Cocoa for Good campaign​, launched last year, which will inject $500m into cocoa communities through 2030.

It also called out its February 2019 pledge to pursue ‘no new deforestation for cocoa’ and to plant trees to shade cocoa crops, plus farmer training programs and its work with the International Cocoa Initiative (ICI).

“We recognize certification alone will not fully solve the entrenched social and economic challenges that contribute to the use of illegal child labor,” ​company spokesperson Jeff Beck told ConfectioneryNews in an email. “To help create a bright future for young people and communities in cocoa-growing regions, we will continue to invest and innovate in this work alongside governments, NGOs, private foundations and activist groups.”

Cote dor loriginale
Belgium's Côte d'Or is one of Mondelēz's premium brands.

On the other hand, the shift in metrics hurt Mondelēz, which fell from a C- to a D this year – having certified only an additional 8% of its supply chain from 2018 levels.

Mondelēz told this site it was in the process of discussing the results with Green America; the nonprofit confirmed this forthcoming meeting. The confectioner believes the analysis lacked nuance and expressed consternation with benchmarking as a means to understand complex problems.

Hershey also took issue with the approach: “Without better understanding the rubric by which all companies are evaluated, it’s difficult to know why the substantial work and investments we are making are rated at a ‘C’,” ​the company told us, adding its ‘broader’ efforts in agroforestry in particular exceeded those of ‘smaller companies with higher grades.’

Since 2012, Mondelēz’s Cocoa Life program has supported thousands of farmers through direct partnerships with on-the-ground NGOs, which the company says also addresses child labor in cocoa-growing communities.

“But eliminating child labor from every community within the supply chain requires meaningful action to address the root causes,”​ the snack giant said in a statement to ConfectioneryNews. "By providing skills, education and access to resources, Cocoa Life is playing a vital role in improving the lives of farmers and driving positive change in cocoa communities around the world."​ (We spoke with Cocoa Life program director​ Cathy Pieters in October.)

Godiva on its F rating

Godiva was the only company to receive a flat-out F from Green America.

The Belgian chocolatier says it has committed to sourcing 100% sustainable cocoa by 2020, but it has not publicly shared details of its plans. (A page on its website, called Godiva Cares, offers snippets of its work​ with the World Cocoa Foundation and Save the Children, but specifics are scarce.)

In a statement to ConfectioneryNews, the company said it “condemns forced labor or any practice that exploits, endangers or harms people, especially children.”

Referencing its corporate ‘code of conduct’ that ‘explicitly prohibits’ forced and child labor, Godiva continued: “We do not own farms and purchase our cocoa through third parties which puts us at a distinct disadvantage on scorecards such as these that don’t allow for an accurate representation of our longstanding commitment to people and planet.”

Certified cocoa does not equal sustainability

A major sticking point with certification schemes is that they all differ in their approach and their standards, and in some cases, companies self-certify, eschewing third-party programs entirely. That complexity renders accountability opaque at best and impossible at worst.

“Companies publish reports and web content that emphasizes the programs they have in place to address social and environmental issues, but it is important for everyone to focus on what companies are actually achieving through these programs and initiatives,”​ said Larsen in an email.

In Green America’s report, the amount of certified cocoa in the supply chain does not necessarily spell success. Ferrero, for example, reports 75% of its cocoa as certified (compared to only half in 2018) but landed a D rating.

That low grade appears to hinge on the fact that Ferrero has not shared an actual dollar investment to support such sustainability initiatives. Hershey and Mondelēz have publicly invested in their fairtrade programs; Nestlé has spent $110m since 2010 on its cocoa plan.

In a short statement, the Italian candy conglomerate said it is “committed to making cocoa farming free of child labor and deforestation” ​through its Ferrero Farming Values Program, recently updated in the company’s annual Corporate Sustainability Report​.

Ferrero sources a small percentage of its cocoa through third-party platforms like UTZ, Rainforest Alliance or Fairtrade International. Of an estimated 390,000 tons of cocoa, bought from 2016 to 2019, about 10% was certified Fairtrade.

The company will also meet with Green America to discuss its D grade, which both parties confirmed to ConfectioneryNews.

We recognize that today’s cocoa supply chain does not reflect the transformation needed and does not deliver on our ambitions for everyone along the chain to have the opportunity to thrive. – Mars Inc.

World's biggest candy makers could be better

Mars (a privately held company, unlike its direct competitors) and Nestlé both landed in the middle of the pack, as they did last year, with C+ ratings.

As part of its Sustainable in a Generation plan, Mars will invest $1bn over 10 years to source 100% responsibly sourced and traceable cocoa while improving farmer income and shoring up its child labor monitoring and remediation (CLMRS) systems.

Notably, Mars says it was the first major confectioner to publicly support​ the floor price increase and living income differentials proposed by Ghana and Côte d’Ivoire. Despite progress, the company acknowledged the challenging road ahead: “We recognize, however, that today’s cocoa supply chain does not reflect the transformation needed and does not deliver on our ambitions for everyone along the chain to have the opportunity to thrive. That is why we launched Cocoa for Generations, our new approach for how we intend to step-change efforts given all we have learned over the years about what works and does not work.”

Nestlé, which reports 43% sustainable cocoa in its supply chain (about 186,000 tons), did not respond to a request for comment. Though the company will admittedly fall short of its 2020 deforestation goals​, it remains committed to a 2021 deadline.

In addition to monetary commitment, Nestlé has partnered with the International Cocoa Initiative on a cocoa-focused CLMRS, which has reportedly monitored 40,000 kids.

Guittard: 150 years of quality and value

Guittard milk chocolate chips

Smaller than the Hershey’s and Godiva’s of the world, but larger (and with a different business model) than brands like Theo and Alter Eco, Guittard is uniquely situated in the supply chain, having just celebrated its 150th​ anniversary.

Guittard’s sustainability program – called Cultivate Better – prioritizes quality and value, nurtured in part through Fair Trade, Rainforest Alliance and organic certifications.

Additionally, as a specialty chocolate supplier, it often buys direct from farmers, paying a premium “far above the market price for cocoa – believing that flavor and quality are value.”

Systemic change can only happen through collective action among industry, government and entities like the World Cocoa Foundation, the company told ConfectioneryNews in a statement. With WCF, for instance, Guittard has helped build three ‘Flavor Labs’ – one each in Ghana, Côte d’Ivoire and Indonesia – that “promote farming and harvest practices to prioritize quality and flavor research.”

Smaller chocolate companies lead in sustainability

Outside of Guittard, the other seven smaller brands earned A’s on Green America’s scorecard. Collectively, they all stressed their founding principles and dedication to, as Alter Eco put it, ‘full-circle’ sustainability.

Alter Eco Truffle Compostable
Alter Eco's truffle wrappers are fully compostable.

By sharing success stories with the industry, Alter Eco hopes it can “serve as a model for other companies to encourage collective impact and changes, as there’s definitely power in numbers,”​ said Antoine Ambert, director of innovation and sustainability at Alter Eco.

Just this autumn, the San Francisco-based chocolate maker created the Amazon Alliance​ with fellow eco-friendly brands. By 2020, it plans to boast a full portfolio of either compostable or recyclable packaging​.

Asked if size should affect sustainability, Ambert told us: “While there may be more obstacles for a large company to achieve sustainability in its supply chain than for one that’s our size, that certainly shouldn’t be a deterrent. Supply chain sustainability and integrity is important and it should matter to companies of all sizes. The extra time and steps it takes to make it happen is worth it for the future of our planet.”

Seattle-based Theo Chocolate agreed that size should not inhibit pursuing sustainable and ethical business practices.

“We believe scale isn’t necessarily what makes the focus on sustainability easier. Because we make our own chocolate from scratch, as a bean to bar chocolate maker, we can control the inputs we use,”​ the company told ConfectioneryNews, adding that its mission has not changed despite now being a nationally distributed brand.

“We hope that through this work, Theo Chocolate and other like-minded chocolate companies will help speed up the chocolate industry’s transition to a more ethical approach.”

Green America Chocolate Scorecard 2019

While there may be more obstacles for a large company to achieve sustainability in its supply chain than for one that’s our size, that certainly shouldn’t be a deterrent. Supply chain sustainability and integrity is important and it should matter to companies of all sizes. The extra time and steps it takes to make it happen is worth it for the future of our planet. –​ Alter Eco's Antoine Ambert

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