Tony’s Chocolonely cuts child labour in cocoa supply chain, posts €133m in sales
In contrast to the industry-wide average of 46.5%, the percentage of children in child labour at the long-term cocoa-growing communities that Tony’s works with is 4.4%.
The figures are released in the company’s annual FAIR report, which also details other highlights, including 21% business growth, three new Mission Allies and a total investment of 6.2% of their revenue into its sustainability programme, which it claims has positively impacted close to 15,000 farmers.
Regarding child labour, Tony’s states the industry average is in line with the newer partner co-operatives Tony’s has onboarded, at 52.8%. This shows that Tony’s long-term partner co-ops benefit from implementing the Child Labour Monitoring and Remediation System (CLMRS) – and that the company’s sourcing model helps reduce child labour, by bringing it down to 4.4%.
To address the root cause of child labour – poverty – Tony’s and its Mission Allies pay the Living Income Reference Price (LIRP), which goes beyond the farmgate price by 77% in Ghana and 82% in Côte d’Ivoire. The model has recently been referenced as a best practice in the 2022 Cocoa Barometer.
The company's transparent finance and impact update highlights its sourcing model’s effectiveness and stresses the need for more industry allies to copy their model in order to make ‘100% slave free the norm in chocolate’.
Tony’s is one of the few companies in the industry that is transparent about the percentage of child labour and farmers earning a living income in their supply chain. The company has made great strides on this to date, with the report stating that 37.6% of Tony’s long-term partner farmers now earn a living income. The ambition to get this number to 100% does provide challenges for the company, since Tony's doesn’t purchase all beans from partner farmers – meaning the beans are also sold at much lower prices to other chocolate companies.
Paul Schoenmakers, Tony’s Head of Impact, said: “Progress takes time. To tackle two of the most serious issues in cocoa – child labour and poverty – we need to enable farmers to earn a living income. To do this, farmers need to be able to sell more of their beans at the Living Income Reference Price. This can be achieved via further growth of Tony’s Chocolonely, so that we can buy more of these beans. But we also need more industry players to join Tony's Open Chain and pay the higher price.”
Last year, the company announced that US ice cream chain Ben & Jerry’s became the latest and biggest Mission Ally to join Tony's Open Chain. Its growth demonstrates that Tony’s sourcing model is replicable and scalable for any manufacturer. It claims there is now no excuse for other players to not follow suit. Retailers can also contribute by stocking their shelves with Tony’s Open Chain products and consumers can help by voting with their wallets.
21% growth for Tony’s, reaching €133.1 million in sales, annual report reveals
Proving that impact and commercial success can go together, the company reported an overall year-on-year growth of 21% to reach €133.1 million ($142m) in revenue – while investing €8.2 million (6.2% of revenue) in impact. Meanwhile, Tony’s gross margin grew from 46.2% to 50.2% - a company record.
Despite its strong performance, the company recognises that some of its financial ambitions were not met. The company faced unpredictable challenges, such as sky-high inflation and a two-month production shutdown at one of its partner’s processing facilities.
The company said it foresees a net revenue growth of mid to high twenties. Most of its markets are in a growth phase and require investments to keep boosting revenues and impact. Tony’s predicts a break-even net margin for next year but acknowledges that market conditions remain highly uncertain.
More financial highlights from the report:
- The company achieved strong growth in its key markets: Benelux, DAN, UKI, US.
- The US was Tony’s fastest growing market in absolute terms – they delivered €8.1 million in net revenue growth and delivered €22.2 million in terms of performance.
- Home market the Benelux & Beyond grew by €4.5 million to €71.2 million. The UK and Ireland increased revenues by 19%, from €20.3 million to €24.2 million.
- The DAN market almost doubled their revenues from €7.6 million to €13.3 million.
- Tony's invested in their own factory in Belgium, allowing the company to increase capacity in line with the growth of its business.