As confectioners prepare for the delayed European Union (EU) Deforestation Regulation (EUDR) to enter into law in December 2025, brands explore various questions and checklists before its arrival.
In our recent webinar, building sustainable and transparent supply chains in confectionery, industry leaders discussed the leading topics surrounding the upcoming law and sustainable development. Ongoing cost concerns, the role of software solutions and the need for transparency, collaboration and inclusivity remain important issues.
Here, we explore these topics and issues, with expert insights from industry leaders.
Perception on environmental, social and governance (ESG) regulations
As the confectionery sector gears up for the European Union (EU) Deforestation Regulation (EUDR) coming into law in December 2025, it shines a spotlight on today’s environmental, social and governance (ESG) regulations. Specifically, how these laws have evolved in recent years and the relationship between cocoa and chocolate manufacturers and global leaders advocating for these laws.
From the software implementation side, it’s a tale of two companies. “There have always been companies that have perceived industry and sustainability-related topics as one of their core targets,” says Georg Fischer, Product Specialist at Osapiens. “Companies that were not focusing so much on this in the past are now being brought to this through regulation,” he adds.
Today, confectionery brands also see how embracing sustainable policies and recommendations can benefit their use case and business processes. Further, by going beyond what is required on a regulatory level and using data and insights, they can turn these into assets and create value.
“Many front-running companies have supported ESG and sustainable business regulations and advocated for stronger regulation for years,” says Stephanie Raymond, Senior Manager for International Partnerships at IDH Trade.
Brands are working to understand the need for a level playing field and the role of regulation in this for sustainability practices to become mainstream. Tony Chocolonely saw this with legislation for the Corporate Sustainability Due Diligence Directive 2024 (CSDDD) and EUDR. The Cocoa Coalition, which Tony’s and IDH are both a part of, monitors legislation. “You’ll see even the larger chocolate companies advocating for this type of legislation because they know that child labour is a problem in their supply chain, they know that cocoa-led deforestation is a problem, they know that poverty is a problem,” says Joke Aerts, Open Chain Lead at Tony’s Chocolonely.
Confectionery brands subsequently feel they are more emboldened to take action if the regulatory requirements are there to level the playing field. Beyond that, companies that have already been doing this and don’t need to wait for legislation are already exploring this area. For them, it’s a strategic advantage to take a deep look into the supply chain and already have an inventory of their problems and who they can partner with to solve some of those issues.
At Tony’s open chain, we are definitely for regulation; we lobby for it quite actively,” says Aerts. “We won’t change the world alone, so if we treat it as a checkbox exercise, nothing will change,” Aerts adds. Some organisations like Tony’s, the Open Chain lead says, will always go beyond regulation. “But a lot of companies tell us they need that regulation to catch up to the problems that have been identified so that they can take more concrete action,” Aerts details.
Role of national standards in EUDR compliance
“National standards are very important—we are all benefitting if those standards are of high quality and implemented universally,” says Aerts.
According to IDH, regional and national standards are often well adapted to the regional and national context they cover and usually have a broader scope. For example, national standards can go beyond deforestation. They can also cover the entire supply chain, beyond exports to the EU. “Leveraging these systems for EUDR compliance can create a real win-win and enhance the impact of both policies,” says Raymond. IDH is a firm believer in the need for joining forces throughout the sector to strengthen standards, for example, the African Regional Standard (ARS) in the cocoa supply chains.
For companies that have been doing mapping already, collaboration is vital with national standards. Tony’s believes in data being owned as closely to the data creators as possible. “So farmers should own their own data, co-ops should be able to share that data with who they like no matter who paid for the mapping and national systems should make that more possible,” says Aerts.
“It’s important we all recognise that the cost and the burden of doing this mapping and compliance with EUDR should not fall on the shoulders of the smallholders,” says Aerts. This reality also underscores the importance of the cocoa-buying industry working with these national initiatives to instigate compliance.
Importance of transparency and AI in supply chain management
Today’s bottom line is that data is available to ensure that confectionery brands can build sustainable and transparent supply chains. “There is a lot of data available, a lot of reports about risk, about the rights of Indigenous people, [yet] production is prone to breaching some of these human rights,” says Fischer.
Challenges, however, do persist relating to transparency and trust. However, the problem is that companies cannot scan this, understand the output or translate this data into a strategy without using AI as a lever to screen what is relevant to me, my goods, production and overall value chain. AI is an important tool to take advantage of available data and reports. It also considers non-governmental organisations (NGOs), for example, that make a lot of data available or raise awareness of situations around the globe.
“The future of AI is a very exciting one,” says Aerts. However, AI doesn’t solve the issue of collecting good data; good data always needs to be going in. AI is also an effective tool for examining various data sources. “The way AI tools are set up should be set up in a way that’s transparent and shows where they’re pulling the data from,” adds Aerts.
Brands need to put good data into the system, undertake quality GPS mapping, share the burdens of collecting that data in the first place and be transparent about their risk assessments and the data sources they are using.
AI is also connected to traceability, which is important to ensure the entire supply chain receives accurate data. “The information must also comply with regulations to trace the product from farm to shelf,” says Monika Berresheim, Senior Advisor for Sugar at Fairtrade International.
A newly adopted Digital Data and Information Strategy helps guide Fairtrade towards a robust system that respects producer ownership of data and meets the next generation of marketing opportunities. For example, there’s now a platform called Fair Insight, where producers can share information with trade partners in the future.
Currently, the producer networks support and train the producers with data. The next phase will allow producer organisations to add detailed information about products to generate a commercial profile that will simplify producers’ reporting and centralise information.
An impact map also highlights more than 100 current and recent projects and studies worldwide. Plus, many country-level producer data sets are filterable by product, topic and keyboard keywords. To comply with regulations, it has developed a new risk map tool, which has sections for each product and informs about the significant risks in sugar and wider supply chains.
Fostering ethical sourcing
Consumer understanding of ethical sourcing is evolving. One question within the confectionery sector is whether it’s possible to shift from being a niche market to making fair prices the industry standard.
In today’s confectionery sector, if we take sugar as an example, there are minimum prices for many sugar products that do not exist. Sugar has a revenue-sharing system between the mills and the producer organisation. In this case, the producer organisations receive a higher amount, and this premium is paid on top of the sales price, especially for small businesses.
Today, commerce is $60.00 per tonne for regular sugar and $80 per tonne for organic sugar. This premium is invested into projects improving sustainable and environmentally friendly production and improving labour practices, child labour and forced labour, especially in sugar—a problem in many countries.
“There is concrete evidence that certification drives impact and certification for fair trade includes setting prices and a premium for a product,” says Berresheim. It achieves impact if it is based on a sound standard covering all pillars of sustainability and managed by an organisation focusing on driving impact. “The standards and sales seem to be a combined success story as farmers benefit from complying with the standards through a premium paid on top of the sugar source,” Berresheim adds.
Producers with compliance issues who invest this money in community projects and consumers who choose products with a Fairtrade label are putting a human face to the supply chain. In connection, because there is a farmer, there are workers behind the label, and they have trust in this, so they are ready to buy products at slightly higher costs. “Such a system is sustainable and invites producers and buyers to be part of it and choose this product on the shelf,” shares Berresheim.
While consumers are increasingly making conscious choices, they remain price-sensitive. “Consumers don’t totally understand the difference between different programmes”, says Aerts. “That’s ok, that’s actually too much to ask—companies should feel obligated to engage in programmes that are working and delivering the results in their due diligence risk assessment,” Aerts adds.
Aerts states this is going to be “powerful”. Especially as the industry sees more programmes bringing the change, reducing child labour, getting farmers over the living income benchmark and stopping deforestation.
Moving ethical sourcing from its niche position to becoming mainstream is not specifically connected to whether it’s a regulation, certification, programme initiative or collaboration.
Its programme effectiveness, delivering results and communicating about the intervention and these results, both failures and successes, very transparently. “That’s how we will get it out of its niche and truly make it mainstream,” shares Aerts.
EUDR implementation: Best practices and pitfalls
As we move closer to the EUDR introduction date, confectionery brands are exploring its practical implications and what valuable information brands need to know to prepare.
In our recent webinar, Tony’s Aerts shared that last year’s discussions were all about EUDR, with everyone scrambling and trying to understand compliance. These conversations have gone quiet because the law has been delayed by 12 months. “What I really hope that we don’t all do is that everyone is in a scramble yet again in November,” says Aerts. “The how of compliance, not everybody knows yet, but the what of compliance we do,” Aerts adds.
A real pitfall will be the struggle at the last minute to update business processes to reflect the EUDR’s law needs, leading to smallholders bearing the costs. Also, data management is a key area to understand, and national systems play a crucial role in handling these. “We can’t wait on those to be operational so take your responsibility now and then be ready to work with the powers that be and the convenient and the most logical places to share data—we’re going to get there eventually,” says Aerts.
The advice is that there needs to be no gatekeeping on the data you’re working on now, but start early, engage farmers, proactively support them and collaborate with others.
From Osapiens’ experience with many software implementations, those companies that start early and take it seriously and use this one-year postponement to be more prepared and to have a better understanding of their existing processes can take advantage and ensure everything is in place when the application period starts.
“We also see that as soon as companies dig deeper into their processes, they find loads of processes that they might not have thought of when they first started thinking of EUDR,” says Fischer. Understanding EUDR processes as early as possible enables brands to organise their existing processes.
