CSR, Fairtrade and Chocolate

Chocolate like coffee is a multi-billion dollar industry. It is also provides some very important CSR and sustainability issues for companies that deal with chocolate. Chocolate has its origins with the cacao tree, native to Central and South America. Today however, about 70% of the world's cacao is grown in Africa. The history of chocolate goes back to the ancient Maya and from there to Spain and the rest of Europe. Solid chocolate was born in the 1850s; around this time demand really took off and what used to be a luxury item became available to the common man.

By 1907, the Hershey's factory was making 33 million kisses per day. Today, over 3 billion tons of cacao supplies a $35 billion chocolate industry. According to researchers, changing weather, agriculture incentives will make chocolate as expensive as gold and in 20 years it could become the luxury item it once was. Cultivation of cocoa takes several years, and farmers face stiff competition from crops like palm oil which is financially appealing. Small farmers earn about 80 cents/day and children of these farmers want a better life and are heading off to the cities. Consumption is increasing faster than production and this is not sustainable.

All of these are great reasons for companies to switch to sustainably sourced chocolate because there has never been a greater need for it. Most chocolate today is grown in West Africa which has severe labour problems and more often than not employs children. This is the first, most primary CSR issue that needs to be addressed by all chocolate companies. The World Cocoa Foundation along with the Fairtrade Foundation works to ensure that cocoa-farmers receive fair wages and children are not employed in the process. Fairtrade cocoa is typically shade-grown and supports the local ecosystem rather than supporting deforestation that non-Fairtrade plantations can do.

There are many chocolate companies that have included Fairtrade into their CSR policies. Green & Black's were the first certified fairtrade chocolate which was bought over by Cadbury which is now owned by Kraft. Before their take-over, Cadbury announced that they will certify 300 million of its Cadbury Dairy Milk chocolate bars as well as its packaged cocoa, at a cost of £1.5m in their newest CSR initiative.

Divine Chocolate has its whole business model based on CSR. It is a Ghanaian manufacturer that is 45% owned by a cooperative of 45,000 cocoa farmers. According to MD Sophi Tranchell, Divine has found the right recipe: "Fairtrade - and particularly the Divine ownership model - delivers sustainability into the hands of the farmers, not the hands of the global buyers." But in the Ivory Coast were most of the world's commercial chocolate comes from, fairtrade does not exist at all, which is what the bigger companies like Nestle, Hershey's etc have to address in their CSR.

According to the Fairtrade Labeling Organization, confectionery manufacturers can easily secure large volumes of Fairtrade cocoa by offering Fairtrade cooperatives a long-term commitment and pre-financing. About time more companies started buying more volumes of fairtrade chocolate not just as a CSR initiative but as a means to safeguard the future of the cocoa industry.