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The Guilty Secret of Chocolate

The Guilty Secret of Chocolate

Smooth, tasty, and comforting, chocolate is a household staple for millions of people. But our favourite sweet is hiding a dark secret and it’s time we confronted it. Whatever your chocolate bar wrapper tells you, it definitely has serious human rights issues at its core.

Chocolate and the World

The global chocolate market is due to reach $140 billion by 2024 (Mordor Intelligence, 2019). Little to none of this money will end up with the people who do the most arduous work. Cocoa farmers make $3-$5 a day and usually support 1-10 dependents. 45 percent of that labour is done by unpaid women (Cocoa Barometer, 2015). If that still doesn’t make you feel a tinge of guilt then maybe the fact that there are approximately 2.1 million kidnapped and enslaved children working in cocoa in Ghana and Côte D’Ivoire, the two largest cocoa producing countries in the world (Fortune, 2016).

Since the mid-2000s, (Harkin-Engel Protocol of 2001) pressure has mounted from governments and consumers alike for chocolate companies to change their sourcing policies. In 2012, several chocolate brands pledged to end cocoa-related slavery by 2020. So far, they’ve failed.

Cocoa Chaos 

So what makes it so hard to do? Why is slave labour and the abuse of children such an attractive business proposition for large chocolate companies? 

To answer this question you should know the situation. Ghana is the second largest cocoa producer in the world and has a government that takes an active role in reducing inequalities. Ghana also accounts for 20 percent of all cocoa production (OECD, 2007), 99 percent of which is family farming on leasehold land.

Families tend to work on 1 to 3 hectares of land, renting from landowners, unable to fix their own prices (Reuters, 2018). Farmers must be part of an association to sell chocolate, and the association must find buyers through the Cocoa Board (COCOBOD), who set national thresholds to ensure minimum wages, which is the first bit of good news in this post.

A cocoa farmer can expect to face poverty, dangerous working environments, and a fluctuating market price. If you’re a child, one of 2.1 million children working in the cocoa industry, you’re likely unpaid and used for backbreaking work that may stunt your growth, likely hungry, scared and far from home. Cocoa to a child is a plant that they farm; they’ve never had chocolate and there’s a good chance they never will.

After the farming and buying process, cocoa goes to a low-level manufacturing company in Ghana to separate the cocoa liquor, butter, and solids. These are low value processes and the outputs are sold to “Big Cocoa” name brands. These companies “add value” to the materials by adding sugar, fats, butter and snazzy packaging. While the Ghanaian cocoa farmer gets $3 a day, the low-level European chocolate maker, who works in a safe environment and is paid equitably – gets about $10 an hour (Glassdoor, 2019).

From these stats, we know that certain parts of the supply chain are unfairly remunerated and that the demand for cocoa perpetuates structural poverty. To avoid this unfairness, some regulators ensure minimum prices for farmers, but are based on market fluctuations. End-product chocolate prices do not tend to fluctuate down, they tend to shrinkflate (ONS, 2017). Meaning the price stays the same but the size of the chocolate reduces for the end buyer. This all leads us to the mystery at the heart of this story. Large international multi-billion-dollar companies are not subject to market fluctuations, but impoverished farmers are.

Solving Slavery

“We need to do something” I hear you cry. If you remember back in 2001, major chocolate players agreed. But here’s the rub. To pay your farmers equitably, you need to know who your suppliers are, you need to analyse your value chain, including parts that are being used unethically. Companies need a system in place, and that’s historically expensive. They also need to absorb the initial price increase for their raw materials. To date, no international chocolate company has made either of those leaps.

The price issues demand a necessary change and manufacturers and consumers will have to absorb the cost of ethics with their chocolates. Increased demand for variety and the slow fragmentation of the market is increasingly allowing smaller companies access to a once highly consolidated market. Consumers have demonstrated they are willing to pay more for these categories: 70 percent of consumers of general goods say they wouldn’t buy from companies if they knew they had slavery in their supply chain.

The only thing left is to evaluate the supply chain, which is in the works. Using distributed ledger technology (blockchain), our platform aims to monitor a supply chain using its sourcing system. This includes a one-click source reporting to government bodies, public acknowledgement, a badge for slave-free products, updates on sources in the supply chain, and databases of slave-free suppliers.

Transparency Can Bring Positive Change

By bringing as many people as possible into reporting and being transparent about their experiences working in the cocoa industry, we can encourage positive change.

Transparency is our friend, even if big cocoa is terrified of it. Clear maps to show the journey of your chocolate from cocoa farming to consumer sales not only means a consumer can see how chocolate is made; it also brings clarity for buyers and traders to rely on stable, ethical, and above-board suppliers, farmers and partners.

So next time you have a chocolate craving, take a moment to choose a chocolate that doesn’t have that bitter aftertaste of slavery. And keep watching for our logo on chocolate products.