Striving Sustainability Chocolate Industry

Striving for More Sustainability in the Chocolate
Industry: The Role of Private Governance in Global

Value Chains
For the most optimal reading experience we recommend using our website. A
free-to-view version of this content is available here, which includes an easy to
navigate and search entry, and may also include videos, embedded datasets,
downloadable datasets, interactive questions, audio content and downloadable
tables and resources.
Author: Marie-Eugénie Lamare, Natalia Aguilar Delgado, Ari Van Assche

Sage Sage Business Cases
© Marie Lamare, Natalia Aguilar Delgado, and Ari Van Assche 2023
Pub. Date: 2023

Product: Sage Business Cases
DOI: https://doi.org/10.4135/9781529618945
Keywords: value chains, global governance, sustainability, industry, fair trade, governance, certification,
regulations, farming, developing countries
Disciplines: Corporate Social Responsibility, Business Ethics & Corporate Social Responsibility, Business &
Management, Sustainability, International Business Policy, International Business & Management
Access Date: September 18, 2023
Publishing Company: SAGE Publications: SAGE Business Cases Originals
City: London
Online ISBN: 9781529618945
© 2023 SAGE Publications: SAGE Business Cases Originals All Rights Reserved.
Striving for More Sustainability in the Chocolate Industry: The Role of

Page 2 of 18
Private Governance in Global Value Chains
This case was prepared for inclusion in SAGE Business Cases primarily as a basis for classroom dis-
cussion or self-study, and is not meant to illustrate either effective or ineffective management styles.
Nothing herein shall be deemed to be an endorsement of any kind. This case is for scholarly, educa-
tional, or personal use only within your university, and cannot be forwarded outside the university or
used for other commercial purposes.
The case studies on SAGE Business Cases are designed and optimized for online learning. Please re-
fer to the online version of this case to fully experience any video, data embeds, spreadsheets, slides,
or other resources that may be included.
This content may only be distributed for use within Saudi Digital Library.
2023 Sage Publications, Inc. All Rights Reserved
Abstract
In January 2021, Carol Davis is given the daunting task of producing recommendations for improving
the impact of her organization’s Fairtrade International sustainability program as many major chocolate
brands turn away from their certification to create their own sustainability programs. This case depicts
the chocolate global value chain and the challenges faced by cocoa farmers. The case also depicts
the challenges that Fairtrade is facing to stay a relevant player. It invites students to follow Davis' jour-
ney as she attempts to identify the roots of the issues that prevent sustainable labor conditions in the
chain. It provides a rich context to understand both the goals and shortcomings of various private sus-
tainability initiatives that attempt to improve sustainability along the chocolate value chain.
Case
Learning outcomes
This case will allow students to identify the sources of sustainability challenges in global value chains. Specif-
ically, the case provides an understanding of the different actors involved along the value chain and the power

Page 3 of 18
dynamics, issues related to agri-food value chains such as cocoa, and the context in which they operate.
Students will also get an overview of the different private governance initiatives that operate in global value
chains to improve sustainability and their shortcomings. These insights will enable students to analyze and
propose strategies to improve the impact of sustainability initiatives in global value chains.
Introduction
In January 2021, Carol Davis, a sustainability officer at Fairtrade International (see Appendix 1 for a descrip-
tion of the organization), was relocated to the African office in Nairobi, Kenya. The regional manager sum-
moned her to discuss the pressing sustainability issues that threaten the cocoa value chain (see Appendix 2
for a snapshot of the industry). The livelihood of many of the eight million smallholder cocoa farmers world-
wide remained precarious and new programs were needed to help secure better terms of trade. A case in
point: despite numerous attempts to make the cocoa value chain more sustainable, the majority of cocoa
farmers earned about USD 0.78 per day, significantly below the poverty line of USD 1.90 set by the World
Bank (Fountain & Huetz-Adams, 2018). Chocolate also was regularly in the news for issues related to child
labor and modern slavery. And cocoa plantations were destroying the rich biodiversity of West Africa’s forests.
To address these issues, Fairtrade has put in place a range of tools to support cocoa farmers. It has unfolded
training programs for farmers on yield, plantation management, household income management, and child
awareness. It has developed premiums that can be reinvested to support certified farmers and enable the
construction of social infrastructure such as wells and schools (Fairtrade International, 2021b). It has initiat-
ed advocacy campaigns to raise awareness among consumers, governments, and businesses of the plight
of children and farmers. It has developed the Living Income Strategy, which publishes Living Income Ref-
erence Prices for producers depending on their country. These price references allow them to set the min-
imum "sustainable" price that producers should receive for a living income and to raise awareness of fair
prices (Veldhuyzen, 2019). And it has developed a mass balance approach where companies can increase
their engagement by mixing certified and non-certified cocoa beans during the shipping and manufacturing of
chocolate bars (Fairtrade International, 2021e). All in all, Fairtrade certification offers smallholder farmers a
minimum price to protect them against market price drops but also provides access to credit and an addition-
al premium to invest in commercial or community projects. The Fairtrade certification has enabled 440,226
producers (Fairtrade International, 2021d) to receive more than EUR 37 million of premiums to cooperatives

Page 4 of 18
and communities in 2020, Overall, Fairtrade-certified farmers report an 85% increase in income, living above
the extreme poverty line (Fairtrade International, 2021c).
The recent decision by several leading chocolate companies to drop their collaboration with Fairtrade Interna-
tional and develop their own in-house sustainability standards was therefore met with surprise and conster-
nation. The world’s leading chocolate company, Mars Inc., decided in 2018 to launch its own in-house Cocoa
for Generations sustainability program, following the path of Mondelēz International with its Cocoa Life cer-
tification. Does the move towards in-house standards undermine Fairtrade International’s efforts to support
smallholder cocoa farmers? Will other companies follow Mars’ lead and develop their own internal certifica-
tion programs as well? The prospects were daunting with the persistent sustainability challenges in the cocoa
value chain. This trend has consolidated in other industries, a prominent example being Starbucks' in-house
ethical sourcing program in the coffee value chain.
Davis and her team understood that no company, government, or NGO had the capacity to drive all the
changes needed to build a sustainable cocoa supply chain by itself. But to be able to act, there was an urgent
need to better understand the bottlenecks that impede a sustainable global value chain in the cocoa sector.
The Roots of Challenges in the Cocoa Value chain
To begin her investigation, Davis decided to meet the actors involved in different steps of the supply chain
(Figure 1), from beans to bars, starting at the “first mile”: the small cocoa producers.

Page 5 of 18
Figure 1. Chocolate Industry Value Chain
Source: Adapted from Fountain and Huetz-Adams (2020)
From Beans
Early in March, Davis flew to Ivory Coast to meet prospective cocoa farmers that were not certified by the
Fairtrade certification. When she arrived in the remote village of the Bangolo department, the rich smell of
cocoa overwhelmed her with a familiar sensation (Ryan, 2019). It was harvest season. Every year, two million
farmers across West Africa collected the cocoa pods during this period, opened them, collected the beans,
and let them dry in the sun (Ryan, 2019). Like so many other cocoa villages, the community had a dire lack of
health and educational infrastructure (Aglionby & Atkins, 2018). Davis met Moussa Ibrahim, who invited her
to visit his small farm of less than two hectares (Fold, 2001). He and his family lived in a small mud house with
no running water or electricity (Ryan, 2011). During the day, the whole family contributed to the cocoa har-

Page 6 of 18
vest, including the children (Hebbar, 2007), to harvest the cocoa pods by hand (Voora et al., 2019). Ibrahim
explained that they lacked financing service to make improvements on their plantations, nor did they have
disease-resistant agricultural alternatives (Hebbar, 2007). Davis knew from her own research that each year
30–40% of the world’s cocoa production was lost to disease (Ryan, 2011). Ibrahim’s harvest was very small,
amounting to an average of four bags of cocoa beans per year (Pilling, 2019). As a sharecropper, Ibrahim
had to return two-thirds of his harvest income to the owner of the land (Ryan, 2011).
The visit to Ibrahim’s farm confirmed Davis’ concern that many cocoa smallholder farmers’ livelihoods re-
mained precarious. Ibrahim explained that he had no choice but to rely on his children’s help in the field be-
cause farming was labor-intensive yet paid manpower was too expensive. His children, like many others on
cocoa plantations, started working on his plantation at the age of six or seven, and had been using sharp
objects, such as machetes, since the age of eight. Children were unfortunately injured regularly while working
on cocoa plantations (Aglionby & Atkins, 2018). Through further research, Davis ascertained that child labor
was very high in the cocoa sector, with an estimated 2.1 million children working on plantations in Ivory Coast
and Ghana alone (Fountain & Huetz-Adams, 2018).
At the end of the harvest, Ibrahim would go to the nearest buying station to sell his few bags of cocoa (Ryan,
2019). The beans were never bought directly by brand-name confectionery companies but rather purchased
by intermediaries, i.e. local trading companies (Fold, 2002). Since there were only two buyers in his isolated
village, Ibrahim sometimes had to travel further to reach a large center where there were about 20 buyers
(Ryan, 2011). The price that Ibrahim would receive from the traders was a source of tension each year. He
knew that a low price would imply little income and therefore a loss of means to take care of his plantation
and his family. Several years of low prices could lead to a vicious cycle as lack of investment in cocoa trees
increased the risk of disease and productivity declines (Fold, 2001). Cocoa smallholder farmers were con-
stantly threatened by price volatility.
To traders
Davis next traveled to a larger trading center in the region of San-Pedro, closer to the port, where there were
about 20 buyers, to understand how cocoa prices were set. She met local trader Jean Kouassi. In these co-
coa bean buying stations, the price that traders like Kouassi offered to smallholder farmers depended mainly

Page 7 of 18
on the world market price of cocoa, which fluctuates greatly from year to year. But because the competition
was fierce between traders, many offered more to attract farmers. These extras often involved machetes,
pesticides, loans, etc. (Ryan, 2011). However, since 2019, the Ivorian government set up a minimum price for
cocoa beans to protect farmers from this fluctuation and global drop in prices. This initiative was well received
by organizations like Fairtrade, as they were themselves trying to fight this downside of market mechanisms
(Fairtrade Canada, 2020a). But two years later, the government announced this minimum price would drop
by 17.5% (Conseil du Café-Cacao, 2022).
Intermediaries such as Kouassi played a strategic role between farmers and chocolate makers, as they were
the link between the big companies and the millions of farmers in the country. Kouassi explained to Davis that
to be able to buy sustainable cocoa from farmers and respond to chocolate manufacturers' demand, traders
were responsible for promoting sustainability initiatives such as Fairtrade to farmers. Indeed, large manufac-
turers would sign contracts with them with specifications that traders and exporters needed to fulfill (Gboko
et al., 2020). In doing so, traders sometimes even gathered farmers into cooperatives to get a specific type
of beans (e.g. Fairtrade or organic beans). It’s a volume business, stated Kouassi, so they need to purchase
large volumes of cocoa to make a profit (Ryan, 2011). Kouassi was buying different types of cocoa beans to
expand his income, i.e. organic cocoa and certified sustainable cocoa (like Fairtrade) but also conventional
cocoa. Once traders had met their certified or organic cocoa volumes for the chocolate manufacturers, they
would continue to purchase conventional cocoa. This situation led farmers to sell their certified cocoa as con-
ventional when the market demand for certified cocoa was reached. Therefore, farmers would not benefit
from a higher price for their higher quality cocoa beans. Kouassi claimed that it was a common occurrence
for farmers.
At this point, Davis and Kouassi joined the other traders setting out for the port to send their beans to the
storage centers (Ryan, 2011). On the way, Davis learned more about the cocoa route and the processing
sector of the chocolate industry. Kouassi explained that the local processing plants don’t store the beans be-
cause of the risk of infestation by insects or the deterioration of the beans due to the humid tropical climate
(Fold, 2002). Instead, trading companies export cocoa to specialized storage centers in places like Amster-
dam, which is one of the most important warehouse centers in Europe. Overall, most of the cocoa from West
African countries was exported to the European chocolate industry, making farmers in West Africa extremely
dependent on the demand from Europe (Fold, 2001). Globally, the Netherlands was the largest importer of
cocoa beans in 2020, with a value of USD 2.4 billion, followed by the United States with 1 billion and Germany
Page 8 of 18
with 777 million (UN Comtrade, 2021). That year the Netherlands imported 895,000 tonnes of cocoa and 91%
of it was from West Africa. The country placed itself as an important European hub, as it re-exported cocoa
beans and semi-finished cocoa products to other European countries (CBI, Ministry of Foreign Affairs, 2021).
Over the decades, the number of international trading companies had decreased considerably, from 50 small-
to medium-sized enterprises to the very few that remained (Fold, 2001). This was the result of changes in
economy of scale and the centralization of the processing segment. The largest processing companies now
had their own supply subsidiaries in the cocoa-producing regions (Fold, 2002), allowing Ivory Coast to be-
come the leading cocoa-processing country in the world in recent years (ICCO, 2021) and placing the Nether-
lands in second place (CBI, Ministry of Foreign Affairs, 2021). The market was highly concentrated as it was
dominated by six large and well-known companies, the largest processing and chocolate manufacturer being
Barry Callebaut (Fountain & Huetz-Adams, 2020). These processing companies deal with grinding the beans
into butter, powder, and liquid.
To Chocolate bars
Davis next explored the downstream segment of the chocolate industry’s value chain: chocolate manufactur-
ers. They had grown in size and power over time. Carol noted that it was hard to distinguish between the
processing and manufacturer sectors because large companies had vertically integrated their value chain
(Fold, 2001). Apart from recognizing the packaging in supermarkets, few people—including herself—knew
this industry. Chocolate manufacturers were large companies from the north, mainly European and American.
The market was dominated by five major players, namely Mars, Nestlé, Mondelēz, Hershey, and the Ferrero
Group (Candy Industry, 2022). These companies were only involved in production and marketing of global
brands. In the United States, the market was even more concentrated: these five companies shared almost
80% of the market in 2020 (Hershey’s, 2021). The concentration of chocolate production companies was part-
ly due to the slow growth of the global market. The only way for companies to grow was through acquisitions
and mergers of small companies with strong local brands in national markets (Fold, 2002). This was why
multinational chocolate companies wielded great power throughout the value chain.
When it came to the last step in the value chain, Davis simply had to go to the closest supermarket to her
home. Indeed, 55% of chocolate products were sold in supermarkets (Ryan, 2011). She learned there that,
despite the appearance of choice, the majority of products on the shelves belonged to the biggest companies.

Page 9 of 18
Supermarkets thus exercised great control over the sale and prices of the products because the market was
highly concentrated and shelf space was expensive. This made it difficult for a small chocolate company with
little bargaining power to gain a foothold in a supermarket (Ryan, 2011).
The Rise of In-House standards
Equipped with a better understanding of the cocoa value chain, Davis grasped more clearly the importance of
Fairtrade certification to achieve farmer resilience in a market with very volatile prices. However, many down-
sides in the system still prevailed. One big issue Davis witnessed in the field was the limited reach of the
Fairtrade certification among producers. So far, Fairtrade-certified cooperatives in Ghana brought together
only 87,907 farmers, which represents 10.2% of the total number of farmers (Fairtrade Canada, 2020b). Many
farmers saw no point in engaging with third-party certifications and complying with the extensive requirements
because the priority for farmers was to receive cash as soon as they sold their beans (Ryan, 2011). Some-
times the prices paid by the certification (even though more attractive) took longer to arrive. The cost of certifi-
cation itself was also a barrier to reach small, isolated farmers. Many couldn’t afford the cost in the first place.
Certification was a long process which took several years of work before having the seal and the right to sell
on the sustainable market. In between, the farmers had to invest considerably in their production to meet the
Fairtrade requirements and pay for the audits that would evaluate them (Van Dijk & Trienekens, 2012). More-
over, once they obtained the seal, smallholders didn’t have the guarantee that they would be able to sell their
certified cocoa on this sustainable market, because its size was still insufficient to absorb the sustainable co-
coa produced. Thus, producers often did not recover their investments and their production costs exceeded
their sales. Another issue was that the certification of cocoa beans was a difficult process to monitor and was
open to manipulation (Aglionby & Atkins, 2018). Davis heard many stories of “decoupling practices” cases
where local farmers and producers dissimulated compliance with the requirements of the certification without
necessarily fulfilling the requirements. One such case is child labor, which, in some countries, had been a
common practice for decades. Davis saw on the ground that the initiatives of local governments to prohibit
child labor had limited reach so far because local people still culturally accepted the practice. The numbers of
farmers involved, often in remote locations, made ensuring full compliance impossible.
Davis was aware that Fairtrade International was not alone in trying to build resilient supply chains in this

Page 10 of 18
industry. Leading companies, especially, were developing corporate social responsibility (CSR) initiatives and
their own in-house certification programs. In-house certification means policies and programs created by com-
panies to regulate themselves without any intermediary involved (Jaffee, 2012), therefore raising suspicion
among public and civil society actors. For example, one of the key market leaders, Mars Inc., has implement-
ed a series of programs to improve productivity, diversify incomes, and increase opportunity in farming com-
munities. Mars has committed to being 100% sustainable by 2025. To achieve this goal, they have partnered
with local cocoa farmers' cooperatives and NGOs—such as Fairtrade, Rainforest Alliance, and UTZ Certi-
fied—to certify cocoa beans as free of child labor and to improve the living conditions of farmers. They offer
benefits such as a premium price for farmers' cocoa beans, running water, harvesting equipment, schools,
and loans for farmers (Ryan, 2011). In 2018 Mars also launched their own in-house sustainability program,
Cocoa for Generations, with a USD 1 billion investment (Mars, 2021). They set up several measures to tackle
the social and environmental challenges of the value chain. As part of their broader Sustainable in a Gener-
ation Plan, Mars had considerably invested in and shifted their supply chain and sourcing management strat-
egy. In that sense, their Next Generation Supplier program was dedicated to making the supply chain more
sustainable by engaging their first-tier suppliers in improving their sustainability performance (Mars, 2022). To
do so, they put in place an industry-standard approach with third-party compliance audits to identify issues
and risks.
Mondelēz was also gradually switching all its brands to its own in-house sustainability program Cocoa Life,
with the promise to source 100% of cocoa through their program by 2025 (Mondelēz International, 2022a).
At the end of 2020, Mondelēz brands were sourcing 68% of their cocoa through Cocoa Life. Their program
was based on three pillars: sustainable cocoa farming businesses, empowered cocoa communities, and con-
served and restored forests. To monitor their impact and progress, they relied on two independent third-party
organizations, FLOCERT and Ipsos, who conducted research and performed audits (Mondelēz Internation-
al, 2022b). In sum, the biggest players in the industry were all gradually switching to their own sustainability
program and certification, engaging in activities on the ground with producers and collaboration with many
different organizations. In addition to Mars and Mondelēz, Davis noted other key players were following the
same trend, such as Lindt & Sprüngli with its Farming program, Nestlé with its Cocoa Plan and Barry Calle-
baut with its Cocoa Horizons program.
Despite years of commitments to different programs and initiatives, companies still struggled to make signif-
icant improvements along their value chains. It appeared then that they lacked the resources or the capacity
to transform their practices beyond their walls, as sustainability was not their primary reason-to-be. Moreover,

Page 11 of 18
considering their position in the value chain, these companies were often blamed for not really engaging in
sustainable commitments and using their CSR initiatives more as marketing strategies than real willingness
to change. Some would further say that they managed to impose their interests on third-party organization
(Jaffee, 2012).
In witnessing the rise of in-house sustainability certifications in the sector, Davis was worried about the effects
of the proliferation of in-house certifications and CSR initiatives. In particular, there were concerns that this
new trend of in-house standards would create confusion in the market for sustainable cocoa products and
reduce the potential impact that multi-stakeholder certification might have. Consumers didn’t understand the
meaning of multiple labels. From the point of view of producers, they confided to Davis that they would proba-
bly face reduced market benefits as there would always be “yet another” standard or CSR to which they must
conform, not necessarily reaping any benefits from it. Moreover, they would also face reduced market access
as they were becoming dependent on the company’s certification whereas third-party certifications were in-
ternationally recognized labels purchased by many companies.
There were also growing concerns regarding the legitimacy and credibility of in-house sustainability programs
as they are managed internally, thus reducing the transparency of their practices. Indeed, one of the biggest
differences between in-house certification and third-party certification is that both the standards and the con-
formity assessment processes of the latter are led by third parties that are independent of interests (Potts,
2017).
Looking ahead
Despite the work of companies and NGOs, many children are still working in the fields (Aglionby & Atkins,
2018) and the living conditions of many farmers remain under the poverty line set by the World Bank: “The
problem is too complex to be solved by a simple consumer initiative. Simply paying registered farmers more
for beans won’t make them better producers” (International Cocoa Organization representative) (Ryan, 2011).
Chocolate industry experts, companies, governments, and various stakeholders have all been looking for dif-
ferent solutions to resolve the socio-environmental issues of this global value chain. How can Fairtrade In-
ternational and other certifications work to scale their impact to continue being relevant players in the field?
Maybe even more importantly, how can the different players support each other to bring the systemic changes

Page 12 of 18
that are needed? What about government interventions? With these questions in mind, Davis started produc-
ing recommendations for Fairtrade International certification and its partners to increase their impact on the
sustainability of this industry.
 Discussion Questions
1. What are the challenges of the chocolate global value chain?

2. Are third-party certifications and in-house certifications to solve sustainability issues in
this chain equivalent? In what terms (think about benefits, risks, and limits)?
3. From the perspective of your assigned stakeholder group, what strategies to increase
the impact of sustainability initiatives should be emphasized?
4. What are the pitfalls of private governance?
Further Reading
Hershey’s. (2021, September23). Confectionery market share in the United States in 2020, by company
[Graph]. Statista. https://www.statista.com/statistics/294497/us-confectionery-market-share-by-company/
Krauss, J. E., & Barrientos, S. (2021). Fairtrade and beyond: Shifting dynamics in cocoa sustainability pro-
duction networks. Geoforum, 120, 186–197. https://doi.org/10.1016/j.geoforum.2021.02.002
Locke, R., Amengual, M., & Mangla, A. (2009). Virtue out of necessity? Compliance, commitment, and the
improvement of labor conditions in global supply chains. Politics & Society, 37(3), 319–351. https://doi.org/
10.1177/0032329209338922
References
Aglionby, J., & Atkins, R. (2018). From bean to bar. Special report, 2020(28 août). https://ig.ft.com/special-re-
ports/child-labour/

Page 13 of 18
Candy Industry. (2022, March15). Net sales of the leading confectionery companies worldwide in 2021
(in billion U.S. dollars) [Graph]. In Statista. https://www.statista.com/statistics/252097/net-sales-of-the-lead-
ing-10-confectionery-companies-worldwide/
CBI, Ministry of Foreign Affairs. (2021). The Dutch market potential for cocoa. https://www.cbi.eu/market-in-
formation/cocoa-cocoa-products/netherlands/market-potential
Conseil du Café-Cacao. (2022). Prix de mise a marché cacao. http://www.conseilcafecacao.ci
Fairtrade Canada. (2020a). Fairtrade welcomes new cocoa floor price in Côte d’Ivoire and Ghana as
benefit for farmers. https://fairtrade.ca/latest/news/fairtrade-welcomes-new-cocoa-floor-price-in-cote-divoire-
and-ghana-as-benefit-for-farmers/
Fairtrade Canada. (2020b). Syndicat des agricultrices et agriculteurs de Kuapa Kokoo, au Ghana. https://fair-
trade.ca/fr/productrices-eurs-et-produits/cacao/kuapa-kokoo-ghana/
Fairtrade International. (2021a). Fairtrade International. https://www.fairtrade.net/about/fairtrade-international
Fairtrade International. (2021b). How fairtrade works. https://www.fairtrade.net/about/how-fairtrade-works
Fairtrade International. (2021c). New study shows higher incomes for fairtrade cocoa farmers.
https://www.fairtrade.net/news/new-study-shows-higher-incomes-for-fairtrade-cocoa-farmers
Fairtrade International. (2021d). Top 7 products dashboard. https://www.fairtrade.net/impact/top-7-products-

dashboard
Fairtrade International. (2021e). Traceability in fairtrade supply chains. https://www.fairtrade.net/about/supply-

chain-traceability
Fold, N. (2001). Restructuring of the European chocolate industry and its impact on cocoa production in West
Africa. Journal of Economic Geography, 1(4), 405–420. https://doi.org/10.1093/jeg/1.4.405
Fold, N. (2002). Lead firms and competition in ‘Bi-polar’ commodity chains: Grinders and branders in
the global cocoa-chocolate industry. Journal of Agrarian Change, 2(2), 228–247. https://doi.org/10.1111/
1471-0366.00032
Fountain, A., & Huetz-Adams, F. (2018). Cocoa barometer 2018. https://www.voicenetwork.eu/wp-content/

uploads/2019/08/Cocoaborometer2018_web4.pdf

Page 14 of 18
Fountain, A., & Huetz-Adams, F. (2020). Cocoa barometer 2020. https://voicenetwork.cc/wp-content/uploads/

2021/03/2020-Cocoa-Barometer-EN.pdf
Gallo, P. J., Antolin-Lopez, R., & Montiel, I. (2018). Associative sustainable business models: Cases in
the bean-to-bar chocolate industry. Journal of Cleaner Production, 174, 905–916. https://doi.org/10.1016/
j.jclepro.2017.11.021
Gboko, K. C., Ruf, F., & Faure, G. (2020). Orchestrating a multi-stakeholder supply chain network: The case
of exporters in cocoa certification in Cote d’Ivoire. Journal of Innovation Economics & Management, 34(1),
33–56. https://doi.org/10.3917/jie.034.0033
Hebbar, P. K. (2007). Cacao diseases: A global perspective from an industry point of view. Phytopathology,
97(12), 1658–1663. https://doi.org/10.1094/PHYTO-97-12-1658
ICCO. (2021, March16). Global leading countries of cocoa bean processing from 2019/2020 and 2020/
2021 (in 1,000 tons) [Graph]. Statista. https://www.statista.com/statistics/238242/leading-countries-of-global-
cocoa-bean-processing/
Jaffee, D. (2012). Weak coffee: Certification and co-optation in the fair trade movement. Social Problems,
59(1), 94–116. https://doi.org/10.1525/sp.2012.59.1.94
Mars. (2021). Cocoa for generations puts cocoa farmers first. https://www.mars.com/sustainability-plan/co-
coa-for-generations
Mars. (2022). Mars next generation supplier program. https://www.mars.com/about/policies-and-practices/

next-generation-supplier-program
Mondelēz International. (2022a). Cocoa life. https://www.cocoalife.org
Mondelēz International. (2022b). Making an impact. https://www.cocoalife.org/impact
Pilling, D. (2019). The African farmers taking on big chocolate. https://www.ft.com/content/

648bd044-1ab3-11ea-97df-cc63de1d73f4
Potts, J. (2017). Throwing the chocolate bar out with the bathwater: How Cadbury’s transition to an in-house
sustainability standard threatens the sustainability of the cocoa sector. https://www.iisd.org/system/files/pub-
lications/cadbury-sustainability-standard-cocoa-industry-commentary.pdf
Ryan. (2011). Chocolate nations: Living and dying for cocoa in West Africa. Zed Books.

Page 15 of 18
Ryan. (2019). Cocoa farmers in west Africa at mercy of global markets. Financial Times. https://www.ft.com/
content/75d656c0-be84-11e9-9381-78bab8a70848
UN Comtrade. (2021, June3). Leading cocoa bean importers worldwide in 2021 (in million U.S. dollars)
[Graph]. Statista. https://www.statista.com/statistics/1112363/global-leading-importers-of-cocoa-beans/
Van Dijk, M. P., & Trienekens, J. (2012). Upgrading of value chains in developing countries. In M. P.Van Dijk
& J.Trienekens (Eds.), Global value chains: Linking local producers from developing countries to international
markets (pp. 237–250). Amsterdam University Press.
Veldhuyzen, C. (2019). Fairtrade living income reference prices for cocoa. https://files.fairtrade.net/2019_Re-
visedExplanatoryNote_FairtradeLivingIncomeReferencePriceCocoa.pdf
Voora, V., Bermùdez, S., & Larrea, C. (2019). Global market report: Cocoa. https://www.iisd.org/sites/default/
files/publications/ssi-global-market-report-cocoa.pdf
Appendices
Appendix 1
Fairtrade International: Certifying Sustainability Initiatives
Fairtrade International (Fairtrade International, 2021a) is a non-profit organization that aims to make trade
fairer, especially for farmers and workers in developing countries. To achieve this, Fairtrade specializes in the
creation of standards and product certification. In particular, Fairtrade International works to provide a code
that encourages farmers to change their behavior and adopt better, more responsible production practices in
exchange for an equitable and reliable market for their products.
The Fairtrade system has different branches, starting with Fairtrade International, which creates the Fairtrade
standards and coordinates the activities of all its organizations. Secondly, the system is composed of three
regional producer networks: the Latin American and Caribbean Producers’ Network, the African and Mid-
dle Eastern Producers’ Network, and the Asian and Pacific Producers’ Network (CLAC, Fairtrade Africa, and
NAPP respectively). These regional associations have the mission to support certified producer organiza-

Page 16 of 18
tions. Today, Fairtrade is made up of approximately 1,700 producer organizations, representing 1.7 million
farmers and workers. The Fairtrade system also has over 25 national Fairtrade organizations that market and
promote certified products in consumer countries, seeking to educate consumers to pay the “fair” price.
Normally, in setting up their certification requirement, Fairtrade certifications align to existing national laws but
also push beyond, adding more steps and requirements that push supply chains to more sustainable prac-
tices. To ensure compliance with the standard, Fairtrade partners with FLOCERT, an independent certification
body that inspects producers and traders. Because third-party certifications are voluntary commitments of
producers and companies to the adherence to certain standards, enforcement of the rules is not an easy task.
Fairtrade is thus a complete system that, to achieve its goals, mobilizes various actors and stakeholders.
Appendix 2
A Snapshot of the Chocolate industry
Chocolate is a widely consumed product throughout Western societies. Indeed, the European and U.S. mar-
kets are the biggest consumers of chocolate (Fold, 2002). Global chocolate consumption was 7.25 million
metric tons in 2014 (Gallo et al., 2018). Overall, the chocolate industry had a retail market value of USD
106.19 billion in 2017 and consumes 43% of the world’s cocoa production. The cocoa sector market itself is

Page 17 of 18
projected to grow by 7.3% to reach a value of USD 16.32 billion in 2025 (Voora et al., 2019).
At the base of the chocolate industry’s value chain are the farmers, who produce the essential component
of chocolate: cocoa. At the other end of the chain are the consumers (Fountain & Huetz-Adams, 2018). In
between, a multiplicity of actors function to sell cocoa, transform it, and turn it into a value-added product. The
value chain of the chocolate industry is roughly divided into two segments (Fold, 2002). One consists of the
cocoa-processing companies, which are responsible for transforming the beans into liquid, powder or butter.
The other segment is made up of the chocolate manufacturers, which use the processed cocoa products to
create a value-added product.
Thus, manufacture of chocolate begins with the production of cocoa, which is mainly located in tropical and
humid areas (Gallo et al., 2018). West Africa is by far the leading cocoa-producing region, accounting for
about 70% of world production, with 40% coming from Ivory Coast, 15% from Ghana, and 5% from Cameroon
and Nigeria (Hebbar, 2007). Over the decades, this region has earned a reputation for the quality of its cocoa,
due, in particular, to its drying technique (Fold, 2002). Today, however, 90% of West Africa’s forests have
disappeared, having given way to cocoa plantations (Fountain & Huetz-Adams, 2018). This represents the
biggest environmental issue in the sector. The rest of the world’s production comes from South Asia, South
America, and Central America (Hebbar, 2007). Worldwide, the cocoa sector provided income for 40 to 50 mil-
lion people in 2012, including five million farmers (Voora et al., 2019).
https://doi.org/10.4135/9781529618945

Page 18 of 18

Striving Sustainability Chocolate Industry

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Striving Sustainability Chocolate Industry

Uploaded by

Copyright:

Available Formats

Striving for More Sustainability in the Chocolate

Industry: The Role of Private Governance in Global

Author: Marie-Eugénie Lamare, Natalia Aguilar Delgado, Ari Van Assche

Pub. Date: 2023

Striving for More Sustainability in the Chocolate Industry: The Role of

2023 Sage Publications, Inc. All Rights Reserved

Striving for More Sustainability in the Chocolate Industry: The Role of

Striving for More Sustainability in the Chocolate Industry: The Role of

The Roots of Challenges in the Cocoa Value chain

Striving for More Sustainability in the Chocolate Industry: The Role of

Figure 1. Chocolate Industry Value Chain

Source: Adapted from Fountain and Huetz-Adams (2020)

Striving for More Sustainability in the Chocolate Industry: The Role of

Striving for More Sustainability in the Chocolate Industry: The Role of

Striving for More Sustainability in the Chocolate Industry: The Role of

The Rise of In-House standards

Striving for More Sustainability in the Chocolate Industry: The Role of

Striving for More Sustainability in the Chocolate Industry: The Role of

Striving for More Sustainability in the Chocolate Industry: The Role of

1. What are the challenges of the chocolate global value chain?

Striving for More Sustainability in the Chocolate Industry: The Role of

Conseil du Café-Cacao. (2022). Prix de mise a marché cacao. http://www.conseilcafecacao.ci

Fairtrade International. (2021a). Fairtrade International. https://www.fairtrade.net/about/fairtrade-international

Fairtrade International. (2021b). How fairtrade works. https://www.fairtrade.net/about/how-fairtrade-works

Fairtrade International. (2021d). Top 7 products dashboard. https://www.fairtrade.net/impact/top-7-products-

Fairtrade International. (2021e). Traceability in fairtrade supply chains. https://www.fairtrade.net/about/supply-

Fountain, A., & Huetz-Adams, F. (2018). Cocoa barometer 2018. https://www.voicenetwork.eu/wp-content/

Striving for More Sustainability in the Chocolate Industry: The Role of

Fountain, A., & Huetz-Adams, F. (2020). Cocoa barometer 2020. https://voicenetwork.cc/wp-content/uploads/

Mars. (2022). Mars next generation supplier program. https://www.mars.com/about/policies-and-practices/

Mondelēz International. (2022a). Cocoa life. https://www.cocoalife.org

Mondelēz International. (2022b). Making an impact. https://www.cocoalife.org/impact

Pilling, D. (2019). The African farmers taking on big chocolate. https://www.ft.com/content/

Striving for More Sustainability in the Chocolate Industry: The Role of

Fairtrade International: Certifying Sustainability Initiatives

Striving for More Sustainability in the Chocolate Industry: The Role of

A Snapshot of the Chocolate industry

Striving for More Sustainability in the Chocolate Industry: The Role of

Striving for More Sustainability in the Chocolate Industry: The Role of

You might also like