Chocolate is one of the world’s favourite foods, however, it’s in risk of disappearing.
Ninety per cent of the world’s cocoa is grown by about 6 million farmers, on small family farms, who earn their living from growing and selling cocoa beans. The primary growing regions are Africa, Asia, and Latin America and the largest producing countries by volume are Côte d’Ivoire and Ghana, that produce 60% of world’s cocoa.
There’s a high demand for cocoa products and a potential long-term shortfall in global supply of cocoa: disease and age are damaging cocoa trees and the number of farmers is falling because it is a precarious way of making a living. Chocolate prices are volatile (Annex 1 and 2), what makes it impossible for cocoa farmers to know how much they will be paid each year, let alone be able to plan for the future. Young people don’t want to work in cocoa farms (the average age of a cocoa farmer is 50 years).
Fairtrade aims to make cocoa farming more sustainable so farmers can better provide for themselves and their families, through payment of the Fairtrade Premium. Between 2013 and 2014, cocoa farmers earned more than £8.4 million in Fairtrade Premiums. 31% of this money was paid directly to farmers, 37% was invested so productivity could be improved and the remaining was invested in community programmes such as schools, medical centres and clean running water. However, only 1.2% of the world’s cocoa is sold on Fairtrade terms. This means that only few people that are dependent on cocoa are experiencing the benefits of Fairtrade (Fairtrade International, 2015).
Fairtrade chocolate represents 12% of total sales in the United Kingdom and Fairtrade-certified cocoa treats are growing. The first time that the Fairtrade mark appeared in the UK it was just on three products: Green & Black’s Maya Gold chocolate, Cafedirect medium roast coffee, and Clipper tea, in 1994. Nowadays, it’s possible to choose from over 4,500 Fairtrade products including tea, coffee, cocoa, chocolate, bananas, sugar, cotton, gold, cut flowers, wine and cosmetics.
It is in the United Kingdom that Fairtrade finds its largest global market and at the same time the United Kingdom is the third largest consumer of chocolate in Europe and seventh-largest importer of cocoa beans in Europe. Each British person spend around €131/ £117 on chocolate annually, with most consumers purchasing low-quality chocolate through mainstream retailers. This market remains very solid, with a strong presence of multinationals, such as Mondel?z, Nestlé and Mars. However, the speciality segment is becoming increasingly popular. The aspect of cocoa origin has also become more important on the high-end chocolate market in the United Kingdom. The fair-trade purchaser is relatively highly educated and has a relatively high income and social status (Idea Consult, 2002). These consumers have led to the specialization of the chocolate market and the increase in artisanal chocolate makers and high-end shops.
The estimated retail sales value of Fairtrade in overall commodities in the United Kingdom has increased steadily from 2002 to 2013 (Annex 3), and so has the estimated retail sales value of Fairtrade cocoa products in the United Kingdom from 2002 to 2012 (Annex 4). In this industry we can see a significant difference between 2009 and 2010, probably because it was in 2009 that the first mainstream chocolate brand became Fairtrade certified, Cadbury Dairy Milk.
Fairtrade is the most important issue related to ethics in consumer behaviour in the UK in comparison with environmental and vegetarian concerns (Shaw and Clarke, 1999 (cited in Enow-Ebot)), however Fairtrade consumption in the UK has its problems and purchases still occupy a minor position in the general retail industry. The majority of consumers are aware of Fairtrade (Annex 5) and say they would buy products from responsible companies, but they don’t believe a company to be responsible just by saying so (annex 6). Consumers think that the price premium of fair-trade products is a barrier in the purchase of these products, since they are more expensive than regular products. Lack of information, poor product presentation, the lack of availability and poor displays in supermarkets also contribute to low purchases of Fairtrade products (Mintel, 2001) (Annex 7).
On the retailers’ side, the picture isn’t perfect as well. They also think that the price is sometimes too high and they don’t highlight Fairtrade products in their supermarkets because these products only represent a very small part of their total revenue intakes (Jones et al.,2003). The purchase of Fairtrade products is a challenge to retailers, as it is difficult for them to ensure constant supply from less developed countries, due to political and economic instability in some of these countries.
Another argument against Fairtrade is that it ignores the relevant market forces and that stable prices independently of supply and demand will intensify the crisis instead of solving it. This argument is used by large companies dealing with Fairtrade products, such as Nestlé. (Enow-Ebot, n.d)
With this essay I realized that Fairtrade really is important for farmers and if we want to live in a better and fairer world it’s the right path to follow. It’s not only more ethical, but also the most sustainable way to produce chocolate. However, Fairtrade faces a lot of challenges, so it is not surprising that it has taken so long for the concept to be fully accepted into the mainstream business sector. There is still a long way to go – it will require major incentives from both retailers and consumers to further implement this concept and boost it into the right direction.