EitFood EU

This activity has received funding from EIT Food, the Innovation community on Food of the European Institute of Innovation and Technology (EIT), a body of the EU, under the horizon 2020, the EU Framework Programme for Research and Innovation

Tony’s Chocolonely: More Than Just Chocolate

Tony’s Chocolonely isn’t just a chocolate company producing your average chocolate bar. Behind each of their chocolate bars is a conscious effort to tackle long-standing issues in the chocolate industry. But how does Tony’s tackle poverty, child labour and deforestation? We interviewed Paul Schoenmakers, Impactus Prime of Tony’s Chocolonely to learn more.

What's the story behind Tony's Chocolonely? 

Tony's Chocolonely was founded 15 years ago in 2005, by a group of journalists who were investigating exploitation in the cocoa industry, after learning about the child labour occurring on cocoa plantations in West Africa.

Back in 2001, all the big chocolate players signed the Harkin–Engel ‘Cocoa’ Protocol, in which they pledged to eradicate child labour and modern slavery from their global supply chains by 2005. These journalists started calling those companies asking, “How are you progressing?” But the results were extremely poor. They decided to take an insider perspective by launching their own chocolate bar, Tony’s Chocolonely – and that’s how we were born.

Image Courtesy of Tony's Chocolonely


What issues in the chocolate industry are you tackling?

Today, there’s still more than 1.5 million children illegally working on cocoa plantations. When we talk about illegal child labour, we’re not talking about kids helping out their parents on the weekend or doing some light work after school. We're talking about activities on the farm that are dangerous and potentially harmful for the development of a child – working with dangerous tools, using dangerous pesticides and chemicals, carrying heavy loads that inhibit the healthy development of growing children. All those types of activities are unacceptable under international norms and also illegal according to national laws. 

More than 30,000 victims of modern slavery in the cocoa sector have been reported just in Cote d’Ivoire and Ghana - which grow more than 60% of the world's cocoa between them. The problems in cocoa all find a root cause in the extreme poverty that cocoa farmers live in. So that's also why we engaged there and sourced directly from Ghana and Ivory Coast – we want to show that it can be done differently. Our mission is to change the norm in the industry and make the entire cocoa industry 100% slave-free. If we can prove that we can do that, then everybody should be able to follow our example and source cocoa ethically. 

Read how Fairtrade impacts the West African cocoa industry.

How is Tony's challenging the status quo in the chocolate industry?

We don't take any shortcuts. The biggest difference is that we direct the entire supply chain, and we know exactly where our cocoa comes from. We work with Fairtrade certified cooperatives as a basis, and on top of that, we implement Tony’s 5 Source Principles: 

  1. Traceable cocoa. For all the chocolate that we sell, we know exactly where it comes from, which cooperatives and which farmers supply to that cooperative.
  2. We pay a higher price. The current price of cocoa is too low. Even with certification premiums, like Rainforest Alliance and Fairtrade, the price is still too low for cocoa farmers to earn a living income. That's why we pay more – we pay a price that enables an average cocoa farmer to earn a living income, enough for decent housing, for food on the table, for sending their kids to school, etc. 
  3. We strengthen farmer groups. There are more than 2.5 million farmers in West Africa, and they are in the weakest position in the value chain. But together, farmers can be stronger. So, we help strengthen cooperatives where farmers work together and can also voice their position and activate their rights to change the inequality in the value chain. 
  4. We engage in long-term relationships with these cooperatives. The changes that we're working on will not happen overnight. Cooperatives and farmers need a long-term horizon to invest beyond just one cocoa season. With all these cooperatives, we engage in a minimum of 5-year periods, where we guarantee that we will buy cocoa at a higher price. 
  5. We support farmers in becoming more professional in increasing the quality and quantity of cocoa they produce on the same amount of land. This helps them increase their income, but also ensures that they don't need to expand into primary forests to grow their cocoa. On the same plot of land, they can also grow food crops (which most of them do) to support their household income. 
Image Courtesy of Tony's Chocolonely


That sounds ambitious! But how do you actually assure these measures are preventing child labour or deforestation? 

We have implemented a Child Labour Monitoring and Remediation System, where we monitor the risk and possible occurrence of child labour. If we find a case, we actively remediate it and make sure that we can get such a child out of that child labour situation.

To prevent further deforestation, we have full GPS mapping of all the plantations and its borders. This helps farmers know exactly what their potential yield can be from a plantation of that size, and it also helped us to check and mitigate the risk for deforestation because we know exactly where the plantations are and also where protected forests are. 

When it comes to paying higher prices, how does Tony’s determine living income price?

Two years ago, we published a ‘living income model’ together with Fairtrade, in which you can calculate what a household income should be. This is calculated based on available data on household size, farming costs and what the price of cocoa should be. We continue to monitor new insights and update the numbers in our model each year to reflect the latest data. If there is a gap in cocoa price and living income, we adjust the extra premium that we pay to fill that gap. 

Read more about how Fairtrade works.

What does your supply chain look like? Does it differ from other chocolate brands? 

Our supply chain is not actually that different from the rest of the chocolate industry: we buy our cocoa through cooperatives who sell it to a domestic trader who exports it, and then we have an international trader who ships the cocoa to Barry Callebaut, the biggest cocoa grinder in the world, who makes chocolate for us. Some of the beans are processed in Ivory Coast to make cocoa butter (a crucial ingredient in chocolate), and the rest of it is exported to Antwerp, where Tony's chocolate is made. 

The biggest difference is that we direct and track the flow of our beans throughout the trade chain. At the start of the season, we agree with all the cooperatives on the exact volume and timing we need, and also on the higher price and extra premium we will pay for that volume. Each part of our supply chain fills out the incoming and outgoing flow of our cocoa beans in our cloud-based platform, ‘The BeanTracker’. So, throughout the entire year, we see the flow of beans going through our value chain – all the way from the farmers delivering cocoa to the cocoa being processed into the chocolate bars that we sell.

Tony's Chocolonely supply chain


But if your beans follow the usual supply chain, how do you ensure your beans are initially coming from the right sources and not mixed with other beans from unknown origins? 

Our beans are segregated from others. For other brands, they have a flow of beans coming in that is all piled up in one giant anonymous heap of cocoa beans. Some beans might be certified, but beans can also be from unknown farms where there’s no traceability. And then, all these brands take some of the beans from this heap and make it into chocolate. There's no direct link between the chocolate brand and the cocoa producer, which means there's also no direct link between the problems at the beginning of the value chain and the chocolate that they sell. And that's where the problems start – because without that direct link, without knowing where and under what conditions your cocoa comes from, you can't take responsibility.

So we've made several changes in the physical supply chain so that we guarantee segregation of the cocoa beans that we source from our partner cooperatives. We also make sure that we don't get any anonymous cocoa beans from regions where we don't want to source from – either deforested or where we don't have sight on labour exploitation. This kind of responsible supply chain is a big change that we are pushing for.

" When we started with our traceable beans, everybody told us that that wasn't possible – they actually laughed at that idea. But if you look at it now, we've proved that it is possible! "

Do you have to pay more to segregate your beans?

Yes, because we are a relatively small chocolate brand, our cocoa flows are only part of the factory process, so therefore it adds a bit of extra costs to keep them separate. But on a larger scale, there are entire factories that produce chocolate for specific chocolate brands. For them, it's more a matter of making sure that they only input traceable cocoa beans – they don't need to invest in a separate piping system in the factory, because the entire factory is actually only processing cocoa from mixed origins. So actually, these bigger chocolate companies would be at a competitive advantage compared to us, because we have to pay for the additional investments in processing equipment to keep our beans separate from the rest. 

But if you pay higher prices, why is Tony’s Chocolonely bars similar in retail price to other chocolate brands?

I think we actually prove that paying that higher price is possible without having a ridiculously expensive chocolate bar, and also while being a healthy fast-growing business. So why aren't other brands paying that higher price? Well, you have to ask them. 

The way I look at it is that they value excess profits over human rights. That's a harsh thing to say, but if you look at the biggest cocoa price drop back in 2017 – when the price of cocoa fell with almost 40% – cocoa farmers earned 40% less, but the price of chocolate on the shelf didn't move at all. In total, on the world scale, that difference amounts to roughly 4.5 billion dollars. That means that in between the farmer and the consumer, those big chocolate companies earn a lot of money.

How is Tony’s Chocolonely challenging bigger chocolate brands to commit to more responsible practices in their supply chains? 

It's so important to change the way of doing business without valuing excess profits over human rights – it’s just something that's unacceptable. We're not pointing fingers, because we realise that it is difficult to change. But we call out to all of them – the entire chocolate industry – to step it up and change their way of doing business. 

With our Sweet Solution campaign, we give a strong signal that we think it is possible to make all the chocolate according to our Five Sourcing Principles. We chose these four iconic brands as a way of representing the entire industry and the challenges that we all have to take upon collectively. We need to be doing business in a way that uplifts farmers out of poverty, and also really pushing out the wrongs in cocoa production. We proved that it works, that it's scalable, and that it’s replicable. It's up to them now to also step it up and join us in this new way of doing business.

Tony's Chocolonely Sweet Solution campaign


Has there been any change in the chocolate industry?

Together with Fairtrade, we placed that living income reference price as the benchmark in the cocoa industry. We’ve teamed up with Ben and Jerry’s, retailers like Albert Heijn in the Netherlands and Aldi in Germany – all who are committed to pay the living income price. 

Our model, all the references and supporting research is open to people to calculate it for themselves, so other companies can refer to that and also start paying a higher price. We also have our Open Chain System, where we can actively support chocolate brands to work according to Tony’s 5 Source Principles. Our platform is where we collaborate with other brands that you could say are competitors, but we don't compete on sustainability, so we collaborate with them. This is where we also share all our knowledge and our network with them. Together with our mission allies, we can collectively source cocoa from the same partner cooperatives and implement the five source principles. That is our most concrete way of actively collaborating with others, inspiring other chocolate companies to also act. 

Do you feel governments are doing enough to enforce regulation on unfair supply in consuming countries?

Well, a lot of things are going on. Within the EU Parliament, the Justice committee recently adopted a proposal for ‘human rights due diligence’ legislation, which holds companies accountable by forcing them to investigate their food supply chain, map out risks of human rights violations and environmental problems and act upon that to prevent, mitigate and remediate those adverse effects. France already has a law like that in place, but it’s only applicable to large companies. Germany is also in the process of passing similar supply chain legislation. In the Netherlands, two years ago, the Child Labour (Duty of Care) Act was approved by Parliament, but it’s still not implemented – the ministry is sitting on it, they need to finalise it and then enforce it. And back in 2011, the OECD member countries actually agreed that companies in their countries have responsibility over their supply chain.

" But until now, governments have been too inactive in enforcing legislation on their companies. That's why things are still so bad in cocoa. As long as taking responsibility is an option, is voluntary, there won’t be any results. "

Despite all the nice commitments and promises and the pilot programmes, companies don't implement the necessary changes on the scale of their entire supply chain. All these companies have sustainability programmes that do nice things, but it doesn’t cover their entire supply chain. Other companies do child labour monitoring and remediation, but only at a select few cooperatives – again, not their entire supply chain. If you still mix in cocoa beans that you don’t know the origins of, then you're not solving the problem. That’s why legislation is absolutely necessary.

Does Tony’s push for change on a legislative level?

We’ve lobbied for legislation in Europe and the US, where governments need to hold companies accountable for whatever is wrong in our supply chains. In the case of cocoa: child labour, forced labour, but also the massive deforestation. We've also teamed up with some of the biggest chocolate players, for example, Barry Calbaut, in our call for legislation. Companies should take responsibility, and we show that it can be done – they have to follow suit. But it's far from a done deal: we have to continue to push for it, make sure that legislation is not delayed. It’s important to make sure that the legislation really has positive changes on the ground, and it’s not just some administrative layer.

Image Courtesy of Tony's Chocolonely


What do you think we, as consumers, can do to be part of this change?

There's definitely momentum growing and we're moving in the right way, but this will be potentially revolutionary. So, there's obviously also a lot of resistance. That's why we need to rally as much support as we can. We’ve launched our petition as part of our Sweet Solution campaign, so consumers can indicate that they also believe that responsible and enforceable legislation is necessary. 

Link to Tony's petition for 100% responsibility.

How do you envision the future of the chocolate industry?

Personally, I really believe in change and I can see the change happening – we just need to accelerate it. With legislation in place, I'm positive that companies will have to move forward with traceability and become more connected to cocoa producers, and really tackle the problems that they have in their supply chain. It won’t just be an option or a voluntary choice to solve the problems – they just have to do it. So that is how I envision the future of cocoa, where things have changed for the better for cocoa farmers, getting them out of poverty, getting the children into school instead of on the farm, stopping deforestation, and legislation is an essential element to get there.

 

Cover image courtesy of Tony’s Chocolonely.