Hershey’s, and the limits of certified chocolate

ft-hersheySilly me. I thought the world’s cocoa farmers, most of whom are poor, would surely benefit when global chocolate companies, including Hershey’s, Mars and Nestle, made major commitments to buy certified cocoa. Hershey’s and Mars pledged to certify 100 percent of their cocoa as sustainably produced by 2020, while Nestle has made a variety of commitments to certification.

It’s more complicated than that, as I should have known. It always is, isn’t it? I learned a little more about cocoa farmers and certification while reporting a story for Guardian Sustainable Business about Hershey’s.

The top of the story, unfortunately, was inadvertently mangled a bit in the editing process (it happens, but rarely) and so while you are free to read it as published in the Guardian, I’m going to post an earlier version here, and I’ll add a comment at the end. Here’s the story:

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Three years ago, following a campaign by activist groups, the Hershey Company announced that it would use 100% certified cocoa in its chocolate products by 2020. The activists, including the International Labor Rights Forum, Green America and Global Exchange, declared victory, albeit with reservations.

Since then, things have grown complicated. Hershey’s is making progress in its sustainable sourcing: the company says that, in 2014, 30% of its cocoa came from certified, sustainable sources. It expects to hit 50% in 2016, a full year ahead of schedule. “This has become a way of doing business in the future,” J.P. Bilbrey, Hershey’s chief executive, told Guardian Sustainable Business.

When Hershey’s made its commitment, some in the industry feared that there would not be enough certified cocoa to satisfy Hershey’s, Mars, Ferrero and other sustainability-minded companies. But, as Bilbrey says, “Capitalism is a wonderful thing. If you demand something, those that supply it to you will provide that particular product.”

What’s less clear is how much of a difference this sustainable sourcing is making in the lives of cocoa farmers. Hershey’s, which had revenues of $7.4bn last year, won’t say how much of its profits have trickled down to suppliers, nor will it say how much business it does with each of its three nonprofit certifiers – Fair Trade, Rainforest Alliance and UTZ Certified. However, the chocolate maker – as well as its certifiers and the activists who pushed it to source certified cocoa – all agree that certification alone isn’t enough to lift the incomes of cocoa farmers.

And that hits at the heart of long-term sustainability. If those incomes don’t rise, there’s a very real risk that the next generation of farmers will give up on the business. “Even with the highest premium paid (for certified cocoa), farmers are way deep in poverty,” says Judy Gearhart, executive director of the International Labor Rights Forum.

Han De Groot, executivee director of UTZ Certified, a nonprofit based in Amsterdam, agrees. After visiting certified cocoa farmers in Cote D’Ivoire, he wrote: “There is still too much poverty to have a decent and sustainable life.”

Hershey’s efforts go beyond certification  [click to continue…]

Fair Trade USA, growing and still controversial

fairtrade_6833958232_076a8a019b_bFair Trade is an elegant idea. It’s an attempt to make globalization work for the world’s poor. Those of us in rich countries agree to pay a bit more for whatever it is we are buying — coffee is by far the No. 1 Fair Trade commodity — and, in exchange, we are assured that the farmers and workers at the other end of the supply chain are treated fairly.

If only it were that simple.

Today, in the US, there are no fewer than seven Fair Trade and Fair Trade-like labels. You can find an analysis of them here, if you so choose. The trouble is, they are competing in what remains by any measure a niche market.

Paul Rice, the founder of Fair Trade USA, formerly Transfair, wants to change that. I went to see him last week in Oakland, CA., and wrote about his efforts the other day in a story for Guardian Sustainable Business.

Here’s how my story begins:

Paul Rice, the hard-charging CEO of nonprofit Fair Trade USA, recently toured the Brooklyn headquarters of furniture company West Elm, along with former president Bill Clinton and West Elm’s president, Jim Brett. They were there to celebrate West Elm’s commitment to handcraft products, including the first Fairtrade rugs, which are made in India. “You can have a huge impact on the wage structure in India,” Clinton enthused. “Consumers will buy these. They’re beautiful, besides.”

Fairtrade rugs? What’s next? A lot more than coffee in church basements, it turns out. “We’re talking about furniture, we’re talking about linens, we’re talking about all kinds of things,” says Rice, when we met last week at Fair Trade USA’s offices in Oakland, California. “This move into the manufacturing sector puts us on the threshold of something really big.”

Fair Trade USA is in fast-growth mode. This fall, Patagonia and PACTwill begin selling Fairtrade apparel, made in factories that they say will meet strict environmental and social standards; a small company called Oliberté already sells Fairtrade shoes. Several years ago, Fair Trade USA formed a partnership with a nonprofit startup called Good World Solutions, which has developed mobile technology to connect big companies to the farmers and workers in their supply chains. Meantime, Fair Trade USA is working to certify a bell pepper farm in British Columbia, Canada, expanding the movement beyond its roots in the global south.

This flurry of activity has brought Rice lots of attention, some of it unwelcome. His supporters say that he works tirelessly to expand the impact of fair trade. Critics accuse him of abandoning its principles. As Jonathan Rosenthal, a co-founder of the co-op Equal Exchange, told The Nation: “Paul is not afraid to think and act on a big scale. That’s one of his great gifts. And he’s willing to cut any corners to get there. That, to me, is one of his great faults.”

The disagreements about what constitutes authentic Fair Trade can get pretty arcane pretty quickly. Some people, for example, argue that a chocolate bar should not be labeled Fair Trade unless the chocolate and the sugar were both procured from worker owned co-ops; others say the chocolate alone should do it. Small differences often matter, but in this arena, it seems to me that the priority ought to be growing the idea and practice of Fair Trade, even if compromises must be made along the way. As the movement grows, the bar can be lifted.

If you want to know more, see my 2012 blogpost, A schism over Fair Trade. You can read the rest of my Guardian story here.

A schism over Fair Trade

Paul Rice is a man on a mission.

The 51-year-old president and CEO of Fair Trade USA, who has led the group since 1998, says he wants the practice of Fair Trade to become bigger, engaging more consumers and helping more farmers around the world. To that end, Fair Trade USA last year quit the international Fairtrade Labelling Organizations, or FLO, an international federation of fair trade groups, to pursue a vision that Rice calls “Fair Trade for All.”  He and his allies want to broaden the definition of Fair Trade, which when it comes to coffee now requires importers to buy from grower-owned co-operatives. The “Fair Trade for All”  permits buying from collections of small farmers and even coffee estates, or plantations, that are deemed to be worker-friendly.

“Fair Trade can be more than a tiny market niche,” Rice says. “It can be scalable and significant.”

Bringing in plantations will make it easier for big coffee buyers like Green Mountain Coffee Roasters, Starbucks and Whole Foods to buy more Fair Trade products–and that’s exactly the problem, his critics say.

Including bigger farms, they argue, will endanger the co-ops that are the heart and soul of the Fair Trade movement.

“Fair Trade is designed to change commerce,” says Rodney North of Equal Exchange, a cooperative that sells Fair Trade and organic coffee, tea, chocolate bars, cocoa, bananas and almonds.  “We shouldn’t be changing Fair Trade to accommodate commerce.” [click to continue…]

Fair Trade: Even in tough times, growing fast

The proliferation of labels and claims at the grocery store can befuddle even the most conscientious consumer. What to buy? Organic produce? Locally grown vegetables? MSC-certified fish? Fair Trade coffee or chocolate?

Paul Rice, the president and CEO of Fair Trade USA, isn’t worried by the clutter. All the labels, he says, reflect a big trend–the growing appetite of food shoppers for  more “transparency and traceability.”

Says Rice: “Consumers want to know where their stuff is coming from. They want to know if it’s safe. They want to know if it’s healthy. They want to know what the impact is on the environment.”

“Consumers are increasingly using their purchasing decisions to express their values,” he says.

Of course, we’ve been hearing for decades that consumers are voting with their dollars; the trouble is, too many of us vote for crap too much of the time. But–and this is important–there’s good news when it comes to Fair Trade: Despite the sluggish US economy, it’s growing fast.

Sales of Fair Trade Certified products at mainstream grocery stores grew by 87 percent in the second quarter of 2011 over the previous quarter, according to recent data from  SPINS, which tracks the natural foods industry. Sales in the specialty and gourmet channels grew by 32 percent, for an overall growth rate of 63 percent.

What’s more, the range of products that are Fair Trade certified is expanding rapidly to include not just coffee, tea, cocoa and bananas, all which are grown in the tropics, but also sugar, flowers, honey, herbs and spices, beans and grains, wine and, most recently, apparel and sports equipment.

[Disclosure: After I’d begun writing this story, the people at Fair Trade USA, which is the leading independent certifier of Fair Trade products in the U.S., sent me a basket of goodies that included coffee, tea, chocolate bars, honey, Honest Cocoa Nova, Pink Guava Drizzle and a soccer ball. Let me know, please, if you’ve got a great recipe that calls for Pink Guava Drizzle.]

I spoke via Skype the other day with Paul Rice and Robert Grgrurev, a brand manager at Green & Black’s Organic chocolate which is going 100% Fair Trade, to learn more about Fair Trade and its impact. [click to continue…]