Tulipshare’s Guide to Good: Cocoa Supply Chains

Jan 24, 2023
In early 2021, Ben & Jerry’s parent company, Unilever, promised to ensure that every person in its supply chain is earning a living wage by 2030. Here's how Ben & Jerry's is setting the standard within the industry.

Where do supply chains go wrong?

West African cacao producers have long struggled with inadequate pay, notably in nations like Ghana and the Ivory Coast. This is caused by a number of factors, such as a lack of government support, a lack of resources and credit access, and a lack of negotiating power in the global market. Additionally, the increased cocoa production brought about by the increased demand for chocolate has resulted in an excess of the bean and a drop in price. As a result, many farmers are compelled to rely on other revenue sources because they are unable to make a decent wage from the cultivation of cocoa.

According to Forbes, over 70% of the world's cocoa production comes from West Africa, with Côte d'Ivoire leading the way as the greatest producer. The 600,000 cocoa farmers in Côte d'Ivoire, however, live in a state of abject poverty that is made worse by volatile commodity prices, climatic fluctuations, and a virus that is reducing the productivity of cocoa trees.

The farmers at the start of the cocoa supply chain frequently face the most difficult obstacles. They are usually smallholder farmers who are unable to secure reasonable pricing for their cocoa because of their weak negotiating position in the global market. Many of them are unable to access the resources and services that would enable them to better their standard of living because they are mired in poverty. It is reported that farmers, often farming small plots of land, make just $0.78 per day from their crops, falling well below the $2.16 to $2.49 per person per day living income needed to survive in Ghana and Côte d’Ivoire.

Additionally, child labour is a significant problem in the cocoa sector, notably in Ghana and Côte d’Ivoire, where it is believed that over two million children work on cocoa farms to help their families make ends meet.

What makes Ben & Jerry’s so sweet?

Ben & Jerry’s has set themselves apart from other companies by being one of the brands that actively advocates for farmers’ living wages. By building a relationship with Fairtrade and their Living Income Accelerator programme, Ben & Jerry’s have been actively working towards a more just future for the cocoa farmers in their network. And now they are moving forward with our aim of preventing modern slavery in the chocolate industry and supporting farmers as they work toward a living income by collaborating with Tony's Chocolonely's Open Chain. In fact, Ben & Jerry made history in 2020 as they were the first ice cream company to pay a living wage for the cocoa that went into their base mix for chocolate ice cream.

What makes Ben & Jerry’s so sweet?

Five key ingredients—cocoa, bananas, coffee, vanilla, and sugar—were sourced thanks to a long-standing collaboration between Fairtrade and Ben & Jerry's. For farmers and workers in poor countries, Fairtrade means better prices, respectable working conditions, local sustainability, and equitable terms of trade.

As a result, whenever you see the Fairtrade Mark on the side of a tub of Ben & Jerry's ice cream, you can be assured that the farmers who grew the ingredients were paid the Fairtrade Price and Premium, helping them develop better environmental practices and climate adaptation strategies.

How does all this impact cacao farmers in West Africa?

Working with Fairtrade has given small-scale farmers who grow essential ingredients like cocoa millions of dollars in Fairtrade Premiums. Between 1% and 2% of all Fairtrade Premiums sold worldwide are from Ben & Jerry's. That premium has a significant impact. A cocoa cooperative in Côte d'Ivoire, who partners with Ben & Jerrys, was able to use these Fairtrade Premium to construct a new medical facility, hire a nurse, set up solar panels, and procure a water pump. Ben & Jerry's has now agreed to pay higher pricing, increasing the annual income of 5,000 farmers in Côte d'Ivoire by $600,000. This means each farmer will earn an extra $120 in income per year, divided equally.

Ben & Jerry's Chief of Social Mission, Dave Rapaport, has high hopes for the future of Fairtrade, even though the price hike won't immediately close the gap between minimum wages and a living income. According to him, Ben & Jerry's involvement with Fairtrade is an essential component of a bigger strategy that extends beyond Côte d'Ivoire.

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