The event: Examining Brazil's Cocoa-Chocolate Supply Chain

Part 3 of a multi-part blog series. Part 1 is available herePart 2 is available here. Updated links to additional posts will be added here as they become available.

Leia parte 1 em português no Chocólatras OnlineA parte 2 está disponível aqui.

On Wednesday, April 24th, we hosted a film screening and discussion with a delegation of Brazilian guests as part of the class our Executive Director teaches at Harvard University, "Chocolate, Culture, and the Politics of Food." The event was attended by scholars and students from several Boston-area universities, Brazilian community members, and representatives of NGOs and businesses.

The speakers at the event were, in order of appearance:

Thanks to the generous contributions of several cacao-chocolate companies, we also included a tasting and discussion of products made with supply chain transparency. These included:

Many of these chocolates are available to purchase in the United States via the following suppliers: Caputo'sChocolopolis, The Meadow.

Event video

View the full event (in English) below in three parts. Part 1 includes presentations from Carla D. Martin and Poliana Dallabrida. Part 2 is the Papel Social documentary The Cocoa Route. Part 3 includes a group discussion and question and answer period with the full Brazilian delegation.

Part 1: presentations from Carla D. Martin and Poliana Dallabrida

Carla D. Martin's slides and Poliana Dallabrida's slides are also available.

Part 2: Papel Social documentary The Cocoa Route

Part 3: group discussion and question and answer period

Please stay tuned for more posts to come on this topic.


What types of international conventions exist to address slavery and define human rights today?

Part 2 of a multi-part blog series. Part 1 is available here. Part 3 is available here. Updated links to additional posts will be added here as they become available.

Leia parte 1 em português no Chocólatras OnlineA parte 2 está disponível aqui.

 

"There are no longer any legal rights of ownership over human beings anywhere in the world."
– Siddharth Kara

All recognized countries today have technically outlawed slavery. Yet "unfree labor" – a term used to describe a variety of types of employment against will – persists. Today scholars and activists use terms like "unfree labor," "modern slavery," "modern-day slavery," "slavery-like practices," "conditions analogous to slavery," or "contemporary forms of slavery" to describe practices such as forced labor, debt bondage, human trafficking, and more. Examples of contemporary unfree labor can be found in almost every country in the world, and stem from the long human tradition of slavery in many cultures, which has existed since the time before written history.

What types of international conventions exist to address slavery and define human rights today?

Research on human rights abuses in labor requires knowledge of both international human rights law and domestic law. In the case of Brazil, applicable international human rights law is primary comprised of international conventions that have been signed and ratified by the national government, and applicable domestic law establishes regulations in harmony with or building upon these international laws.

A few important organizations are relevant to our discussion:

The United Nations is "a global organization that brings together its member states to confront common challenges, manage shared responsibilities and exercise collective action in an enduring quest for a peaceful, inclusive and sustainably developing world, in conformity with the principles of justice and international law and with respect for human rights and fundamental freedoms."

The mission of the Office of the United Nations High Commissioner for Human Rights is "to work for the protection of all human rights for all people; to help empower people to realize their rights; and to assist those responsible for upholding such rights in ensuring that they are implemented."

The International Labour Organization is a UN agency, and since 1919 its mandate has been focused on social justice – bringing together governments, employers, and workers of the now 187 member States, to set labor standards, develop policies, and devise programs to promote decent work for all. The fight against forced labor remains one of its top priorities.

Additionally party to the ILO/MPT working paper is a national agency, the Public Prosecutor's Office (Ministério Público do Trabalho, MPT), the branch of the Public Ministry of Brazil whose function is to act in the defense of collective and individual labor rights.

Internationally, unfree labor is considered an abuse of human rights, as codified and defined by the United Nations (UN) and other organizations. Notably, the UN defines human rights as:

Human rights are rights inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, or any other status. Human rights include the right to life and liberty, freedom from slavery and torture, freedom of opinion and expression, the right to work and education, and many more.  Everyone is entitled to these rights, without discrimination.

The following conventions and declarations on human rights are especially important to understanding the possible violation of rights through unfree labor in the global context:

Each of these organizations places priority on addressing pressing human rights violations as they are defined by these documents, and in focusing attention on the violations and proposing solutions to them. It is in this context that the ILO/MPT working paper must be understood.

What legal definitions and indicators are used to define "conditions analogous to slavery" and "child labor" in the ILO/MPT working paper?

In any investigation on slavery or child labor, there are certain conditions or indicators that can satisfy the definition.

A "condition" is a property of a situation that could be used to classify it as a type of labor. For example, to qualify types of work as "child labor," a situation must include the conditions described by law around the child's age, type and hours of work performed, and the conditions under which it is performed. These conditions are then measured by "indicators," a defined metric to indicate the level or quantity of a thing, in surveys and interviews, as a way to calculate estimates according to statistical standards.

The ILO/MPT working paper is primarily concerned with two types of rights violations: "conditions analogous to slavery" and "child labor," though it is not always clear what specific type of child labor is being described in the writing.

The authors cite several specific legal definitions linked with domestic Brazilian and international policy that are used to define these particular labor conditions and rights abuses, including but not limited to:

  1. International Labour Organization Declaration on Fundamental Rights and Principles at Work (1998):

Adopted in 1998, the Declaration commits Member States to respect and promote principles and rights in four categories, whether or not they have ratified the relevant Conventions.

These categories are: freedom of association and the effective recognition of the right to collective bargaining, the elimination of forced or compulsory labour, the abolition of child labour and the elimination of discrimination in respect of employment and occupation.

  1. International Labour Organization definitions surrounding child labor (1999):

Not all work done by children should be classified as child labour that is to be targeted for elimination. Children's or adolescents' participation in work that does not affect their health and personal development or interfere with their schooling, is generally regarded as being something positive. This includes activities such as helping their parents around the home, assisting in a family business or earning pocket money outside school hours and during school holidays. These kinds of activities contribute to children's development and to the welfare of their families; they provide them with skills and experience, and help to prepare them to be productive members of society during their adult life.

The term "child labour" is often defined as work that deprives children of their childhood, their potential and their dignity, and that is harmful to physical and mental development. It refers to work that:

  • is mentally, physically, socially or morally dangerous and harmful to children; and
  • interferes with their schooling by: depriving them of the opportunity to attend school; obliging them to leave school prematurely; or requiring them to attempt to combine school attendance with excessively long and heavy work.

The worst forms of child labour involves children being enslaved, separated from their families, exposed to serious hazards and illnesses and/or left to fend for themselves on the streets of large cities – often at a very early age. Whether or not particular forms of "work" can be called "child labour" depends on the child's age, the type and hours of work performed, the conditions under which it is performed and the objectives pursued by individual countries. The answer varies from country to country, as well as among sectors within countries.

  1. Article 149 of the Brazilian Penal Code (originally published in 1940, updated in 2003):

Reducing someone to a condition analogous to that of a slave, namely: subjecting a person to forced labour or to arduous working days, or subjecting such a person to degrading working conditions or restricting, in any manner whatsoever, his mobility by reason of a debt contracted in respect of the employer or a representative of that employer.

Penalty – two (2) to eight (8) years of imprisonment, together with a fine, on top of any sentence handed down for violence.

1º Any persons committing the following offences shall receive the same penalties:

I – retaining workers at the workplace by preventing them from using any means of transportation

II – retaining workers at the workplace by confiscating their personal papers or personal property, or by maintaining manifest surveillance

2º The prison sentence is increased by half if the crime has been committed:

I – against children or adolescents

II – on the basis of race, colour, ethnicity, religion or origin.

  1. Article 7 item XXXIII of the Brazilian Federal Constitution (1988 with amendments):

The following are rights of urban and rural workers, in addition to any others designed to improve their social condition:
...
XXXIII. prohibition of nighttime, dangerous or unhealthy work for those under eighteen years of age, and of any work for those under the age of sixteen, except as an apprentice.

  1. Article 227 of the Brazilian Federal Constitution (1988 with amendments):

It is the duty of the family, the society and the Government to assure children, adolescents, and youths, with absolute priority, the rights to life, health, nourishment, education, leisure, professional training, culture, dignity, respect, liberty and family and community harmony, in addition to safeguarding them against all forms of negligence, discrimination, exploitation, violence, cruelty and oppression.

A variety of additional decrees and land statutes from Brazilian domestic law also inform the working paper, as described in the text. These address tax evasion, sharecropping, and corporate responsibility, all of which are relevant to the context of cacao production and sales in Brazil.

While definitions and indicators along the international and domestic legal lines described above are not free from controversy, it is important to understand that they nonetheless serve as an important basis for research and protection against human rights abuses. Research completed according to traceable definitions is essential to informing conversations within industry and in supporting evidence-based policy making.

What additional measures exist to support research and action against labor rights abuses in Brazil?

Since 2003, the public mechanism of transparency of the Brazilian state has been the Register of Employers (Cadastro de Empregadores) that subjects workers to conditions analogous to slavery. This is known colloquially as the "Dirty List" (Lista Suja).

The list discloses the names of individuals or legal entities found to engage in human rights abuses according to Article 149 above. Overseen by the Ministry of Labor and Employment, the Slave Labor Eradication Inspection Division administers the list. The list is published every six months and the names of businesses stay on the list for two years. Any businesses on the list cannot receive public funds, experience bank lending penalties, and are subject to investigation.

While the list has experienced interruptions and technical changes in recent years due to legal challenges, it currently lists 202 entities, a small number of them involved in cacao production. It is often the case that when an entity is placed on the list, it is covered in local and national media; suppliers to well-known large companies can sometimes even attract international media attention.

The Dirty List has historically generated considerable impact, especially through the creation in 2005 of the National Pact for the Eradication of Slave Labor, where companies signing the pact agreed to cut all ties and financial support for businesses on the list and to share best practices in the prevention and eradication of slave labor. At one point, the pact had 300 signatories representing more than 30% of Brazil's GDP. This pact was further institutionalized in 2013 with the founding of InPACTO, the Institute of the National Pact, with the objective to unite the private sector and civil society organizations to prevent and eradicate slave labor in productive chains.

The current businesses committed to InPACTO as dues-paying members are listed online, and include come of the most powerful companies in Brazil (e.g. 3M, Carrefour, and Walmart). They also include some cacao-chocolate companies and organizations operating in Brazil such as Cargill, Nestlé, and UTZ, with a number of notable omissions. The coffee sector formed a working group in conjunction with InPACTO and Catholic Relief Services in 2017 to address its own labor challenges.

Finally, since 1992, the ILO's International Programme on the Elimination of Child Labour (IPEC) has been active in Brazil. Brazil was prioritized for this work due to the ability of existing institutions in Brazil to measure statistically the incidence of child labor, and due to the country's political environment, which often openly acknowledges that child labor exists and works to eradicate it.

With the support of the ILO and UNICEF, Brazil launched the National Forum on Preventing and Eradicating Child Labor (FNPETI) in 1994, bringing together stakeholders from the government, NGOs, employer organizations, labor unions, and other institutions dedicated to eliminating child labor from Brazilian supply chains. It serves as a democratic, non-institutionalized space for discussing proposals, defining strategies, and building consensus between government and civil society on the issue of child labor. The current FNPETI national network includes the ILO and the MPT.

Both the work of InPACTO and the work of the FNPETI are important to understanding the context of the ILO/MPT working paper on cacao.

Brazil faces many challenges in eradicating human rights abuses in labor. At the same time, the reality is that many Brazilian government institutions, companies, and NGOs are working to address these challenges actively, serving as an inspiring global reference for action around the world.

Postscript: Brazilian labor history

Chattel slavery was formally abolished in Brazil with the passing of the Lei Aurea (Golden Law) in 1888, though its impact remains to the present day. To read more about the history of slavery and forced labor in cacao production, read "The Bitter and Sweet of Chocolate in Europe," by Martin and Sampeck.

Resources


The views expressed in this blog post are those of its authors. They do not necessarily reflect the views of the journalists, policy makers, companies, or organizations mentioned in this post.


Why is FCCI engaging research on labor in cacao production in Brazil?

Part 1 of a multi-part blog series. Part 2 is available here. Part 3 is available here. Updated links to additional posts will be added here as they become available.

Leia parte 1 em português no Chocólatras Online. A parte 2 está disponível aqui.

In December 2018, we learned of an International Labor Organization/Ministério Público do Trabalho (ILO/MPT) report that confirmed instances of conditions analogous to slavery and child labor in cacao production in certain areas of Brazil. As an organization committed to the abolition of slavery, we read the report and watched the related documentary with concern. The cases described are grave. They do not appear to reflect the majority of practices in cacao production in Brazil. But they do reflect part of a broader structural problem throughout agricultural production in Brazil and globally. We strongly condemn these human rights abuses. We also know that colleagues of ours throughout Brazil are working tirelessly to build a robust, vibrant supply chain focused on social and environmental responsibility, directly in opposition to these types of human rights abuses.

Our goals

We began a period of reflection during which we considered carefully our responsibility to acknowledge the research, understand its context, and respond. We turned for additional insight to our scholarly colleagues who study Brazil, labor in cacao, and labor in Brazilian cacao production. We collected information and resources to support us in the following goals:

  1. Understanding the reality, root causes, and risk factors of the situation in Brazil.
  2. Contextualizing the situation in relation to cacao production globally.
  3. Defining potential actions that the fine cacao and chocolate community might take to address the situation.

For those who know FCCI's work and those who do not, we are releasing a series of answers to frequently asked questions on our blog this week to offer a clear narrative and public education on this situation.

Film screening and discussion on April 24, 2019

As we conducted our own investigation, we began a conversation with the journalist who oversaw the research, Marques Casara, of human rights-based research unit Papel Social. Casara and his team member Poliana Dallabrida shared their research with us and answered many of our questions about their work. They then generously agreed to travel to Boston along with Maria Claudia Falcão of the International Labor Organization and Patrícia de Mello Sanfelice of the Ministério Público do Trabalho to continue our conversation. This gathering presents a unique opportunity to discuss this working paper in an academic setting, provide a space for questions and answers, and highlight some of the excellent work being done by our colleagues in Brazil today to reform the cacao-chocolate supply chain.

On Wednesday, April 24th, we will host a film screening and discussion with these four guests as part of the class our Executive Director teaches at Harvard University, "Chocolate, Culture, and the Politics of Food." To complement our focus on the reality of the labor situation in Brazil, we will serve chocolate from Gutzeit Chocolates produced with cacao from one of the farms, Fazenda Panorama, cited by the working paper as an example of transparent labor practices in action. Additional contributions of chocolate and commentary are forthcoming from other stakeholders in Brazil. This event will be livestreamed and archived for future viewing.

FCCI is devoted to identifying, developing, and promoting fine cacao and chocolate. A key element of our mission is to create opportunities for knowledge sharing and mutual understanding throughout the cacao-chocolate supply chain, and the planned event of next week aims to do just that.

Why is FCCI engaging this research?

As much as the quality of Brazilian cacao and chocolate and the efforts of institutions throughout Brazil are succeeding in the face of many challenges, the working paper from December 2018 indicates that a need for social change still exists as well as a need for institutional capacity to study and support this change. This is true of cacao and the agricultural system globally, both of which remain a site of many human rights abuses. Our own home, the United States, is not exempt from this, and we likewise follow developments here closely for comparative purposes. The labor abuses documented in the working paper appear primarily distant from the work of the fine/specialty cacao-chocolate sector in Brazil; they nevertheless place the entire industry at risk, from both reputational and ethical standpoints.

This calls for further education, communication, and action.

Our collective expertise at FCCI includes agricultural labor, historical and modern slavery, African and African American Studies, and the Lusophone world; this knowledge informs our approach to this issue. Members of the academic, political, and advocacy communities expert in these issues have been invited to participate in the audience at the event. Throughout the next week, we will share resources via our blog that will support nuanced, informed discussion of the labor issues in cacao.

Our work requires that we address the factual reality of the cacao-chocolate industry. We believe that we must champion ethics and human rights at the same time as we promote cacao and chocolate quality. Denying the reality of the labor situation in Brazil, no matter its scope or scale, is untenable and unconscionable. We also recognize that in addressing this issue directly, we confront the controversy, politics, and intense emotions inherent in dangerous, ignominious subjects such as slavery.

The reaction from our colleagues in Brazil has been divided - many welcome this conversation, but some have critiques they wish to share about this report, and some are understandably uncomfortable with the risk that it poses to their country's image and to their businesses. We know from years of study that leaving a report such as the ILO/MPT one floating untended and unaddressed is not an option. Clear, informed education and communication is urgently required.

In fact, we watched a similar situation play out in the Brazilian coffee sector beginning in the summer of 2013, and participated in the specialty coffee industry's response to that situation in 2016. (See resource links below.) By engaging with the issue actively, working with knowledgeable actors to understand and narrate the situation, the coffee industry was able to begin addressing the issue.

We hope that the community of professionals and chocolate-lovers will follow along over the next week with an open mind, determined to face this reality with honesty, transparency, and a readiness to enact change. We invite you to join us in better understanding cacao and labor in Brazil, and in addressing the abuses of human rights that this report has documented.

Postscript: Our commitment to Brazil

In the three years since FCCI was founded, we have had the great privilege to work in support of Brazil's rural vibrancy and cacao renaissance.

First, in the spring of 2016, we supported the coffee industry's response to a similar situation of slave labor in the Brazilian coffee supply chain. This culminated in a talk delivered by our Executive Director at the Re:co Symposium in Atlanta, Georgia.

In July 2016, we hosted an FCCI Cacao Grader Intensive class at the International Festival of Cacao and Chocolate in Ilhéus, Bahia, Brazil, attended by representatives of CEPLAC, Instituto Cabruca, Instituto Federal de Educação, Ciência e Tecnologia Baiano, Universidade Estadual do Sudoeste da Bahia, Universidade da Amazônia, and over a dozen cacao and chocolate businesses.

Since that time, our team members have traveled to Brazil three additional times: first, to participate in the Perfect Daily Grind Micro-Coffee Festival, next to attend the World Cocoa Foundation Partnership Meeting as part of their Innovation Marketplace program, and then to offer a Cacao Grader Intensive course in partnership with Dengo in São Paulo.

We have continued our relationship with many members of the groundbreaking Associação Bean to Bar Brasil, promoted the work of researchers from Brazilian universities and the inspiring Centro de Inovação do Cacau, supported the Instituto Arapyaú and many emerging scholars in their work to better understand the specialty industry, and even been interviewed by Brazilian journalists about our own projects.

We have likewise hosted experts in Brazilian cacao and chocolate production at our events in the United States and included Brazilian cacao and chocolate products in several of our courses taught around the world.

We have, through every step of this journey, witnessed firsthand the commitment to quality and sustainability that exists in the Brazilian specialty cacao-chocolate sector, and the incredible potential that it holds for the future. In short: Brazil is one of the most exciting countries in today's cacao-chocolate universe and we must collectively support its future success.

Resources

Read the ILO/MPT working paper on labor in cacao production in the original Portuguese and in English. Watch the original documentary in Portuguese and the trailer for the documentary with English subtitles.

To learn more about the response of the specialty coffee industry to reports of human rights abuses in Brazil's coffee sector, read the Catholic Relief Services blog post series "Modern Slavery in the Coffeelands" and watch the Specialty Coffee Association's Re:co Symposium panel on this topic:


The views expressed in this blog post are those of its authors. They do not necessarily reflect the views of the journalists, policy makers, companies, or organizations mentioned in this post.


Reporting on the FCCI-UC Davis Survey Project

How can we design partnerships for change in the cacao-chocolate community?

Facilitating action-research partnerships to bring research, ideas, and community together

How might academic research better serve the needs of the specialty cacao and craft chocolate community? The FCCI-UC Davis research team emerged from the desire to facilitate action-oriented research to address this question. This blog post summarizes our process of research design and invites your participation in the next phase of collaboration.

Shared vision
To start, we’d like to explain our own position as researchers. We were drawn to this work because of the correspondence in values between what we and the craft chocolate and specialty cacao community hold dear. Our individual values stem from our backgrounds of having worked with farmers and seeing the potential for specialty markets to develop more equitable models for the supply chain. In particular, we saw how the craft chocolate movement brings into focus ethics, quality, and community.

Our goals in working together were to align academic research with industry issues and needs and to engage the cacao-chocolate community to make real action-research partnerships. The three phases of this journey have been Identification of core research areas, Matching of industry-academic alignment, and Planning for action, each detailed below.

Identification of core research areas: The first task was to get a sense of where industry needs and academic research currently stand. Ryan and Madeline led a brainstorming session at the 2016 Chocolate Makers’ UnConference in Seattle, asking: In what areas would you like to see more academic research? The six main themes that emerged from this conversation were: Impact and Transparency Reporting, Pricing, Genetics and Cultivation, Flavor and Taste, Chocolate Manufacturing, and Health and Physiology. We used these themes as the basis for the information-sharing part of the survey. We also listened to core themes from the UnConference and generated a list of skills that could facilitate this information sharing. These included language skills, business skills, teaching and education, and technical skills.

We wanted to see whether these themes resonated with the chocolate community at large, so we partnered with FCCI to gather more perspectives surrounding those six themes. Together, we became the UC Davis-FCCI research team and spent the next many months designing two surveys, one for industry and one for academics. (There is certainly overlap between these two categories. People in industry may also do research and academics may have projects with considerable industry cross-over.) The people targeted for the industry survey included chocolate makers and cacao farmers, retailers, service providers, and others who consider cacao and chocolate their profession. The academic survey targeted academics — people who are regularly teaching, publishing, or writing about cacao and chocolate — to see who is doing what research.

The results were overwhelmingly positive. We received 235 completed responses from the industry survey and 164 responses from the academic survey. (The responses included those who had completed at least 50% of the survey questions.) Considering the size of the fine chocolate and specialty cacao market, and the relatively small number of academics working on cacao and chocolate, we think the participation rates are a big step in the direction toward collaboration.

Matching of industry-academic alignment: Each survey had a specific set of questions for people in academia or industry, along with an embedded set of identical skill-sharing and information-sharing questions. Figure 1 shows an example.

Figure 1: Skill-sharing questions asking whether people sought assistance or could consult in the areas of teaching/education, business skills, technical skills, and language translation.

Next, we brought together the data from the industry and academic surveys. We coded open-ended responses on academic research according to alignment with the six topics from the industry survey. If someone’s research aligned 100%, we assigned it a 1-point score for that topic, and is the research aligned only somewhat, we assigned a 0.5-point score, and repeated this for each topic. This alignment is shown in Figure 2. This suggests considerable interest in the work of the academics doing this research, and the possibilities for further alignment and collaboration on these themes.

Figure 2: Industry interests and academic research alignment for the six themes. The green lines indicate that Genetics and Cultivation and Flavor and Taste were the top areas of interest. The blue lines indicate the number of academic researchers doing work on each of the six themes.

For the skill-sharing questions, we grouped respondents from both surveys together and looked at the number of people willing to share a skill and the number of people in need of assistance. Figure 3 shows that there are more people willing to assist than people in need of assistance, or simply put, the supply outnumbers the demand.

Figure 3: Grouped responses of skill-sharing from the industry and academic surveys. “Willing to assist” includes those who can offer pro bono or fee-for-service. “In need of assistance” includes those willing to pay or in need of a volunteer.

Planning for Action: Focused on the six themes, we led sessions at the 2017 UnConference and Northwest Chocolate Festival in Seattle and the 2018 Fine Chocolate Industry Association (FCIA) Elevate Chocolate event in San Francisco. You can view our presentation and the slides from these events here (presentation, slides).

In Seattle, people broke into teams based on their interest in one of the six themes and brainstormed burning questions and their vision of collaboration. Each team identified a champion to lead the next steps, shared contact information, and decided on the team’s next meeting date, time, and venue. Our next step is to schedule calls to understand what resources those champions need.

Now, we invite your participation to advance the next phases of planning and action. Our commitment to the chocolate community is to facilitate academic-research partnerships by linking up research needs with resources. This began with identifying core topic areas and people in industry and academia who are willing to collaborate. We then created research teams, identified champions, and have shared lists of contact information. Beyond this, we would love feedback from the community on what resources you need for this collaboration to thrive.

We’ve come up with a few ideas for collaboration and are open to your suggestions. Please answer a few quick questions below.

Thank you for taking the time to read this post! We will reach out again soon.

Who’s Who

Dr. Carla D. Martin is the Founder and Executive Director of the Fine Cacao and Chocolate Institute (FCCI) and a Lecturer in the Department of African and African American Studies at Harvard University. Carla is a social anthropologist whose current research focuses on ethics, quality, and politics in cacao and chocolate and draws on several years of domestic and international ethnographic experience. Her work at the FCCI focuses on identifying, developing, and promoting fine cacao and chocolate, primarily by addressing ethics and quality issues in the value chain. Find her online here and here.

Dr. Ryan Galt is a broadly-educated geographer whose teaching and research interests are centered on the relationship between society, agriculture, food, and the environment. He holds the position as the MacArthur Foundation Endowed Chair in Global Conservation with an Emphasis on Sustainable Development for a project entitled "Just chocolate? Impacts of ethical cacao-chocolate commodity chains on biodiversity conservation, crop genetic diversity, and livelihoods." Find him online here.

Madeline Weeks is a PhD student in Geography at the University of California Davis studying specialty cacao and craft chocolate. Her broad research areas include social and economic impact, ethics and gender equity, and community-based development. She has worked at origin in Belize, Guatemala, and Vietnam and stays engaged in the online community. Find her online here.


Sizing the craft chocolate market

Sizing the craft chocolate market

by Carla D. Martin, PhD, Executive Director of FCCI

One of the most consistent questions I’m asked as a researcher is: “Do you have any stats on the craft chocolate market?” Providing a simple answer to this question is a challenge due to the niche character of craft chocolate and specialty cacao. Specifically, the market currently lacks:

  • an industry definition of craft chocolate,
  • standards for defining specialty or fine cacao,
  • differentiation from or within the so-called premium chocolate sector,
  • data collection and verifiability on any of the above,
  • transparency into cacao and chocolate production size and specialty pricing at the level of individual companies, and
  • institutional resources to support collecting and publishing any of these statistics.

Nevertheless, by drawing some common-sense parameters around what we do know and can count, we’re able to calculate baseline numbers that provide a better understanding of the current size and scale of this segment of the cacao-chocolate industry. I’ve done the following below.

Undoubtedly some will find these metrics and the calculations underlying them unsatisfying due to the above-referenced lack of standard definitions or inevitable quibbles around cherry-picked individual cases that do not match self-prescribed values. That’s fine and to be expected. I plan to continue to refine and expand these numbers as better data becomes available over time. This is part of my own craft as an academic.

However, I insist that even with a lack of standard definitions and existing reporting, we can and must work to at least estimate the size of this market. Craft chocolate and specialty cacao exist at a disadvantage to the bulk, industrial market, as they often operate along lines less traditional to capitalist production. For example, this is a heterogeneous, polymorphous, small marketplace by design. Relying on standard supply chain metrics as defined by the large-scale industrial chocolate sector is not possible given this category’s current multiformity. With preliminary figures such as those shared in this post, we can move closer to understanding what matters most for sizing craft chocolate moving forward.

In addition, we cannot overlook the importance of these figures to responsible communication among stakeholders. Cacao producers, in particular, exist in the most precarious, resource-limited position in the supply chain, and are tasked with determining which varieties of cacao to grow, how to access a poorly-differentiated and unbalanced market, whether to invest in the adoption of certification schemes, and how to plan for their own livelihoods. They do all this while facing an overall information gap and education deficit on the specialty market and its actors. Increasingly, the cacao producers with whom I work report that they have been given misleading figures about specialty pricing and buying possibilities. They receive this misinformation “through the grapevine,” so to speak. Upon investigation, it is clear that it most often stems from craft chocolate industry stakeholders who, with excitement and interest in promoting this specialty category, have been known to pass along casual, uninformed, and plainly inflated statistics at salons, festivals, or farm visits, as well as in print and digital communications. While perhaps this is not surprising – modern capitalist business production relies on size and quantity metrics and notions of continuous growth and aggregation to determine value – it stands opposite to many of the values expressed by those involved in craft production. It is also unethical, as the spread of misstatements on the size of the market can result in cacao producers making decisions based on falsehoods rather than the critical information necessary to ensure their self-determined success.

For readers of this post, I encourage you to engage with the figures stated here actively, to interrogate them, and to contribute to improving them over time. Most of all, I ask that if you use these figures to educate or communicate with other supply chain stakeholders, that you present them critically and contextually, with a sense of the accountability that comes with providing information to others that will potentially impact their life decisions. I do not publish these figures lightly, but rather base them on years of information gathered through field research, interviews, participant observation, close reading of primary and secondary sources, and empirical data collection. Likewise, I ask that when discussing these numbers, you cite this post as the source (more on how to do that below), so that people can read and think for themselves as they consider this information.

Getting theoretical: what is craft chocolate?

At the simplest level of explanation, bean to bar chocolate makers or manufacturers transform cacao beans into finished chocolate products in-house. This is different than the work done by chocolatiers, who transform chocolate from another manufacturer into different finished products like truffles, bonbons, barks, or bars. The Fine Chocolate Industry Association glossary provides the following brief definitions:

Chocolate maker: This term usually refers to those companies that produce chocolate in small batches from fermented and dried specialty cacao. [Note: the term craft is often used along with the term chocolate maker, but not always.]

Chocolate manufacturer: This term usually refers to those large companies that produce a broad range of mass market and/or specialty chocolate from dried cocoa beans.

Debates on the meaning of craft, bean to bar chocolate making and manufacturing are common in the industry. While societies have long debated the definition of craft, this particular debate appears to be a relatively new historical phenomenon: Bernachon’s small-scale chocolate production began in the 1950s, companies like Bonnat and Valrhona have been exploring single-origin chocolate production since the 1980s, North American small-batch, single-origin processing began in the 1990s with Scharffen Berger (now owned by Hershey’s), and individuals and companies who have been called/are calling themselves craft chocolate makers have been growing in number for over a decade. This market niche is actively working out its value system. Recent years have seen attempts to create a (now-defunct) Craft Chocolate Makers of America group, a (three company-drafted) Craft Chocolate Manifesto, and many published lists of craft chocolate companies as variably defined by retailers, bloggers, journalists, and other industry players. Actors in this space have often prioritized chocolate made from the bean, small processing capacity (for example, less than 200 metric tons of cacao per year), primary business ownership by involved craftspeople rather than outside investors, and batch production that avoids homogenization of flavor and standardization of product lines. Beyond this, craft chocolate makers also often claim to value skilled production by an artisan, participation in a heritage revival or type of vintage re-pioneering, and the development of a market segment that resists the type of capitalist production that distances producers and consumers. Despite these trends, much of the above is flexibly interpreted by companies claiming to engage in craft chocolate production.

My own thoughts on the definition of craft are highly informed by economic, political, and cultural theories of value. As an anthropologist, I try to understand how human beings make meaning out of their labor and how they effectively produce their world together. Craft is a term used in this loosely bounded chocolate community with conflicting meaning and great flexibility, most frequently without full acknowledgement of its inextricable link to the work of people of color, and especially women. For more on this, see Critical Craft: Technology, Globalization, and Capitalism. Concerns about cooptation of the terms “craft” or “bean to bar” are rife, and given the wide variety of claims posited by actors in the craft chocolate space, it is also possible at present to identify craft chocolate as a category that results from individuals who see it in this way, who designate their labor as craft, and who are part of communities that claim the celebration of craft as their own.

Put differently, the notion of craft chocolate reflects a diverse group of people’s value systems and relationship to materials, other people, and the economy. By claiming that what they do is “craft,” people are saying “this is who we are” and “this is what we value.” They are organizing their lives – work, production, consumption – around the pursuit or furtherance of their desires. Contemporary notions of craft are as much about cosmopolitanism, power, and identity as they are about artisan skill and craftsmanship in the immediate sense. This can be a social force: as groups of people make their worlds collectively in this way, they can enact change, and that change can have elements of the revolutionary. Some individuals and companies that identify as part of the craft chocolate movement commit publicly to paying prices substantially above bulk commodity for cacao, building long-term, direct relationships with cacao producers, providing unprecedented transparency into their sourcing practices, actively focusing on artisan skill and fine flavor in chocolate production, and educating consumers about the supply chain and value.

Too often, however, actors in the chocolate industry neglect to fully recognize the labor and equality of the producers who craft the cacao that becomes chocolate. These actors are thus mutually recreating the inequality of which the cacao-chocolate supply chain was born. That, to me, is the urgent structural problem that needs addressing in this specialty category as much as in the industrial, bulk category, and thus it is the ethical imperative that drives the bulk of my work. More to come on all of the above in the future.

Number of chocolate makers and manufacturers working with specialty cacao

The cacao-chocolate industry currently tends to differentiate between craft chocolate makers and industrial chocolate manufacturers based on production size and scale. But size is just one part of the complex equation of craft value described above and therefore an inadequate sole measure for our purposes. In fact, it is important to acknowledge that the application of business and success metrics derived from large-scale industrial chocolate production might never be a good fit for the craft sector.

Given that there is not yet a clear definition of what production metrics matter most to this niche market segment, and that many companies are actively seeking to grow larger while continuing to employ the term craft to describe themselves, I sidestep the question of defining craft altogether. Of greater interest for this particular discussion, and for the cacao producers that are part of it, is the number of chocolate makers and manufacturers that choose to purchase specialty cacao at a price premium. While there is not (yet, though we at FCCI are working on it) an agreed-upon industry standard for specialty cacao, it is reasonable to define it for the purposes of this post as:

Specialty cacao: cacao produced with craftsmanship and intention toward the sales goal of receiving a premium above the bulk commodity market price. Specialty cacao production is based on a notion of quality that is linked to lack of defects and the presence of fine flavor and aroma(s).

For the purposes of this post and a first attempt to size this niche market segment with verifiable data, I have also defined the following:

Specialty chocolate maker: a bean to bar chocolate maker working with mostly specialty cacao and using less than or equal to 200 metric tons of cacao annually.

Specialty chocolate manufacturer: a bean to bar chocolate manufacturer working with mostly specialty cacao and using more than 200 metric tons of cacao annually.

To find chocolate companies that qualify as specialty chocolate makers or specialty chocolate manufacturers (meaning that they are focused on purchasing specialty cacao at a price premium), I have investigated whether a company is working from bean to bar in-house, whether it is using cacao from identifiable sources known to be sold for premium specialty prices, and whether its finished chocolate products are currently available for purchase. Within the group of qualified companies, there remains great variety in how they approach organoleptic evaluation of cacao, and privilege genetics, environmental factors, and farm management at origin. The wide-ranging price premiums that they pay for cacao thus include both tangible (e.g. flavor, variety) and sometimes intangible (e.g. sustainability certification, environmental protection, development potential) factors. Significantly, the thing that they most share in common is a claim that they actively seek to differentiate their end product by claiming superior flavor experience. This superiority is typically described as resulting from a combination of the quality of raw materials and chocolate production. (Whether these companies successfully achieve such flavor superiority is another matter best left for a later discussion.)

Following these criteria, there are around 480 specialty chocolate makers and manufacturers worldwide. Geographically, this breaks down as follows:

  • the United States: 192
  • Canada: 34
  • Europe: 92
  • Asia and Australia: 57
  • Africa: 6
  • Mexico, South America, and the Caribbean: 100
  • Total: 481

Keep in mind that tracking the companies in this category is difficult, and there is certainly some limited number that will have been missed. These figures are therefore best understood as estimates.

If, for the sake of argument, we designate companies in this segment that are processing more than 200 metric tons of specialty cacao per year as chocolate manufacturers (not chocolate makers), there are approximately 30 specialty chocolate manufacturers transparently working with specialty cacao around the world. That would then mean that smaller companies, the specialty chocolate makers, total approximately 450 globally, with variation in production size from less than one metric ton up to at most 200 metric tons of cacao per year. Given the current state of data available in this category, it is not yet possible to adequately distinguish among companies using a mix of specialty and bulk cacao, another reason that these figures should be understood as estimates.

Business size of chocolate makers and manufacturers working with specialty cacao in North America

The largest concentration of chocolate makers and manufacturers working with specialty cacao is in North America (here defined as the United States and Canada). This is a market segment typified by micro-businesses with single digit numbers of employees, with a low number of small businesses (10-99 employees), and a very small number (about a dozen globally) that would qualify as medium-size businesses (with 100-999 employees). Of the 226 North American specialty chocolate makers and manufacturers, approximately 40 have more than 5 employees and 62 have their own retail space.

Note that, beyond these 226 existing businesses, an additional 26 businesses have closed their doors since 2010. Technically speaking, this represents a relatively low failure rate for businesses in general and especially those in the food category, but given the young age of many of these companies only time will tell whether this failure rate remains low. For instance, it is not yet possible to accurately differentiate chocolate makers that are profitable and sustainable from those that are not.

In the context of chocolate and confectionery manufacturing more broadly, the United States Small Business Administration standards define any company working from cacao beans with 1,250 or fewer employees as a small business. To the best of my knowledge, none of the businesses that make up the data points I am considering here would qualify as large enterprises with a greater number of employees and annual revenue over $1 billion.

Production of specialty cacao

Of course, without specialty cacao producers, the craft chocolate sector would be something else entirely. Working within a number of constraints, we can also calculate some basic metrics related to the scale of the specialty cacao market.

The International Cocoa Organization (ICCO) Ad Hoc Panel on Fine or Flavour Cocoa publishes a list of countries that export “fine and flavour” cocoa, with estimates of the share of total exports that can be classified as fine and flavour cocoa. These percentages are largely unverifiable due to a lack of transparent data collection and, per my own ethnographic inquiry and forthcoming agricultural economic research from the Cacao para la Paz research team, are likely large overestimates in most cases.

At the last meeting of the panel in September 2015, the above recommendations were made, and subsequently approved by the International Cocoa Council at a meeting in May 2016.

In addition, the International Cocoa Organization (ICCO) tracks some data on cacao production and potential for price premiums. The statistics below were cited by Executive Director Jean-Marc Anga at the Foro Cacao in Nicaragua in November 2015. They show that production of cacao that is fine/specialty (not following a standard definition) made up roughly 6% of annual global production. The pricing numbers would likely look different this year given the structural surplus in cacao production, especially bulk cacao from West Africa, and the striking drop in cacao prices on the commodity (bulk) market, which has ricocheted throughout many specialty operations as well. Like the percentages from the Ad Hoc panel above, these figures are difficult to verify. In addition, the framing of these figures – currently the only “officially” collected about specialty cacao – neglects entirely the intention in raw material craftsmanship by cacao producers. If we are to recognize the crafting of chocolate, then should we not equally value the craftwork of cacao producers, and thus frame our inquiries around specialty cacao to include data beyond annual production and potential market price?

ICCO data 2015:

Cacao type Annual production (tonnes) Market price (USD/tonne)
Ultrapremium fine 12,000 5,000 - 10,000+
Fine 230,000 3,700 - 5,000
Bulk certified 600,000 3,100 - 3,700
Bulk 3,200,000 3,000 - 3,500

Use of specialty cacao by chocolate makers and manufacturers

Approximately 210 chocolate makers in the United States and Canada (processing at most 200 metric tons of cacao per year) use specialty cacao. Based on the data that I have gathered and cautious estimation, it is possible to estimate that these 210 companies use roughly 1,000 metric tons of specialty cacao per year collectively. Half of the total cacao being used is in the top 10% of this group – in other words, about 20 of these small companies use 500 of those tons; the other 190 use the other 500. The vast majority of the medium-sized companies in this space do not yet publish how much cacao they purchase per year, so I have refrained from estimating their volume here. One can reasonably imagine that the amount of cacao used by these companies adds up to thousands of tons per year, not necessarily all of it qualifying as specialty, and that there will be similar concentration with a small number of companies buying the largest percentage of the cacao. By extension, this means that the vast majority of the specialty cacao being purchased (per the numbers in the chart above) is being used by large companies that do not necessarily identify themselves as focused on specialty, and certainly not on craft. It is possible also that some of these companies might not be paying price premiums for cacao produced as specialty, meaning that there could be a substantial gap between specialty cacao production and sales, as has been well documented elsewhere in relation to certified cacao.

Number of specialty cacao production operations

Based on the data that I have collected so far, there are around 50 specialty cacao production operations serving the craft chocolate market globally, though this figure will vary depending on how it is measured. At present, I have collected data on those specialty cacao operations that aim to distinguish themselves along the tangible and intangible lines detailed above, and that provide at least enough transparency into their operations that one can determine through research that they sell cacao for quality premiums above the bulk commodity market price to chocolate makers and manufacturers.

These specialty cacao production operations break down along the following farming model lines:

  • private estates or research farms: 18
  • farmer-led cooperatives or associations: 9
  • contract farming/outgrower schemes (for those unfamiliar with this terminology, consult chapter 3 here): 25
  • Total: 52

Put another way, this means that, of specialty cacao production operations:

  • 50% are contract farming/outgrower schemes,
  • 35% are private estates or research farms, and
  • 15% are farmer-led cooperatives or associations.

Beyond this, surveying the field shows that the vast majority of specialty cacao producers are based in Latin America and the Caribbean. There are a few specialty cacao production operations in Asia and Africa (though the world’s largest cacao producers – Ghana, Cote d’Ivoire, Nigeria, and Cameroon – are so rarely represented in this market as to be virtually absent from it) and even fewer in Hawai’i.

The most popular origins are, in rough order of volume of cacao used by the specialty chocolate makers considered here:

  • Madagascar, by a significant margin (from Åkesson’s Estate specifically)
  • Dominican Republic
  • Peru
  • Ecuador
  • Bolivia
  • Belize

Other origins have smaller, still noticeable representations, including but not limited to: Guatemala, Venezuela, Tanzania, Papua New Guinea, Trinidad, Haiti, Philippines, Costa Rica, Congo, Colombia, Brazil, Nicaragua, Vietnam, Mexico, and Honduras. (Stay tuned for a forthcoming publication from Ryan Galt’s team at UC Davis for more on what they’ve found regarding the popularity of craft origins.) At present, it is very difficult to track the size of specialty cacao operations, a further indication of the inequality that shapes the supply chain. Ideally, I would like to be able to provide business size information on number of farmers, laborers, production size, and operation sustainability for the specialty cacao producers represented in this section. In order to do this, further transparency, reporting, research, and recognition of the craft value of farming work is necessary.

Sustainability standards and transparency in the specialty sector

When it comes to sustainability standards and transparency in the specialty sector, there is very little in the way of certifications. For example, if one compares the amount of cacao that is designated as fine production by the ICCO to the amount of cacao that is sold as certified in the relevant countries, it becomes clear that the amount of specialty cacao that is likely to also have a certification is very low. The sources of specialty cacao that are most likely to also have a sustainability certification are Peru, Mexico, Dominican Republic, Indonesia, Ecuador, Congo, Belize, and Tanzania, though the likelihood of cacao receiving specialty premiums linked to quality and also having a certification remains low in most of these cases. In this pool of countries, the most likely certification is organic, followed by Fair Trade USA, then Rainforest Alliance (now merging with UTZ) and Fair for Life. Beyond this, a small but notable amount of cacao (233 tons in 2016) is third-party, direct trade certified via the Taza Chocolate Direct Trade program.

There is variety among a small number of chocolate companies in this space in how they approach communication around sustainability and transparency. Theo Chocolate publishes a pricing matrix on its website. Taza Chocolate and Uncommon Cacao publish annual transparency reports. Dandelion Chocolate publishes a yearly sourcing report. Madécasse Chocolate recently published its first impact report. Askinosie Chocolate practices self-defined direct trade with profit-sharing and philanthropic projects. Ingemann Cocoa ID provides a searchable lot identity sheet for its cacao. Guittard Chocolate and Felchlin detail their sustainability values on their websites; Equal Exchange and TCHO collaborate directly with small farmer co-operatives on a USAID grant project. Valrhona has a Corporate Social Responsibility plan. Zotter Chocolate champions the use of certified cacao. Rogue Chocolatier recently published farm gate price for cacao and more in a chocolate bar package insert.

In the small, specialty chocolate maker category, there is some transparent trade, but in general the information about amount of specialty cacao purchased and price paid for that cacao provided by individual companies is minimal, and the burden thus falls to producers, consumers, or researchers to seek it out for themselves, an often impossible task. More often than not, companies in this space rely on relationships and/or annual visits to producers, complex notions of trust, and a “take our word for it” approach to ethics and sustainability. Given the fact that voluntary sustainability standards have now become mainstream in the chocolate industry, the specialty cacao and chocolate market faces a serious issue moving forward: it must prove that any claims made about sustainability, farmer livelihood, and more are evidence-based and that its ethics and value proposition is at least equivalent or even superior to that of the large-scale industrial chocolate manufacturers in the private sector. At present, leaving aside their often good faith intentions, self-identified craft chocolate and specialty cacao companies make many unverifiable claims. Even more, it is not uncommon to encounter the dangerous idea that quality of chocolate is directly linked with quality of life of cacao producers. That a cacao sample is of superior quality does not imply that those who produced it have better lives. Flavor is insufficient evidence.

Next steps

If you would like to explore some of the companies that make up the data for this post, check out the FCCI specialty cacao and chocolate map and spreadsheet, which will allow you to do some of your own research and calculating. This is the most comprehensive database of its kind, a volunteer-driven work in progress as the industry develops and further research is conducted.

Likewise, if you would like to comment on this post or contribute to future developments in the research, please reach out to FCCI at contact [at] chocolateinstitute [dot] org and someone from our team will respond to you as soon as possible. We look forward to hearing from and collaborating with you as we conduct further work in this area.

Cacao producers can continue to invest in improving the quality of their crops and the sustainability of their farming practices. Distributors can continue to increase transparency into cacao production and purchasing. Specialty chocolate makers and manufacturers can continue to push the envelope on what is possible by creating sustainable small business plans, encouraging consumption of a different type and higher level of quality of chocolate, being price flexible on cacao purchases, and resource- and profit-sharing with cacao producers. Retail outlets that focus on curating craft and fine chocolate (also listed on the map referenced above) can continue to present useful opportunities for consumers to learn and explore the vibrant options available to them. Awards systems can continue to refine their judging systems and communication about product value. Consumers can seek out better products where or when information is available. But all stakeholders should be mindful of the fact that marketing is not education and that voting with dollars or taste buds, while it certainly matters, is a highly individual act that does not automatically build the collective action necessary to change long-entrenched supply chain inequality.

The question remains: is the specialty market fundamentally transformative of the cacao-chocolate supply chain? Craftwork can and should be a source of economic and cultural value for producers from farm to factory. The overall deflated price of cacao, the figures above, and my ethnographic research into the financial struggles that actors in the craft/specialty sector face indicate that there is much left to be desired in this niche market. The fact that people find producing and consuming craftwork meaningful is not enough. People must also be liberated and able to live in a self-determined manner. It is likewise important to understand that we cannot rely on the market to reform the market. For that, what we need most is activism for social change: public denunciations of the power imbalances that define the cacao-chocolate market, clear institution building toward the goal of equality throughout the supply chain, and fighting for policies that undo the profits made off of structural inequality. Will specialty cacao and chocolate play a significant role in organizing toward these goals? We shall see.

Acknowledgments
I am grateful to colleagues who provided invaluable feedback on early versions of my thinking and/or drafts of this post: Summer Allen, Trevor Bass, Amanda Berlan, José David Contreras Monjarás, Chloe Doutre Roussel, Colin Gasko, Maria Fernanda di Giacobbe, Peter Giuliano, Charles Kerchner, Kraig Kraft, Nate Kostelnik, Cristina Liberati, José López Ganem, Mark Lundy, Adriana Reis Ferreira, Anthony Rue, Kathryn Sampeck, and Sunita de Tourreil. Special recognition is due to Irene Sotiropoulou, whose generous comments on heterodox economic analysis influenced my writing profoundly. Any errors herein are my own.

How to cite
Martin, Carla, “Sizing the craft chocolate market,” Fine Cacao and Chocolate Institute (blog), August 31, 2017, https://chocolateinstitute.org/blog/sizing-the-craft-chocolate-market/.

Copyright

This document is copyrighted under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License (http://creativecommons.org/licenses/by-nc-nd/4.0/).