Increasing demand
During ‘Sinterklaas’ and Christmas, there were approximately 23 million chocolate products in the Dutch supermarkets from which 22 million were made of Fair Trade cocoa. The market share of Fair Trade cocoa raised from 15% in 2009 up to 95% in 2010! This enormous increase is mainly due to the campaign of Oxfam Novib with the green ‘Sinterklaas’. Although the sector already gave a commitment to change to Fair Trade cocoa, the campaign was a huge success. 

Not only the main supermarkets are showing leadership but also chocolate giant Mars made a promise to change to Fair Trade cocoa. Mars is now responsible for 10% of the world-wide traded cocoa and before 2020 all the cocoa for Mars must be produced in a sustainable way. 

Declining supply
There is only one major issue: is the cocoa supply sufficient to meet the needs of the consumer? A number of experts in the cocoa sector are expecting that chocolate is rapidly turning into a luxury product. The main cocoa suppliers are West Africa (Ivory Coast, Ghana, Nigeria, Cameroon), Indonesia and Brazil. West Africa is responsible for 60% of the world-wide cocoa production, but it is here that the industry is badly organized. The small local farms receive low income so that child labor is still an issue. Also by choosing ‘full-sun’ cocoa the trees need a lot of intensive fertilization and the consequence is soil depletion. Civil wars and infections are other contingencies and then there is also the London based Armajero that bought 7% of the world-wide produced amount of cocoa in July 2010 to influence the price.  
 

The new caviar?
There are multiple reasons to believe that cocoa is turning into the new caviar. How can this gap between supply and demand be solved? First of all, the production need to be re-organized like for instance happened in the coffee sector with the Max Havelaar coffee. Second, alternative production methods such as ‘shade-grown’ cocoa could be an option. Cocoa trees are planted in between other foliage so that the soil depletion is prevented and the harvested amounts are bigger. The large companies need to implement sustainability into the whole supply chain so that they show leadership. Only the future can show if the market is really in a period of transition or that it is only a form of greenwashing. 

Between-us recently conducted research on the opportunities for the sustainable cocoa sector. A summary of the results is available in a discussion paper. For more information on sustainability in the cocoa sector or about the discussion paper, please contact Ines Rothmann via ines@between-us.nl or +32 484900794.