Dive Brief:​

• A new report reveals that cocoa and chocolate companies’ programs to improve sustainability in the sector have had little impact over the past 10 years, with continuing high levels of child labor and low farmer incomes, Food Ingredients First reports.

• An estimated 2.1 million children work in cocoa fields in Côte d’Ivoire and Ghana alone, the Cocoa Barometer 2018 report found, and no governments or companies are anywhere near their commitments to reduce child labor by 70% by 2020. It also found that the average cocoa farmer earns about a third of what is considered a living income, and about 90% of West Africa’s original forest has already been destroyed.

• The report recommends making farmers’ net income the key metric for all sustainability initiatives, and moving to mandatory requirements on human rights, transparency and accountability, among other measures to deal with the problems in the cocoa sector.

Dive Insight:

Consumer demand for more transparent supply chains has increased, and this report provides just that, shining a light into some of the darkest corners of the cocoa and chocolate sector.

It is clear that companies recognize cocoa as a problematic product, but as the market for chocolate continues to grow, they are failing to redistribute value along the production chain, giving cocoa farmers a raw deal. The value of the U.S. chocolate market alone is expected to surpass $30 billion by 2021, according to a 2016 TechSci Research report.

Chocolate and cocoa companies worldwide have been touting their efforts to improve sustainability in the sector for years. Most recently, Hershey announced a $500 million investment in West African cocoa sustainability strategies earlier this month. Other chocolate companies have made sustainability investments and pledges, including Nestlé, Lindt, Mars, Mondelez, Cargill and Barry Callebaut.

Even though these commitments are about responsible sourcing, they are also about ensuring a sustainable cocoa supply — thereby protecting producers' bottom line. Companies that are serious about the long-term future of their business will be concerned by the findings of this report; the current state of the market suggests future cocoa supplies could be under threat.

Shopper demand for transparency only seems to be intensifying, and many industry analysts have said it is no longer an optional extra for companies. But transparency also implies corporate engagement with potential problems, and communicating with consumers about how they are dealing with those issues.

Companies that are uncomfortable with revealing the realities of their supply chains are likely to face consumer backlash. To avoid it, cocoa and chocolate companies should see the Cocoa Barometer 2018 report as a starting point for action that goes further than ever before.