Teun van de Keuken is a Dutch TV journalist on the consumer report TV show (kinda like a ‘60 Minutes’ of food) Keuringsdienst van Waarde. KVW for short. In 2003, Teun was shocked to read a small news article that said forced labor still existed in the cocoa industry. To the journalists of KVW, that seemed like front-page news, so they started a segment on KVW all about cocoa.  

The segment started like every other on the show, with Teun directly calling chocolate companies and asking for answers. Unfortunately, not only were the chocolate companies unwilling to answer his questions, but some even blacklisted Teun to prevent him from getting in contact. 

The chocolate supply chain starts with millions of cocoa farmers and ends with billions of consumers. But what about the piece in the middle? This piece is dominated by a handful of chocolate giants (who we call big choco) that profit from keeping the purchase price of cocoa as low as possible. There’s nothing wrong with a profitable business, of course. After all, companies would go bust without it, that’s just common sense. What’s not so great, however, is when that profit comes at all costs. And in this case, profit comes at the cost of exploitation of farmers at the beginning of the supply chain. 

Cocoa is grown in places all around the equator like Asia and South America, but more than a whopping 60% of the world's cocoa comes from two mid-sized countries in West Africa: Ghana and Ivory Coast. These two countries are also where the problems in the cocoa industry are at their worst. Most farmers there have only a small plot of land and earn just 78 cents a day from the crops they grow there. That amount isn’t just low by our standards, the living income is set at $2.16 per person, per day for Ghanains and for Ivorians it’s set at $2.49 per person per day. Farmers just aren’t paid enough, even with certification premiums.  

This means that farmers are forced into a cycle of ongoing poverty. And while the price of cocoa isn’t the only issue that keeps farmers trapped in a cycle of poverty, it is a big one. And that poverty is the root cause of the 30,000 cases of forced labor and 1.56 million cases illegal child labor that exist in the chocolate industry today.  

1. traceable cocoa beans

In order to take responsibility for the conditions under which your beans are grown, you first need to know where those beans come from. So, while you can’t pick and choose which sourcing principles to use, this one is the starting point. 

The cocoa beans we use are 100% traceable back to the source and, unfortunately, that makes us kinda unique. Right now, the standard practice in the cocoa industry is that all the beans a company buys are mixed up in a big anonymous pile and then turned into chocolate. 

The practice of mass balance beans, or taking cocoa beans from the big anonymous pile, makes it impossible to know which beans are from where and which chocolate bars they go into. And while some progress is being made by big chocos in terms of traceability, it’s still not enough. 

To keep track of our beans, we make sure to keep them out of the anonymous pile and we process them separately from every other chocolate company’s beans, even though our bars are made in the same factory as some big chocos. More on that later. With the help of our partners, we also track our beans from farm to bar using a tool we call Tony’s Beantracker. This allows us to not only be sure of how many beans we source from each farmer, but also under which social and environmental conditions they’re grown on those farms. This creates the foundation for us to take responsibility for our choco. Plus, it gives insights to all our partners along the way too. For example, coops we work with are notified when their beans get to Antwerp, ‘cause that’s when we’re due to pay the Tony’s premium. Cha-ching! 

2. a higher price

As we touched on earlier, cocoa farmers earn far too little for their crops. So until the standard purchasing price for cocoa is enough for cocoa farmers to earn a living income, we need another solution: paying a higher price. Paying a higher price is essential because it enables cocoa farmers to earn a living income and run their farm. 

That's why premiums like the Fairtrade certification premium are a good step in the right direction. However, the current Fairtrade certification premium (which is paid on top of the standard “farmgate” price of cocoa) still isn’t enough for farmers to earn a living income.

So, what is the right price, and how do we make sure farmers are paid that price? Tony’s and Fairtrade worked together to come up with a model to calculate the Living Income Reference Price (LIRP). The LIRP is a fancy calculation that takes into account a lot of factors like the expenses of an average farmers, an average family size per farmer and what kind of disposable income will create a reasonably good quality of life. The LIRP is higher than the standard (farmgate) price of cocoa and the Fairtrade premium together, so we add a Tony’s premium, which makes up the difference. 

So, once farmers are paid a higher price, does that mean the cocoa is sourced fairly? Not necessarily, ‘cause like we said before, all 5 Sourcing Principles are needed. Keep on reading and you’ll see what we mean. 

3. strong farmers

Ever heard of the phrase "two heads are better than one"? Well, that rule applies to the cocoa industry too! It’s important for farmers to stand together, because they are stronger as a team. So, as a rule, Tony’s only works with farmer cooperatives. Farmer cooperatives are groups of farmers who have decided to work together – this can mean working together to sell cocoa beans but can also provide other benefits like access to community farming equipment. 

Collectively, farmers create a platform for themselves and are better prepared to represent themselves in their coops, communities and even in politics. This unity and professionalization empowers cocoa farmers to structurally change the inequality in the cocoa chain. 

4. the long term

Imagine working for 6 months at a time, all the while not knowing how much you’ll earn for that hard work. It’d be tough to save up for investments in your future, like a car or a down payment on a house. Unfortunately, that’s what it’s like to be a cocoa farmer. Twice a year, farmers sell the beans they’ve harvested at the best price that they can get. That’s why it’s important to go for the long-term, longer lead time for planning leads to more possibilities and can help farmers to move out of the poverty trap. We ensure that cocoa farmers have a 5-year commitment from Tony’s, guaranteeing that we’ll buy cocoa beans from them at a higher price. These commitments give farmers the opportunity to make long-term investments in their farms, like buying new cocoa trees for a better harvest, or investing in equipment or training. 

Our 5-year contracts are also intentionally one-sided. This means that farmers and cooperatives can break the contract at any time without consequence. For example, if they find a better deal with another buyer. After all, these agreements are meant to support farmers, not to trap them. 

5. improved quality and productivity

Not only does the price of cocoa need to be higher, but so does production. Many cocoa farmers only produce 30-40% of what should be possible. And that means that they miss out on income. 'Cause more beans to sell means more money. Another problem is that the quality of beans is often poor, so they don’t sell very well. Better quality beans can be sold for a higher price and contribute to, you guessed it, more income!

How can we help farmers to improve the quality of their beans and the productivity of their farms? We invest in agricultural knowledge and skills training. For example, teaching farmers to replant and rehabilitate cocoa trees can help to improve the performance of their farms.

This agricultural know-how empowers the farmers to drive their own development and future, while simultaneously minimizing the environmental impact of cocoa farming (like deforestation to expand farmland). A win-win!

Once we get up and running with a cooperative, these Sourcing Principles should work to address the poverty which leads to exploitation of cocoa farmers. Which is why we hope more companies will adopt our 5 Sourcing Principles via Tony’s Open Chain.  

But what about when we start working with a new cooperative? Do we only find and work with cooperatives that have no cases of illegal child labor in their supply chain? If only it were that simple.

We source our cocoa beans from Ghana and Ivory Coast, where exploitation of cocoa farmers is most prevalent. We keep growing as a company and therefore we're able to scale up and work with more farmers. However, this means also that with every new relationship, we have to start from square one. Every year new farmers are integrated into our supply chain, and those farmers haven’t been receiving the benefits of our 5 Sourcing Principles yet, so we can’t guarantee that illegal labor doesn’t exist within their cooperatives. So, we have to seek out and address cases of illegal child labor as they come. We do this with a system called CLMRS.  

And what about forced labor? We’ve never found a case of forced labor in our supply chain, and it’s not for lack of looking. We keep a sharp eye out for any cases of illegal labor, and we’re not the only ones. In 2017 Tulane University and the Walk Free Foundation did extensive research in our supply chain and didn’t find any cases of forced labor, whew!  

To address a problem, you’ve got to know that it exists first! We’ve been raising awareness about the bitter truth in the chocolate industry since we started Tony’s in 2005. ‘Cause if retailers and choco fans actively demand chocolate free from exploitation, chocolate companies will need to listen and make that happen. The more people know what’s going on and choose to join us in our mission to change the industry, the sooner we'll make 100% exploitation-free chocolate the norm. 

The other purpose of this pillar is to create awareness around illegal labor activities among cocoa farmers, so that we can work together to protect children’s rights. We believe that everyone needs to take action to end exploitation in the cocoa industry, and this pillar is the first step in empowering everyone to do that. 

2. Tony's leads by example

Our mission is ambitious, but it can be done. And to convince other players in the chocolate industry to work with us towards our goal, we need to prove that it can be done. And proving that our solution is practical means more than just proving that our 5 Sourcing Principles work.  

For example, it could be argued that switching to our way of doing business with cocoa farmers would be too expensive and could put big chocos out of business if they implemented it. So, it’s important to prove that we can make chocolate differently while being financially successful. That’s one reason why we’re a full-on business and not a non-profit. So, while we focus on impact above all else, we do make a profit too. 

Another argument that could keep big chocos from following our lead is that Tony’s is just a small company, and it’s a whole lot easier to trace cocoa beans when you’ve only got a few of them to keep track of. So, we work with the same cocoa processor as some big chocos: Barry Callebaut. In 2005, we deliberately chose to partner with Barry Callebaut to show that it is possible to be fully traceable while working with a large processor. This way we show that every chocolate company can work according to our 5 Sourcing Principles. From the start, Barry Callebaut has believed in our mission and collaborated with us to set up fully segregated processing for our 100% traceable beans, so they are never mixed with other beans that weren’t produced using our 5 Sourcing Principles. See what Barry Callebaut has to say about it in this PBS feature. Plus, working with Barry Callebaut allows us to further scale up our production and enables us to grow Tony’s Open Chain by processing the 100% traceable cocoa beans from our mission allies, too.   

Together with our partners, from farmers to choco fans and everyone in between, we prove that our way of doing business is possible for anyone in the chocolate industry. No excuses! 

3. Tony's inspires to act

We can’t achieve our mission alone. To change the chocolate industry from within, we need all the players involved to join in. That’s why it’s important for us to inspire others to act, especially big choco. 

We’re increasing the pressure on the industry through dialogue with politicians, NGOs, and scientific institutions. But the end goal is to get as many chocolate companies as possible to change the way they do business with cocoa farmers for the better. So, we’re always inviting other chocolate companies to follow our model and adopt our 5 Sourcing Principles via Tony’s Open Chain. Ben & Jerry's, Aldi, and Albert Hein ​​​​​​​have already joined in. That’s a good start, but we’ve still got a long way to go..