Combating a cocoa shortage
Mars is leading its industry in tackling the problems of African farmers
- March 28, 2014
The dynamics behind your favorite chocolate bar are changing.
While demand for chocolate is growing among emerging middle classes in places like China and India, the growth of cocoa production can’t keep pace as trees age and farmers — who live in some of the world’s poorest regions — turn to more profitable crops.
To prevent a predicted 1-million-ton shortfall of cocoa beans by 2020, McLean-based Mars Inc. has become a major player in efforts to improve the productivity and livelihoods of cocoa farmers.
Mars, the world’s largest candy company with well-known brands such as M&M’s and Snickers, spends $30 million a year on its Cocoa Sustainability Initiative. Under the 5-year-old program, Mars is investing in cocoa tree research, helping expand and standardize certification programs for farms, and improving the lives and communities of farmers.
“I’ve worked in cocoa a long time,” says Jeff Morgan, a community development specialist for Mars. “We’ve realized that in order to change the way that cocoa is grown on these farms and make it really productive for the farmers, it’s going to take a long time. And Mars is committed to working with governments, industry partners and scientific partners with a long-term goal in mind.”
While the goal certainly has a long timeframe, it’s ambitious. Mars, a $33 billion-plus food manufacturer and one of the biggest chocolate companies in the world, has pledged that by 2020 all the cocoa it purchases will be certified as sustainably produced.
That means it will buy all of its cocoa from productive and profitable farms that are environmentally sensitive and don’t subject children to forced labor or hazardous working conditions.
“Mars’ initial commitment five years ago certainly changed the dynamic in the industry,” says Alex Morgan (no relation to Jeff Morgan), senior manager of sustainable agriculture for the Rainforest Alliance, one of the world’s three largest cocoa certification groups. “Prior to that, it was really kind of smaller, more niche types of brands that were working on certification.”
Other big chocolate companies, such as Lindt, Ferrero, Nestle and Hershey, eventually followed Mars’ lead, with plans to buy only certified cocoa in the same timeframe.
“We view this work in terms of helping farmers to improve their livelihoods as pre-competitive,” meaning chocolate companies would all benefit from working together to solve these issues, says Jeff Morgan of Mars.
In addition to partnering with other major companies — many who have their own sustainability efforts — Mars is also working with international groups, such as the World Cocoa Foundation, to improve the lives of cocoa farmers, while ensuring an ample supply of cocoa in the future.
Reaching millions of farmers
Overcoming problems that plague cocoa farmers is a daunting endeavor. Cocoa is grown by 5 million to 6 million cocoa farmers on small farms around the world, each with an average of four to seven acres, making wide-scale change difficult.
Most cocoa farms are located in some of the poorest regions of the world, where farmers often aren’t aware of conventional agricultural techniques, such as tree pruning, the proper handling of cocoa beans or the use of fertilizer.
In West Africa, where 70 percent of the world’s cocoa is grown in Ivory Coast and Ghana, many trees are 30 to 40 years old, and their yields are dropping. By some estimates, about 40 percent of the world’s cocoa production is lost to pests and disease.
As a result, many cocoa farmers are switching to more profitable endeavors.
“Cocoa trees are less productive, and younger generations [of farmers] are less interested in cocoa farming,” says Alex Morgan of the Rainforest Alliance, which also certifies farms growing tea, coffee and other products. “[Chocolate companies] need to make cocoa farming more profitable and more interesting to younger generations.”
The difficulties of cocoa farmers can become problems for chocolate companies. In the current growing season, the International Cocoa Organization is forecasting a supply deficit of about 115,000 tons.
Another serious issue is the use of child labor on cocoa farms. The International Cocoa Initiative estimates that 300,000 to more than 1 million children work in chocolate production in Ivory Coast and Ghana. Many labor in unsafe conditions, and some are the victims of human trafficking (“sold” by relatives or abducted by traffickers to work for farmers as virtual slaves) — a problem that has been exacerbated by labor shortages on cocoa farms.
The certification of cocoa farms is seen as a key effort to address the industry’s widespread problems.
Mars is working with the world’s largest cocoa certifying organizations to strengthen required standards and spread certification programs to more farmers. Currently, most certifications are handled by the Rainforest Alliance, Fair Trade and UTZ Certified.
Chief among requirements is that the farms must employ fair labor standards. The Rainforest Alliance, for example, has 99 criteria in its certification process. During an annual audit, a farm must meet 15 critical “drop-dead” issues regarding child labor, forced labor, discrimination, deforestation, hunting and wildlife. The audit also requires farms to meet 80 percent of the 99 criteria to obtain certification, as well as a score of 50 percent in each of 10 categories. “We’re just making sure they are taking a balanced approach to sustainability,” says Alex Morgan.
Certifiers typically work with farmer groups and associations rather than individual growers. Reaching rural, independent farmers is a problem. “One of the big challenges that we have, as well as the industry at large, is how we can get farmers who aren’t part of a co-op or organization to work together,” says Morgan. “It’s that functioning as a group that will allow them better access to markets.”
Mars is also working with the European Committee for Standardization and the International Organization for Standardization on developing criteria.
The certification process can be beneficial to farmers beyond improving their yields. Certified cocoa attracts premium prices, but expansion of the certification programs will require major investment. Currently, an estimated 15 percent of worldwide cocoa production is certified.
So, with an increasing number of companies looking for certified cocoa, will there be enough to meet their demand? “It’s certainly possible, but it’s going to take significant investment from [chocolate companies] and others in the supply chain,” says Alex Morgan. “The more industry members are focused on the long term the better.”
Mars is now the largest purchaser of certified cocoa. The company says that more than 30 percent of its cocoa came from certified sources last year. “We want to make sure more people are introduced to certification,” says Jeff Morgan of Mars.
A more profitable crop
Mars wants to triple cocoa farmers’ yields through demonstration farms it is establishing in the Ivory Coast.
The company has had small projects on cocoa farms since the 1980s. But the candy giant decided to expand its reach when cocoa supply problems became apparent in the early 2000s, working with others to expand farmer training programs in West Africa, Indonesia, Vietnam, Cameroon and Kenya. “When we took a close look at this, we thought perhaps we were being spread too thin,” says Jeff Morgan.
Starting in 2009, Mars began to focus most of its farmer training efforts on its Vision for Change program in Ivory Coast, where 35 percent of the world’s cocoa is grown. The company also changed its approach.
Previously, Mars had provided training to farmers, supplying fertilizer and teaching them proper pruning and disease management techniques. Yields on these farms increased 30 to 40 percent, but that’s not enough improvement to solve the farm profitability problem or boost the chocolate supply industrywide. “If your yields have already deteriorated by 40 percent, you’re still not moving that farmer into higher yields,” says Morgan.
So today, Vision for Change focuses on creating demonstration farms that showcase innovative farming techniques, not only for proper care of trees, but rehabilitation of older trees. It’s more of a “training the trainer” process that the company hopes will inspire cocoa farmers to implement new techniques.
A key new technique is grafting, in which farmers insert improved planting material on the root stock of older trees. This improves older trees and produces pods faster than planting new seedlings. It takes 36 months for a grafted tree to produce pods that can be harvested, while it takes 48 months for a new seedling to produce pods that can be harvested. Another big push is the distribution of fertilizer and instruction on its proper use, which alone can boost a farm’s yield by 20 percent.
Vision for Change also is trying to improve communities where cocoa is grown. Mars works with local leaders to determine a community’s highest needs and invests in improvements. The company also is establishing child protection committees to ensure children are going to school and are not exposed to dangerous farming conditions.
In total, Mars hopes to reach 150,000 farmers through the program.
Mapping the cocoa genome
The third piece of Mars’ sustainability efforts is its support for scientific research on cocoa.
Cocoa is considered an “orphan crop.” That means it isn’t supported by the same level of research as products grown in the U.S. and Europe, which attract university and government research.
“Mars realized back in the 1990s that there was a real need for breeding to improve cocoa plants,” says Morgan.
Since then, the company has supported breeding research around the world, but a foray into cocoa genetics really boosted the company’s scientific knowledge of the bean. “With all the modern tools, Mars decided we needed to really understand the genetics of the breeding,” says Morgan.
The company mapped and published the sequence of the cocoa genome in 2010. That development improved scientists’ ability to improve cocoa breeding and led to the creation of planting material and the development of grafting technology being tested on demonstration farms.
The company’s genome research has expanded to other major tree crops in Africa, and Mars has become a key partner in the African Orphan Crops Consortium, which is sequencing the genomes of 100 traditional African food crops.
Combined with the expansion of certification programs and spread of farmer training programs, Mars hopes its efforts will help ensure your favorite chocolate bar is there for good, and that everyone that had a hand in producing it prospers.