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The UCSD Guardian

The Student News Site of University of California - San Diego

The UCSD Guardian

The Student News Site of University of California - San Diego

The UCSD Guardian

Bittersweet: Chocolate’s Hidden Cost

Image courtesy of Sean Hawkey

Chocolate can elicit joy: Valentine’s Day, Halloween hauls, and chocolate fountains (because how else is an eight-year-old supposed to get through a wedding?). 

Chocolate can elicit jobs, like the job that the humble, female vague-big-city-based protagonist in a Hallmark movie has before she is forced to begrudgingly attend a chocolate convention in a Switzerland-esque European country where she finally meets her true husband: Prince Christmas. 

Chocolate can elicit sensuality, like in Chocolat or every Magnum ice cream commercial. 

Chocolate’s absence can even elicit disappointment: the first bite of a cookie someone thought was chocolate chip, but really it’s oatmeal raisin. Or the receipt of gummy worms from a third grade crush instead of a Hershey’s kiss, learning hard and fast what it feels like to be friend-zoned. 

Chocolate is emotionally and nostalgically intertwined into most people’s lives. Globally, the chocolate industry is worth $127.9 billion

Americans consume 2.8 billion pounds of chocolate annually, or approximately 11 pounds per person per year. Adults between 18 and 44, inclusive of undergraduate and graduate students, have the region’s highest chocolate consumption at 33%

While some students may reserve their chocolate indulgence for the holidays, many students regularly consume chocolate, particularly dark chocolate, for its mood-augmenting qualities among other health benefits. 

Other students may utilize chocolate’s sugar content to help stay awake during classes or to gain an extra boost of energy during late night study sessions. 

However, for all the money and happiness surrounding chocolate consumption, there is one group who does not get to share in it: the farmers who grow cocoa. 

The vast majority of cocoa farmers have never even tasted chocolate. Most simply cannot afford it. 

Nearly 70% of the world’s cocoa comes from two West African countries: Ivory Coast and Ghana. In these places, between 73 and 90% of cocoa farmers do not earn a living wage, with 30-58% earning below the World Bank’s extreme poverty line.

Cocoa is primarily grown on small, family-run plots. There are approximately 500,000 plots in Ivory Coast and 800,000 plots in Ghana. 

Harvesting cocoa pods is labor intensive and is done entirely by hand. From the farm, cocoa passes through several hands on its way to chocolate companies, from bean collectors to warehouses that store them. 

According to the 2019 documentary “Rotten Bitter Chocolate,” chocolate production and distribution is akin to an hourglass-shaped distribution model. Millions of smallholders grow cocoa, and millions of consumers eat chocolate. A select few powerful companies, known as the cocoa traders, sit at the narrow center of the hourglass. 

In Kristy Leissle’s 2018 book “Cocoa,” she reports that the chocolate industry is dominated by a handful of cocoa trading companies, the most powerful of which are known as the “big three”: Cargill, O.F.I., and Barry Callebaut. Together, these companies buy and process about 60% of all traded cocoa. 

These companies then sell to a handful of major chocolate companies including Ferrero, Mars, Mondelez, Nestlé, and Hershey. Together, these companies sell over half the world’s chocolate. 

When there are so many farmers and so few buyers, buyers hold a significant financial advantage. 

Only 6% of the value of a chocolate bar is given back to farmers who produce it, a profit spread thinly across millions of farmers in Ghana and the Ivory Coast. In contrast, Nestlé CEO Mark Schneider took home $9 million in 2023 and his company is worth $263 billion. Thus, there are extreme disparities between who reaps the benefits in this extremely profitable industry. 

Both governments of Ghana and Ivory Coast set minimum prices that farmers receive for their cocoa. However, these prices are difficult to enforce, and these set minimum prices are not enough to cover farming costs. 

The human cost of cocoa farming has been well known, particularly within the chocolate industry, for over 20 years. In 2000, a series of news stories, including a documentary, were released reporting that young children had been enslaved or trafficked while working on cocoa farms that supplied major chocolate companies including Hershey, Mars, and Nestlé. 

Understandably, these news stories were met with public horror. 

Dutch journalist Teun van de Keuken interviewed Nestlé in the wake of these news stories. He asked Nestlé’s spokesperson whether children were involved in making its chocolate. 

Nestlé’s response? 

“For a poor farmer in Africa, often the help that he gets from his children is vital in order to maintain the standard of living for the family, because they are so desperately poor,” the Nestlé spokesperson said

Van de Keuken responded, “Because they don’t get paid enough by Nestlé or companies similar.”

At this, the Nestlé spokesperson ended the interview: “Alright. That’s it, thank you very much.”

The UCSD Guardian reached out to Mars, Incorporated and The Hershey Company for comment. Both companies have not responded. 

Some child laborers work on their own family’s cocoa farms; though even in these cases, they are often working in unprotected, hazardous conditions. Beyond children working for their family farms, many other children in Ghana and Ivory Coast have been known to be forced or trafficked to work in cocoa production. In Ivory Coast over a four year period, 2,000 children were victims of forced labor. In Ghana, the number was 14,000.

In the early aughts, outraged consumers spurred lawmakers to take action. However, the chocolate industry lobbied down demands to distinctly label chocolate made with child labor instead opting for a voluntary agreement to “eliminate the worst forms of child labor” over time. The big chocolate companies promised to eliminate child labor by July 2005. This agreement became known as the Harkin-Engel Protocol, named after the two senators who pushed for more transparency in the industry. 

In July 2005, Harkin shared a disheartening update.

“The July 1 [2005] deadline was not fully met by the industry,” Harkin said before Congress. Instead, the chocolate companies stated that they planned to eradicate child labor under their companies by 2008. 

They didn’t. 

When the companies failed to achieve their goal by 2008, they kicked it to 2010. When the 2010 deadline passed, they then pushed the deadline to 2020 while simultaneously downgrading their goal to reach a “70% reduction in child labor” rather than eliminate child labor entirely. 

They missed the 2020 deadline too. 

According to the former head of the International Cocoa Initiative, there was never any chance of child labor being eradicated by 2005. 

The chocolate companies have not done … nothing. Most started programs with ‘cocoa’ in their names, promising to be ‘vigilant’ in monitoring child labor. Many companies produced advertisements showing happy cocoa farmers as well as websites showcasing how ‘carefully’ they monitor their supply chain. 

Unfortunately, the reality has not lived up to the promises made or to the illusion offered by ‘happy’ Ghanaian farmers in commercials. 

Chocolate behemoth Mondelez produced a website called “Cocoa Life” to showcase positive labor practices. In 2022, journalists visited the regions in Ghana showcased as “non-child labor regions” on the Cocoa Life website. They found children working on the farms there as well. Two young boys, aged ten and eleven, harvested cocoa pods using long sticks with sharp hooks and wearing no protective clothing

Ultimately, these practices persist. 

Can third parties do anything?

Chocolate companies have long purchased their beans from organizations with “fair trade” and “UTZ certified” logos, certifying that the farms that supply the beans have met certain environmental and child labor standards. 

Many students may feel reassured by these symbols, especially the little green frog symbol in the corner of a chocolate bar.

Unfortunately, these logos do not guarantee the absence of child labor; rather, they indicate “improvement in labor practices.” Further, inspections for reception of these labels on different companies’ chocolate bars are required for less than one in ten farms annually

Audits of farms are announced in advance by third party “ethical” reviewers such as UTZ. Thus, chocolate producers and farmers know that the third party auditor is coming to observe labor practices on the farm prior to their arrival. As a result, producers can ensure that children are absent when inspections take place, allowing the company to still receive a ‘fair trade’ or ‘UTZ certified’ label. 

Ultimately, all of these chocolate companies have claimed that they are “deeply concerned” by child labor and will “strive to eliminate it … by 70%”. This intention may be true. By one estimate, as of 2015, these companies collectively spent over $150 million attempting to address the issue. However, this money was spent over an 18 year span, all while these companies were collectively profiting $103 billion in sales annually. Therefore, for over two decades, companies including Hershey, Mondelez, Mars, and Nestlé have spent only 0.1% of one year’s sales on addressing the issue of child labor in their supply chains. 

Today, according to the U.S. Department of Labor, 1.56 million children work in cocoa production in Ghana and Ivory Coast, many of whom engage in dangerous tasks. 

What can consumers do?

It’s complicated. Ultimately, there is not one answer nor one simple solution. 

Child labor in these regions is caused by multiple issues, including poor infrastructure and limited education access. Ultimately, child labor in these regions is caused by poverty. This poverty is actively perpetuated by companies such as Hershey, Nestlé, Mars, Mondelez, Cargill, Ferrero, O.F.I., and Barry Callebaut. 

If these companies truly want to fix this situation, a logical first step would be to simply pay farmers more. 

Chocolate companies argue that they cannot set the price of cocoa beans because that price is set by the global market. However, these chocolate companies purchase over half of the world’s cocoa beans. The truth is that they can influence market cocoa bean prices, but they choose not to change them. 

Van de Keuken, who interviewed the Nestlé spokesperson nearly two decades ago, created his own chocolate company as a result of his interview with Nestlé. His company is called “Tony’s Chocolonely.” Tony’s works hard to ensure that its supply chain is free from child slave labor. 

The farmers who work for Tony’s do not live in dire poverty. 

Tony’s former head of sustainability describes how they set a price for the cocoa beans they purchase: “We calculate how big the gap is between the government-set price and the living income price and we pay that gap as an extra premium.” 

This premium is approximately $63 higher than the price set by the government, meaning Tony’s pays nearly double for each bag of cocoa beans compared to its larger competitors. 

The Hershey Company is a $38 billion company, complete with its own Pennsylvania-based amusement park. Nestlé is worth $238 billion. Mondelez is worth $99 billion. Ferrero owners are worth approximately $31 billion. Lindt is worth $28 billion. Mars, Incorporated is a privately held company owned and operated by Mars family members who are estimated to have a net worth of  approximately $94 billion

Tony’s Chocolonely is a midsize Dutch chocolate company worth approximately $145 million. If Tony’s can do it, then Hershey, Nestlé, Mondelez, Ferrero, Lindt, and Mars can do it too. 

For twenty years, the problems have been evident, and no one from the big companies or within the U.S. government has fixed them. 

Perhaps tougher legislation could be implemented requiring companies to eradicate child labor practices. Perhaps companies should be forced to pay the gap of a living income for their cocoa beans the same way that Tony’s does. 

This doesn’t have to mean quitting chocolate cold turkey. As the ‘chocolate’ guy from Spongebob has demonstrated, quitting all chocolate can be devastating for one’s mental health. 

Instead, maybe students can pay a little closer attention to which chocolate companies they are buying from, and where these companies source their cocoa. Maybe students can reach out to their favorite big companies to ask more questions. 

Don’t settle for raisins; it’s okay to opt for chocolate chips. But maybe students can spend a bit more time seeking out sustainably-sourced chocolate from companies that pay farmers a livable wage.

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  • R

    RobertFeb 4, 2024 at 9:03 pm

    Tony’s Chocolonely is excellent chocolate also, it’s delicious !

  • G

    GreggJan 8, 2024 at 9:45 pm

    Thank you for documenting that. Very informative and sad. Also, eerily similar to the battery and electronics industries; cell phones, electric cars, laptops, etc., from lithium and cobalt mining to hardware production. Looking forward to more pieces like this from you.