The Fairtrade Sourcing Program (FSP), launched last year, allows chocolate makers to source a single commodity - cocoa - on Fairtrade terms. Firms can carry an FSP logo if they source 100% Fairtrade cocoa for a brand. Previously companies had to source everything that could be Fairtrade as Fairtrade, namely sugar and vanilla.
Under the FSP, a chocolatier can bulk buy Fairtrade cocoa – for example Ferrero will source 20,000 metric tons (MT) of Fairtrade cocoa over the next three years under the FSP. Companies can also buy 100% Fairtrade cocoa for a brand as Mars will do for its UK and Ireland Mars bar.
Divine: No incentive to increase Fairtrade commitment
Sophi Tranchell, managing director at Divine Chocolate, said it was frustrating to see multinational corporations making lesser commitments to Fairtrade than they otherwise may have done under the old rules.
“This latest version of Fairtrade (FSP) means that it is now possible for a company to have certified products with surprisingly low percentages of cocoa in the ingredients, with no incentive to increase that percentage of the total ingredients - while Fairtrade sugar farmers miss out on the potential of supplying one of the major ingredients in these products.”
UK-based Divine Chocolate sources 1,000 MT of Fairtrade cocoa annually and ensures all its ingredients that can be certified are Fairtrade.
“Global chocolate companies have each made big announcements regarding sizeable long-term investments they plan to make in cocoa farming, with little or no possibility of consumers calling the companies to account or knowing whether it is all spent, how it is all spent, and whether it actually overlaps with other commitments e.g to Fairtrade,” said Tranchell.
Fairtrade: Opening the door to more cocoa farmers
Harriet Lamb, CEO of Fairtrade, told this site the FSP helped her organization to alleviate poverty for cocoa farmers in the developing world at a greater scale.
“We’ve opened the door for cocoa farmers to have more Fairtrade cocoa sales…If we’re not making enough sales, it’s very difficult for us to make an impact.”
She said the FSP was a different way for businesses to engage with Fairtrade. “The bar has not been lowered,” she said. Cocoa sourced under the FSP is subject to the same Fairtrade standards and premiums as the full Fairtrade mark. “The bit that has changed is the labelling side,” said the Fairtrade boss.
Companies sourcing under the FSP can carry an FSP mark on their brand, but only if they are sourcing 100% Fairtrade cocoa for that brand.
Cocoa commitments rise under FSP
Nine companies signed up to the FSP when it launched last year and now 14 companies buy Fairtrade cocoa through the program.
Lamb said that many of these companies had agreed to scale up under the FSP, which will lead to an additional $4.4m in premiums by 2016 compared to pre-FSP levels. For example German chocolatier Riegelein will source all cocoa for its own-label ‘Riegelein’ assortment under the FSP by 2017.
Lamb said the FSP had helped Fairtrade cocoa sales grow sixfold in Germany in the first year. Globally, 6,000 MT of cocoa were sold under FSP in 2014 and volumes will rise to 22,000 MT by 2016, excluding Mars’ recent commitment for the UK Mars bar.
Banging heads against walls over sugar
Fairtrade CEO Harriet Lamb said she was concerned cane sugar producers in the developing world would be muscled out of the market by cheap beet sugar prices and subsidies from the EU. She said the situation may even worsen when EU sugar beet quotas are scrapped in 2017.
Lamb said the FSP was introduced after Fairtrade had “banged its heads against the wall” in persuading chocolate makers to switch to Fairtrade cane sugar from the developing world.
“We’d been unable to convince the big chocolate manufacturers on the continent. They were insistent they were going to use locally-sourced beet sugar…The local sugar beet lobby is very strong and very powerful indeed,” she said.
Labeling rules don’t help either, she added. If a chocolate manufacture in Switzerland wants to use a Swiss-made mark on their brand for example, it must source Swiss-grown beet sugar.
Antonie Fountain, coordinator at VOICE Network (Voice of Organisations In Cocoa in Europe), said that chocolate companies had been reluctant to switch from beet to cane sugar because it changed the taste.
Divine sets the bar high
Lamb acknowledged Divine’s concerns on the FSP, but said the program could even strengthen Divine’s position as a leader in Fairtrade.
“There are always companies like Divine that will go the extra mile and set the bar high for the industry. They are at the forefront of Fairtrade," she said.
Despite her reservations on the FSP, Divine’s MD stood by Fairtrade. She said Fairtrade certification offered cocoa farmers a fairer deal, where other certifications and corporate cocoa development programs had not.