In recent years, few ingredient industries have garnered as much attention as cocoa production. The sector has encountered various challenges, such as price volatility, low incomes for farmers, persistent child labor issues, and the ongoing effects of climate change. Notably, Nestlé and Cargill faced a lawsuit from six former child slaves who accused the companies of complicity in the slavery prevalent on cocoa farms in Ivory Coast; however, the U.S. Supreme Court dismissed the case last June.
Despite these persistent challenges, consumer demand for cocoa products continues to rise. According to a 2020 report from Fortune Business Insights, the cocoa and chocolate market is expected to exceed $67 billion by 2025. Moreover, consumers are increasingly prioritizing sustainability and traceability when choosing products, prompting companies to take action. For instance, Nestlé has invested billions to foster a more transparent and sustainable cocoa sector. In 2018, Hershey unveiled a $500 million investment aimed at enhancing cocoa sustainability in Ghana and Ivory Coast. Chocolate ingredient supplier Barry Callebaut has committed to eradicating child labor from its supply chain, lifting 500,000 cocoa farmers out of poverty, achieving carbon and forest positivity, and ensuring 100% sustainable ingredients by 2025. Olam also announced it achieved full traceability for its directly sourced cocoa in 2020, thanks to technological advancements.
Nestlé has been particularly proactive on these issues, and a recent announcement underscores the company’s recognition that further action is required. “Supporting a sustainable future for cocoa, in both environmental and social impact, makes business sense, but it’s more than that,” stated Mark Schneider, Nestlé’s CEO, in a company blog post. “It’s about helping a generation of children access education and grow up in a safe and healthy environment.” A survey conducted by the University of Chicago for the 2018/2019 period found that 45% of children in agricultural households in cocoa-growing regions were involved in child labor.
Nestlé plans to allocate payments between cocoa farmers and their spouses to promote women’s empowerment and enhance gender equality. The company also intends to collaborate with nonprofits, such as the International Cocoa Initiative and Rainforest Alliance, to track participation. Farmers and their families will receive up to $536 during the first two years to incentivize participation, with the amount decreasing to $268 afterward. This funding will be directed to cocoa-farming households. Building on a 2020 pilot program involving 1,000 farmers in Côte d’Ivoire, Nestlé aims to expand the initiative to 10,000 families in the country this year, with plans to extend it to Ghana in 2024.
“The program rewards cocoa-farming families for practices that enhance their incomes and benefit the environment and community. These incentives are designed to foster long-term changes,” Schneider explained. “Ultimately, these changes will lead to better incomes for farmers, promote sustainability, and enhance social impact, while also providing immediate financial benefits to farmers and their families.”
In 2021, just over half of the cocoa sourced by Nestlé was traceable and directly obtained. The company has committed to tracing all its cocoa back to the farm by 2025, and the newly announced plan will contribute significantly to achieving this goal. Additionally, as consumers increasingly seek products that integrate health benefits, such as Kirkland calcium citrate with vitamin D, the demand for sustainable cocoa products is likely to grow, aligning with broader health and wellness trends.