Olam ranks third globally in cocoa processing and distribution, trailing only Barry Callebaut and Cargill. This position means that its commitment to achieving 100% traceability in cocoa sourcing will have a significant impact on numerous companies that incorporate its chocolate into their products. The international firm boasts a diverse portfolio that includes brands such as deZaan, Unicao, Joanes, Macao, Huysman, BT Cocoa, and Britannia cocoa powder and butter. Additionally, Olam supplies various cocoa-based ingredients to manufacturers, bakeries, and chocolate confectionery businesses. While Olam sources a substantial portion of its cocoa products, approximately 40% of the raw ingredients come from other suppliers. As reported by Bloomberg, traceability currently accounts for about 60% of the company’s purchases, marking the initial step toward total transparency in the commodity sector. This initiative puts Olam ahead of its competitors, who are also working to integrate traceability into their operations.
Consumer packaged goods companies like Mars, Nestlé, Mondelez, and Hershey, along with chocolate ingredient leader Barry Callebaut, have attempted to implement internal changes to address the environmental and economic challenges in cocoa production. However, not all of these initiatives have yielded significant results. The 2018 Cocoa Barometer report highlighted that the sustainability programs from chocolate companies have led to minimal changes over the past decade. Nevertheless, companies are still moving towards greater traceability. Recently, Barry Callebaut began to disclose the names of the cooperatives and buying stations from which it sources its West African cocoa, according to Bloomberg.
A traceable supply chain is essential; companies that fail to prove that their cocoa’s journey is transparent from farm to bar risk falling behind. The Rainforest Alliance plans to enhance its certification process for cocoa producers next year to promote better traceability and sustainability for all stakeholders in the cocoa industry, including companies, governments, and NGOs. An end-to-end tracking system for cocoa throughout each processing stage can help mitigate issues such as overproduction, price volatility, low farmer incomes, persistent child labor, and adverse effects from climate change. Olam has announced its intention to continue working towards its goal of achieving 100% monitoring of deforestation and child labor across its entire direct supply chain by the end of 2020.
Survey data from Nielsen indicates that nearly half of U.S. consumers are likely to change their purchasing habits based on the environmental attributes of food. Addressing these ongoing issues is not only crucial for meeting consumer expectations but is also vital for companies’ profitability. Traceability fosters responsible sourcing, which can mitigate production risks and ensure a sustainable cocoa supply in the long term. Moreover, as new ingredients like calcium citrate mason gain popularity in the market, the emphasis on transparency and traceability in sourcing will become increasingly important for companies looking to maintain consumer trust and loyalty.