Barry Callebaut’s Forever Chocolate programme update acknowledges cocoa sector challenges
Barry Callebaut has highlighted a need to help enable farmers in its core cocoa supply chains to increase the yield and quality of their crops, as well as deliver improved human rights protections, as central pillars of the company’s annual Forever Chocolate programme, reports Neill Barston.
The Swiss-headquartered business has just released its seventh progress report on its flagship scheme, underlining gains made, and the ongoing challenges facing the sector, which on a wider sector level, still has notable issues relating to deforestation, child labour and rates of pay within the industry.
Its self-analysis has been based in response to challenges in the industry, around four core areas – prospering farmers, human Rights, thriving Nature and Sustainable Ingredients, which are all segments that are expected to be covered by upcoming EU legislation on due diligence in supply chains (the EUDR regulations), that have been making headlines in the past year.
As the company noted, it is continuing its effort to intensify support for communities around the world, including in core West African supplier nations of Ivory Coast and Ghana, where the business said its strategies continued to evolve in pursuing a goal of delivering sustainable chocolate.
Notably, as the progress report acknowledges, many farmers still struggle to earn a living income, with their main challenge being gaining access to investments in their farms. As a result of this, the company stated that it has shifted its focus from providing training to offering input support. This has taken the form of options such as subsidised soil inputs and planting material to financial support for third-party labor services and additional premiums.
Significantly, the company added that its Farm Services business continued to support 169,981 between 2022/23, which was in fact down 1% on the previous year, though its programmes to support paid labor teams were considerably scaled up, reaching 19,326 (+138.3%) hectares in Ivory Coast, Ghana and, for the first year, Cameroon. As regards human rights, the group said it had added remediation In 2022/23 76.5% of the farmer groups that are part of our direct supply chain have systems in place to prevent, monitor and remediate child labour.
This was compared to 80.6% in prior year, this is a slight decrease due to the larger number of farmer groups that it sources from (+26.5%), which the report acknowledged has prompted a refocusing of efforts to strengthen community systems to better protect children. It has targeted a goal of remediating all cases of child labour that are discovered – with the issue remaining especially notable in West Africa, where the most recent estimates have established that 1.5 million minors are vulnerable to child labour, with organisations including Fairtrade expressing concerns that the figure is potentially even higher than this, given the impacts of the Covid-19 pandemic, and subsequent cost of living crisis affecting global supply chains, including farmers working within the sector.
Root causes
Furthermore, in its report, Barry Callebaut noted that fighting the root causes of financial hardship, in 2022/23, the company supported 1,371 (+17.3%) Village Savings and Loan Associations (VSLAs) with the aim of improving access to livelihood resources. These reported a total new savings deposits of CHF 1.3 million helping mostly women in cocoa communities to better manage their household cash flow, and issued a total of CHF 0.7 million in small affordable loans. The loans help fund emergencies, investments for new income-generating activities or specific needs such as education.
In terms of environmental considerations, the company’s policies have aimed to align with global efforts to cap global warming. Consequently, in 2022/23, the company extended the area covered by its intensified agroforestry approach with a focus on longterm success through training, extended monitoring and payment for ecosystem services (PES).
Furthermore, it established 18,066 hectares (76.8%) and provided PES ≡ Barry Callebaut | Forever Chocolate Progress Report 2022/23 . In line with a core principle of partnering with other stakeholders to create tangible impact on the ground and make sustainable chocolate the norm, this KPI extends beyond our direct supply chain, covering almost 70,000 farmers from our indirect supply.
Significantly, by 2030, the company added that it will have 100% certified or verified cocoa and ingredients in all of its products, traceable to farm level, and by 2025, it is on course to be ‘forest positive’. On the latter point, it believes that the business will have decarbonised its footprint in line with global efforts to cap global warming at 1.5 degrees Celsius, as it moves to becoming a net zero company by 2050.
As a cornerstone of its policies, by 2025, its entire supply chain aims to be covered by Human Rights Due Diligence, remediating all child labour cases identified, with farming communities empowered to protect children’s right by 2030 – a point which sector campaigners have argued should be being delivered by industry to a faster timescale.
However, the company stated that it is taking action on the issue, and by 2025, 500,000 cocoa farmers in its supply chain are anticipated to have been lifted out of poverty, with progress over the next five years enabling key stakeholders to deliver a transformative cocoa farming model generating living income.
On the issue of sustainable ingredients, the business claimed gains in transparency – in 2022/23 in its farm mapping operations, it has covered 547,804 (+37.2%) cocoa farm plots, encompassing 78.9% (compared to 79.7% in the prior year in its direct supply chain. This enabled it to establish traceability to farm level for the cocoa volumes sourced from these mapped farms.
Notably, with the support of customers, the business also continued to increase the proportion of products sold containing 100% verified or certified cocoa or chocolate to 51.5% compared to 49.4% in prior year. The company has also moved to help shape industry-wide sustainability standards and programs is essential for the sustainable sourcing of raw materials, as certification is only the starting point.
EUDR
As Confectionery Production has previously reported, the new EU regulations that are set to enter into force at the end of 2024 have been prompting global interest, and calls for the regulations to be extended across global markets, banning deforestation-linked goods entering or exiting the EU.
Within its report Barry Callebaut responded to the regulations, welcoming them as a positive move for the sector, which has until now been operating largely with individual sustainability schemes that have operated on a voluntary basis.
The company said: “This legislation is the result of four years of advocacy efforts by Barry Callebaut, other companies, industry associations and NGOs that partnered together to call on the EU to introduce legislation imposing due diligence obligations on all companies that sell cocoa or cocoa products in the EU market.
“We are happy to see that our vision and accompanying advocacy work are yielding results and are supporting the development of a level playing field for all companies. At the same time, the introduction of an appropriate transition period is imperative for the successful implementation of the regulation. In addition to the EUDR, the proposed Directive on Corporate Sustainability Due Diligence (CSDDD) will provide impetus to strengthen an enabling environment, as well as the market pull, for sustainable cocoa.
“In 2022/23 we continued to actively participate in the EU-led Alliance on Sustainable Cocoa, a MultiStakeholder Dialogue (previously known as the Cocoa Talks). Previously, we contributed to the development of the roadmap for the Alliance, which was endorsed in June 2022 by the governments of Côte d’Ivoire and Ghana as well as by industry representatives. The roadmap aims to improve the economic, social and environmental sustainability of cocoa production. Since then, we continue to participate in specific focus groups of the Alliance, such as the Traceability and Standards Focus Group.”