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Rotten’s Bitter Chocolate Exposes Uncomfortable Truths In The Chocolate Industry

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When Frank Laws of Frankly Delicious launched his successful Kickstarter campaign, he wrote something that made me want to find out more. He explained he was inspired to make his own chocolate - after vowing he'd never do such a thing - after watching Rotten's Bitter Chocolate episode on Netflix. Despite being a Netflix virgin, I hurriedly signed up to the video streaming platform to watch the programme.

For those not in the know, Rotten is a docuseries on Netflix, exposing the hidden truths in the supply chain for many of our favourite foods. In 2018's series one, the programmes peered into the murky side of honey, peanuts, garlic, cod fishing, chicken farms, and milk production. 2019 saw the release of series two which uncovered the darker side of avocado farming, cheap wine, bottled water, sugar cane, and marijuana foodstuffs, but the episode I was most interested in was the one on chocolate.

The programme opens with a Christmas scene at Brussels' Grand Place, one of the first locations I visited that kickstarted my love for all things chocolate. Belgium is a huge player in the chocolate industry, and exported a whopping 250,000 tonnes of chocolates in 2016. Indeed, there are over 2,000 chocolate shops in Belgium and the country is also home to the world's largest chocolate factory, run by Barry Callebaut in Wieze.

Quickly though, the footage begins to reveal that beneath the seductive appeal of chocolate is the bitter reality of deforestation, modern slavery, and desperate poverty.

Narrated by Latif Nasser, the episode exposes many uncomfortable truths about the chocolate supply chain as it stood in 2019. For all our technological advances and industrial evolutions, the cocoa supply chain has remained unchanged for generations. At its core is an inherent reliance on "misery and exploitation" that is "a magnet for crime and corruption" attests the programme.


From Farm To Bar

Throughout the 50-minute episode, the programme tours the complex supply chain to reveal its stark inequalities. And it's surprising just how vast this web of commodity trading really is.

You'd be forgiven for thinking the chocolate industry uses a simple supply chain. The farmer grows the cacao and sells it to the chocolate maker. The chocolate maker turns the cacao into chocolate bars and sells it via supermarkets to blissfully ignorant consumers who scoff it without a second thought.

Except it's not that simple. The programme traces cacao from the farmer to the pisteur (somebody who transports the cocoa to a large village). Then it moves to the village collector, an aggregator if you like. Next is the cooperative (a commercial entity that aggregates the beans from villages). Then, it's onto the exporters (that aggregate the beans from the cooperatives and prepare it for shipping). Eventually it's loaded onto giant cargo ships that sail to the processor's country, in a transaction remotely dealt with by commodity traders. From here it is either turned into final products and sold via retail channels, or sold as a bulk product to chocolatiers who then produce final retail goods ready to sell to consumers.

Red cacao fruit pods
Cacao pods on a tree. Photo credit to Maliflac

Neil Gordon, CEO of Global Agricultural Exchange, Inc (GAEX), states in the video that "consumers are so out of touch with how food is made in general." He reckons "most people don't know what a cocoa pod looks like."

He adds that around 10 parties typically touch the beans before they are exported, and each tier in the supply chain needs a share of the cost of the beans to survive. The price you pay for your chocolate is disproportionally shared amongst all these entities, with huge settlement delays for those that call ill afford them.

Most also work on an advance, so rely on borrowed money to get the beans to market. Farmers are often victim to corruption and may only receive a portion - or occasionally none - of the monies owed to them. In the case of cocoa farmer Jean-Frederic Kanga Kouassi, he claims to have lost 600,000 West African CFA Francs (around £830) to fraud and corruption.


Poverty

Cocoa thrives within 10 degrees north and south of the equator, and most of the world's cocoa comes from Ghana and the Ivory Coast in West Africa. "Côte d'Ivoire supplies 40% of the world's cocoa but receives less than 7% of the profit generated by this sector globally", according to The World Bank. What makes this figure even more difficult to swallow is the fact that a staggering six million people are involved in the cocoa sector in the country alone.

Etelle Higonnet, Senior Campaign Director at Mighty Earth, claims the chocolate industry "is one of the wealthiest in the world", estimating global revenues of around $100 billion US dollars per year. Yet there's deep inequalities within this supply chain.

Netflix Rotten title image
Rotten title image. Image credit to Rotten; Netflix

Cocoa is a commodity that's traded on the market, so the price that farmers receive correlates to the prices on the international markets. The farmers - and even governments - have next to no say on the price of cocoa. As the programme explains, even though the Ivorian government's Cocoa Board sets an annual farmgate price to ensure a "living wage", it's based on a percentage of the London market price and relies on farms having masses of fruiting trees to make anything close to a living wage. The programme uses the 2018 rates of 750 West African CFA Francs (around £1) per kilogram of dried beans, together with the fact that each tree can produce around a kilogram of beans per season on average, to demonstrate that the average Ivorian cocoa farmer nets just $200 US dollars (£150) a year. That's hardly a living wage, is it?

Farmers have no leverage in price negotiations and often only have one person (the pisteur) who will buy their beans, and so may be coerced into accepting a rate lower than the government-mandated farmgate price. If it's a choice between accepting a lower rate or not selling at all, farmers in this position will understandably take whatever they can get.

Kiendreogo Tinkouliga of Bangolo, Côte d'Ivoire, attests to the great difficulty of the life as a cacao farmer. His seven children help with harvesting the crop, which is still done by hand using machetes. Pam Thornton, Commodity Fund Manager at Armajaro Asset Management LLP, describes the cultivation and harvesting processes as "medieval", while Antonie Fountain, Managing Director of VOICE Network, draws stark contrasts with the modernised (and mechanised) soy and wheat farming sectors.

Farmer harvests a yellow cacao pod
Harvesting a cacao pod. Photo credit to Pixabay

The reality is that low incomes - "less than $1 US dollar a day" estimates Etelle Higonnet - together with an abundant supply of cheap labour, stifles both the need and the ability to invest in equipment, technology, or tools to modernise harvesting. Farmers quickly and easily become trapped in crippling poverty, receiving rock-bottom rates for their crops.

It's not just the farmers that suffer. Cocoa beans are sun-dried so often involve whole communities in some form. Cocoa farmer Eric Koffi Kouassi explains that in his village there's no drinking water and the 200-strong school doesn't even have a building.

Poverty also means that farmers have to make a tough choice between feeding their families or protecting their crop against disease. Crops fall victim to disease which entraps the farmer in deeper deprivation in a cruel and vicious downwards spiral.


Modern Slavery

The last cheap chocolate bar you ate may well have supported modern slavery, forced child labour, and even child trafficking in some shape or form. The reality is that without 100% traceability, chocolate companies cannot say for certain that their entire chocolate crop - and supply chain for that matter - is both sustainable and ethical.

In 2010, Slavery: a Global Investigation exposed sickening realities of slavery in the modern world, particularly in the cocoa industry.

Yet, despite all the the rhetoric, a decade later, society has taken just baby steps towards abolishing this shameful practice once and for all. Even in the digital world of 2020, we're still a long way off seeing every cacao bean being 100% traceable, so the reality is that slave and/or child labour may be in use right now to harvest cocoa.

In the episode, Neil Gordon claims that major manufacturers want to see child labour eliminated from their supply chains for good, but lays the blame with governments that lack budgets to enforce labour laws on the ground.

Ultimately, until 100% traceability can be achieved right across the entire industry, there's always a risk that cheap chocolate exploits both slave and child labour.


Crime

The dire poverty in the cocoa supply chain means that anyone with cash can become a target of crime. Rotten details accounts of murders and thefts, particularly amongst the pisteurs which operate cash-rich businesses. In fact, pisteurs purposefully dress down to minimise the risk of getting hijacked, robbed, and even murdered.

So long as poverty continues, the threat of theft of machinery and equipment is very real, and serves as yet another disincentive to modernisation of this supply chain. After all, why spend a fortune on valuable equipment if it's likely to be stolen?

Change needs to happen, of course it does, but it needs robust, on-the-ground governmental assistance and an effective policing network right across the board, leaving no farming community behind.


Deforestation

With rates so low, some farmers understandably plant sheer volumes of cacao trees. But the need to survive has lead to the destruction of precious rainforests and ecosystems, especially in Africa.

The programme highlights the rampant deforestation inside the Cavally National Park, Côte d'Ivoire. Swathes of protected forests were cleared by farmers to make way for illegal cocoa plantations. Reuters journalist Ange Aboa explains that the fertile soil means new trees can fruit in as little as two years, compared to typically six years on existing cocoa plantations. Combine that with free (albeit illegal) use of land and it can be a lucrative supplementary income for desperate farmers. He claims that 500,000 tonnes of cocoa has been grown inside protected areas, according to Government sources.

Inside a cacao pod
Inside a cacao pod. Photo credit to Dghchocolatier

Etelle Higonnet claims "the Ivory Coast has lost 85% of its forests since 1990." Why isn't the world outraged by this? The sweet taste of cheap chocolate seemingly outweighs our desires to see the world's precious rainforests protected for future generations.

Many consumers are hooked on the sweet taste of cheap chocolate and yet are simultaneously ignorant to the origins of the crop. Indeed, many bean-to-bar makers tell me it's an uphill struggle explaining to customers why their ethically-sourced and sustainable chocolate costs more than a bar of mass produced chocolate in the supermarket.

Sustainable and ethically sourced cocoa has to be the solution, for the sake of the planet and for the livelihoods of cacao farmers and farming communities.


Traceability

Henk Jan Beltman, Chief Chocolate Officer at Tony's Chocolonely, stated "if you know what goes on at the beginning of the chain then it's not possible to enjoy chocolate." Indeed, this sparked his company's aim to create a slave-free chocolate supply chain. The brand knows who its farmers are, and pays a premium for its beans.

In 2012, Tony's Chocolonely agreed a deal with Barry Callebaut to produce its bars. Using Chainpoint technology, dubbed Tony's Beantracker, the brand has full traceability over the beans in its bars, which are manufactured separately to Callebaut's own brand of chocolate couverture. The goal for Tony's Chocolonely, besides paying farmers a true minimum living wage, is to convince big business that it's both viable and in their interest to have a sustainable supply chain that works for everyone.

Inside the Tony's Chocolonely Sea Salted Almond 51% Dark Chocolate Packaging
Inside a Tony's Chocolonely wrapper

And change is coming. Tony's Chocolonely manufacturing partner, Barry Callebaut, for instance, has pledged to use 100% sustainable ingredients by 2025, be that dairy products, sugar, palm oil, soy lecithin, hazelnuts, vanilla, coconut oil, or cocoa. It recently launched an online traceability tool to empower chocolatiers with data on where the beans in its dark and milk chocolate couverture comes from, as far back as the cooperatives. It's not a complete visibility tool yet, but it's a good start and a promising change by such a large company. It will hopefully prompt other chocolate businesses to follow suit with their own visibility tools in some shape or form.


What's the Answer?

That's the big unanswered question. How do you rid the supply chain of poverty, while still creating an affordable consumer product?

Etelle Higonnet likens the power distribution of the supply chain to an hourglass, with millions of customers at the top, millions of smallholders at the bottom, and just a handful of powerful players - the cocoa traders - in the middle, controlling the market.

The traders buy the beans on Futures Contracts, and sell them to chocolate manufacturers. These traders can also be involved in processing the beans further, offering value added services along the way, such as grinding into cocoa liquor or pressing into cocoa butter and cocoa crumb. Etelle Higonnet estimates there are 10 big traders but the three biggest are Barry Callebaut, Cargill, and Olam Cocoa.

Re-engineering this complex, unequal supply chain requires change driven by the the most powerful players in the chain. But there's little incentive for large entities to radically change their business practices or substantially inflate the price they pay for cocoa, especially if such changes eat into profits or reduces shareholder returns.

Something has to give though. This isn't a sustainable nor ethical business model, and sooner or later, the industry will have to change, whether it likes it or not.

Cocoa beans drying in the sun
Cocoa beans drying in the sun. Photo credit to Dghchocolatier

Consumers were very quick to link the use of palm oil to deforestation and the loss of habitat for orangutangs. The public outcry was so strong it prompted many manufacturers to either ditch palm oil altogether or seek sustainable stocks of it. Yet, consumers seem oblivious - or ignorant - to the equally destructive environmental, economic, and societal impact of cheap chocolate.

So should we boycott certain chocolate brands to force them to change? The chances are it won't make much impact on their bottom line. Besides, they may well choose to appease public concern by switching to sourcing cacao from another region in the world, depriving hard-pressed regions even further.

While some producers have already switched to sourcing more ethical cocoa elsewhere in the world, Antonie Fountain doubts this is the much sought-after answer, as he reckons its the bulk cocoa market, especially in West Africa, that needs to see change the most.

So, should we just pay more for our chocolate? This isn't a sustainable answer either. There's no guarantee that this additional money will flow back to the farmer and so this alone would likely exacerbate the inequalities.

Certification programmes, such as Fairtrade, UTZ, and Rainforest Alliance, undoubtedly have helped improve the livelihoods of farmers, but Órla Ryan, author of Chocolate Nations, doubts these have as big an impact as people might imagine. Journalist Ange Aboa claims that while such initiatives were initially positive, many are fast becoming just another middleman between the farmer and the end consumers.

Perhaps on-the-ground action is the golden key that unlocks change?

Joseph-Olivier Biley, CEO of WeFly Agri, uses drone technology to empower farmers with information as to what's really going on in their plantations to assist with full traceability of the cocoa beans. The imagery from this can also be used to convince lenders to approve loans based on the size and health of the farm as shown from the air.

Axel Emmanuel, chocolatier at Le Chocolatier Ivoirien, firmly believes the root problem lies with the distribution of wealth. His dream is to establish factories to produce Ivorian chocolate locally, at source, retaining more of the economic benefits within the local region. It's a similar concept to the Raise Trade programme in Madagascar or Casa Luker's Chocolate Dream in Columbia.

Whatever the solution, it is likely to be multifaceted, with change driven from all angles. Big business holds a lot of power but need to be incentivised to change, driven by consumer demand and reputation. As consumers, we can easily change our habits once we realise our actions are harmful. As soon as consumers wake up to the true cost of cheap chocolate, then the speed of change might accelerate from the glacial pace right now. And local entrepreneurs like Axel Emmanuel need to be supported by key stakeholders to make an impact on the ground.

You can watch the Rotten Series here (Netflix subscription required).

If you'd like to read more on this topic, I can recommend Kristy Leissle's book, Cocoa. I'd also urge you to support British bean-to-bar chocolate makers who are vocal champions of ethical and sustainable chocolate production.

Have you watched Bitter Chocolate? Has it changed your shopping habits, perceptions, or brand loyalty? Let me know your thoughts in the comments below.

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