Hershey has become the latest major chocolate company to make a bold public commitment to sustainable cocoa. Andy McCormick, Hershey’s vice president, cocoa sustainability, spoke with Ben Cooper about the company’s 21st Century Cocoa Plan and its commitment to collective efforts to achieve a sustainable cocoa sector.
Like all major chocolate companies Hershey has found itself in the firing line for years over the principal sustainability issue affecting the sector – child labour in the West African supply chain. However, in recent years, the iconic US chocolate brand has been under particular pressure, accused by campaigners of dragging its feet on the issue.
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Whatever the veracity of such claims, Hershey has now sought to draw a line under them by launching its 21st Century Cocoa Plan, a sustainability strategy incorporating both practical engagement on the ground in origin countries and a commitment to source 100% third-party-certified sustainable cocoa by 2020.
Hershey describes this commitment as a “cornerstone” of its programme. Currently working with three third-party certifiers, namely UTZ, Fair Trade USA and Rainforest Alliance, it says it is on track to source at least 10% of its total global cocoa requirements from certified sources by the end of 2013, 40% to 50% by the end of 2016 and 100% by 2020.
“The certification commitment,” says Andy McCormick, Hershey’s vice president, cocoa sustainability, “assures suppliers that there’ll be a major company in North America over the next number of years buying certified cocoa, helping them make those upfront investments in farmer organisational work and education work.”
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In tandem with that pledge, McCormick continues, Hershey will be running its own sustainability programmes, such as its CocoaLink programme, which uses SMS messaging as a means of farmer education. He says Hershey’s plans “fit well” with its “roots as a company”, with cross-industry moves and with the objectives of the Ivorian and Ghanaian governments.
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By GlobalData“We called this a watershed moment because we see the opportunity to embed sustainability and high labour standards, through certified cocoa and through sustainability initiatives, into the cocoa-growing sector, and to do it in a specific time period.”
While child labour is the most prominent issue of public concern, the West African cocoa supply chain faces a host of challenging structural issues, including low productivity and profitability and a pressing need for investment to boost yields, renew tree stock and train farmers. Above all, perhaps, the Ivorian and Ghanaian governments are seeking to halt a steady drift away from cocoa cultivation by younger generations of farmers.
In this regard, the Hershey 21st Century Cocoa Plan is aptly named, as McCormick explains. “The Ghanaians and the Ivorians are quite concerned about the ageing cocoa farmer, so part of this work really is to make it a 21st century business, to show younger farmers that you can be profitable, that you can make a living, a good living, in cocoa, which is currently not perceived to be the case.”
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Hershey vice president for cocoa sustainability Andy McCormick |
While specific measures can be taken on the child labour issue, most stakeholders would agree with McCormick that the issue needs to be addressed as part of an holistic approach to secure the long-term viability and sustainability of cocoa farming in west Africa.
“Hershey shares with both the farmer community and our industry the sense of urgency to address these issues in a comprehensive, thorough, thoughtful, measureable, analytical way,” says McCormick. He sees the low productivity rates stemming from a lack of input and lack of investment as the “locus of the issue”. And with regard to farmer education, McCormick is enthusiastic about the use of mobile phone technology inherent in Hershey’s CocoaLink programme.
Pointing to “the desire among farmers for information and for change”, McCormick says the company has been surprised by the uptake. “We actually thought at this point there’d be maybe 4,000 optimistically registered. We have about 16,000 and we are pretty confident that by the end of next year we will have 100,000 cocoa farmers.”
He also stresses the long-term viability of the CocoaLink initiative. “The sustainability of the CocoaLink programme is built in with the partnership with the Ghana Cocoa Board,” says McCormick. “So the programme will be private-side funded for only three years, then beginning in 2015 it will be part and parcel of their outreach to farmers.” This year, the scheme is also being rolled out in Côte d’Ivoire.
Hershey estimates that by 2016, around 75% of farmers in Ghana and Côte d’Ivoire will have a smartphone of some sort, and McCormick suggests the use of low-cost technology is an example of markets providing solutions to long-running challenges.
“Until three or four years ago really the only way to effectively communicate to the farmers was face-to-face in the village or gathering them in a place, which is difficult, expensive and time-consuming,” McCormick tells just-food. “I’m not saying the mobile phone is going to change all that but what I am saying is we think the market will help address some of these real challenges.”
Market forces are also clearly at work on the certification challenge. Branded companies such as Hershey are targeted by campaigners not least because they are the public-facing element in the supply chain, far more exposed to consumer opinion and the impact of negative publicity than the somewhat anonymous traders and processors further up the supply chain. As such, when a company such as Hershey or Mars Inc makes a commitment to source 100% certified cocoa it will have a knock-on effect on its suppliers.
Hershey made an initial announcement concerning its 2020 commitment last October. At that time, the company estimated certified cocoa probably accounted for less than 5% of the global supply. “We felt that one thing we could definitely contribute was, by virtue of our scale particularly in North America, that we could accelerate the supply of certified cocoa.”
According to McCormick, during the six months since its first announcement, the company’s commodities team has had “deeper conversations” with suppliers around this question. The fact that Hershey has been able to make the projections it has for 2013 and 2016, he says, “shows that the suppliers heard the message, see the opportunity and are responding”.
However, while Hershey expects to be able to meet its 2013 target using the three certification programmes it works with, meeting the longer-range targets is going to require the development of other certification systems.
While some campaigners have asked Hershey to be more explicit about how its future cocoa production will be certified, the reality is that no company truly knows exactly how these substantial certification pledges will be met. For its part, Hershey says it intends to support the development process which it rightly says will “take time and the engagement of all stakeholders and multiple means” to achieve.
Hershey’s announcement is the latest in a series of company-specific actions and commitments announced over the past year or so, as chocolate companies have sought to take individual accountability for the impact of their supply chains.
However, McCormick believes such actions are “synergistic” to collective activity. “The next phase is that we want to see those individual initiatives drive an aggregated outcome that is measurable in a way that it hasn’t been before.” In that context, the certification challenge underlines perfectly why both individual company accountability and collective engagement are required.
