Cocoa Coverage

Cocoa, the principal ingredient in chocolate, comes from the cacao tree, which is grown on millions of small, family-run farms worldwide. The cocoa sector provides a livelihood for up to 50 million people, primarily in developing countries, as they manually transform cocoa beans into chocolate liquor (i.e., pure cocoa mass), butter or powder for use in cosmetics, chocolate and other edibles.

An estimated 5 million farming households depend on cocoa as a cash crop. However, 70 per cent of cocoa is produced by smallholders living on less than USD 2 a day and relying on the sector for up to 90 per cent of their income. Additionally, farmers are at the losing end of the supply chain, bearing all the risks of potentially low prices.

Voluntary sustainability standards (VSSs) emerged in the sector over 20 years ago, providing consumers with more sustainable cocoa purchasing options while addressing the sector’s challenges.

Despite this nearly 20-year VSS presence, poverty among cocoa farmers and child labour is still an issue. Many large chocolate confectionery companies have developed their own sustainability programs, coupled with direct investments and higher farm gate prices to their cocoa producers to help alleviate these issues. However, both more transparency and the implementation of more sustainable production practices are needed.

With the sector’s projected growth paired with market price volatility, can VSSs foster sustainable development and address the crucial issues persisting in the cocoa sector? We will explore these issues further in our cocoa report, to be launched in the second half of 2019.

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Key Takeaways

40 to 50 million jobs

The cocoa sector is an important source of livelihoods, providing revenue for 40 to 50 million people.This includes 5 million farming households who depend on cocoa as a cash crop, and who produce up to 70 per cent of cocoa.

USD 8.6 billion

About 45 percent of cocoa produced was exported in 2017 worth USD 8.6 billion. The chocolate industry is the main destination of cocoa consuming 43 percent of total production in the same year.

1.3 million metric tonnes

In 2016, at least 1.3 million metric tonnes were VSS-compliant, valued at USD2.1 billion. About 75 percent of this cocoa comes from West Africa, led by Cote d’Ivoire and Ghana, with important volumes coming from Dominican Republic, Ecuador, Indonesia, and Peru.

VSS production up by 46 per cent

Between 2008 and 2016, conventional production decrease by 7 per cent, while VSS production increased by 46 percent.