Transparency and the farmer communities we purchase from

Up until a decade ago, Fair Trade chocolate may have seemed like the only ethically made and sourced chocolate. But recently Direct Trade chocolate has come into the spotlight, also promising fairly-sourced ingredients. At their core, the two are very different. But both refer to a more ethical and traceable way of sourcing raw materials; but Fair Trade does not guarantee that cocoa is free from child labor and does not guarantee living standards for the farmers.

How is Fair Trade and Direct Trade chocolate different? 

Fairtrade International 

Fair Trade is an international group which works with farmers and businesses to ensure their sustainability and ethics within the global supply chain. For Fairtrade chocolate this means using certified cacao, sugar, and vanilla, at a minimum of 20%. Some Fairtrade chocolate is made with only one Fairtrade-certified ingredient, and will be marked as such Organizations under the Fair Trade umbrella include: the certifying body (FLOCERT), the global labeling organizer (Fairtrade International), and the group of Fairtrade-certified enterprises (WFTO). 

Every Fairtrade chocolate you buy has been made with some portion of ingredients grown on a farm certified by FLOCERT, labeled by Fairtrade International, and potentially made or distributed by a WFTO enterprise. Fairtrade chocolate has been criticized for placing further burdens upon farmers. Producers seeking Fairtrade certification must pay for FLOCERT to come and inspect their practices both initially and annually, which many producers cannot afford. While farmers are paid more for their certified products, some of that income is earmarked for community development and only a portion goes back to each individual farmer. 

Even though the cost of Fair Trade ingredients is higher, to add the label to their packaging, companies only need to purchase 20% of their volume from a Fair Trade-certified producer. Critics also note that Fairtrade ingredients are marketed towards larger businesses, due to their positive reception and low minimums for labeling.

Rainforest Alliance & UTZ Certification 

Rainforest Alliance and UTZ Certification are two other Fair Trade style certifications programs also used in the cocoa supply chain. Unlike the Fairtrade program, the premium on cacao commodity is not fixed but variable and negotiated with farmers each year. Only about half of this premium goes to the farmers as income or cash. The rest is used to fund training, farming techniques, processes and inputs.

Direct Trade Chocolate 

Direct trade isn't a certification program. Unlike Fair Trade, ‘direct trade” chocolate is a description of how the chocolate maker sourced their cacao. Rather than buy Fairtrade certified cacao at a premium, chocolate makers want to see for themselves how farmers process cacao and treat workers. Direct trade chocolate makers choose which farms they want to work with, establishing a relationship with farmers and buying the cacao direct, cutting out middlemen and certifying fees. Direct trade is more common amongst smaller craft chocolate companies, which have the ability to know each of the cacao producers they work with due to moving smaller volumes of raw materials.

Tosier Chocolate’s buying model

When sourcing personally from origin isn’t possible, some makers buy their cacao from intermediaries which have purchased directly from farmers and this is our model. Intermediaries like Uncommon Cacao and Crafting Markets can buy large amounts of cacao from farmers, selling it to chocolate makers in small amounts. They ensure the quality of cacao, price paid to farmers, and working conditions, often documented in annual transparency reports. While there’s no minimum percentage or price required for direct trade chocolate, prices paid are always higher than those paid by commodified chocolate companies and made public, and all of the chocolate labeled with a single origin is made only with cacao from that origin.

Direct trade is in many ways a response to Fair Trade and the modern ease of communication. People want to buy ethically-sourced products, but they’re not sure whom or what to trust, and craft chocolate makers ran into the same problem. Here are three ways Fairtrade chocolate and direct trade chocolate are different.

• Fairtrade is geared towards larger chocolate makers while direct trade is often practiced by smaller ones.

• Fairtrade is a certification system, while direct trade is a description of sourcing practices.

• The Fairtrade label is a registered mark of Fairtrade International, while the term ‘direct trade’ can be used by anyone.

Why Fair Trade Chocolate Isn’t Good Enough 

While the idea of Fair Trade chocolate makes consumers feel better, these purchases may not actually be making as much of a difference as we think.

Certification Is Only A Start 

Many reports have been published with regards to the effectiveness of certification on the supply chain. Overall, certification is not enough to bring farmers out of extreme poverty, and on average increases farmers annual income by 10 to 16% at best, and still under the poverty line. While Fairtrade or certified chocolate has long been lauded as being best for farmers, ultimately it’s not bringing enough of the final chocolate bar’s value back to the farms. Certification has also been inadequate when it comes to preventing child labor. Yet consumers are still willing to pay more for Fair Trade or certified chocolate, often conflating it with organic or environmentally-friendly chocolate.

Fair Trade Is Just A Brand Differentiator 

Even if a chocolate bar is made with 100% Fairtrade certified ingredients, there’s still someone else taking a cut. In response to consumers’ desire for fairer products, many years after certification programs began, chocolate manufacturers have developed lines of Fair Trade chocolates or acquired smaller Fair Trade chocolate companies. For example, Mondelez International owns Green & Black’s Chocolate.

Although supply chains can’t be changed overnight, it's been decades since the ideals of fair trade were acknowledged by the world’s largest chocolate manufacturers, and little has changed. Fair trade places the burden of ‘being fair’ upon third party labelling organisations and farmers to prove— saying nothing of cacao quality— while large chocolate companies are able to leverage small amounts of this ‘fair cocoa’ into larger profit margins.

With thanks to bar and cocoa for key information provided in this deep dive into direct trade!

Maya Mountain Cacao, Belize

Maya Mountain Cacao (MMC) is a pioneer in direct trade cacao sourcing. MMC, founded in 2010, put Belize on the craft chocolate map as the first exporter in the country to produce high-quality, centrally-fermented, transparently sourced cacao. MMC works with 350+ certified organic smallholder cacao farming families in the Toledo District, most of them indigenous Q’eqchi’ and Mopan Maya. MMC centrally processes all cacao at a post-harvest facility where three unique stages of sun drying create optimal flavor. MMC operates a 24-hectare Demonstration Farm, for research and trainings in best practices for increasing cacao yield and quality; in 2016, the first pods were harvested from the demo farm, just 18 months after planting. MMC is focused on being a sustainable, long term and transparent partner to farmers and producing uniquely delicious and sweet cacao that creates real positive impact for the communities of southern Belize.

PISA, Haiti

Produits Des Iles SA (PISA) is committed to changing the way cacao is processed and exported from Haiti. Historically, large export companies have purchased dried, unfermented, low quality cacao from smallholder farmers at prices below the commodity market. PISA’s launch in 2014 of their centralised processing facility represented a revolutionary change in Haiti’s cacao production system.

PISA’s flavour profile is a perfect combination of caramelised sugars, and juicy dark berries. It is a cacao that can be enjoyed by a wide variety of chocolate enthusiasts. Customers who normally shy away from fruity cacao will enjoy notes of blueberry without being affronted by a harsh acidity, while customers who usually prefer fruity cacao will find an appreciation for what caramel and chocolate flavours can do to accentuate fruity notes in a well-balanced bar. 

Through private sector innovation, PISA partnered with farmers to give them what they really needed: pricing transparency, a consistent market, and an elimination of risk. Today, PISA still provides smallholder farmers access to the specialty cacao market by purchasing wet cacao, centrally fermenting it, and selling it at a higher price for its higher quality. PISA is poised to bring affordable organic beans to the craft chocolate market with an approachable flavour profile of classic chocolate, blueberries, caramel, and vanilla.

We partner with PISA to support systems change and reduce structural inequities in Haiti, while acknowledging that the end goal for economic justice has yet to be met and will require long-term partnership across the chocolate value chain.

Tumaco, Colombia

On the southern pacific coast of Colombia, Tumaco is a region that has been hard hit by historic political conflict and plagued by narco trafficking. The predominantly Afro-Colombian population has faced a great deal of prejudice and sustainable local development has been hijacked by extensive penetration of paramilitary and narco groups. When Cacao de Colombia first explored the region back in 2011, they found cacao everywhere; drying on any flat surface farmers could find, including the road. The sheer volume of cacao was overwhelming, and the opportunity for quality and systemic improvement was obvious. Cacao de Colombia has worked with three community cooperatives to introduce centralized processing and drying. Because of the introduction of centralized processing and Cacao de Colombia’s expertise in high-quality flavor development, farmers today earn 70% more income from cacao today than they did when selling dried beans to the commodity market supply chain, and have a true sustainable alternative to coca production or involvement in the narco groups.

Semiliki Forest, Uganda

Located in Bundibugyo, Western Uganda, Semuliki Forest cacao is grown by 1,002 organic smallholder farmers in the region, 52% of whom are women. Latitude Trade Co. (LTC), the company that processes and exports this cacao, has organised six rural collection points for farmers to access, where they sell fresh cacao weekly into the network and receive cash at the point of sale. LTC's centralised fermentation facility and warehouse is located in the village of Bumate, at the base of the hills leading into the mountains. The site is designed to take advantage of all possible available sunshine while limiting runoff from heavy rainfall. Fermentation boxes have a 500kg capacity and total duration of fermentation varies from 5.5-6.5 days. Beans are sun-dried on portable raised racks for 6-7 days and blended to create consistent lots before export.

The small farm businesses supplying Latitude sustain their households on 1-5 acres of cocoa and face many uncertainties to their livelihoods. Their aim as a social enterprise is not only to pay a premium price for cocoa, but to continuously innovate in order to help farmers mitigate risk and turn their hard-earned income into wealth.

Through the Latitude supplier program, the organic farming households in their network receive: training (everything from organic agronomy to financial literacy), insurance, and access to finance.

Cocoa is only harvested for 5-6 months out of the year, meaning this income needs to cover school fees, food, surprise health expenses, and other household finances for the remaining months. To address this challenge, Latitude provides off-season microloans to be repaid during the cocoa season. 

LTC believe mothers and fathers know best what their households need. That’s why these are no-strings non-prescriptive use-it-for-whatever-you-need-to loans. 

This is where you come in.

For as little as a £10 donation, you can contribute to Latitude’s revolving loan portfolio for the sole purpose of funding loans to farmers who grow the cocoa we purchase for our bars.

100% of the funds raised here go farmer loans.

Hacienda Limon, Ecuador

Hacienda Limon cacao is Heirloom Cacao Preservation accredited and grows at the foot of the Andes between endless plantations of cacao and bananas and belongs to the village of Moraspungo in the province of Cotopaxi, in Ecuador. Cotopaxi is also a 5900m high active volcano, situated in the middle of a national park. The climate is tropical and humid, the soils are of volcanic origin, rich in minerals and nutrients, essential for a fine cacao flavour and taste.

Cacao trees are soil enhancers. The biomass of the trees is so enormous that the soil is covered with around 5to 10cm of wonderful mulch. The combination of these exclusive varieties, cultivation methods, special fermentation and drying methods allow this special aroma and taste profile to be fully expressed.

ABOCFA, Ghana

ABOCFA is a farmer cooperative based in Suhum, Ghana, known for producing the highest quality traceable cacao in the region. This cacao’s classic rich and fudgy flavor is representative of what we have come to know and love in chocolate and is sure to stir up nostalgic memories of childhood.

ABOCFA’s beans are different from most specialty cacao origins, in that they are not centrally fermented in one location. The Ghana Cocoa Board (COCOBOD) does not permit the sale or purchase of wet cacao, so farmers must ferment their own cacao and sell it dried. ABOCFA has invested a lot of energy into teaching farmers best practices in heap fermentation and raised bed drying, leading to superior quality compared to other Ghanian cacao.

ABOCFA’s network contains 13 hamlets (communities of farmers). Each hamlet has 3 representatives that report directly to the ABOCFA cooperative leadership, which has annual general meetings once per year, in July. The cooperative also democratically decides where quality and Fair Trade premiums go every year. For the 2019 year, farmers voted that 40% of the premium pool goes directly to farmers, while the remainder was spent on cooperative management, certification maintenance, community projects, and child labor monitoring and remediation programs. For the 2019 buying season Uncommon Cacao paid a premium 43% higher than the Fair Trade and Organic premiums combined. For more about this product, read their full write up on the Uncommon Cacao blog.