Sweeter Kisses? Hershey Commits to Fair Trade, Responsible Cocoa, Uses Innovative Technology

(HN, 2/7/2012) -- Last week The Hershey Company announced it was expanding its programs to improve living standards and supply chain efficiencies for cocoa producing communities in West Africa by investing $10 million over the next five years.  By 2017, the Company says its public and private partnerships will directly benefit 750,000 African cocoa farmers and over two million people in cocoa communities across the region by focusing on two important groups – cocoa farmers and those they say who `love Hershey’s products’.

HUMNEWS spoke with Andy McCormick, VP of Public Affairs for The Hershey Company about the investment and what it would mean to Hershey’s farmers.  McCormick, who grew up in Pennsylvania and now leads Communications, PR and Corporate Social Responsibility efforts for the Company has also worked in Ghana as a U.S. Peace Corps volunteer and knows West Africa well.  He calls his tenure at Hershey’s a `happy coincidence’.   McCormick also serves on the boards of the World Cocoa Foundation and the International Cocoa Initiative – both global bodies designed to regulate and offer solutions in cocoa production.

Hershey’s announcement comes 10 years since major international chocolate companies, including Hershey, committed to ending child labor, forced labor and trafficking in their cocoa supply chain by signing the Harkin-Engel Protocol, commonly known as the Cocoa Protocol in September 2001.  A decade later, although both Hershey and its public and private partners have invested in developing new agricultural practices that are helping West African farmers double the yield on their cocoa farms, which in turn increases their family’s income - hundreds of thousands of children continue to labor in hazardous conditions in West Africa, particularly in the Ivory Coast and Ghana.

The US Department of Labor has also noted five West African nations which may still be producing cocoa tainted by forced and/or child labor. To address the problem they’ve created a partnership which includes Hershey as well as other partners include USAID, USDA, Cote d’Ivoire Cocoa Committee, numerous local and global NGOs, and the Bill and Melinda Gates Foundation, called the Framework of Action to significantly reduce the worst forms of child labor in Ghana and the Ivory Coast by 2020.  

(PHOTO: A female cocoa farmer/SOURCETRUST)By making its pledge last week, Hershey is following on other initiatives in recent years that it and other major cocoa producers have committed to in order to clean up the cocoa industry.  UNICEF estimates 600,000 children work on cocoa farms in Ivory Coast and that 35,000 are victims of trafficking;  children carrying machetes or pesticide equipment used in cocoa work has been widely reported on.

McCormick acknowledges that, “We are a growing global business and we have had criticism in the past. But, we try to listen constructively and are working to strike a balance between our business strategy and our values, and we keep learning.”  He goes on to say, “At Hershey we’ve already been working to address child labor issues in West Africa, and we all recognize that more needs to be done.”  

The Company has formed partnerships with the Rainforest Alliance, UTZ Certified, and Fair Trade Certified and commits to production of `certified cocoa’, which Eric Servat of the Rainforest Alliance’s cocoa program says, “Is almost doubling every year”.   

“Certified cocoa is currently under 2% of the market,” says Andy McCormick, “But it’s growing by a large margin and we believe that by 2020 that will increase to about 15-20% of market share”. 

All of the certification partners require farmers to comply with International Labor Organization standards, which includes a ban on child labor.

In fact, chocolate is big business and accounts for an annual $83 billion in global sales.  Certified cocoa is actually worth more and growers can make $0.10 more per kilogram for certified cocoa, but it’s just a start for poor farmers who often don’t have enough money to even send their children to school.

(PHOTO: A cocoa farmer in Ghana using Cocoalink/Hershey) Hershey, a 100 year old company and one of the world’s leading chocolate companies, has worked with farmers and development organizations for more than 50 years and Andy McCormick says, “Because cocoa farms are family farms where on average 5 family members work and live, improving farming methods to be more modern, sustainable and safe will increase West African cocoa output by 50%; increasing family income.  In turn, doing so will increase school attendance and improve community health”.

Addressing the needs of cocoa farmers and the chocolate producing supply chain is becoming not just a humanitarian issue but also is necessary action due to the impact of climate change on growers.  Global cocoa production is primarily done by the 10 member countries of COPAL (The Cocoa Producers Alliance) - namely Brazil, Cameroon, Ivory Coast, Dominican Republic, Gabon, Ghana, Malaysia, Nigeria, Sao Tome and Principe and Togo who account for approximately 75% of total world cocoa production; almost 70% in West Africa alone grown on 2 million small family farms.  The crop is labor-intensive and only grows in equatorial climates.

Hershey’s Andy McCormick says that, “Climate change has been causing desertification in parts of West Africa where cocoa is grown, and as the desert squeezes out fertile lands – in Ghana in particular – that’s starting to have an impact on harvests. We are talking with the farmers about this and about varieties of cocoa which grow more efficiently by instituting new programs”.  He adds, “Weekly rainfall moves the cocoa market right now”.  

Cocoa prices have risen since the start of the year by almost 15% with some of the highest prices seen since 1977, as the annual weather phenomenon called the `Harmattan’ - which brings a dry, dusty and cold trade wind in West Africa from the Sahara desert to the Gulf of Guinea from the end of November to the middle of March - has been most severe this year.  Though, meteorological forecasts show that the Harmattan will dissipate shortly and the rainy season will begin.

(PHOTO: Cocoa farmers in Ghana/Hershey)One such innovative program aimed at addressing farmer’s growth needs is CocoaLink. Started in 2011 in Ghana by Hershey, the World Cocoa Foundation, the Ghana Cocoa Board (COCOBOD), the Cocoa Research Institute of Ghana (CRIG), Dream Oval and World Education, CocoaLink leverages Ghana's mobile phone infrastructure (almost 80% saturation) to connect more than 8,000 cocoa farmers and community members in 15 villages with practical agricultural and social information that will help them increase their incomes and improve their livelihoods. The program has the potential to reach more than 100,000 by 2014.

Farmers and community leaders receive, at no charge, voice and SMS text messages that include information on improving farming practices, farm safety, child labor, health, crop disease prevention, post-harvest production and crop marketing.  Farmers can also share their own information and receive answers to specific cocoa-farming questions from peers and experts.

In October of last year Hershey said it would enhance CocoaLink to include information about disease prevention and would provide cell phones and solar chargers for women farmers in rural villages by partnering with the nonprofit organization Malaria No More to leverage CocoaLink to help save lives and decrease malaria deaths in Africa by 2015.   The Company instituted an internal smart phone recycling program, collecting more than 500 smart phones no longer being used by Hershey’s U.S. employees and redeployed them to women across Ghanaian cocoa communities.  Ghana accounts for about 20% of world cocoa production, making it the country’s single largest non-oil foreign exchange earner beside oil.

Last week in making its announcement Hershey said it would expand the CocoaLink program to farmers in the Ivory Coast to further grow crop yields, provide education and support to farmers, their families and communities.  The Ivory Coast is the source of more than 1/3 of the world's cocoa supply and has approximately 600,000 cocoa farmers; industry data indicates that about half are already using mobile phones.  Cocoa makes up 15% of Ivory Coast’s GDP and 40% of its export revenues. Hershey’s initiative adds to the eight-month-old government's plan to overhaul the cocoa industry in the country and is a condition for debt relief from the International Monetary Fund.

In its latest output report on the sector, Marex Spectron a London based analyst group said that world 2011-2012 cocoa output will be short 94,000 tons, which is a change from its November estimate of a small global surplus.  Not all of this impact is due to climate change however, though Marex noted weather conditions in December and January in Ivory Coast and Ghana were dry compared to a much wetter 2010-2011 season which saw a record cocoa surplus of 417,000 tons.  Much higher cocoa demand globally is also driving production needs – and inevitably will increase costs for chocolate products.  Hershey has said its own costs should remain higher in 2012 and recently raised prices on its candies.

(PHOTO: Learning about cocoa farming/Hershey) The International Cocoa Organization estimates that Asian demand for chocolate would grow 10% in 2012, with strong growth in China, Indonesia and India; with Europe remaining the world’s largest cocoa buyer.

This is why in making its announcement last week, Hershey also established the `Hershey Learn to Grow’ farm program along with its partner Source Trust. Launching in Ghana the initiative will provide local farmers with information on best practices in sustainable cocoa farming as growth in demand intensifies, and consumers call for more responsible growing standards.  For example by supplying farmers with technologies such as high-yield seedlings, better planting and pruning practices, organic fertilization and biocontrol of insect pests, farmers can increase output and therefore, income – even while climate change takes hold.  

Additionally, the effort will create a farmer and family development center in the heart of Ghana’s central cocoa region where during the day the schoolchildren will use the computer lab for learning and in the evening the farmers will use the lab for cocoa learning. Hershey is also working with technology partner Cisco to use `telepresence’ for distance education purposes.

The initiative will involve more than 5,000 cocoa community members, more than 1,000 farm families, establish 25 community-based farmer organizations and will build technology centers that will be used to teach improved agricultural, environmental, social and business practices; provide access to planting materials as well as finance for farm inputs; and support GPS mapping of farm acreage so that farmers will use the right amount of fertilizers and pesticides for maximum yield and sustainability - with the goal to double productivity yield and farm income over four years.

(PHOTO: Cocoa farming/Hershey) By doing this Hershey hopes to assist the Government of Ghana to meet the goals of Ghana’s 2009-2015 National Plan of Action for the Elimination of the Worst Forms of Child Labor (WFCL), associated with achieving the international Millennium Development Goals by 2015. 

“Creating sustainability throughout our supply chain is our goal,” says Andy McCormick. “Milton Hershey was a master of building business and we know that you’re only as successful as the communities you’re in.  Our future is intimately connected to the growing regions and people we work with. Our scientists and farmers are excited to be working on the ground together to make things better.”

Further says McCormick, “The issue of rural youth and their job prospects-we think our interaction with farmers, school systems and young people to `skill build’ can really make a long term positive contribution to kids’ lives and we’re very excited about playing a constructive role”.

Consumers win too as Hershey will address their demands to bring to market for the first time, 100% Rainforest Alliance certified chocolate products later this year.  The first sweet treats will be the Hershey’s Bliss® chocolate bar available in the United States; and later Latin America and Africa where the Company is working with the Rainforest Alliance to source cocoa from certified farms for Hershey’s premium brand, Dagoba®.

Rainforest Alliance Certified farms have met comprehensive sustainability standards that protect the environment and ensure the safety and well-being of workers, their families and communities. Additionally, Rainforest Alliance inspectors will monitor and audit practices on farms supplying certified beans to Hershey, to include instances of unsafe or illegal child labor and use training programs to increase school attendance. These programs will be coordinated with industry and government initiatives.

Hershey made their investment announcement just days before a planned protest group which included the The International Labor Rights Forum and was started last year by Change.org called the `Raise the Bar, Hershey! Campaign’ which was to run a high profile commercial challenging Hershey’s labor practices during the US Super Bowl Game after collecting over 100,000 petition signatures.

In a statement, the group said, `This commitment is a welcome first step for Hershey to improve its supply chain accountability. This commitment also demonstrates that The Hershey Company acknowledges the severity of the labor abuses that taint the West African cocoa sector and the members of the Raise the Bar, Hershey! Campaign congratulate Hershey on this first step to achieve greater supply chain accountability and hope that it will be the beginning of comprehensive supply chain traceability and certified child-labor free Hershey chocolate products.’

In making the commitment to better global cocoa standards Hershey Company President and CEO, J.P. Bilbrey, said, “Hershey is extending our commitment with new programs to drive long-term change in cocoa villages where families will benefit from our investments in education, health and economic opportunities. Our global consumers want The Hershey Company to be a leader in responsible business practices and in finding smart ways to benefit cocoa communities. We are excited and humbled by this opportunity to create positive change in West Africa”.

Hershey says it will regularly update its progress on these programs through its Corporate Social Responsibility public reporting.   

Will all of this mean sweeter `Kisses’? Stay tuned…..

----Joy DiBenedetto, HUMNEWS