Dive Brief:

• Hershey, in partnership with the Rainforest Alliance, plans to distribute cash payments of up to $600 per household per year to about 5,000 cocoa farming households within its supply chain as part of its Income Accelerator in Côte d’Ivoire. The payments will be based on the adoption of sustainable and regenerative farm management practices that increase farm profitability and resiliency to unexpected environmental circumstances. 
• In addition, Herhsey said it will work with Côte d’Ivoire government agencies and non-governmental organizations through public-private partnerships to invest in the construction of 10 primary schools in cocoa-growing communities and implement a program to preserve the Mabi-Yaya Nature Reserve.
• Cocoa production, the majority of which comes from Ivory Coast and Ghana in West Africa, has long been plagued by child labor concerns, environmental worries and allegations that companies that depend on producers have not done enough to help them financially. 

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Dive Insight:

With chocolate consumption on the rise, more attention has been heaped on its primary ingredient: cocoa. 

The industry has faced a number of challenges, including fluctuating prices, low farmer incomes, persistent child labor and ongoing impacts of climate change. Nestlé and Cargill were sued by six former child slaves who claimed the companies were complicit in contributing to slavery at cocoa farms in Ivory Coast. The U.S. Supreme Court later threw out the lawsuit on grounds that the plaintiffs could not sue under the 1789 Alien Tort Claims Act because alleged violations at issue took place outside of the United States.  

Food companies such as Nestlé, Hershey and Mondelēz International, as well as chocolate ingredient suppliers like Barry Callebaut, have all announced investments in recent years for initiatives that include improving living conditions, eradicating child labor, helping the environment and boosting sustainability. A large part of that is tied to the fact that without cocoa, or at the very least a smaller supply, chocolate output would suffer and what is produced would inevitably cost more.

But consumers increasingly are voting with their wallets and buying products that mirror their beliefs. This has forced producers to step up their spending.

Nestlé said early last year it would triple its cocoa sustainability funding to 1.3 billion Swiss francs ($1.4 billion) by 2030, using some of the money to provide financial incentives to cocoa-farming families in Africa who help prevent child labor and reduce their environmental footprint. The world’s largest food manufacturer said it will pay farmers who implement efforts that include sending their children to school and adopt adopting good agricultural practices.

For Hershey, whose brands include Reese’s, Kisses and its iconic bar, the latest announcements follow a similar track by investing in education and the financial well-being of growers.  As part of the recent announcement, Hershey also said it will invest in village savings and loan associations that work with area farmers. 

“Access to education for children and environmental conservation are critical components of our broader Cocoa For Good strategy and vital to building healthy communities where cocoa farmers and their families live,” Chuck Raup, U.S. president for Hershey, said in a statement. 

Low farm income contributes to child labor and deforestation, Yves Brahima Koné, managing director at Conseil du Café-Cacao noted in a Hershey press release. Nanga Kone, country director for Côte d’Ivoire at the Rainforest Alliance, added that most cocoa farmers don’t receive enough to make a decent standard of living, a factor that is exacerbated by climate change.