Until a decade ago, Fairtrade chocolate might have seemed like the only ethically made and ethically sourced chocolate. But recently, direct trade chocolate has come into the spotlight, also promising fairly sourced and processed ingredients.
In fact, the two are very different. Both refer to a more ethical and traceable way of sourcing raw materials; however, fair trade does not guarantee that cocoa is free from child labor or guarantee farmers' standard of living.
What is fair trade chocolate?
Several international organizations are active players in the global fair trade market. These intermediaries are essential for obtaining trade certification from local farmers.
Flocert & Fairtrade International
Fairtrade is an international group that works with farmers and businesses to ensure their sustainability and ethics within the global supply chain. For Fairtrade chocolate , this means using certified cocoa, sugar, and vanilla, at a minimum of 20%. Some Fairtrade chocolates are made from a single Fairtrade-certified ingredient and will be marked as such.
Among the organizations under the umbrella of Fair Trade are: the certification body (Flocert), the organizer of the global label ( Fairtrade International ) and the group of Fair Trade Certified Companies (WFTO).
Every Fairtrade chocolate you buy has been made with some of the ingredients grown on a Flocert -certified farm , labeled by Fairtrade International, and potentially manufactured or distributed by a WFTO company.
Fairtrade chocolate has been criticized for imposing additional burdens on farmers. Producers seeking Fairtrade certification must pay for Flocert to inspect their practices both initially and annually, something many producers cannot afford.
While farmers are paid more for their certified products , part of this income is allocated to community development and only a part goes back to each farmer.
Although the cost of Fairtrade ingredients is higher, to add the label to their packaging, companies only need to purchase 20% of their volume from a Fairtrade certified producer .
Critics also note that fair trade ingredients are marketed to large corporations, due to their positive reception and low labeling minimums.
Rainforest Alliance & UTZ Certification
Rainforest Alliance and UTZ Certification are two other fair trade certification programs also used in the cocoa supply chain.
Unlike the Fair Trade program, the cocoa premium is not fixed but variable and negotiated annually with farmers. Only about half of this premium is paid to farmers in the form of income or cash.
The remainder is used to fund training, agricultural techniques, processes and inputs.
What is direct trade in chocolate?
Direct trade is not a certification program. Unlike fair trade, "direct trade" chocolate is a description of how the chocolatier sourced its cocoa.
Rather than purchasing premium-priced Fair Trade-certified cocoa, chocolatiers want to see firsthand how farmers process cocoa and treat workers . Direct trade chocolatiers choose the farms they want to work with, build relationships with the farmers, and purchase the cocoa directly , eliminating middlemen and certification fees.
Direct trade is more common among small artisanal chocolate companies, which have the opportunity to know each of the cocoa producers they work with due to the movement of smaller volumes of raw materials.
When direct trade is not possible, some manufacturers purchase their cocoa from intermediaries who have sourced their cocoa directly from farmers.
Middlemen can buy large quantities of cocoa from farmers and sell it to chocolate makers in small quantities. They guarantee the quality of the cocoa , the price paid to farmers, and working conditions, often documented through annual transparency.
Although there is no minimum percentage or price requirement for direct trade chocolate, the prices paid are often made public, and all chocolate labeled with a single origin is made only with cocoa from that origin.
How are fair trade and direct trade different?
Direct trade is, in many ways, a response to fair trade and the ease of modern communication. People want to buy ethical products , but they don't know who or what to trust, and artisan chocolatiers face the same problem.
Here are 3 reasons why Fair Trade chocolate and Direct Trade chocolate are different.
- Fair trade is aimed at large chocolatiers , while direct trade is often practiced by small chocolatiers .
- Fair trade is a cocoa certification system, while direct trade is a description of ethical sourcing practices .
- The "Fairtrade" label is a registered trademark 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 reassures consumers, these responsible purchases may not make as much of a difference as we think.
Chocolate certification is just the beginning
There have been numerous reports published regarding the effectiveness of certification in the supply chain.
Overall, Fairtrade chocolate certification is not enough to lift farmers out of extreme poverty and, on average, increases farmers' annual income by 10 to 16 percent at best, while remaining below the poverty line.
Although Fairtrade or certified chocolate has long been considered best for farmers, it ultimately fails to return a sufficient share of the value of the final chocolate bar to farms.
Fairtrade certification is also insufficient to prevent child labor, yet consumers are still willing to pay more for Fairtrade or certified chocolate, often confusing it with organic or environmentally friendly chocolate .
Fair trade is just one element of brand differentiation
Even if a chocolate bar is made with 100% Fairtrade certified ingredients , there's always someone else taking a cut. In response to consumer desire for fairer products, many years after certification programs began, chocolate manufacturers developed Fairtrade chocolate lines or acquired smaller Fairtrade chocolate companies. For example, Mondelez International owns Green & Black's Chocolate.
While supply chains can't be changed overnight , it's been decades since the ideals of Fair Trade were recognized by the world's largest chocolate manufacturers, and little has changed.
Fair trade places the burden of "being fair" on third-party labeling organizations and farmers—not to mention the quality of the cocoa — while large chocolate companies are able to profit from small amounts of this " fair trade cocoa " to increase their profit margins.
Why is direct trade better than fair trade cocoa?
Even though chocolate lovers are calling for change and equality in the supply chain, fair trade chocolate doesn't guarantee it. The way to empower farmers around the world is to change the structure of the supply chain, treating farmers like businesspeople.
This may involve teaching farmers how to process their cocoa and paying premium prices for equivalent quality. But to get there, chocolatiers need to get to know their farmers and farms, because Fairtrade certifiers visiting that cocoa farm won't be making your next chocolate bar .
Direct trade chocolate requires us to trust not a certification body but the artisanal chocolatiers who produce the chocolate themselves, which shortens the supply chain.
Buying cocoa directly from farmers not only cuts out many middlemen, but also, for small businesses, creates direct relationships between the two parties responsible for creating the final chocolate flavor.
This brings in much more money for the farmers themselves, since chocolate makers can pay based on various factors.
Rather than paying a blanket premium for all certified cocoa , chocolate makers can set a price that is fair to both parties, emphasizing quality, flavor, farming practices, and cocoa variety .
By changing the way we value cocoa and expressing it directly to farmers, we are encouraging diversity in cocoa farming . Direct trade chocolate makers aren't just looking to qualify for a sticker on their packaging; they're actually looking to source their cocoa sustainably and ethically .
With today's ease of communication and transportation, there is no reason to have a cocoa supply chain so long that farmers receive less than ten percent of the income from their hard work.
Why is direct trade in chocolate more expensive?
Artisan chocolate , from bean to bar, is a sector of the broader chocolate industry, characterized by small-batch, traceable, and ethical chocolate production .
Artisan chocolate is more expensive than industrial chocolate because manufacturers use higher-quality cocoa, often direct-trade, and have higher overhead costs. In addition to direct -trade cocoa , artisanal chocolatiers often use organic sugar and locally sourced inclusions.
Higher overhead costs include expensive specialized equipment, lower packaging quantities , and limited, if any, reduction in shipping and material costs.
Compared to industrial chocolate bars , artisanal chocolate is often made with much higher cocoa percentages, up to 100% dark chocolate .
Sometimes the cocoa used in artisanal chocolate bars is of ultra-fine, or very rare or unusual origin, which further increases the cost of obtaining said cocoa.
Dark chocolate is more expensive than milk or white chocolate because it is made with more cocoa than other types of chocolate . Unfortunately, price does not dictate quality. Therefore, it is important to do your research on the chocolate you eat, from how it was made to where its ingredients come from.
At KKO , we strive to highlight fair trade chocolate that is best for you, the farmers and the planet.
Support Natural and Artisanal Chocolate by purchasing Thai Chocolate or Goodies in the colors of KKO and participate in the sustainable development of Thai farmers cultivating organic cocoa .
