Cadbury Chocolate Brand Goes Fair Trade
Cadbury Dairy Milk in the UK will be the first major brand to make all of its chocolate fair trade certified. By the end of the summer, it will be buying all of the cocoa for its candy bars and cocoa powder from fair trade growers in Ghana, tripling the country's cocoa sales. Fair trade supporters are hoping the move will goad rivals like Nestle and Mars into considering similar actions.
Cadbury has already raised its prices in anticipation of the change, and going by its latest earnings report, the company is doing well -- so far chocolate is proving recession-proof.
Cadbury is getting certified under the Fairtrade label. There are different certifying bodies for fair trade, and they all have their own specific requirements, but the basic idea is similar. The grower gets a bigger piece of the pie, and there's a price floor, so if the price of the commodity drops below the cost of production, growers can still stay in business.
There are also rules about working conditions. In West Africa there's a history of children working long hours under dangerous conditions on the cocoa farms, and a fair trade label guarantees that a brand was not produced under those circumstances.
Cadbury's Fairtrade certification will also require the company to invest a certain amount back into the communities that produce the cocoa. Generally, these are very poor communities -- I spent some time with a fair trade coffee project in Nicaragua, and in that case, the money went towards things like community latrines, safe drinking water projects, putting members' children through school, and training farmers to make higher quality beans.
Cadbury's initial certification covers only chocolate in Britain and Ireland, but it will likely spread elsewhere; a spokesman for Cadbury New Zealand said the brand is moving towards Fairtrade certification there as well. Still, it's not the first time the UK is ahead of the curve on fair trade -- in November, Starbucks switched all of its store offerings to 100 percent fair trade coffee, but only in Britain and Ireland.
Fairtrade certification is just the latest in Cadbury's many initiatives towards sustainability. In the UK the company recently started working with dairy farmers to reduce cow flatulence, one of the greatest sources of the greenhouse gas methane.
And a year ago, Cadbury pledged $96 million in investments to support cocoa farmers. There were some who questioned the company's commitment and motives; after all, the investments benefited Cadbury.
Education involves teaching farmers how to increase yields and work better with each other ... The 850 water wells, which will give 170,000 people access to drinking water, will save women and children from fetching water and give them time to do other things around the farm. ...I don't quite get this argument. Cadbury is looking at sustaining its own long-term future by supporting its farmers and doing its best to protect the natural resources it depends on. That's smart, and a lot of companies still aren't thinking that way. It may not be philanthropy, but it's still what this planet needs. Smaller brands like Original Beans may have more truly ethical products, but a $13 chocolate bar is not likely to command much market share.Cadbury is out to secure its supply and has cleverly managed to dress up the deal to make it look virtuous.