According to the ICCO (International Cocoa Organization), an estimated 4.9 million tons of cocoa were produced during the 2021-2022 season. Production has increased over the past 40 years, driven by strong demand from consumer countries, particularly in Europe.
A large portion of the world's production takes place in Ivory Coast and Ghana, which account for 60% of global yields. Similarly, according to the Cocoa Barometer 2022, 92% of cocoa transits through the six largest companies, whereas Valrhona represents only 0,15% of global production.
The cocoa market is volatile because prices are liable to fluctuate due to politics, weather events, overproduction or underproduction in cocoa-growing countries, speculation, new consumer demand and so on.
By way of an explainer, we describe the cocoa industry (which includes cocoa beans and their derived powder, liquor and butter) as being structured into three parts:
Valrhona is a downstream operator which has chosen to purchase the vast majority (94%) of its cocoa from producers grouped into cooperatives and associations.
The upstream sector contributes to 40 to 50 million people’s livelihoods worldwide, including 4.5 million family farmers and 14 million rural workers.
Without the long-term contracts of the like implemented by Valrhona, the world market is dominated by a handful of operators and doesn’t allow small producers to exert any influence on prices. Fluctuating world cocoa prices prevent these small-scale producers from being able to rely on a steady income and investing in better farming practices.
As a result, price control mechanisms have been put in place by the Ivory Coast and Ghanaian governments since the 2020/21 harvest to guarantee producers a minimum cocoa bean price. These mechanisms include a Living Income Differential (LID) of $400 per ton paid by all cocoa buyers, including Valrhona. Despite governments’ efforts, it remains difficult to regulate prices, and they don’t always guarantee a sufficient income for small-scale producers.
At Valrhona, we are aware that these minimum prices are not enough to guarantee a decent standard of living, and we are acting accordingly.
We are part of the French Initiative for Sustainable Cocoa, which brings together 64 member companies of the Syndicat du Chocolat, the French government, NGOs and cocoa and chocolate industry research institutes. The initiative is in step with others launched in around Europe, such as Beyond Chocolate (Belgium), Gisco (Germany), Swisco (Switzerland) and Disco (Netherlands).
We are conscious of the complex and deep-rooted social, economic and environmental challenges facing the cocoa industry, so we want to work collectively and in partnership with everyone in the French cocoa industry to make our actions more effective. The initiative’s signatories are jointly committed to three specific, time-limited objectives:
We will pursue and enhance our policy of paying a fair price in 100% of our purchasing contracts with all our suppliers and partners.
This price must contribute to a decent living income for producers.
A living income is "the annual income required by a household residing in a given location to ensure a decent standard of living for all members of that household". The components of a decent standard of living include food, water, housing, education, healthcare, transport, clothing and other basic needs.
By 2030, we will be progressing our purchasing contracts with our partner suppliers to meet internationally recognized, certified Fair-Trade standards which guarantee a fair price (such as Fairtrade, Fair for Life, SPP and so on).
Fair trade certification is a process in which an independent body verifies that a product or organization complies with fair trade standards. These standards are designed to ensure that producers are treated equitably and get a fair price for their products. Certifications cover various factors, such as producers' working conditions, sustainable agricultural practices, and social and environmental criteria.
In Ivory Coast, over the last five years Valrhona has bought its cocoa at a price averaging 34% more than the minimum guaranteed by the state. Valrhona also gives producers a premium based on quality. An independent third-party organization (JLB Expertise) checks that this bonus payment is allocated correctly.
In Ghana, in 2022, the premium per bag was increased by 40% to help producers cope with local inflation.
By 2024, 100% of the cocoa beans purchased from our partners in Ivory Coast, the Dominican Republic and Venezuela will be Fairtrade-certified. These beans represent 30% of our total cocoa supplies.
Through the testimony of Julien Desmedt, cocoa sourcer, discover the actions taken by Valrhona in Haïti to improve cocoa farmers’ income.
In West Africa, the NGO International Cocoa Initiative estimates that 1.56 million children are forced to work alongside their families. At Valrhona, we are aware of the need to do better and make every effort to combat child labor.
Valrhona has been committed to programs that facilitate and improve access to education since 2014.14 schools have been built and renovated in Ivory Coast, Ghana, the Dominican Republic and Venezuela supporting a total of 65 cohorts and 2,555 students.
Valrhona relies on its long-term relationships with partners and producers as a means of supporting them in the fight against deforestation and global warming. We are committed to having no plots on protected land. By overlaying all our partner growers' plots onto each country’s official map, we can check that none are in a protected area.
At the same time, we are committed to reducing its carbon use across all emission scopes: we have a target of cutting our carbon emissions by 90% (compared with 2018) by 2050. So we have launched a program with the NGO Nitidæ to calculate our cocoa beans’ carbon footprint from the growing area itself. Since 2023, these field studies carried out and certified by the NGO have made it possible to survey, qualify and quantify the risk of deforestation over a 20-year period.
At Valrhona, we know that agroecology is a priority if we are to sustain cocoa-growing over the long term, so we have a responsibility to help our producers to adopt this practice.
Since 2015, we have been a founding member of the Cacao Forest project, a pioneering multi-sector initiative that aims to build a sustainable cocoa industry through agroforestry.
Between 2015 and 2022, several agroforestry models were tested in the Dominican Republic, and the most successful ones were identified and ready to be rolled out across the country. Since 2023, the Cacao Forest program has been developing a proposal for Ivory Coast.
Traceability underpins all our policies and ambitions and is a prerequisite for any environmentally and socially responsible business. It enables us to monitor, strengthen and orient our actions.
100% of Valrhona cocoa beans are traced from the producer. To go further, Valrhona is committed to extending its plot-based traceability so that we can gain even more visibility over production areas. By the end of 2022, 60% of our bean harvest had been geolocated and mapped - that is 6,951 producers with over 11,441 hectares of mapped plots.
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