Scaling up sustainable sourcing: Mondelēz pledges all chocolate brands will source sustainably by 2025

01 May 2019 --- Mondelēz International’s Cocoa Life program is making a “landmark” pledge that by 2025 all Mondelēz chocolate brands will source their cocoa sustainably through the initiative. Currently, 43 percent of Mondelēz’s chocolate sources cocoa through Cocoa Life so there is a long way to go to reach the six-year target, however, the confectionery giant says it is on track. The commitment comes as the program – which helps to create a thriving cocoa supply chain by providing educational and financial support to cocoa farmers to improve crop yield and preventing deforestation – publishes its Annual Report. In other sustainability-related news, Nestlé announced a milestone whereby 77 percent of its agricultural commodities are verified as deforestation-free.

Under half of Mondelēz’s chocolate already carries the Cocoa Life logo including Milka, Cadbury Dairy Milk and Côte d’Or, but other brands such as Toblerone and Lacta will also come onboard.

Mondelēz says Cocoa Life is an excellent example of a self-verification program going above and beyond industry standards and this expansion will see an increase in the number of farmers and communities Mondelēz supports across six cocoa origin countries: Ghana, Côte d'Ivoire, Indonesia, Dominican Republic, India and Brazil.

“With our partners, we have a robust scale-up plan in place to reach the 2025 volume ambition and will continue to invest adequately in Cocoa Life,” Cathy Pieters, Director of the Cocoa Life Program, tells FoodIngredientsFirst. “As one of the world’s largest chocolate companies and one of the largest buyers of cocoa worldwide, Mondelēz aims to achieve the ultimate goal of securing a sustainable supply of quality cocoa. Cocoa Life strengthens our global chocolate business and deepens our connection with cocoa-growing countries. By building a more robust supply chain, we can fuel our growth as a business by responding to consumer demand for sustainably-sourced cocoa,” she says. 

The 2025 commitment closely follows Mondelēz and Nestlé laying out action plans to expand programs to combat deforestation in West African cocoa-growing regions in March. As part of a drive to scale-up their efforts to eliminate deforestation and restore forests in the Côte d’Ivoire and Ghana, some of the biggest players in the cocoa supply chain published their pledges on how to move towards deforestation-free commodities by 2020, while also improving transparency and traceability in the cocoa supply chain.

“We believe partnerships are key to a holistic approach and lasting change. We work with governments, non-government organizations, supply chain partners and communities to leverage expertise, networks and ensure effective roll-out of Cocoa Life on the ground. In origin countries, we partner with NGOs like CARE International, Fairtrade, Voluntary Services Overseas (VSO), World Vision, Swisscontact, Solidaridad and Save the Children,” Pieters continues. 

“All these NGOs have extensive experience and work with cocoa communities to assess their needs and develop the action plans against which we invest through Cocoa Life. We work closely with our cocoa suppliers – the manufacturers who process our cocoa such as Barry Callebaut, Olam and Cargill – who have valuable on the ground expertise and existing relationships with cocoa farming communities. We also work with government cocoa authorities at origin to support farmer training, cocoa research, and promote more sustainable practices across the cocoa sector.”

Cocoa Life’s report reveals that cocoa yields are continuously improving; communities are steering their own development; and having mapped 63 percent of Cocoa Life farms in Ghana, Cote d’Ivoire and Indonesia, Mondelēz knows they are not in protected forest areas.

Key supply chain actors, as well as investors, are increasingly aware of how the rapid onset of climate change poses a huge risk to business, particularly raw materials such as cocoa. The reputational risk of using raw materials linked to issues such as deforestation is also growing and consumers are more aware and connected than ever if a company’s supply chain is linked with deforestation and other controversial ethical and environmental issues.

There has been more variability in crops and unexpected cost inflation driven by climate change for companies like Mondelēz in recent years. One of the biggest concerns is how deforestation’s contribution to climate change is a problem in cocoa-growing countries such as Côte d'Ivoire, Ghana and Indonesia, negatively impacting cocoa crops which need shade. Farmers can also clear land in order to increase their plots. 

“Cocoa is the essence of our chocolate and an important part of our business. With demand for chocolate rising, to drive our business growth we need to secure a sustainable supply of its essential ingredient; we need a thriving cocoa sector,”  Pieters explains.  “By investing, supporting and believing in Cocoa Life, we are at the forefront of the fight against climate change.”

She explains how the company needs to ensure cocoa is “made right”, which for Mondelēz means investing directly in tackling the root causes of challenges, including climate change, gender inequality, poverty and child labor. 

“These challenges are complex and there are no quick or easy solutions, which is why our program takes a holistic approach. We don’t fix one problem only to create another,” she adds. 

Mondelēz was also the first company to raise the issue of deforestation in the cocoa sector at COP21 in Paris and is a founding member of the Cocoa & Forests Initiative – a public-private partnership to end deforestation and promote forest restoration and protection. 

Positive impact
The program initially launched in 2012, when Mondelēz committed US$400 million to Cocoa Life over a decade. Today, it works directly with cocoa farmers and communities to transform their livelihoods through a focus on skills, education and access to essential resources such as planting materials and crop protection.

According to the Cocoa Life report, the program’s key impacts so far have included improving cocoa yields as cocoa farms become more efficient and their yield increases. Farms that can do more with less land are able to create spare land that can be used for other income-generating activities, helping make cocoa farming a prosperous business.

Cocoa Life communities have been able to attract the funding and resources needed to develop. This is an important step because sector change will only be sustained if local actors feel empowered to steer their own development, notes Mondelēz.

Notably, farmers are choosing not to expand into protected forests and encouraging and enabling cocoa farmers and communities to protect the land where cocoa is grown has been fundamental to the Cocoa Life approach. Mapping efforts and tools support farmers in understanding how to get more out of their farms – helping them build better businesses.

“Success will not be found by acting alone. This is why we are building a movement for lasting change and scaling our holistic approach through productive, collaborative partnerships,” Pieters notes. “We hope our encouraging results inspire more industry members to implement integrated approaches and broaden their impact at scale,” he adds.

The news comes as Nestlé announces that 77 percent of its agricultural commodities are verified as deforestation-free. This is a key milestone in the company's efforts to achieve its zero-deforestation commitment.

In 2010, Nestlé made a no deforestation commitment to ensure that none of its products globally would be associated with deforestation by 2020. Over the years, the company has worked with partners like Airbus and Earthworm Foundation, and its suppliers to identify areas at risk of deforestation. The company is using a combination of tools, including certification, supply chain mapping, on-the-ground verification and satellite imagery from the Starling system to achieve this goal.

Starling is the result of a fruitful collaboration between Airbus, Earthworm Foundation and Nestlé. Nestlé is now using the system to monitor its entire palm oil supply chain. Pilots in pulp and paper are also now underway and the company plans to extend it to soy later in 2019. Starling's cutting-edge technology helps Nestlé understand better where deforestation occurs, what drives it and who is involved. The company uses this information to verify compliance, challenge its suppliers and prioritize transformative actions.

“Nestlé is the first company to use satellite monitoring across all its palm oil supply chain, accelerating its no deforestation commitment and providing such level of transparency to the public. The data collected through these satellites points out that challenges remain and no single company can achieve that on its own. All businesses that have similar commitments must start monitoring, verifying and most importantly acting on the basis of what these tools reveal to us. Eventually, publically available information about deforestation and supply chains will allow consumers and investors to really see which companies are truly walking the talk,” says Bastien Sachet, CEO of Earthworm Foundation.

Nestlé says it will continue to engage with all its suppliers to fulfill its no deforestation commitment more quickly. In particular, the company also recognizes the need for a collaborative approach to improve smallholders capacity in eliminating deforestation. Nestlé is working to find solutions that ensure sustainable supply chains while respecting people's rights to improve their livelihoods.

By Gaynor Selby