Kraft Embraces Cocoa Sustainability Via Rainforest Alliance Certification
About 4,000 Cote d’Ivoire cocoa farmers stand to benefit thanks to an ambitious new project from the Rainforest Alliance environmental group, Kraft Foods and the U.S. Agency for International Development.
The project involves educating farmers in eco-friendly, sustainable agricultural practices that will allow them to increase cocoa yields while better protecting the environment. Participating farmers will work toward achieving Rainforest Alliance certification by meeting a series of environmental and social standards that include conserving natural resources, protecting the welfare of workers and putting more efficient management practices into place.
The first deliveries of Rainforest Alliance Certified cocoa from the C’ote d’Ivoire –- which Kraft is slated to purchase –- are expected in 2007. Farmers who produce this sustainably grown certified cocoa can expect to increase profits by from 15 to 20 percent initially, says Frank Hicks, a Rainforest Alliance program director, who has been working in West Africa to help get the certification venture there established.
Other partners in the project include the German Agency for Technical Cooperation and a cocoa trader in Cote d’Ivoire called the Armajaro Group. The partners in the project coalition are investing nearly $2 million to benefit cocoa farmers in six cooperatives over a three-year time span.
The project — while formidably difficult — is progressing well, says Jonathan Atwood, director of commodity sustainability programs at Kraft. “I don’t think we could be happier about how it is setting up,” he notes.
Patience and realistic expectations are key for participants in such ventures, says Atwood, who notes that, “It will take some time in 2007 to get some volume [of certified cocoa].”
The Cote d’Ivoire project is modeled on a successful Rainforest Alliance program initiated in Ecuador in 1997. “I think the challenges in terms of literacy and education [for the participating farmers] are even greater in the Ivory Coast,” says Hicks. For example, he points out that people there don’t all speak the same local language, whereas in Ecuador almost everyone speaks Spanish.
Atwood agrees that the venture presents plenty of challenges. “We didn’t go into this expecting that it will be easy,” Atwood continues. “Farming in West Africa is difficult for a number of reasons — poverty, childhood mortality, [deficiencies in] educational structure, less efficient agricultural practices.”
Fortunately, Kraft has experience as a participant in the Ecuador cocoa project. The company also has a sustainability program model outside the cocoa category. Kraft’s partnership with the Rainforest Alliance started in 2003 on a coffee certification program.
“We’re the largest buyer of Rainforest Alliance Certified coffee,” says Atwood. By the end of 2006, the company will have purchased 26 million pounds of it.
A number of Kraft’s European brands are Rainforest Alliance certified. In the United States, the company’s Rainforest Alliance certified brand is Yuban, which carries the tag line, “The coffee you make can make a difference.”
“Our tag line says it all,” Atwood says.
Products made with cocoa grown on Rainforest Alliance certified farms will be eligible to feature the Rainforest Alliance seal on their label.
Atwood is enthusiastic about the fact that a food company of Kraft’s size has allied itself so strongly with sustainability. Thus far, he points out, many of the brands that have forged a strong connection to social or environmental causes have come from niche players.
“What we’re trying to do is to bring the idea of sustainability to mainstream brands,” he says. “So it’s a bit of a different challenge, but it’s one that we think is worth undertaking.” n
Consciousness Raising in the Grocery Aisle
How much do consumers care about purchasing products that are flagged as eco-friendly or sustainably grown?
Lynn Dornblaser, director of Custom Solutions at global research firm Mintel International, is convinced that interest is mounting.
“The causes that they champion differ a little,” says Dornblaser. “But the point is that more and more companies are engaging in sustainability issues or engaging in corporate and social responsibility.”
Buying an eco-friendly or fair trade product allows for “passive participation” in a worthy cause, Dornblaser reflects. “It helps consumers feel good and sends a message to those around them that they are aware.”
European shoppers tend to be more attuned to such issues, notes Dornblaser. “With European consumers, because of heritage and geography and history, it seems that they have a better understanding of where food comes from and what goes into raising animals or crops,” she observes.
However, U.S. consumers are becoming better informed in this arena. With more international travel, our world view is expanding, and with it our collective social consciousness, she continues.
“More people are learning foreign languages; more people are getting passports,” says Dornblaser. “And I think a lot of that is driven by today’s younger consumers, the millenials, who are in their 20s. I think they’re more aware of the wider world. And that ties really well into the whole idea of being more socially responsible.”
Jonathan Atwood, director of commodity sustainability programs at Kraft Foods, agrees with Dornblaser that Europeans may be bit more forward-thinking in this area, but he is convinced that the interest exists on the domestic front as well.
“The common thread that I hear is that people do care about what their products are made of and that they understand something about where they came from,” says Atwood. “And that [they care that] people who grew the ingredients are treated fairly.”
As for the marketing of such products, the more simply the message is presented, the better the odds are that it will be heard, says Dornblaser. She cites the example of the endangered animal photos featured on bars of Endangered Species Chocolate.
“To me, that’s really smart,” says Dornblaser, “because it sends the message really clearly that if you buy this, you’re helping a tiger. Consumers need messages that are really easy to communicate.”
Pricing, of course, can be a stumbling block. The bottom line is, a marketer can’t charge too much more for a product with a socially responsible back-story or mainstream consumers won’t go for it.
“If it costs more, there will be only a small core of dedicated consumers who will pay the price premium,” says Dornblaser.
“I think for these kinds of products to really be successful long-term, they’ve got to find a way for pricing to be as close as possible to other products,” she continues. “Consumers are more price conscious than they are environmentally conscious.”