FAIRMADE describes a product made start to finish at the origin of the cocoa with locally sourced ingredients, materials, and labour.
The manufacturing of the product acts as a catalyst for development by supporting skilled manufacturing jobs and significantly increasing the value captured in the country of origin compared to the export of cocoa as a raw material.
FAIRMADE defines an approach that highlights the country of cocoa origin and the contribution that manufacturing has on cocoa-producing economies.
Purpose of FAIRMADE
A trade model or way of making a product needs a name for makers to consistently describe their work and to get industry recognition. Currently, there is not an agreed term or an agreed way to measure the added value created by making a product at origin.
There are several companies that use the FAIRMADE business model, but each has its own way of describing its work. Examples of terms currently in use are vertical integration and tree-to-bar.
Three examples of companies producing chocolate at the origin of the cocoa are:
If we agree on a shared definition, it will facilitate clearer communications with the chocolate confectionery industry and consumers alike.
Like Fairtrade farmers, communities making chocolate at origin would benefit from a term that communicates the work, challenges, and impact behind their products.
Just as Fairtrade informs the industry and consumers about price premiums, work conditions and social development projects on farms, FAIRMADE can communicate the benefits of making products with communities at origin.
By producing FAIRMADE chocolate instead of exporting raw ingredients, cocoa producing countries can create production jobs that improve their economies, helping to lower poverty rates.
Chocolate consumer markets – primarily in the Northern Hemisphere – can create more demand for FAIRMADE chocolate by associating it with consumer products and spreading awareness of the concept.
Context for FAIRMADE
According to the International Cocoa Organization, countries in the equatorial band produce most of the world’s cocoa, and more than 70% of the crop is cultivated in Africa:
Most cocoa producing regions are net exporters of their crop, meaning they export most of their cocoa as a raw ingredient and value-added chocolate production takes place abroad:
Cocoa producers are among the poorest nations in the world, and most have poverty rates over 20%.
At present, Fairtrade certification programs focus exclusively on raw food ingredients. There is not a business model concept that explains and promotes the positive impact of finished products on developing nations.
Reference trade models
FAIRMADE is based on the spirit of two trade models:
- Direct Trade
- Fairtrade and other ingredient certifications: UTZ, Fair for Life, Rainforest Alliance
According to Direct Trade pioneer Taza Chocolate:
“We created the chocolate industry’s first third-party Direct Trade cacao sourcing program, to ensure quality and transparency for all. We have real, face-to-face relationships with partners who respect the environment and fair labor practices. They provide us with the best organic cacao, and we pay them prices significantly higher than Fair Trade.”
The face-to-face relationships, fair prices and the win-win nature of the partnership are aspects of Direct Trade that apply to FAIRMADE.
Fairtrade aims to improve farmer livelihoods by uniting farmer in cooperatives, combatting child labour, democratizing decision making and paying social premiums. FAIRMADE builds on Fairtrade by using the work conditions and minimum price floors as references for ingredient sourcing and impact measurement.
Calls to action
Please consider the following action points:
Provide your feedback on the FAIRMADE concept in the Glossary feedback form.
We welcome any feedback, and we are specifically looking for comments on the following subjects:
- What quantitative targets / thresholds would you suggest for FAIRMADE to assess impact? For example, should FAIRMADE added value be measured as a percentage of the product’s retail sales price or as a multiple of the value of the primary raw material needed to make the finished product (i.e., cocoa)?
- Should the primary ingredient (cocoa) represent a minimum value or percentage of the production cost to qualify a product for FAIRMADE?
- What are your suggestions for verifying that a company is using the FAIRMADE model?
If you are interested in joining a working group to improve, visualize and disseminate the FAIRMADE concept, please provide your email address in the feedback form.
Some items that working groups can address are:
- What marketing / educational materials can be created to explain the FAIRMADE concept in a user-friendly way: graphics, video, interviews, etc.?
- What platforms can be used to disseminate the FAIRMADE: social media, press, trade organizations, etc.?
- What are the most important target audiences for adoption / use of FAIRMADE: FAIRMADE makers, development organizations, certification agencies, trade organizations, etc.?
- How can FAIRMADE be applied to other food products and which products are best suited for adoption of the concept?
Próximamente versión en español
Brett Beach is co-founder of MIA (est. 2017), a chocolate company that collaborates with farmer communities and chocolate companies in Africa to make bean-to-bar chocolate in the country where the cocoa is grown.
Prior to MIA, Brett was co-founder and co-CEO of Madécasse (2008-2016), a US company that produced chocolate in Madagascar in partnership with local cocoa farmers and a production partner.
Brett lived in Madagascar from 1999 to 2006 where he was a Peace Corps volunteer and a international development project manager at the US Embassy, the United States Agency for International Development and IBIS, a private sector seaweed cultivation company.
Brett received a Bachelor of Arts from Loyola Marymount University in Los Angeles, California (1996).
Bad Samaritans: The Myth of Free Trade and the Secret History of Capitalism, Ha-Joon Chang, Bloomsbury Press, 2007.
“‘Big Chocolate’ failing Ghanaian cocoa farmers over living incomes, says Oxfam,” Anthony Myers, Confectionery News, May 15, 2023.
Cocoa, Kristy Leissle, Polity, 2018.
“Direct Trade 101,” Taza Chocolate, Accessed on June 12, 2023.
“Creating Unique Impact with a Cause-driven Business,” Brett Beach, MIA, Accessed on June 12, 2023.
“Fairtrade living income reference prices of cocoa: an explanatory note (revised version 2019),” Carla Veldhuyzen, Fairtrade, September 2019.
How Rich Countries Got Rich… and Why Poor Countries Stay Poor, Eric S. Reinert, PublicAffairs, October 2019.
“Madécasse: Competing with a 4x Fairtrade Business Model,” Scott Marshall, Darrell Brown, Bex Sakarias and Min Cai, Oikos free case collection, 2013.
“MIA FairMade Short,” MIA Foodie, March 24, 2023.
“No Silver Bullets: Closing the $10 billion income gap in cocoa calls for cross-sector action,” Cathy Pieters, Mondalēz International, November 17, 2020.
“Produced in the south – consumed in the north,” Swiss Platform for Sustainable Cocoa, Accessed on June 12, 2023.
“Reality check: What can we do about cocoa’s price?,” Brett Beach and Dr Kristy Leissle, Confectionery News, September 12, 2022.
The Divide: A Brief Guide to Global Inequality and its Solutions, Jason Hickel, London: Penguin Random House, 2018.
“2022 Impact Report,” MIA, 2022.
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