How Can We Avoid Peak Chocolate?

Fast-forward ten years and the cocoa industry is predicted to be in crisis.  Productivity in Ghana and Cote d’Ivoire – which together account for 60% of global cocoa production (pdf) – will have dropped due to land degradation, lack of investment by smallholder farmers and the declining availability of suitable land due to climate change.

Combine these with rising demand for chocolate from Brazil, China and other emerging markets, and the $9bn cocoa industry is likely to face supply shortages unless it takes action now, warns a new report.

Major chocolate companies, including Nestlé and Barry Callebaut (which processes almost a quarter of the world’s cocoa beans), all claim to have invested money in sustainability programmes designed to support smallholder cocoa farmers.  The latter account for more than 85% of global production.

However, this is not likely to be enough to stop poverty-stricken farmers switching to more lucrative crops like palm oil or rubber, suggests the report by the Earth Security Group.

The Earth Security Index 2015, published today, warns that a number of other major commodities, including palm oil, soybeans and maize, are also likely to face future supply chain volatility.

Growing economic inter-dependence means that sustainability pressures in commodity producing countries are more likely than ever to trigger economic risks across the globe. This, says the report, puts an onus on multinational companies to work much closer with their supply chains to help manage future risks.

In the case of chocolate, climate change and unsustainable farming techniques have already decreased the amount of land for cocoa crops by 40% in the past four decades. At current production rates, the shortfall is expected to reach one million tonnes by 2020.

In key producing countries such as Cote d’Ivoire and Ghana, cocoa is grown by more than a million small-scale family farmers, most of whom have never tasted a bar of chocolate and live in chronic poverty.  A lack of capital and poor governance, says the report, is holding back much needed investment in productivity, logistics and rehabilitation of land.

“You can’t sustain a booming chocolate industry worth billions while the producers are living in poverty.  It’s not sustainable,” says Alejandro Litovsky, report author and founder of the Earth Security Group.

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