Developing Ethical Chocolate Via Blockchain-Based Cocoa Bean Tracking

If chocolate is not the world’s most beloved food, it is at least a top contender, and has been for nearly 300 years. Global consumers eat a lot of chocolate each year – around $85 billion dollars’ worth, or 7.7 million tons annually. And Americans eat a lot of that – we are the leading importer of cocoa powder on the planet, and are responsible for about 18 percent of the world’s chocolate consumption each year. That nets out to about 12 pounds of chocolate per person per year – an impressive amount, to be sure, but not enough for the U.S. to get the gold medal in this particular contest.

Europe is the world’s leading consumer of chocolate, eating about 50 percent of what is produced annually. The average Brit, Swiss or German citizen will each eat around 24 pounds per year.

The fact that chocolate is beloved the world over is not much of a mystery: it’s delicious, it’s versatile and, according to science, it has chemical properties that make human beings feel happy. What’s not to love?

Well, according to Tony’s Chocolonely, there is an awful lot not to love in the chocolate industry – because while the end product is sweet, the process by which it is created is anything but. Today, an estimated 2.3 million children work in the cocoa fields of Ghana and Côte d’Ivoire. Those children are not employees who are getting paid a reasonable wage for harvesting coffee beans; they have largely been conscripted into their labors and are, for all practical purposes, slaves.

Big chocolate brands are aware of this and have spoken out against it – but given the realities of the supply chain, separating the “clean beans” grown by employees and the “dirty ones” grown by slaves is incredibly difficult. Chocolatiers purchase large lots of cocoa beans from middlemen who stand between the purchases and the plantations that produce them. The beans are mixed with together, and the end buyer generally has no way of knowing exactly where their raw materials have come from.

The large brands have been under mounting pressure to remediate these issues, but progress has been sporadic at best.

Tony’s Chocolonely has been in the business of trying to clean up the chocolate industry for 13 years, by sourcing the products it sells directly from growers and avoiding those that use unethical child labor practices. But while that was a good starting recipe for running a clean business themselves, it wasn’t enough. What the industry needs, according to the Dutch confectioners, isn’t just for individual brands to offer a better product – it needs to clean up its act wholesale.

“To create a slave-free chocolate industry, we’re dependent on an important ingredient: a traceable cocoa bean. We’d like to think of our supply chain as a shared value chain, where each and every involved party is informed of the exchanged values,” Tony’s explained.

This drove Tony’s in 2015 to begin developing its Beantracker platform, which the goal of monitoring a cocoa bean’s journey from the field into a candy bar. The individual nodes of the Beantracker range from cooperatives to local traders and from international traders to processors.

“All actors have the responsibility to enter their information on the platform and share it with all others. In exchange, they receive all other relevant information,” noted Tony’s.

In 2017, the company began collaborating with Accenture to put the Beantracker on the blockchain, as they found it to be a perfect technological tool to create an unbroken, tamper-proof and uninterrupted record of data sufficient to track the motion and commercial history of every cocoa bean as it passes through the global economic system.

It is not a system without difficulties. Their early pilot ran the gamut of technical glitches, but the essential challenge lies in digitizing data.

“The big challenge for any traceability technology (blockchain or Beantracker) is getting the data from the physical world onto the digital platform,” the company noted. “That is also the big advantage of blockchain tech for bitcoin, which is 100 percent virtual. A physical value chain, with bags of cocoa without scannable tokens, is a completely different thing. Getting the data virtual is the name of the game.”

But it is a challenge that they believe is doable – and one where they are making progress by building a network of trust within their system.

The next goal is to expand that circle of trust to the chocolate industry writ large – and to get the major buyers wired into their tracking platform and using ethically sourced chocolate.

Because Tony’s Chocolonely doesn’t want to just sell slave-free chocolate themselves – they would like every other chocolate seller to do the same, and are willing to build the technological platform to get the industry to that point.