Cocoa
Find out more about our approach to sourcing cocoa
According to the International Cocoa Organisation, Europeans account for almost half of the world’s chocolate consumption. The UK alone is the seventh largest consumer of chocolate. Serving this demand are around 6 million growers of cocoa, 60% of which comes from Cote D’Ivoire and Ghana.
The cocoa industry faces a number of significant challenges. It is incredibly difficult for growers to make a decent living as much is grown on small farms of fewer than 5 hectares and they often have limited knowledge of modern farming techniques. Aging trees that are past their peak cocoa pod production, declining soil fertility, pests and diseases all impede productivity. At the same time, the sector faces a number of social challenges such as lack of quality basic education affecting everything from labour practices and business decisions to youth migration to more urban areas. Children in cocoa growing areas face the realities of rural poverty such as scarcity of land, food insecurity, lack of education infrastructure, access to potable water, and poor health services. The regular practice of children working on cocoa farms is often a natural way of life for growers who, for a variety of reasons, want to train their children and at the same time use them in order to reduce labour costs.
Cocoa is a very important ingredient for M&S as it is used in over 1,000 of our products from chocolate bars to cakes and deserts. Over the past few years we have been working to develop a practical approach to sourcing cocoa more sustainably in order to help secure our access to this vital ingredient in years to come as well as improving the lives of growers.
Commitments and targets
We want to lead our sector in sustainable production and consumption, offering our customers the good value, high quality products and services they expect from M&S, while respecting planetary boundaries and the need for social equity.
Our goal is to ensure that 100% of our cocoa (by volume) continues to be sourced from verified sustainable sources - a goal we first met in 2017. We are also committed to engaging in wider industry efforts to improve the cocoa sector and building resilient supply chain communities by investing in programmes, which build livelihoods, protect the environment and improve wellbeing.
Approach
Cocoa is very important to M&S. We use about 6,000 tonnes of cocoa bean equivalent each year to make over 1,000 products. Whilst we source cocoa through over 100 direct suppliers, more than 70% is sourced through just three main suppliers making confectionery, cakes and biscuits. We have our own unique high quality special recipes which means our supply chain is incredibly complex. Traceability is also a real challenge due to the way in which cocoa is traded, so it is hard for us to fully understand our supply chain beyond the trader. This is compounded by the fact that we use less than 0.01% of the world’s annual production of cocoa so our leverage or influence in the sector is minimal.
We are working with our suppliers and growers to help them address the ethical, environmental and economic challenges they face in order to maintain a long-term sustainable and secure supply. Over the last few years we have been developing an approach which is both practical and reflects our size and influence in this industry.
Our Sustainable Cocoa Commitment is as follows:
- We will source 100% of the cocoa (by volume) we use in M&S brand products from verified sustainable sources by March 2017 (Achieved)
- We will engage in industry efforts to improve the sustainability of the cocoa sector through our membership of the World Cocoa Foundation (WCF) and the International Cocoa Initiative (ICI) (Ongoing)
- We will support the efforts of CocoaAction through our membership of the WCF and our relationship with our key suppliers. In 2018, we also signed up to the WCF Cocoa & Forest Initiative (Ongoing)
- We will help encourage the engagement and action of cocoa traders through our work with the Retailer Cocoa Coalition.
- We will invest in programmes which enhance the lives of people in cocoa growing communities (Ongoing)
Our approach to delivering our Sustainable Cocoa Commitment is as follows:
To understand our supply chain and work with our suppliers to secure a quality supply chain
Minimum Standards
Our Technical Terms of Trade set our minimum technical expectations for suppliers to meet. It also sets out our position on a number of areas.
Our commitment is to source 100% of the cocoa (by volume) we use in M&S brand products from 'verified sustainable sources'. We achieved this target in March 2017. We define verified sustainable sources as meeting any of the following standards:
- UTZ certified / Rainforest Alliance
- Fairtrade certified; or
- Third party verified HORIZONS cocoa
- Olam Livelihoods charter
We evaluate the programmes and expect them all to adhere to the following:
- Being third party independently verified or certified
- Robust approach to labour and human rights, including child labour
- Promoting more environmentally sustainable cocoa agriculture
- Promoting farmer livelihoods and productivity
Currently all of our cocoa meets these standards and we use an external third party to verify this on an annual basis. Our suppliers are also required to meet the requirements set out in our Global Sourcing Principles. Find out more about our approach to supplier management.
Supply Chain Traceability
Due to the nature of the global trading system it is incredibly difficult to trace a batch of cocoa from farm to factory to retailer. One of the issues, for example, is the lack of standardisation as information is exchanged between various links in the supply chain.
We are committed to achieving greater supply chain transparency and traceability. We are working closely with our key cocoa trader to understand how we can improve our level of traceability over the next few years.
Retailer Cocoa Collaboration
M&S helped found the Retailer Cocoa Collaboration (RCC) in 2017 following the success of the Palm Oil Traceability Collaboration.
The aim of this pre-competitive group is to support existing industry efforts to drive improvements in the cocoa sector and, in doing so, better define the role of the retailer in this space. By taking a collaborative approach, the RCC enables retailers to develop the most efficient and effective model supporting change within the sector by engaging Traders in meaningful dialogue and minimising duplication of effort.
To support market transformation through working with industry partners, standard setting organisations and other stakeholders
World Cocoa Foundation
We became the first retail member of the World Cocoa Foundation (WCF) in 2013. Founded in 2000, the WCF is an international membership organisation that represents more than 100 organisations across the cocoa value chain. It is committed to creating a sustainable cocoa economy by putting farmers first, promoting environmental stewardship and strengthening development in cocoa growing communities.
We believe the WCF is the right forum to address the needs of cocoa farmers as well as the needs of the cocoa industry.
International Cocoa Initiative
We became the first retail member of the International Cocoa Initiative (ICI) in 2014. Established in 2002, the ICI is the leading initiative promoting child protection in cocoa growing communities. ICI works with the cocoa industry, civil society and national governments in cocoa growing countries to ensure a better future for young people and contribute to the elimination of child labour which is an endemic issue in the sector.
We joined the ICI because we wanted to support this innovative organisation tackle the key issues in the cocoa sector.
To support programmes which enhance the lives of people and communities
Leadership development in Africa
We’re committed to working with our suppliers to help them develop the necessary skills and competencies to meet our requirements by offering a range of training and development opportunities.
For example, our Partnership with Emerging Leaders has trained over 20,000 people in the supply chain in Kenya and South Africa.
We know that education is a critical issue for the cocoa sector. We are committed to training at least 8,000 cocoa farmers in the Emerging Leaders programme. This is equivalent to the number of growers that produce the cocoa sourced for our products. The programme has taken place in both Ivory Coast and Ghana with cocoa farmers and early indications is that this will have an extremely positive impact for cocoa farmers. We are now working on a roll out plan.
We have seen the impact of the training in smallholder farmers in Kenya and South Africa and believe that the impacts in West Africa will be equally powerful.
Cocoa and Forests Initiative
Ivory Coast and Ghana are home to some of the world’s most precious rainforests yet this is decreasing at a rapid rate. A quarter of Ivory Coast was once covered by rainforest and this now covers less than 4% of the country. It is believed that 2.3 million hectares of rainforest in Ivory Coast and Ghana was cleared for cocoa farms between 1988 and 2007.
To combat this issue the governments of Ivory Coast and Ghana and thirty-three leading cocoa and chocolate companies have joined together in the Cocoa & Forests Initiative (CFI) to end deforestation and restore forest areas. M&S were one if the founding signatory companies.
In 2019, all members of the CFI were asked to develop an action plan to show how they will work on the following:
- Forest protection and restoration
- Sustainable cocoa production and farmers’ livelihoods
- Community engagement and social inclusion
It has been challenging to agree how retailers can meet the requirements of the CFI action plan when we are far removed from the supply chain and do not have any presence on the ground.
Around 95% of M&S' cocoa comes through CFI signature suppliers (the remainder is from countries that are not part of the CFI). Our approach has been to form the Retailer Cocoa Collaboration, a group of retailers who have come together to hold their cocoa suppliers to account in their work and commitment to the CFI. RCC agreed actions include:
- Public endorsement (where appropriate) of the Cocoa and Forests Initiative. This includes encouraging our traders and suppliers to commit to the 8 CFI principles as well as company specific communications.
- An ambition to map our collective supply chains so we know what percentage of our cocoa supply is from each trader.
- A commitment to assess cocoa traders’ performance against key sustainability indicators. This approach replicates that of the Palm Oil Transparency Coalition and acknowledges that the key lever for change within the cocoa supply chain for retailers is at the trading level.
- Following the assessment, understand how our current work on cocoa sustainability is supporting CFI. Where there are gaps, we will explore opportunities to support further.
- A commitment to bi-annual meetings as part of the Retailer Cocoa Collaboration.
Working with others
Listening, learning, responding and working in partnership is an important part of how we do business.
We are working with a number of industry and civil society organisations to tackle many of the challenges faced in the cocoa sector. Outlined in more detail above, we're working with our direct suppliers and Solidaridad and Emerging Leaders to help growers address the ethical, environmental and economic challenges they face in order to maintain a long-term sustainable and secure supply.
We also participate in a number of multi-stakeholder initiatives such as the World Cocoa Foundation and the International Cocoa Initiative to improve the sustainability of the cocoa sector.
