The New Year and Christmas chocolates’ stack on my kitchen island had just started dwindling, and I have already started noticing the promotions for Valentine’s Day chocolates all around.
Those sparkling and shining boxes, those glossy wrappers and the content, the chocolates that melt in your mouth, all leave a deep impact on our environment and the livelihood of people who produce the key ingredient – Cocoa. Ever wondered, how some of the most established and most famous names in the world of chocolate ensure better care of our environment and contribute to sustainable living all the while trying their best to provide us with a mouth-watering and eye-popping experience?
In part 2 of this six-part series, I decided to explore the sustainability action of Lindt and Sprungli, a global leader in the premium chocolate sector with its origins in Zurich, Switzerland, and 175years of history in chocolate production. Check out the first part below.
Read: Be human. Be well. Be planet. Lululemon’s Sustainability Strategy
Sweet and Dark Facts
A quick look at Statista Research Department Report shared on Dec 1, 2020, brought forward some interesting facts about the always booming Chocolate Industry and Cocoa Production.
- Chocolate recorded retail sales of about 98.2 billion U.S. dollars worldwide in 2016.
- Switzerland had the highest chocolate confectionery consumption per person
- In 2018/2019, the production of cocoa beans in Africa was estimated to be some 3.6 million metric tons.
- Poor soil fertility conditions, old tree stocks, uncontrolled use of chemicals, and deforestation are threats to the sustainability of cocoa production.
- UTZ is a certified program for sustainable farming that ensures compliance with certain production requirements.
- Since 2009, the number of UTZ certified cocoa-producing countries has increased from three participants to 18 in 2018.
Core, Not so sweet!
A deeper dive into the belly of the industry reveals a bit more of the bitter side.
As per the Global Market Report of Cocoa, published by the International Institute of Sustainable Development, 43% of all the cocoa produced in 2017 was used by the chocolate industry and this consumption is expected to grow given the projected growth of the chocolate industry to USD 189.89 billion by 2026.
However, this does not translate to a great livelihood for Cocoa growers and to the environment.
Child labor and poverty among cocoa farmers have long plagued the families of Cocoa growers. As per a report published by the National Opinion Research Center at the University of Chicago, about 1.56 million children were involved in cocoa related child labor in Côte d’Ivoire and Ghana in 2018-19.
Deforestation is another mega issue surrounding this industry. Total forest cover in Côte d’Ivoire, one of the largest Cocoa producing region, has fallen from an estimated 16 million hectares in the 1900s to 7.8 million hectares in 1990 and 3.4 million hectares in 2015.
Steps in the Right Direction:
Industry leaders, environment safety protagonists, and organizations for a sustainable living have been trying to address these issues for over a decade and a half. Statistics are still abysmal, but chocolate and confectionery brands are taking more initiatives.
Most of the established brands are focusing on one or the other of these issues and are taking steps in the right direction. Lindt & Sprungli is taking an all-rounded approach.
Lindt has invested around $14m in its sustainable cocoa program since 2008 as it aims to have a fully traceable and verifiable supply by 2020. Though the statistics from 2020 would be made available later in this year, we already have the strategy that it is using to achieve its goal, Let’s dive in.
Lindt & Sprüngli’s sustainability strategy is based on 4 pillars.
- Improving Livelihood
- Contributing to an intact environment
- Performing together
- Delighting consumers
1. Improving Livelihood
Lindt & Sprüngli’s Farming Program highlights the company’s initiative for the better livelihood of its farmers and producers. Improper care of the land, lack of awareness about better plantation techniques, and unavailability of the right farming equipment are the key reasons that keep farmers from managing the yields and earning the right value for their crop.
The Farming Program empowers farmers with the right knowledge about sound agricultural and economical practices. The company helps farmers build village infrastructure, access equipment, and learn ways to safeguard their land for long-term use.
This program serves multiple objectives.
- Higher productivity of farms
- Diversified incomes and increased resilience of farmers
- Reduction of the risk of child labor
- Improved community infrastructure
- Conservation of biodiversity and natural ecosystems
2. Contributing to an Intact Environment
Lindt & Sprüngli is taking the “Intact” part of the pillar quite literally. This pillar single-mindedly focuses on controlling deforestation. In March 2019, the company came out with a detailed action plan to control deforestation in all the countries where its cocoa originates. Currently, the company is functioning with a commitment to free the entire cocoa supply from deforestation by 2025.
Agroforestry is another action that the company is promoting to balance the existing impact of deforestation. Lindt & Sprüngli’s sustainability team works to provide shade trees, disease-resistant cocoa seedlings, and training to effectively use the provided support.
GPS farm mapping is another valuable action to Ensure no cocoa is sourced from protected areas, and there is no expansion of cocoa cultivation into the forests.
3. Performing Together
This pillar aligns with the UN Sustainable Development Goal 8 and Goal 5. As a part of it, Lindt & Sprüngli takes more responsibility for observing human rights in its supply chain. Diversity, gender equality, training, and development are basics tenants within this umbrella.
This pillar is primarily a sanity check in the list of sustainable action plans. Strategically, this is a weak point in the 360-degree approach of the company with standing and history as strong as Lindt and Sprüngli.
4. Delighting Consumer
By the title, this pillar of Lindt & Sprungli does not resonate with any element of sustainability. Still, in the context of a consumer packaged good, this serves as the foundation of every sustainable effort of Lindt and Sprüngli. It is a realistic pillar that ensures great quality and business standards are achieved for continuous business growth.
The scale of investments needed to bring about the enormous changes covered in pillar 1 and pillar 2 cannot be achieved without a profitable bottom line and this pillar works towards building revenue and strengthening that bottom line. From a strategic business perspective, this is the wheelhouse that fuels all the sustainable efforts.
What’s next?
Issues impacting cocoa production and chocolate industry are too deep to be resolved in a short period of time and creating new fair-trade brands is not a solution for the incumbents as they align with long-established consumer expectations and associated brand equity.
Lindt and Sprüngli’s action plan for better livelihood and Intact Environment still need to show measurable results but the investment committed beyond dollars shows the intent of plausible success and that is where every thought through strategy begins.
For more such insightful articles, browse through The Strategy Story or catch up on your reading of other Forward-Thinking Strategies
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