Towards ethical chocolate: multicriterial identifiers, pricing structures, and the role of the specialty cacao industry in sustainable development

Abstract

The specialty cacao industry is unique in that it is thought to offer higher price premiums and claims to provide cacao farmers with considerably more sustainable resources than traditional cacao systems, prioritizing farmer welfare and environmental resource conservation. However, with poor coherency of industry definition, quality quantifiers, and standardization, specialty cacao buyers can set prices and quality requirements without clear definitions that are easily externalized. Poorly defined standards put farmers at a disadvantage, allowing buyers to wield more bargaining power over producers, often assessing beans with independent or internal quality requirements. This research identified current industry definitions, and prices paid to farmers were collected and compared to world market prices, fair trade prices, and commodity producer prices. Five primary pathways were found to define characteristics for specialty cacao: (1) quality, (2) genetics, (3) origin, (4) certification, and (5) direct trade. This research shows for the first time, variability in farm gate prices for specialty cacao, as well as an average price 95.13% higher than commodity cacao, demonstrating the critical role that specialty cacao can play in developing a more sustainable chocolate industry. Ultimately, cacao farmers are agricultural entrepreneurs managing complex businesses that require reasonable access to independent, unbiased, and objective farmer-driven information on price transparency, market averages, and quality grading systems. This research reveals the need for systems-level definitions to quantify quality parameters to help farmers gain access to higher prices offered by buyers and provide incentives for economic opportunities and support for environmental conservation within specialty cacao markets.