top of page
Cerca

Changing the Cocoa Industry One Chocolate Bar at a Time: The Tony’s Chocolonely Story

Aggiornamento: 12 nov 2024



  1. Introduction: The Sweet Taste of Tony’s Chocolate Revolution

Try to imagine biting into a piece of chocolate and knowing that it doesn’t just taste good, but it does good. For most people, chocolate is a guilty pleasure, a momentary escape from the duties of life. For Tony’s Chocolonely, chocolate represents far more than indulgence; as it is a full-fledged vehicle for carrying meaningful economic, social and environmental change. 

Tony’s Chocolonely was funded in 2005 by a group of Dutch journalists who, appalled by the exploitative practices behind the global cocoa industry, set out on an ambitious mission for their startup: to eradicate child labor and modern slavery from the cocoa supply chain (Tony's Chocolonely, 2023).

Rather than passively responding to market trends or consumer demand, Tony’s has been a proactive role in integrating its core sustainable business practices into every aspect of its operations, hence influencing not just its own practices but the broader sustainability standards of the cocoa and chocolate industry (Tony's Chocolonely, 2023a).  Not by chance, Tony’s Chocolonely was recognized as the Best for the World B Corp in 2022 for its commitment to social and environmental responsibility (Tony's Chocolonely, 2023a).

This essay will explore how such an achievement is reflected by a comprehensive sustainability strategy that goes beyond offering fair-trade chocolate and instead aims at achieving systemic positive change, hence rewriting the detrimental rules of both the cocoa and the chocolate industry.

  1. Chocolate Bars that Tell a Story

Tony’s began as a social business, "pursuing a social mission while conducting commercial activities that support its operations," (Battilana & Lee, 2014). Over time, it evolved into a B Corp, a "social business that has passed a specific (sustainability) certification process and that “reaches beyond the profit maximization logic” by “explicitly including the interests of stakeholders into their governance structures” (Waldner & Rasche, 2023). The evolution wouldn’t have been possible without the company’s core efforts in embedding its mission directly into the core of the consumer experience. Tony’s does so by choosing to sell unevenly divided chocolate bars as a striking metaphor for the unequal distribution of profits within the global cocoa industry (Tony's Chocolonely, 2023b). 

  1. The Sustainability Advantage of Being Small

As a small-to-medium-sized enterprise (SME), Tony’s Chocolonely exemplifies the agility and personal commitment to sustainability that sets SMEs apart from larger multinational corporations (MNCs) (Avdić, 2021). According to Grimstad and colleagues, "In the SME, drives to be sustainable and responsible are much more likely to be intrinsic to the business" (Grimstad et al., 2020). In contrast, MNCs are often characterized by bureaucratic systems and structures that steer their sustainability efforts in more rigid and formal ways and that prioritize sustainability compliance over innovation (Morsing & Spence, 2019). 

Tony’s, free from such constraints, is able to embed sustainability at the heart of its operations through initiatives like the Open Chain, which aims to create a sustainable network of companies willing to purchase cocoa collectively at higher prices, so that farmers receive better pay. (Tony's Chocolonely, 2023a). As Morsing and Spence further highlight, "SMEs can be said to be ‘relational’ in their business operations, and this is a particular strength in terms of sustainability and responsibility" (Morsing & Spence, 2019). As it will be shown in the next section, Tony’s chooses a relational approach to form deep, meaningful partnerships with cocoa farmers, and this eventually allows the company to leverage responsibility and sustainability at a system level.

However, Tony’s also faces challenges inherent to being an SME as it lacks the extensive financial and operational resources needed to scale its sustainability efforts globally (Rasche, 2023). As the company seeks to expand into regions like Latin and Southern America, parts of the world where child labor and exploitation are also prevalent in the cocoa and chocolate industry, it will need to balance its agility with the operational and financial robustness required for sustainable global growth (Food Empowerment Project, 2022). This challenge will ultimately test Tony’s ability to preserve its proactive and ethical approach to sustainability and related innovative initiatives while transitioning from an SME to a MNC.

  1. A Sustainability Strategy Focused on Shared Value

The cocoa industry has been historically characterized by exploitative, captive Global Value Chain GVC structures between firms (buyers) and farmers (suppliers) throughout history (Busquet et al., 2021). Tony’s Chocolonely has been disrupting such traditional dynamics by structuring its business model around the relational type of GVC governance (Gereffi et al., 2005). This approach takes the form of direct long-term partnerships with 11 cooperatives of cocoa farmers, with the goal of fostering mutual dependency, trust, and shared value (Tony’s Chocolonely, 2023a). Not by chance, these partnerships, and the initiatives tied to them, align with all of the three mechanisms at the base of Porter and Kramer’s Creating Shared Value (CSV) framework.

The first pillar of the CSV framework is “reconceiving products and markets” (Porter & Kramer, 2011). This principle is clearly reflected in Tony’s Chocolonely’s financial commitment of paying €10.6 million in premiums to 17,740 cocoa farmers during the 2022/23 season. These premiums are 78% higher than the farmgate price in Ivory Coast and 73% higher than the one in Ghana (Tony's Chocolonely, 2023a). Beyond financial support, Tony’s Chocolonely also guarantees full traceability of its cocoa beans through its Bean-to-Bar Transparency initiative, ensuring that every bean can be traced back to the 11 cooperatives of farmers it partners with (Bean Tracker, n.d.). By doing this, Tony’s contributes to reconceiving the traditional demand that was non-carent about ethical cocoa practices by fueling the growing consumer demand for 100% traceable ethical cocoa (CBI, 2020). This holistic approach, other than providing farming communities with financial stability and hence increased resilience in relation to the challenges posed by phenomena like climate change, confers the company with increased competitive advantage (Porter & Kramer, 2011). 

Tony's operations also align with the second principle of “redefining productivity in the value chain” (Porter & Kramer, 2011). Partnerships like the one Tony’s Chocolonely endured with Satelligence are pivotal for the company in terms of quantifying the percentage of deforestation associated with cocoa production, with Tony’s achieving 0% (Tony’s Chocolonely, 2023). Avoiding deforestation not only improves Tony’s impact on biodiversity, but also creates optimal conditions for cocoa farming, increasing their efficiency and productivity (Tony's Chocolonely, 2023a). 

Lastly, Tony’s enables “local cluster development”, which is the third CSV mechanism (Porter & Kramer, 2011). This takes shape through investments in infrastructure, education, and community development in cocoa-growing regions, designed to generate positive ripple effects within the local socio-ecological systems (SES) by creating holistic long-term sustainable development within these ecosystems (Kennedy, 2024a). These system-wide community efforts by Tony’s and the consequent systemic ripple effects exemplify hence how economic upgrading can go hand-in-hand with social upgrading in the creation of a model that benefits both the business competitiveness and the well-being of targeted ecosystems and communities (Barrientos et al., 2011).

As Tony’s continues to scale, it faces the ongoing challenge of maintaining its commitment to sustainability while ensuring its products remain affordable. The company's efforts to finance its sustainability initiatives, along with external pressures like the global decline in cocoa supply, have led to increased production costs, ultimately resulting in higher prices for its chocolate bars (Huij, 2024). These higher prices can make Tony’s products less accessible to price-sensitive consumers, potentially limiting its market reach and hence limiting the creation of shared value for its customers (Trotman, 2024). Beyond the customer aspect, striking the right balance between affordability and sustainability is crucial for Tony’s as it seeks to reverse its financial loss of €2.3 million in the 2022/2023 fiscal year (partly attributed to absorbing increased chocolate prices) while staying true to its ethical mission (Tony’s Chocolonely, 2023). 

  1. Redefining Legitimacy Through Comparative Institutionalism

Tony’s Chocolonely’s ability to operate across diverse global environments can be better understood through the concept of institutional distance, which refers to the differences between the institutional environments of the home and host countries (Kostova, 2020). Comparative institutionalism directly relates to institutional distance by focusing on the way components of national institutional systems such as economic models, and legal frameworks interact and complement one another, emphasizing that both SMEs and MNCs must understand the unique institutional configurations of each country to navigate these differences successfully (Kostova et al., 2020). In particular, to manage institutional distance, Tony’s should align its strategies with the institutional systems of countries like Ghana and Ivory Coast, regions where the socio-economic systems tolerate weak labor protections and corruption within the cocoa industry (Anti-Slavery International, 2004). Aligning its resources and strategies with local institutions would ensure that Tony’s comply with regulatory and normative expectations and hence gains legitimacy.

Instead of merely seeking to fit into the established institutional system, Tony’s strives to transform it, prioritizing long-term ethical reform to gain wide long-term over local short-term local legitimacy. By implementing the Child Labor Monitoring and Remediation System (CLMRS), Tony’s introduces global labor standards that confront and disrupt the local practices that have normalized unethical labor conditions, in particular when it comes to child labour. By training local facilitators to identify and respond to cases of child labor, Tony’s offers hope for a brighter future for the 1.56 million Ghanaian and Ivorian children trapped in child labor, giving them a chance to go to school and hence break free from exploitation (Tony's Chocolonely, 2023a). This proactive stance aligns closely with DeBerge’s assertion that businesses, being considered more and more responsible for governance of Global Value Chains, must extend their corporate responsibility boundaries for tackling unethical practices in the value chain (DeBerge, 2024). 

However, Tony’s commitment to exceeding local standards could sometimes be perceived as imposing foreign values, potentially creating friction with local stakeholders who may feel actually alienated or overwhelmed by the company’s strict ethical demands, or who simply feel threatened by the company as they want corruption to continue to persist (Maryville University, 2021). Tony must be careful when spreading its ethical practices and principles across different regions as hypothetical disconnects could hinder Tony’s long-term effectiveness in building trust and achieving widespread local and global impact.

  1. Conclusion: Crafting a Future Where Chocolate is Enjoyable for All

To conclude, this essay demonstrates that Tony’s Chocolonely is more than just a chocolate company, as it is a pioneer in championing strategic sustainability initiatives that are progressively eradicating the detrimental institutional realities of West Africa and will ultimately lead to reaching shared value and positive systemic change in the whole cocoa and chocolate industry.

As Tony’s continues to grow, it faces the critical challenge of expanding its impact across new institutional landscapes while staying committed to its mission. To successfully do this, Tony’s should adopt a multi-pronged strategy that includes forming partnerships with local governments and NGOs to strengthen regional enforcement of labor laws, while continuing to invest in technology and infrastructure to link and enhance traceability and transparency throughout the whole supply chain. Additionally, as it transitions from an SME to an MNC, Tony’s should explore innovative financing models to support its growth without compromising financial stability. Finally, for maintaining a balance between ethical sourcing and competitive pricing, Tony’s will have to create stronger ongoing dialogue with consumers to justify higher costs, as well as increase efforts on strategic marketing to reinforce the value of responsible consumption.

As the last summarizing notes, it can be stated that the company’s sustainability and positive impact journey it experienced up to now are a clear demonstration for both the industry and, in general, for society at large, that building a fairer chocolate industry where profits are equitably distributed among all stakeholders is within reach, one chocolate bar at a time. 


7. References


 
 
 

Comments

bottom of page