Chocolate production and the challenge of supply chain optimization

Posted: October 21, 2024

Who doesn’t love a bite of chocolate? Gooey or dense, light or dark, pure or baked—chocolate has warmed its way into hearts and minds (yes, it has been shown to improve mood and even cognition) by making its way to Europe, having originated with the Maya. Today, the vast majority of chocolate begins its journey in West Africa, specifically Ghana and Ivory Coast, from which its supply chain meanders quite a bit before reaching the production line. Some record-keeping is done manually, and some even by hand. So how do we go about improving the sustainability of something with so little transparency?

Why is the cocoa supply chain so complex?

The cocoa supply chain is disjointed—its contributors are scattered and, in many cases, alienated from one another. A recent article in The Economist described it as “much like a high-end bar of chocolate …  complex, opaque and a little nutty.” With West Africa as the feedstock, Europe as the trader, and financial capitals like New York as backers, it’s easy to see how complex an operation it can be without even digging into issues like data and climate.

But there are multiple approaches to achieving a more sustainable chocolate supply chain, running the gamut from better traceability to data sharing to changing the ingredients themselves. And with climate change affecting forests, a clearer supply chain isn’t the only issue—increased rain, deforestation, and other climate-related effects are making harvests more precious and raising issues around decarbonization.

Transparency and traceability for chocolate production

Let’s examine the issue of supply chain fragmentation. Often, the left hand doesn’t know what the right hand is doing, making it difficult for anyone to accurately track the phases of production. Tony’s Chocolonely, a Dutch chocolate company that offers the delight of custom confectionary wrappers, has committed to 100% traceable chocolate. It does this with end-to-end supply chain visibility, documentation, and data sharing.

Tony’s purchases directly from their farming cooperatives in Ghana and Ivory Coast, and created a system called Beantracker that says what it does right on the tin—allows its partners to digitally document every bean from the farm to the port in Antwerp. The company even holds an annual kick-off to keep on the same page—from farming co-ops to producers to bean traders—and it’s working. The latest figures show it increasing revenue 23% year-over-year. All from committing to sharing data start to finish.

How can chocolate be produced more sustainably?

Another smaller player in the chocolate world has made sustainable supply chains and decarbonization its priority with a completely different strategy. Choviva, a German-based confectionery, makes its products without cocoa. It uses oats and/or sunflower seeds that go through a fermenting and roasting process very similar to cocoa, combined with sugar, plant-based fats and either milk or oat powder to give it a chocolatey taste.  

The result? The company claims it’s not trying to replace chocolate, but offer “sustainable alternative ingredient that paves the way for a more climate-friendly manufacturing.” It claims its carbon footprint generates 80% less emissions than chocolate, and that it accomplishes this using a life cycle assessment method that measures emissions throughout the producer-to-manufacturer supply chain. This information is stored in the Choviva’s cloud-based SaaS platform designed to check and assess carbon footprints for up to 50,000 products and ingredients.

Food for thought

There’s no way around some level of complexity in chocolate production—but there’s lots of room for improving the supply chain. Whether companies share data from farm to production line or sow their oats from just a few miles away, innovative approaches to manufacturing are changing the game with digital tools and new ways of thinking. And the result is record profits.