Enhancing traceability in the cocoa sector
Sustainability is extremely important in the cocoa sector. And to meet the growing sustainability requirements, improving traceability is crucial. A traceable product is one you can follow at all stages of the supply chain. Digital solutions have become vital to achieving complete traceability.
Why is traceability important for a sustainable cocoa market?
Traceability is important as it ensures that sustainability claims are reliable, making it necessary for the cocoa sector to achieve its sustainability goals. It ensures that the criteria of the European market are met and helps tackle urgent topics in the cocoa sector, such as:
- Fair income and less poverty;
- Stopping child labour;
- Stopping deforestation; and
- Fighting climate change.
Countries producing and consuming cocoa already have stricter supply chain requirements. This is partly due to national sustainable cocoa initiatives’ goals. Examples of initiatives include:
- The German Initiative on Sustainable Cocoa;
- The Swiss Platform for Sustainable Cocoa;
- The Belgian Beyond Chocolate; and
- The International Cocoa & Forest Initiative.
These initiatives share good practices, which companies then implement to contribute to sustainability goals.
How digital tools can help improve traceability
Digital solutions provide a way to improve traceability in the value chain. These solutions give better access to reliable information and link chocolate bars to cocoa bean farmers. Digitalisation provides buyers, producers and consumers with tools to share and access up-to-date, accurate information. Digital tools allow supply chain actors to:
- Verify the geographical origin of cocoa;
- Link sustainability characteristics to specific batches of cocoa;
- Collect information on certification payments; and
- Inform and engage with consumers.
Popular traceability systems often work with cloud-based or blockchain platforms. Examples include CocoaTrace (Koltiva) and FarmerConnect. These tools track data and store information about different transactions along the supply chain. It is vital to be accurate when collecting and processing data, as these systems often rely on the quality of data collection.
Developing digital traceability systems
An increasing number of actors in the cocoa value chain want to improve traceability in the sector. Many have explored and invested in technology solutions. Ghana already has a cocoa traceability system at the community level, but not at the farmer level. The nearly-finished Cocoa Management System (CMS) provides a solution. The CMS is a database of all Ghanaian cocoa farmers and all transactions made by authorised cocoa industry organisations. This improves traceability.
Cocoa traders and chocolate manufacturers have also developed traceability systems. They use software to track cocoa beans, for example. With these systems, companies can achieve their sustainability goals and have more control over their supply chain. Examples of digital traceability tools include:
- Beantracke –Tony's Chocolonely;
- Olam Direct – Olam;
- CocoaWis – Cargill;
- Katchile – Barry Callebaut; and
- Koa's blockchain-based system – Koa.
Changes for cocoa exporters
The European Union (EU) puts legislation and policies in place to ensure that exporters source products responsibly and sustainably. An example is the EU regulation on deforestation-free products. The EU regulations affect the demand for sustainable cocoa in the EU market. The Cocoa Barometer Consortium reports that transparency and accountability are becoming more and more important. Soon, traders may have to prove the origin of the cocoa they import into the EU. Using digital traceability tools can help you prove the origin of your products. This will help you get access to the EU market and strengthen your position as a trading partner.
For cocoa exporters:
- Consider using a (digital) traceability system;
- Define your priorities;
- Develop a strategy for the efficient use of traceability tools;
- Research more than one digital solution; and
- Find the best fit for your company before deciding to use or invest in a specific tool.