Hershey’s and the Extra Bitter Future of Chocolate

Everyone loves Hershey’s Chocolate with a marshmallow and graham cracker over a campfire, but by 2050, due to global warming, we might see drastic shortages in their main ingredient, Cocoa! Without long term sustainable and innovative actions by the company, we might be witnessing the end of chocolate for the masses and the s’mores that come along with it.

Cocoa, the world’s most stubborn tree –

According to the World Cocoa Foundation, the Cocoa tree (which grows the cocoa bean) can only grow in very specific environments, typically humid, rainy tropic areas found within only a tiny 5-degree latitude range on earth.  About 70% of world production comes from West Africa, and 1/3 of world production comes from The Ivory Coast.[i]  The rest of cocoa production comes primarily from South America and the Philippines.  The top producing countries are also some of the poorest in the world.  In Ivory Coast and Ghana (world #2 producer), 46% and 24%[ii][iii] of the populations are below the poverty line, and ease of doing business is 142 and 102 (out of 190)[iv][v].  In addition, both of these countries are very likely to be massively affected by climate change over the next 30-40 years.  According to Peter Läderach’s 2013 paper on the effects of climate change in these two countries, rainfall will increase insignificantly by 2050, while temperatures will rise by a full 2.0 degrees Celsius.  The increase in temperature will reduce humidity and increase the likelihood of droughts.  As a result, land suitable for cocoa production will decrease drastically (See figure below).[vi]

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As one of the largest buyers of Cocoa, Hershey’s has begun to, and needs to continue to take drastic action to create sustainable practices in these countries, and attempt to mitigate the effects of global warming, through a combination of agricultural innovation, structural investments and sustainability initiatives.

Agricultural Innovation –

The cocoa tree is a notoriously slow grower, highly susceptible to disease, and extremely hard to grow outside its very limited biome.  While conventional hybrid breeding has been prevalent in the industry for years, led by Trinidad’s Cocoa Research Center, to date there has been no attempt to create a GMO cocoa tree that could hopefully leapfrog all current breed’s in their ability to survive and flourish in the future.[vii] Innovation in this area might not seem politically feasible today due to the EU ban on GMO crops, however Hershey’s sponsored the sequencing of the cocoa genome in 2010 with results published in nature.[viii] In the United States, Hershey’s primary market, GMOs are far less of a concern, so hopefully high yield, disease and drought resistant GMO cocoa trees can be grown by Hershey’s suppliers and ensure the survival of affordable chocolate for years to come.

Structural Innovation –

Hershey’s is currently also on the ground in The Ivory Coast and Ghana teaching their suppliers how to best grow and maintain their farms with the latest science and techniques.  Hershey’s “Learn to Grow” program which is part of the overall “CocaoAction” program, is helping farmers in Ivory Coast replant old inferior cocoa trees with the best hybrids, teaching them methods for maximizing yields and helping them make the most out of fertilizers and other materials.[ix]  This program has a joint effect of maximizing yields for Hershey’s today and into the future and at the same time helps the farmers make a better living. Hershey’s needs to continue these programs, and drive GMO or new hybrid breeds that will better adapt to changing climate conditions.

Sustainability Initiatives –

Hershey’s has been a contributor to global warming in the past, however they have made major strides over the past few years to enact change in their sustainability practices.  Hershey’s signed a commitment in 2014 to purchase 100% of its palm oil from sustainable sources, rather than palm oil created from deforestation.[x]  In addition, they enacted aggressive recycling policies, built a LEED Gold factory in their headquarters town of Hershey, PA, and committed to reduce their greenhouse gas emissions by 50% between 2009 and 2025.[xi]  Overall, these changes only make the smallest dent in overall greenhouse gas emissions, it signals that Hershey’s is ready to fight against human made climate change, for their own sake and for the planet’s.

For Hershey’s, climate change is fairly inevitable, however the aggressiveness in which they respond to the challenge is so important, because after all, there is no substitute for chocolate.

 

Word Count – 730

[i] World Cocoa Foundation. “Cocoa Market Update” http://www.worldcocoafoundation.org/wp-content/uploads/Cocoa-Market-Update-as-of-4-1-2014.pdf Accessed November 2016

[ii] World Bank. “Statistics on Ivory Coast” http://data.worldbank.org/country/cote-divoire Accessed November 2016

[iii] World Bank. “Statistics on Ghana” http://data.worldbank.org/country/ghana Accessed November 2016

[iv] Doing Business Index. “Ivory Coast” http://www.doingbusiness.org/data/exploreeconomies/c%C3%B4te-divoire Accessed November 2016

[v] Doing Business Index. “Ghana” http://www.doingbusiness.org/data/exploreeconomies/ghana/ Accessed November 2016

[vi] Laderach, Peter et al. “Predicting the Future climatic suitability for cocoa farming of the world’s leading producer countries, Ghana and Cote d’Ivoire” Climatic Change (2013) 119. http://link.springer.com/article/10.1007%2Fs10584-013-0774-8 Accessed November 2016

[vii] Rupp, Rebecca. “Can GMO’s Save Chocolate?” National Geographic. http://theplate.nationalgeographic.com/2015/03/18/can-gmos-save-chocolate/ Accessed November 2016

[viii] Argout, Xavier et al. “The genome of Theobroma cocoa” Nature 43, 101-108 (2011).  http://www.nature.com/ng/journal/v43/n2/full/ng.736.html, Accessed November 2016.

[ix] Hershey’s. “Learn to grow program” https://www.thehersheycompany.com/content/corporate/en_us/news-center/news-detail.html?1980311 Accessed November 2016

[x] Hershey’s. “Palm Oil Press Release” https://www.thehersheycompany.com/content/corporate/en_us/news-center/news-detail.html?1970779 Accessed November 2016

[xi] Hershey’s. “Enviromental Sustainability” https://www.thehersheycompany.com/en_us/responsibility/good-business/environmental-sustainability.html Accessed November 2016

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5 thoughts on “Hershey’s and the Extra Bitter Future of Chocolate

  1. Really interesting Justin, thanks for sharing. I agree Hershey is taking important steps here. I was actually involved in exploring a partnership with them that fits into your example of Structural Innovation initiatives. I was impressed by their progressive views on working with farmers and suppliers. I wrote about it over at “The missing link to the last mile: Overcoming communication barriers to climate resilience” https://digital.hbs.edu/platform-rctom/submission/the-missing-link-to-the-last-mile-overcoming-communication-barriers-to-climate-resilience/

    1. #promoteyoself

  2. Thank you for sharing your thoughts on Hershey’s, a brand we have grown up savoring! Your analysis of the threat to cocoa supply will likely have significant implications to not only chocolate producers, but several food brands that rely on chocolate as an ingredient. It is dreadful to imaging a world without chocolate!
    Given Hershey’s marque product is its individually wrapped miniature chocolates, I am curious to see if the company has introduced any packaging innovation, use of recycled packaging material or waste reduction targets for paper and aluminium use. For example, well-reputed brands such as Mars have systematically increased the use of recycled material in their packaging. Along with targeted measures to make packaging more ecofriendly, Hershey’s could also benefit from waste management and water reduction at its production units.

  3. I also agree that Hershey’s isn’t doing enough to save the key ingredient of their products. I honestly feel like in order for the world to be more sustainable, everything has to be more expensive and therefore become less in demand. I think this applies to chocolate, coffee, electronics, clothing, etc. When your scale of production is so large in quantity, it’s just impossible to make a big change to fight climate change.

    I’m also concerned that cocoa comes from developing economies, but Hershey’s consumers are mostly in the U.S. We saw this with Ikea as well (and almost all big corporations), where the impact of climate change is felt in the emerging economies the most in order to serve the customers in developed economies.

  4. Thanks for the article, Justin! Hershey wouldn’t be the same without the scent of chocolate permeating the air. I have been slightly depressed reading these blog posts about how three of my favorite things: beer, wine, and chocolate are basically on the brink of extinction due to global climate change. I really think GMO is the only way to go in the short term. What do you think the feasibility (in the not too distant future) of huge capital investments in extensive greenhouses and biodomes that can meticulously monitor the environment and produce the optimal conditions for cocoa trees? I personally think it would be unmanageable and the cost would far outweigh the price, but I do believe some form of hydroponics, at least for more vital plants, will eventually be a large part of our future.

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