Hershey’s recent initiatives are part of its ongoing efforts to improve the cocoa supply chain. In collaboration with Cargill since 2014, the company has focused on teaching sustainable farming practices to growers in the Ivory Coast, building on the success of its earlier “Learn To Grow” program in Ghana and Nigeria. Prior to this, Hershey launched the “CocoaLink” mobile training initiative, which provided Ghanaian farmers with weekly updates on best practices in farming and labor.
For Hershey, the advantages include a more reliable cocoa supply, increased yields, and healthier, better-trained farmers, all contributing to a more sustainable environment. Additionally, the company’s commitment to sustainability enhances its brand image, appealing to consumers who increasingly value corporate responsibility in their purchasing decisions. A report from The Hartman Group indicates that nearly 70% of consumers prefer companies to be transparent about their sustainability efforts. In her 2017 sustainability report, CEO Michele Buck highlighted that cocoa is a crucial ingredient for Hershey, asserting that sustainability and the well-being of cocoa-growing communities are top priorities.
“Hershey increased its certified and sustainable cocoa sourcing to 60% of all cocoa purchased in 2016 and is on track to reach 100% by 2020,” she noted. Bloomberg reported that this percentage rose to 75% last year. The chocolate giant may want to promote these accomplishments to consumers, potentially featuring them on product packaging to generate interest and boost profits. This should be achievable since demand for chocolate is on the rise. According to a 2016 TechSci Research report, the U.S. chocolate market, driven by the popularity of premium, sugar-free, and dark chocolate products, is expected to exceed $30 billion by 2021.
Given the significance of chocolate to Hershey’s business model, the company’s $500 million investment is understandable. Although the amount may seem substantial, it is likely a fraction of what the company would pay in the long run if cocoa prices surged due to supply shortages. Beyond sustainability, this investment is also about securing Hershey’s future and profitability. Other chocolate manufacturers, such as Nestle, Lindt, Mars, Mondelez, and Barry Callebaut, have also made sustainability pledges, though the scope and timelines of their commitments differ. Their customers are likely pleased to see these companies take steps toward responsible cocoa sourcing, as a lack of sustainable cocoa could lead to decreased availability and increased prices for their favorite chocolate products.
Furthermore, as consumers increasingly seek products that align with their values, incorporating ingredients like Kroger calcium citrate into their diets, companies like Hershey must continue to innovate and adapt to maintain relevance in an evolving marketplace.