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Bitter sweet - not so fairtrade chocolate
Transcript of Bitter sweet - not so fairtrade chocolate
Overview of the Case
"Everyone loves Chocolate. But for thousands of people, chocolate is the reason for their enslavement."
Aftermath of CNN Reports
What is CSR? Who are the globally conscious consumers and why do they matter?
2) Who is Responsible for Fair trade in the chocolate market.
4) If you were working in the chocolate industry as an international marketing manager and were able to influence decisions, what would you suggest and why?
Bitter sweet - not so fair trade chocolate
Chocolate is a treat enjoyed across the global in many different forms, worth $117.6 billion dollars in 2012.
little did the consumers know that these everyday treats were being sourced from highly unethical practices that involved child labor, slavery and high levels of corruption.
In 2012 CNN reported on these practices and rattled consumers opinions on major brands such as Nestle, Kraft - Cadbury and Hershey.
There was a worldwide movement by consumers demanding that these large corporations stop sourcing their Cocoa from such horrible conditions and give back to these communities.
The reaction to these reports saw the emergence of the globally socially conscious consumer who expect that companies give attention and take care of all the stakeholders involved within their value chain.
This is also gave rise to major companies adopting the Fair trade partnerships as damage control for their brand image in their consumers perspective.
Being a global brand means that you are supported by global consumers. Global consumers are conscious of their surroundings and expect the companies that they buy from to have a strong sense of global corporate social responsibility. It is no longer good enough in a consumer’s eye, to be dedicated to your consumer market whilst setting such terrible conditions for entire communities in their supply chain.
When Global Chocolate brands were pinned setting these conditions in the cocoa farms in Africa, had they not acted quickly, they would have lost market share very quickly. There was potential for consumers to boycott entire brands and stick to chocolate brands that they know is sourced responsibly.
FAIRTRADE labeling ORGANIZATION (FLO)
is the worldwide standard setting and certification organization for the cocoa market.
independent body of the FLO which is responsible for the global certification and verification of Fairtrade products, which includes the cocoa industry.
Fair trade: Today, more than six million people - farmers, producers, workers and their families - in 70 countries benefit from the unique, independent Fairtrade system. Fairtrade provides farmers and workers in developing countries with a fair price (the Fairtrade Price) for their produce, helping protect them from damaging fluctuations in world market prices by setting price floors and price premiums to communities.
CSR stands for Corporate Social Responsibility is the term given to aspects of a company's actions and what they do to encourage a positive impact through its activities on the environment, consumers, employees, communities, stakeholders and all other members of the public sphere who may also be considered stakeholders.
Basically, a company with strong corporate social responsibility would have actively sought out suppliers for cocoa that use fair and legal employment conditions and that didn’t contribute to extreme poverty in the West African region.
If they knew the region from which they sourced their raw materials was known for such extreme labour conditions, they would have carried investigations into whether or not their suppliers are doing the same and found other farms to source their raw materials from. This corporate social responsibility is expected from consumers as it sets a standard of social and environmental awareness in large corporations.
Suggestion: A big marketing plan to improve the image of the firm. This includes a campaign and public statements by the PR department which includes the promise to find a solution to the issue. Then enforceable contracts with suppliers would be made, in which a higher price for the raw materials is specified in turn for the ethical treatments of chocolate farm workers (Age limitation and FAir payment). If the supplier turns out to be unable to meet the standards the chocolate brand should look for other suppliers. Regular visits be representative to check if the standards are met, are also essential.
And Why? because the brand reputation is extremely important and as soon such scandals are revealed, decision have to be taken, in order to avoid losing customers to brands that are perceived to behave more ethical