The drive to deforestation-free chocolate is happening at a time when the cocoa sector is facing major environmental issues, particularly the deforestation associated with cocoa. For companies looking to get their operations and supply chains in line with sustainable standards, the pressure has never been higher. Consumers and governments are demanding transparency, but achieving it won't be easy.
As global efforts to combat deforestation intensify, regulations like the European Union Deforestation Regulation (EUDR) are reshaping the cocoa industry. These new requirements demand unparalleled transparency and compliance, setting a high bar for sustainable sourcing. Navigating this landscape is no small feat, especially as companies adapt to traceability systems, support farmers, and align with evolving global standards.
For a detailed look at the EUDR, its implications, and how your business can stay ahead, explore: EUDR Regulation's New Extended Timeline on Deforestation-Free Chocolate.
At Luker Chocolate, we made deforestation-free chocolate a reality by focusing on ethical sourcing, building strong farmer relationships, and developing game-changing sustainability programs. Chocolate companies like yours are motivated to rise to this challenge and protect their brand's integrity. Limited traceability, the cost of sustainable practices, and changing regulations are just a few of the hurdles that can make it seem impossible.
In this blog, we'll discuss our lessons, upcoming industry regulations, and how newcomers can use these learnings to strengthen their process.
Cocoa farming provides vital income for millions, but it also drives deforestation. Together, Ghana and Côte d'Ivoire produce 70% of the world's cocoa, but they have cleared many of their lush forests for cocoa farms. Between 2001 and 2015, the clearance of land for cocoa farming eliminated a third of Ghana's forest cover and a quarter of Côte d’Ivoire's.
In this scenario, cocoa-growing countries, particularly in West Africa and parts of Latin America, are grappling with striking a balance between food security, economic needs, and the crucial conservation of forests.
For instance, Luker Chocolate grows its cocoa using agroforestry practices, where farmers cultivate a variety of trees, including cocoa, alongside other crops. This approach helps restore degraded land, support biodiversity, and sequester carbon.
Besides, our GPS-mapped farm-level tracing system, LukerTrace, maps every farm in its supply chain. The system connects satellite images and GPS data to prove or trace cocoa to specific plots on farms. This makes sure that all of Luker's cocoa doesn't cut down trees, and it lets us check compliance back to December 2020, which is what the European Union Deforestation Regulation (EUDR) requires.
Traceability is the cornerstone of compliance
Collaboration with farmers is critical
Regulations will drive innovation but require flexibility
Traceability is the cornerstone of compliance
Traceability is fundamental for meeting the growing demand for deforestation-free cocoa. Companies must demonstrate to the European Union Deforestation Regulation (EUDR) that their products have not contributed to deforestation, providing detailed documentation on the locations and methods of cocoa cultivation.
This new requirement has introduced significant challenges for many in the cocoa sector, particularly in regions where smallholder farms dominate. With the deadline for compliance set for December 2024, businesses are racing to implement robust traceability systems to avoid market disruptions in the EU.
As explained before, our traceability system employs GPS polygon mapping and satellite tracking to ensure transparency throughout its supply chain, mapping farms back to December 2020 to verify compliance with EUDR standards. Such innovations not only satisfy regulatory requirements but also build trust among consumers and industry partners. However, the industry as a whole lags behind: only 7.5% of soft commodity manufacturers worldwide can demonstrate that their supply chains do not involve deforestation. This underscores the importance of many companies implementing advanced traceability technology.
Beyond compliance, traceability has become a critical factor in brand value. Consumers increasingly prioritise sustainability, with 73% willing to pay more for products that align with their values. Transparent supply chains provide a competitive advantage, strengthening trust and loyalty. As the cocoa industry embraces these systems, it also sets a benchmark for other agricultural sectors facing similar deforestation challenges.
Collaboration with farmers is critical.
Cocoa farming’s future depends on smallholder farmers, who produce most of the world’s cocoa yet often lack the resources to implement sustainable practices. In Colombia, 90% of cocoa farms are small, family-run operations. These farmers face challenges such as limited access to technology and training, which can hinder their ability to comply with new deforestation regulations. Partnerships between businesses and farmers are essential to overcome these barriers.
To incorporate this collaborative approach, The Chocolate Dream combines education and financial incentives. It trains farmers in agroforestry techniques that integrate native trees with cocoa farming, boosting biodiversity and improving soil health. These practices can boost farmer incomes and contribute to the preservation of Colombia's ecosystems.
However, this collaboration extends beyond farming techniques. We closely collaborate with farmers to map their land and ensure compliance with regulations such as the EUDR. We provide technical support and facilitate access to resources, empowering farmers to adopt environmentally friendly practices without sacrificing productivity. These efforts illustrate how businesses can play a vital role in creating equitable and sustainable solutions for the cocoa industry.
Regulations will drive innovation but require flexibility
The EUDR and similar global regulations signal a transformative shift in the cocoa industry, compelling businesses to adopt innovative sustainability practices. However, these laws also create challenges for smallholder farmers in low- and middle-income countries, who often lack the resources to meet strict compliance requirements. The World Bank estimates that the EUDR could affect 22% of Latin America's agricultural exports to the EU, highlighting the risk to farmers' livelihoods.
We have embraced this challenge by focusing on adaptability and inclusivity. Our approach includes mapping farms, training farmers, and providing technical assistance to ensure compliance with the EUDR. We also partner with local governments and NGOs to support farmers and mitigate potential economic losses. By aligning local practices with global standards, we ensure that regulations foster sustainability while protecting vulnerable farming communities.
These regulations also encourage companies to rethink traditional farming practices. Luker’s investment in agroforestry and biodiversity projects demonstrates how innovation can align with compliance. For instance, its efforts to incorporate native trees into cocoa farms not only reduce deforestation risks but also improve yields. As the industry adapts to these changes, it can become a model for balancing regulatory demands with environmental and social impact, benefiting stakeholders across the value chain.
As the EU sets a high standard for deforestation-free policies, other regions are likely to follow suit. In North America, regulatory efforts are beginning to gain momentum. The United States has introduced initiatives like the FOREST Act, which aims to curb imports linked to illegal deforestation. Although not yet as comprehensive as the EUDR, this legislation signals a growing commitment to tackling deforestation in global supply chains.
Latin American countries, which grow much of the world's cocoa, increasingly incorporate sustainability into their agricultural policies. Colombia, for instance, has implemented national sustainability laws that align with global standards. However, these countries also face challenges in balancing economic development with environmental conservation, mainly as they work to meet the demands of markets like the EU.
In the coming years, we anticipate stricter regulations in the Asia-Pacific region. As major consumer markets like China and Japan adopt more sustainable sourcing practices, businesses in these regions are likely to demand higher levels of traceability and compliance from their suppliers. This trend mirrors global consumer expectations for ethical products and reflects the increasing influence of international sustainability standards.
These emerging regulations underscore a worldwide shift toward sustainability, compelling companies to innovate and collaborate.
The road to deforestation-free chocolate is both a challenge and an opportunity for the cocoa industry. As regulations like the European Union Deforestation Regulation (EUDR) reshape global supply chains, they push companies, farmers, and stakeholders to innovate and collaborate in unprecedented ways. Traceability, farmer empowerment, and adaptability to evolving standards are no longer optional but essential for achieving a sustainable future.
Luker Chocolate’s commitment to ethical sourcing, agroforestry, and transparent practices demonstrates that deforestation-free cocoa is attainable and can drive meaningful change for both people and the planet. These efforts align with rising consumer expectations and position the cocoa industry as a leader in sustainability.
As the cocoa industry navigates this transformative period, Luker remains dedicated to sharing insights and collaborating with stakeholders across the value chain. Together, we can redefine what it means to produce chocolate sustainably, creating a future where every bite contributes to a better world.