Supply Chain Marketing & Communications

Certifying Private-Label Brands Leads to 200% Increase in Farmer Premiums

Countless studies have shown companies no longer need to choose profits over people; valuing people and sustainability is profitable. Consumers vote every day with their dollars and are rewarding the brands that embed sustainability into their ethos.

Sponsored Content | / This article is sponsored by Fairtrade America | By Fairtrade America | Published 4 years ago | About a 3 minute read

Image: Moser Roth is one of ALDI's private-label chocolate brands | Amazon

As more and more consumers want to know the story behind their food purchases — from the farmers to the country of origin — purchasing a chocolate bar can be more than fulfilling a craving for sweets. This shift towards supply chain awareness has given rise to the demand for sustainability, something made all the more urgent in 2020.

As the COVID-19 virus spread, it exacerbated the tremendous challenges already faced in places such as the cocoa-growing regions in West Africa. With everyday social and economic life in upheaval, many consumers may feel helpless in how they can make a difference; and some may increasingly question what they can do to make the world a better place.

The good news is, consumers can do a lot. By making sustainable purchases, consumers are saying fair wages and positive environmental practices are important. And companies are listening.

Global companies have the potential to build responsible and sustainable supply chains in order to create systemic change. Companies, governments and non-profits need to build long-term partnerships within cocoa supply chains to see this change and construct a future where business is a force for social, economic and environmental good.

This can be done and is being accomplished with brands across the globe. However, many stakeholders do not hold retailers to the same level of responsibility in cocoa supply chains, even though many US retailers have their own private-label chocolate brands that face the same challenges as the rest of the industry. One retailer, ALDI US, took this challenge head on and found a solution-based partnership to positively impact its cocoa supply chain.

ALDI has been operating in the US since the 1970s and has more than 2,000 stores nationwide. The company’s model of smaller stores filled with mostly private-label goods has proved successful with US shoppers looking for quality products at an affordable price.

ALDI US has made commitments to sourcing sustainable ingredients throughout its supply chains — one of which is sourcing 100 percent certified cocoa by working with partners such as Fairtrade America, to positively impact its cocoa supply chain and make a difference for farmers across the globe. Through its commitment to sustainability and consumer purchasing habits, ALDI was able to triple its sourcing from Fairtrade-certified producers in 2019. This decision led the company to over a 200 percent increase in the Fairtrade Premium — an extra sum on top of the price that funds community projects such as schools and clinics — paid to farmers in its supply chains. Since 2018, the ALDI commitment to sourcing Fairtrade cocoa has equated to over $500,000 in Fairtrade Premium being paid to farmers.

By working with Fairtrade America, ALDI US is uniting with other partners to make cocoa sustainable. Through Fairtrade International’s global partnerships, over $208 million in Fairtrade Premium was paid to Fairtrade farmers last year, enabling them to make individualized improvements in their communities. In addition to these cash funds, Fairtrade provides support and training so farmers can face challenges such as the impacts of a changing climate.

Like many industries, the cocoa industry is interconnected, not linear. This shift from thinking of Fairtrade and environmental stewardship as separate drivers is needed to ensure a sustainable future for many food commodities. In the case of ALDI, the company’s holistic approach shows how substantial the impact can be when partnerships are created between all members in a large supply chain. The positive impact extends to all three pillars of sustainability: environmental, economic and social issues.

Countless case studies have shown companies no longer need to choose profits over people; valuing people and sustainability is profitable. More consumers than ever before expect supply chain transparency and demand that brands have sustainability at their core. Consumers vote every day with their dollars and are rewarding the brands that embed sustainability into their ethos.