Tony’s Chocolonely Scales Impact Model While Delivering Record Growth

Tony’s Chocolonely, the impact company that makes chocolate, has published its
latest annual FAIR report for
2022-23 — which shows it was able to pay its highest farmer premiums to date,
continued to lower the rate of child labor, confirmed its supply chain is
deforestation free, and welcomed six new corporate partners dedicated to
furthering its
mission
of delivering 100% slave-free
chocolate.

According to the report, more than 17,000 farmers (+20 percent YoY) now benefit
from Tony’s 5 Sourcing
Principles —
including receiving living-income pricing for all cocoa sold via Tony’s Open
Chain — an industry-led initiative that’s
helping chocolate brands transform their supply chains through transparency. The
company also reports a record €28m (+23 percent YoY) rise in chocolate revenue,
reaching an annual revenue of €150m.

In 2023, Tony’s unveiled its new legal structure — called Tony’s Mission
Lock
— to ensure its impact mission, its 5 Sourcing Principles and its core values
cannot be amended without approval of the new governing structure; overseen by
three, independent Mission Guardians — effectively and irrevocably locking
in Tony’s mission for as long as the company exists.

“As an impact-led company that wants to drive change across the whole industry,
we must prove that ending exploitation of West African farming families can
come in parallel with good returns for shareholders, impactful careers for
employees and care for our planet,” said Chief Chocolonely Douglas
Lamont. “Our results this
year demonstrate yet again that partnering with others in the cocoa supply chain
and balancing the needs of all our stakeholders is both the right thing and the
smart thing to do, to build a successful impact company over the long term.”

Higher farmer incomes and less child labor

Millions of cocoa farmers in West Africa receive too little for their
cocoa,
denying them a living income and exacerbating poverty, illegal labor and
deforestation. Over 1.5 million children work illegally on cocoa plantations;
forced labor affects 30,000 individuals; and 80-95 percent of rainforest in
Côte d’Ivoire and Ghana has already been lost since 1955, with one-third
caused by cocoa production.

In 2022-23, the premiums paid upped the cocoa income earned by farmers supplying
to Tony’s Open Chain in Côte d’Ivoire by 51 percent. This is a direct result of
both Tony’s and its Mission Allies (other brands sourcing cocoa via Tony’s
Open Chain) paying the Living Income Reference
Price
(LIRP) — which is higher than the national farmgate price and the Fairtrade
price, enabling
farmers to reach a living income. Maintaining the LIRP regardless of national
cocoa prices could be a potential game-changer for farmers if adopted
industrywide. Currently 17,740 farmers — 20 percent more than last year —
benefit from living income cocoa prices thanks to Tony’s Open Chain.

Partner co-operatives within Tony’s Open Chain showed a significantly lower
prevalence of child labor — at 10.5 percent versus the industry average of 46.7
percent. Encouragingly, Tony’s long-term partner co-ops (3+ years) have an even
lower rate of 4.4 percent — demonstrating the ability to effectively reduce
child labor if Tony’s 5 Sourcing Principles are successfully applied.

Record revenue growth and strong momentum

A record absolute net revenue growth of +€28m (+23 percent) took annual net
revenue to €150.2m. Key growth contributors included a successful launch into
the chocolate snacking market with Tony’s Lil’
Bits and
particularly strong revenue growth in the UK, the US and Germany. As
Tony’s continues to invest ahead of the curve (reflected in an EBIT of -€2.7m)
to bolster its growth momentum across multiple markets, the company strengthened
its balance sheet through a €20m investment from existing shareholders in June
2023.

Lower carbon footprint

Detailed satellite mapping and deforestation reviews have confirmed that Tony’s
supply chain is deforestation free, resulting in 87 percent lower emissions in
Ghana and 95 percent lower emissions in Côte d’Ivoire than most other cocoa sold
in the same region. To go further, the company signed up to the maximum scope
1&2 science-based emission-reduction target (42 percent by 2030 for SMEs).

More partners on a change mission

Tony’s Open Chain also welcomed six new Mission Allies — with the recent joining
of Dutch variety chain HEMA and
Jumbo, the Netherlands’ second-largest supermarket
chain, marking the participation of most major Dutch grocery groups – resulting
in a bigger share of 100 percent traceable cocoa that enables a living income on
retailer shelves.

As Tony’s Open Chain expands, the company announced a new impact promise —
“Together, we’ll end exploitation in cocoa” — to bring to life the wider
scope of work involved in Tony’s 5 Sourcing Principles. Building on Tony’s
original “slave-free” mission, the evolved statement targets all interconnected
forms of exploitation in the cocoa supply chain — including ensuring a living
income and combatting rampant deforestation, whilst acting as a rallying cry to
build an industry-wide change coalition.

“Tony’s Open Chain enables cocoa-buying brands to embrace our mission of ending
exploitation in cocoa,” Open Chain Lead Joke
Aerts says in the report. “It allows
other companies to adopt Tony’s 5 Sourcing Principles, so that together we can
make a bigger impact in Ghana and Côte d’Ivoire.”

Tony’s invites more companies to join in its ambition to end exploitation in
cocoa together, by becoming Mission Allies and sourcing cocoa beans through
Tony’s Open Chain. In doing so, their beans are sourced according to Tony’s 5
Sourcing Principles from communities where the Child Labor Monitoring and
Remediation System is fully implemented.