How Nestlé is making its cocoa more traceable

With sustainability high on policymakers’ agendas, the deadline for the implementation of the European Union Deforestation Regulation (EUDR)​ is fast approaching. Chocolate manufacturers must be ready.

Swiss multinational Nestlé, with programmes such as the Income Accelerator in Côte d’Ivoire​, aims to make its cocoa supply chains both more environmentally sustainable and more transparent. But what are the barriers to full implementation? And can consumers be sure that they’re eating sustainable chocolate?

How is Nestlé making its cocoa more sustainable?​Nestlé, with its Income Accelerator Programme, is aiming to increase the income, and thus improve the livelihoods and lives of cocoa farmers and their families. In so doing, its cocoa – and chocolate – becomes more sustainable.

The Income Accelerator started at a pilot level in 2020 followed by a launch proper in 2022. The programme encourages cocoa farmers to learn more productive farming practices, such as pruning, and take part in agroforestry practices, through cash incentives. Furthermore, they are incentivised to enrol their children in school and develop alternative income streams.

Nestlé’s Income Accelerator works with farmers to develop farming practices such as pruning. Image Source: NestléFor taking part in each of these activities, each farmer receives €100 each year, followed by an additional €100 for completing all four of the tasks, making the total €500. This goes down to €250 after two years.

Cocoa sourced from the programme is traceable, meaning that it can be sourced back to its farm of origin. This makes it more able to conform to the EUDR.

How is Nestlé ​ensuring its cocoa is traceable?​Traceability is a big part of the EUDR. In order for a commodity to be EUDR-compliant, regulators must be confident that they can trace it back​ from the shop all the way to its source – in this case cocoa farms.

“It begins with farmers,” said Darell High, cocoa manager at Nestlé. “We know all the farmers in the accelerator, we’ve mapped the farms. This means that someone, [for example] a lead farmer, has walked round the perimeter of all the fields with a GPS unit, mapping the farms so we know where they are. The traceability starts from there.

“They’re selling the cocoa to the first buyer, which is the farmer cooperative​; and then the cooperative sell it to [cocoa supplier] Cargill, who then transport it to York.

“So that’s the core of it. We know where the farmers are, we know where the fields are, and we can trace the cocoa from there.”

Mass balance vs. Identity preserved (IP_There are a number of different ways of sourcing cocoa sustainably. Cocoa sourced through mass balance, according to Rainforest Alliance, is RA-certified cocoa mixed within the production process with cocoa not certified by them. Thus, products labelled with the RA logo won’t necessarily contain certified cocoa, but the full amount of certified cocoa was paid for by the manufacturer to ensure sustainable production. According to the RA, all major international sustainability initiatives use a form of mass balance at some point. The advantages of mass balance are that it’s more affordable than setting up a segregated supply chain between certified and non-certified cocoa.

The identity preserved (IP) sourced cocoa, on the other hand, ensures that the sustainably sourced cocoa is kept separate from the non-certified cocoa throughout the entire supply chain, meaning that consumers can not only be more confident the chocolate they’re eating is sustainably sourced, but can trace it all the way back to the farm where it is sourced from. However, creating segregated supply chains requires a lot of investment.

Mixed identity preserved means the cocoa is only IP sourced cocoa, but different origins are mixed together.

According to Kerry Daroci, cocoa sector lead for the non-profit Rainforest Alliance (RA), which certifies cocoa farms making cocoa sustainably, “Nestlé is moving to the highest level of traceability,” with cocoa from farmers participating in the Income Accelerator programme remaining separate throughout the entire supply chain.

“At this level of traceability, cocoa from specific farmers – in this case farmers participating in the Income Accelerator Programme – can separate throughout the entire supply chain from farm group all the way to that final packaged KitKat.

“So the RA traceability system enabled data to follow that cocoa throughout the supply chain, providing more information about where and under what conditions the cocoa was produced.

“Nestlé can monitor and evaluate sustainability progress throughout the supply chain. That enables Nestlé to identify areas of potential improvement or address any risks that might arise throughout the supply chain, and it also shows a commitment to due diligence. It can also help Nestlé to comply with upcoming and new regulation, which is important in the space right now.”

Such traceability also, she suggested, builds consumer trust. This is important, given that consumers are increasingly keen on knowing and understanding where their food is sourced, and if it’s being produced sustainably.

In fact, in 2024, the multinational expects 45,000 tonnes of cocoa to come from farmers enrolled in the Income Accelerator Programme alone, and be fully traceable back to farms enrolled in the scheme.

Living incomeOnly a small fraction of cocoa farmers earn living income, the level of income needed to live a decent life.

According to Nestlé’s Darrell High, land size is a key barrier to achieving full living income. “You get a range of farm sizes. The average is about three and a half hectares. You get some farms down to one hectare. If you’ve got one hectare farm and you’ve got seven to eight people in a household, achieving a living income will be difficult. But you can make life better. We can close that gap, but it’s very difficult to completely close it because of the land size.”

Another key issue is climatic conditions affecting cocoa bean yields. “Climate change is having a really big impact on that. Heat, rainfall or lack of rainfall is really affecting yields. You look across the cocoa producing regions, you can see that yields are really affecting income,” the RA’s Daroci told FoodNavigator.

As of 2023, 85% of Nestlé’s cocoa was sourced by farmers supported through Nestlé Cocoa Plan, which was launched in 2009 to boost cocoa’s sustainability, and of which the Income Accelerator is a part. By 2025 it aims for 100%.

Nestlé is committed, suggested Cheryl Allen, head of confectionary sustainability and health for Nestlé UK and Ireland, to segregating the cocoa that is sourced sustainably throughout the supply chain, and increasing the amount that is segregated each year. “We see this as being increasingly important in helping us provide greater transparency for a wide range of stakeholders,” she said.

Does Nestlé’s cocoa conform to the EUDR?​Completely traceable cocoa, explained the RA’s Daroci, conforms fully with the EUDR. The ‘mass balance’ cocoa, where RA-certified cocoa is mixed with non-certified cocoa in the supply chain, has the potential to conform to the EUDR as well, although it depends, she said, on the suppliers.

Cocoa traceability helps Nestlé conform to the EUDR. Image Source: Getty Images/Milequem DiarassoubaIdentity Preserved (IP) cocoa “does meet a very strict level of traceability, so that would be something that is in line with what EUDR regulations expect and require.

“’Mass balance’ cocoa does not necessarily mean that it’s not EUDR compliant. Rainforest Alliance mass balance certified cocoa can still meet EUDR requirements as long as the suppliers in the supply chain are able to trace back cocoa. Sometimes that’s done totally separately from certification, so as long as suppliers have some sort of system in place to do that sustainability. They’re the ones bringing it into Europe and they’re the ones that initially need to present that information to the EU and trace it along the supply chain.”

Most cocoa is imported segregated, added Nestlé’s High, but mixed up in the factories of the suppliers, where it becomes mass balance.