Tony’s Chocolonely Scales Impact Model While Delivering Record Growth

The impact-driven chocolate brand doubled farmer premiums, further reduced child labor and environmental impacts, and continued to grow its coalition of Mission Allies.

Published 8 months ago | About a 5 minute read

Image: Tony's Chocolonely

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.