business development fair trade food

Equitable trade – the Malagasy chocolate experiment

When I was about ten, the highlight of the school year was a field trip to the Robert chocolate factory in Antananarivo, Madagascar. The memory of its airy white rooms and boutique full of be-ribboned chocolate boxes came back to me yesterday, when when my wife presented me with a bar of chocolate from that same factory, now for sale in Sainsbury’s in Luton.

It’s under a different name, Sambirano Grand Cru, from the Malagasy company, but a little digging reveals that it’s not only Robert (pronounced Roe-bear), it’s also the result of a fascinating movement called Equitrade.

Equitrade is related to Fairtrade, but it differs in some important ways. Fairtrade is ultimately about growers, and fair prices to small-holders and producers. A fair price for cash crops is guaranteed, but the goods themselves and hence the profits, are made elsewhere. Equitable trade aims to support the sale of finished goods, rather than raw materials, with all the added value of a completed product. This way, the majority of the profits stay within the developing economy, taxes are paid to the local government, and the whole country benefits from the trade.

To follow the example of the chocolate bar, your average Fairtrade chocolate bar costs £1,70, writes John Vidal in the Guardian. Only 5p of that sum stays in the country where the cocoa beans were grown, around 2-3% of the price you pay. Because the actual chocolate is made elsewhere, the rest goes to the developed world producers, the brand, the supplier, the retailer, and so on. Because Equitrade works to keep the whole production chain local, 51% of the retail price of a bar of Sambirano stays in Madagascar. Considerably better, I’m sure you’ll agree. (Ethical Consumer magazine rates this as the second most ethical chocolate on the market, with a rating of 16.5. For comparison, Green and Blacks scores 9.5, Cadbury’s 6.5, Galaxy 2.5 and Yorkie 0.5)

Malagasy440.jpgThere are a number of knock-on effects to Equitrade. The first is that there is a transfer of knowledge to the developing country. In this case, entrepreneurs worked with the UK’s Academy of Culinary Arts to fine-tune their chocolate for the market. The Robert factory has been producing confectionery for the local market for decades, but now produces a world-class product that can compete internationally. That expertise transfer runs all the way down through the chain to the farmers, who are using better methods and growing better beans.

Secondly, there’s real kudos for Madagascar here. Conoisseurs have known about Malagasy cocoa beans for a long time, and wider recognition of that is no bad thing. Sambirano is described as ‘one of the great chocolates of the world’ by the Seventypercent website, and is sold at Fortnum and Masons in London, while its sister Mora Mora won a silver medal at the Academy of Chocolate awards last year. That it was not just grown, but processed and packaged in Madagascar too, should be a real source of pride for a country best known for lemurs, for being poor, and for sharing its name with an animated movie. Building the reputation of Madagascar internationally is great for national pride and self-respect, and also attracts further investment, and thus further development, jobs, and economic growth.

Another important factor in Equitrade is taxes. Because a larger share of revenues stay in Madagascar, the Malagasy government gets a bigger share in tax, in this case 11% of the value of a chocolate bar. That feeds into the national coffers, and makes education, healthcare and public spending initiatives possible.

factoryinside.jpg Equitable trade is a challenge. To get Sambirano into the UK market required considerable investment in factory upgrades and modernisation, research into recipes and European tastes, streamlining supply chains and investing in better quality control at the growing end. “We wanted to make it all in the country of origin” says Neil Kelsal of Equitrade. “Yes, the whole process – farming, fermentation, drying, roasting, winnowing, grinding, mixing, refining, conching, tempering, moulding, packaging, and transportation.” That takes time, but the Malagasy company are now working to bring spices, nuts, and tea and coffee to the international market. That will be with TAF, whose coffee-roasting aromas used to waft out over the dike road into town. When I find their fine Arabica for sale in Luton, we’ll have passed another milestone for both Madagascar, and for international development.

Equitrade is still very much in its infancy. Malagasy is the first Equitrade company, and the founder has now moved full time to an Equitrade Foundation. It’s a movement to watch, and as its pioneers include Malagasy companies Robert, TAF, and TIKO, and its supporters include president Marc Ravalomanana, it’s a movement Madagascar can call their own.

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9 comments

  1. Regardng the current uncertainties with food prices and the role of ever increasing demand from China and India. There is a greater need for us to conserve and be increasingly frugal about food consumption at home.

    Simple food saving tips are things we need to get used to and practice more regularly. Most of these are common sense and can be quite creative. You can find a list of free food saving tips at sites such as http://www.foodcrisis.co.uk amongst other similar sites as well.

    We all need to contribute to a fairer and a more foodwise program for ourselves.

  2. Interesting blog – thanks!
    Global Fayre is a Fair Trade retailer based in Springfield, MO. We carry a number of Fair Trade chocolates, some of which do a better job at giving a larger share to the producing coop than others. With Divine, for instance, the growers in Ghana own one third of the production company, so I guess that takes it somewhat towards your notion of Equitrade. We also stock Shaman chocolate, from Central Mexico – they handle all production etc themselves.
    So – not al Fair Trade is as ‘bad’ as you painted it in terms of where the values fall.

  3. No, Fair Trade is definitely a good thing, I agree. What’s misleading about it is that when you step into Starbucks or a similar outlet, you find that Fair Trade is portrayed as somehow charitable and philanthropic, which it isn’t at all. It’s fair, and that’s all it’s claiming to be. It promises not to exploit, which is great, but isn’t as good as actively seeking to benefit someone. If you want a system of trade that’s more than fair, that’s generous, that’s about investing in the poor, transferring skills, creating greater independence, you need something more like the Divine model, Cafedirect, or Equitrade.

  4. Good for Robert! It always had fantastic chocolate and I am very glad that the world is waking up to it! It is reassuring to hear that the factories in Madagascar have been upgraded. I remember Robert’s open days, when the street children could all crowd in and get some free chocolate along with a goodly number of respectable citizens. The former were not at all averse to dipping a grimy finger into a mix and licking it clean, and there was no way of stopping them!

  5. I don’t agree that Fair Trade is (meant to be) portrayed as charitable. Quite the opposite – when we give people talks in our store about the Fair Trade movement, we stress that it is absolutely NOT charity; it’s about treating trading partners with respect and helping people that are trying to help themselves. Helping them by forming a lasting FAIR trading relationship.

  6. It’s great that Global Fayre gets to share that perspective with people, and it sounds like your company is setting a good example in modelling what Fair Trade is about.

    It certainly isn’t meant to be charity, but I think it has been hijacked a little by corporations wanting to look more ethical than they are. A particular tea brand comes to mind here in the UK who recently got Rainforest Alliance certified (different thing, but the principle holds). That’s great, but the way they talked about it you’d think they had solved global poverty in one stroke. It’s that kind of misrepresentation that I’m wary of.

  7. You’re right about corporations hijacking Fair Trade. We saw the same thing happen when ‘organic’ became a marketing buzz word. There is an interesting debate now between some of the leading Fair Trade coffee companies and TransfairUSA (who certifies Fair Trade food products here in the USA). There seems to be some flexing of the Fair Trade ‘rules’ to enable WalMart to stock fair trade coffee from plantations rather than from cooperatives…..

  8. Great article – led me to check Malagasy and Equitrade out further but the information I found was a bit confusing… Malagasy and Equitrade seem to be the same business, and there’s no mention of Robert at all.

    Has anyone tried getting in touch with them? I tried ringing the different numbers but to no avail. Smells a bit funny to me – another business claiming to be charitable which aren’t. These are the worst sort of business for developing country businesses.

  9. Yes, it isn’t easy to follow – Robert is the chocolate maker in Madagascar.
    Malagasy is a separate company that is a partnership between Robert, and a number of other Malagasy companies, with a base in Lancashire, of all places.
    The entrepreneur who started Malagasy then left the company to found Equitrade as a foundation, to encourage other businesses to follow the same model. They’re only starting, so Malagasy are still the only registered company, but they’re getting some recognition and are viewed as highly ethical by independent bodies.
    I have been in touch with them too. I’ve exchanged a couple of emails, and I’ll be watching this space.

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