It is one of the great discussions within the specialty coffee industry.  We are working with a large retailer that is asking for a Fair Trade certified hot cocoa drink mix.  The company has specified that the product needs to have the Fair Trade logo on it because it believes customers will react favorably to it.

I am a big believer in the fair trade system.  (Uncapitalized, in this context, and, unfortunately, always undercapitalized!)  However, in this instance, we are faced with one of the ironies of using the branded Fair Trade logo.  Namely, products can only be branded with the Trans Fair logo if they come from a cooperative.  One of our cocoa sources is in Ghana, and we have a very strong relationship with them.

Because of the governmental system in place in Ghana, farmers sell their beans directly to the government, and in return receive a reasonable price.  In Ghana, 9 million people make their living from growing cocoa, so it is in the government’s interest to ensure the price is as high as possible, and they have successfully done so for decades.  But this company is not a co-op.  So we can’t use their cocoa for this product.  Which is a shame, since we would be purchasing a significant amount of cocoa powder, the money would go straight back to Ghana, and make a significant impact on all of their lives.  It is a curious system.

OK, some days even I can’t believe how much fun I have.  I spent two hours tasting an assortment of chocolate bars.  Mont Blanc is developing a chocolate wheel that will incorporate a common vocabulary of flavors that will allow us to better communicate the subtleties and nuances of what we taste.  The staff tasted six bars, five dark chocolate and one milk chocolate.

For consistency, all of the dark chocolates were premium, meaning that they had at least 59 percent chocolate liquor. The bars we used had between 59 and 80 percent chocolate liquor.  Obviously, the amount of chocolate in each bar varied, but that also allowed us to better discern the different flavors.

One bar, for example, had a very smoky, leathery, almost tobacco flavor.  Another one initially had a very astringent, metallic flavor, but that mellowed to include notes of cherry and raisin. The milk chocolate bar had a pronounced dairy note, as you would expect, but also had flavors of vanilla, caramelized sugar, and even hints of lavender.

This was the first of what will be a number of tastings. When finished, the results will be used to produce a chocolate wheel that should help people better understand the nuances and differences in chocolate.

Chocolate and cocoa are commodities that are widely traded, but in actuality are controlled by a handful of companies.  There are probably about a half dozen significant chocolate manufacturing companies in the world.  We work with several different ones, since each has different products that we prefer to use in different formulations. These companies are all huge multinational companies, and one often gets the sense that they are all working together as a cocoa cartel.

Over the past two years, prices have increased significantly.  Part of that can be attributed to the rise in the commodity price of cocoa.  One of  the ironies in the increase of that price is that most of it isn’t attributable to companies buying chocolate.  Instead, it comes from financial speculators, hedge fund managers, and investors trying to make money in the futures markets.  But for those of us who actually need the products and want to maintain a level of quality, it has forced about a 25 percent price increase!

The commodities market is an interesting place. Hard to believe that a hedge fund directly affects the cost of your mocha.

Day 3 of the Sustainable Brands Conference and common themes are emerging from all of the speakers:

1. Innovation – All of the products being discussed are innovative and cutting edge. The cleaning supplies such as Method or Clorox’s Green Works all had to prove to be as good as their non eco-friendly counterparts before they could be widely adopted. The Toyota Prius is another example of innovation that leads to adoption. One of the other ideas being discussed is that consumers are unwilling to sacrifice utility for sustainability.

2. Efficiency – Talk revolves around efficiency within product development and supply chains and how the challenges of being more efficient is creating more sustainable solutions. One company developed a machine for cleaning floors that uses ionized water instead of chemicals. Although it costs more than its counterpart, it is more efficient, cleans better, and people that use it are more comfortable with it because they don’t have to worry about being in constant contact with toxic chemicals. In terms of supply chain efficiency, one company is shipping product from Los Angeles to New York rather than trucking. It takes longer, but it costs less and uses much less carbon.

3. Doing good is profitable – All of the companies here are profitable, and all are sustainable businesses committed to making a difference in their products and how they interact with their employees, customers, and vendors. It is refreshing to hear that doing the right thing is a sound rationale for ethical business practices.

4. Consumers connect – Consumers are connecting with companies and their products on a very emotional, personal level, such as New Belgium Brewery’s advocates and their Tour de Fat bicycle events. I viewed remarkable video clips of thousands of customers all riding their bikes at the event. In addition, New Belgium is promoting bike riding as an alternative to driving which is the ultimate in sustainable transportation and also strengthens the bond with their customers.

Two of the speakers yesterday were from Dow Chemical and Clorox. The speaker from Clorox spoke about the company’s acquisition of Burt’s Bees for a billion dollars and how they were focused on growing that brand and not screwing it up in the process.

I had a conversation during the coffee break (appropriately enough) with an old friend, a well-known coffee roaster and environmental and social activist who I have known for 15 years. I asked him what he thought about the presentations. His comment was that it was all very sophisticated, whereas the types of sustainable development projects that he is used to involve some cash (twenty dollar bills), PVC tubing and a large water tank to try and provide clean water for a coffee beneficio in Guatemala.

As we stood in the hall drinking our coffee and talking about the specialty coffee industry, we both agreed that the idea of spending a billion dollars to buy a company making beeswax lipbalm and shampoo was just something that we couldn’t relate to. But we were certainly going to increase our next donation to Coffee Kids.