For a chocolate brand that turns over more than €100 million annually, with a 21% market share in the Netherlands, where it was founded nearly two decades ago, Tony's Chocolonely still looks like it's getting its feet under the table. That's partly because its mission is not to profiteer from its thick, dense bars but to eradicate slavery from the production of chocolate globally by bettering workers' conditions at cocoa plantations. Tony's is an ‘impact company’, the business' UK country manager, Ben Greensmith, says of its lofty aims.
The origins of Tony's Chocolonely date back to 2003, when Dutch journalist Teun van de Keuken learned of the widespread modern slavery and illegal child labor across cocoa farms in West Africa – remarkable considering that some of the world's leading chocolate brands had signed an agreement committing to the eradication of slavery and child labor from their supply chains. He decided to do something about it, demanding that a local judge convict him of supporting child slavery because, by paying for chocolate, he was supporting the exploitation of minors. When the case was dismissed, he tried to change the industry from within – by ‘showing there's a way to be a successful chocolate brand that doesn't involve the exploitation of West African communities,’ says Ben. ‘And that's what we've been doing ever since.’
Tony's Chocolonely, its name a reference to Teun's lonely battle to change the industry, launched as a publicity stunt in 2005 with a few thousand ‘slave-free’ chocolate bars – made with a transparent supply chain and proper pay for farmers, its bright-red packaging symbolizing the alarming situation in the industry. The bars sold well and the company, now under new ownership, hasn't looked back: it's sold in more than 20 global markets, with more coming soon.
In the UK, Tony's turned over £18 million in 2021, having doubled its revenues each year since its UK launch in 2019. And it's following the same path in Germany, Austria and Switzerland; sales in international territories are expected to surpass those in the Netherlands for the first time by the end of 2022.
Packaging and marketing
Tony's is known for its branding as much as it is for its chocolate. That's no accident. In contrast to other mission-driven brands, which so often lean into a pared-back and somber image, Tony's has crafted a bold and unapologetically outspoken identity with its funky packaging and quirky communications. In a chocolate market dominated by legacy brands like Mars, Nestlé and Ferrero, Tony's definitely stands out.
Designed by Arjen Klinkenberg, the company's creative designer, the wrapper – with its thick-set, retro typography printed on boldly colored matte paper – looks fun and whimsical. ‘We're presenting an alternative to a common chocolate, so the way it looks should be different in any way possible,’ says Arjen. For example, Tony's avoids the use of the color brown because it's ‘too obvious, and we want to be anything but obvious’.
Tony's provokes a certain curiosity, says Chris White, the founder of London branding agency This Way Up Design. This combined with the name, which instantly makes it feel ‘hugely personal’, makes for a product that feels accessible and honest. For Chris, all this ‘makes you want to come and have a look on the back and the inside’, and that opens the door for the brand to communicate its deeper message. According to Tony's, 89% of people who buy its bars do so because they love the packaging or what's inside; 11% come for the message.
‘If you just go out there and hit people round the head with this crazy statistic that there [are] more than 1.5 million kids working illegally in West Africa because of poverty and it can be solved, you might not associate that with delicious chocolate,’ says Ben. ‘So we flip it on its head: we draw you in with chocolate, then we tell you about the message and what the solution is. We feel we have to get people's attention first.’
Inside the packaging, Tony's raises awareness of slavery and child labor with writing, but also by deliberately dividing the chocolate pieces asymmetrically as a representation of the inequality within the cocoa supply chain: ‘You could get a big bit, like the large chocolate companies, or you could get a tiny bit, like the farmers,’ Ben says. Because the company doesn't use paid media, it relies on the bar to ‘tell the story of the brand’.
The company does, however, use provocative marketing to drive awareness. One campaign involved rolling out ‘lookalike’ chocolate bars, mimicking Twix, Toblerone, Kit Kat, and Ferrero Rocher, to draw attention to the unethical activity that's rife in the industry. ‘We try not to lecture, but we are outspoken and we challenge; we make enemies,’ Ben says. ‘These companies are putting profits and shareholder value ahead of people's livelihood simply because they can get away with it, and we want to make it very difficult for them to continue doing that.’
Battling murky supply chains
The global chocolate industry is huge and can be lucrative – it's worth around $130 billion globally and is set to reach $200 billion by 2028, according to intelligence company Fior Markets – but Tony's hasn't had it all its own way. In February 2021, it started attracting negative headlines after being cut from a list of ethical producers by industry organization Slave Free Chocolate due to its work with Barry Callebaut, a large cocoa processor accused of abuses in its supply chain.
The cocoa supply chain, which goes through a number of hands, is complex and opaque, but more than 60% of the time it begins in Ghana and the Ivory Coast. While the likes of Mars and Nestlé drown in profits, the farmers they depend on live in such abject poverty that they're forced to employ children, often trafficked migrants, to survive.
The price of cocoa in these countries is set by the government, known as the ‘farmgate price’, but this still leaves farmers below the poverty line. Most big companies pay the bare minimum. Even the improved terms of organizations like Fairtrade – which offers premiums for certified cocoa sourced from farms that prohibit child labor – fall short, according to Ben. And when you buy a Fairtrade chocolate bar, it doesn't mean the cocoa in your bar is necessarily fair trade, only that someone, somewhere, has traded that amount of cocoa fairly.
Ensuring full traceability across the chain is difficult because the sourcing of the beans is spread across millions of smallholder farms and they're often sold via local traders who operate with limited oversight. Beans are also routinely mixed during the manufacturing processes.
With the help of blockchain technology, however, and long-term partnership agreements with co-operatives in Ghana and the Ivory Coast, Tony's claims to ensure traceability across its cocoa supply chain. The company also claims to pay farmers a premium that's calculated according to the size of their farms and families, aimed at not only increasing their income but enabling them to invest in resources like agricultural training courses that will increase their productivity. Around 9% of the retail price of Tony's bars goes to the cocoa farmers, and you can see a breakdown of these premiums in the company's published annual reports.
‘You have this total lack of ownership because companies don't own their farms,’ Ben says. He adds that ‘we're proving that you can have a fully traceable supply chain’, which takes time and costs a lot because you have to GPS map each farm to know potential production numbers, but it's ‘100% necessary’. Even so, the system is far from perfect; after all, ‘a fully traceable supply chain’ in the cocoa industry still has problems.
Ayn Riggs, director of Slave Free Chocolate – a collective that removed Tony's Chocolonely from its directory of ethical producers at the end of 2020 – believes that Tony's ethical mission is ‘a form of greenwashing’ and is merely a way to sell more bars. She doubts that it has a fully traceable supply chain or that it's paying farmers a living wage. ‘They're not changing the world,’ she says, ‘they're marketing a product’.
Tony's reacted to the bad publicity by putting out a lengthy statement, part of which read: ‘We have never found a case of modern slavery in our supply chain. But we do find instances of illegal child labor occurring on the cocoa farms where we source our beans. We have always been 100% transparent about this.’
‘It's difficult not to get defensive because it's one of those stories that's difficult to respond to, but we're just very factual,’ says Ben. ‘We have to work with one of the big producers to prove scalability. We could choose a different business model, but then the likes of Cadbury and Nestlé wouldn't take notice.’
Three key learnings
The chocolate industry is not only highly lucrative but also highly consolidated: Hershey's, Nestlé, Mars and Mondelez, which owns Cadbury, Oreo, Toblerone and Belvita. Each of these legacy brands turns over billions each year selling chocolate; in just the first three months of last year, Mondelez turned over $7.2 billion, with a gross profit of $515 million, boosted by sales in Oreo cookies and Dairy Milk. In the scheme of things, Tony's is a tiny fish in an ocean of sharks, but there are three cornerstones to its success.
1. Stating its mission loud and clear. Tony's is a mission-led brand and a purpose beyond the bottom line can prompt better customer engagement and wider success. An insight study found that a majority of companies that over-perform on revenue growth link all they do to a purpose. So, work out what your mission is and then shout about it.
2. To disrupt the industry, the product needs to be really different. Tony's achieves this through its branding. With its bright colors and big font, the packaging screams on the shelf, inciting curiosity and making people want to learn more. There's value in non-conformity and originality.
3. Being open and honest when dealing with criticism. Any business must be open to challenge, and it's important to deal with any criticisms with transparency. As a company that's defined by a mission to eradicate slave labor from the chocolate industry, Tony's must take the utmost care to ensure its own production is ethical. So, when Slave Free Chocolate removed Tony's from its list of ethical producers, the brand needed to take action fast. ‘We didn't see any impact on sales,’ Ben says. ‘We had some reactions from some customers, but when we put the reaction and response out to the public in an open and honest way, most people seemed to get it.’