What Is Fair Trade & Direct Trade Chocolate

Fair Trade graphic against two blurred bar of dark chocolate
Do you ever wonder about how the chocolate you buy gets from the field to the store shelves? Growing and harvesting cacao beans is a labor-intensive process. Cacao beans, which grow in football-shaped pods on Theobroma trees in tropical areas, must be carefully harvested by hand. The pods are removed from the tree with a machete, the cacao pods are opened, and the seeds (or beans) are removed. Then the cacao beans must be fermented, dried, roasted and ground.

In the 1990s, about 90 percent of the cacao beans used to make chocolate were grown on small family farms. Most of those farmers had no idea what their cacao beans were worth, and they also had no way to find out. The low wages combined with increased output to meet a growing global demand created a situation that caused them to look to child and slave labor to produce enough cacao beans to support their families.

To combat this system, the fair trade and direct trade systems were developed. You may have heard these terms and seen fair trade labels on chocolate or coffee, but what does it mean? And what’s the difference between direct trade vs fair trade chocolate? Keep reading to learn more.

What Does Fair Trade Mean Chocolate?

At Cococlectic, we know the choices we make affect others and that the chocolate we choose to sell in our shop in the US directly impacts cacao growers in other parts of the world. We believe everyone in the supply chain should be compensated fairly, treated ethically, and that sustainable practices should be implemented to preserve the planet.

Fair trade is a global movement that provides a certification for thousands of products, including chocolate, coffee and dairy, when they meet certain strict standards. The fair trade certification is used in 62 countries and counting. When farmers and workers are paid a fair wage for their products instead of being exploited for cheap labor—that is considered the definition of fair trade.

What is fair trade chocolate? Specifically, fair trade chocolate is made with cacao beans grown by farmers who are paid a fair price for their crop instead of the lower price set by the commodity market.

If you’re wondering what does fair trade chocolate mean, the answer lies in knowing more about the fair trade system, why it was implemented and how it works. Here are several things you should know about fair trade chocolate:

  • Fair trade improves the lives of cacao farmers and their families. When farmers are paid a fair price for their crops, they can work to overcome poverty and build a better life for themselves and their families. In the fair trade system, farmers can create cooperatives and growing associations, which gives them leverage to negotiate for better prices. A minimum price per ton is set, and farmers either receive market price or the fair trade minimum—whichever is higher.
  • Fair trade fights against child labor. Fair trade cacao beans are grown ethically and without using child or slave labor. If child labor practices are found, the farming groups work with the growers to address the underlying cause of the issue. For example, if the issue is lack of access to schools, fair trade farming groups build schools or set up scholarships.
  • Fair trade promotes sustainability. Fair trade farming does not use GMOs or dangerous chemicals.
  • Fair trade evens the playing field between developed countries and developing nations. The fair trade system works to address disparities between small scale farmers in developing countries in the Global South (Africa, Latin America and Asia) and those of subsidized farms in developed countries like the US in the Global North. Subsidized farms have an advantage over small farms in that they have greater access to financing and crop insurance, among other things. A fair trade agreement states that companies from developed countries will pay a fair price when they purchase products from developing nations. In exchange, growers in developing nations will engage in ethical and sustainable production practices. Under the fair trade system, more money goes back to the farmers for community development.
  • Fair trade provides a recognizable certification. FLOCERT is the global certifier for the fair trade system. They perform an audit to ensure supply chains are transparent and use fair and ethical practices.

What Chocolate Products Are Fair Trade?

When we buy fair trade chocolate, we show we support the ethical treatment of growers and workers around the world who produce the food we eat. Fair trade means the workers are paid fairly and also that they have safe working conditions that do not use child or slave labor.

At Cococlectic, we feature the products of conscious craft chocolate makers who have made it their mission to employ fair trade practices. These small-batch bean-to-bar chocolate makers develop partnerships with the farmers who cultivate their cacao crops and put the planet first without compromising taste or quality.

What Is the Difference Between Fair Trade Chocolate and Direct Trade Chocolate?

The majority of cacao beans are sold as a commodity crop where farmers are paid the same regardless of quality. The fair trade system dates back to the mid-1940s, and until the mid-2000s, it was the only way to ensure ethically sourced chocolate. Then the direct trade system was developed in 2005, and it also promised ethically produced and sustainable chocolate products.

So what is the difference between these two chocolate trade methods? Both are designed to ensure fair compensation and ethical and sustainable growing practices (meaning they use no child or slave labor and they are concerned about the planet). But at their core, fair trade and direct trade of chocolate are actually quite different.

Let’s start with fair trade. Fairtrade International is a global organization that works with farmers and businesses to ensure ethical practices along the supply chain. Fairtrade International has established standards for farmers, workers and buyers and provides a certification for those who meet these requirements. The fair trade certification is meant to assure buyers that the chocolate was produced by growers who were paid a fair wage for their work, that the health of the people and the environment were a priority, and that ethical practices and labor standards were followed.

In order to receive a fair trade certification, the farmer or farmers co-op pays an upfront fee along with an annual fee. The way it works, in theory, is that the grower will recover the cost of the certification by charging more for their cacao beans, and in return, the chocolate maker is assured that the labor practices of the grower are ethical.

Direct trade, on the other hand, isn’t a certification. Instead, it’s a term that describes the relationship between the buyer and the farmer. Direct trade means the buyer works directly with the farmer to determine a fair price to pay and buys directly from the farmer—there’s no middle person.

In the direct trade system, chocolate makers build long-term relationships with cacao growers. This ensures that growers are more successful economically and the cacao they grow is of the highest possible quality. It works to close the gap between the farmer and the consumer, but it’s more about the quality of the product and the company that’s buying from the farmer than it is about the farmer himself. Direct trade companies produce chocolate, coffee or other goods and deliver the items through the mail to their customers.

Which Is Better?

The fair trade system has made great strides toward ensuring cacao farmers are paid a fair wage and that ethical labor standards and sustainable farming practices are upheld. Consumers often look for a fair trade certification because this label inspires trust, but these purchases may not be making as much of a difference as we think.

The downside to a fair trade certification system is that many small farmers can’t afford the cost of the fair trade certification. And the fair trade certification is not a guarantee of quality. If a farmer has poor quality beans but can afford the fair trade certification, he can still get and receive a higher price for lower-quality beans.

Unfortunately, a fair trade certification is not enough to bring farmers out of extreme poverty. On average, this certification increases farmers annual income by 10 to 16 percent, which still leaves them under the poverty line. Even if a chocolate bar is made with 100 percent fair trade certified ingredients, someone else still gets a cut.

Another drawback to the fair trade certification is that it’s not a guarantee that child or slave labor hasn’t been used in the harvesting of the cacao beans. What consumers may not know is that numerous investigations into some West African fair trade cacao farms have uncovered unethical practices in spite of these certifications.

Some craft chocolate makers do not include a fair trade logo on their packaging because they feel the fair trade system doesn’t go far enough. Other companies use the FLOCERT label to do more than others to support growers. For example, the Ghanaian cooperative Kuapa Kokoo has a long and unique relationship with Britain’s Divine Chocolate that goes far beyond the standards required by the fair trade certification. Members of Kuapa Kokoo own nearly half the shares in Divine, which is publicly traded, and they benefit from the dividends, meaning they have a stake in the final product.

Direct trade goes even further than fair trade. By eliminating the middle person, chocolate makers can find the quality cacao beans they need while compensating farmers at a rate that helps pull them out of poverty. In the direct trade system, farmers receive anywhere from 50 to 300 percent more than for commodity cacao beans, the cacao beans are usually higher in quality and the supply chain is transparent and traceable.

At Cococlectic, we only sell fair trade or direct trade chocolate products. We feature a different American small-batch bean-to-bar chocolate maker each month. These craft chocolate makers are passionate about producing their chocolate from scratch using only three main ingredients: cacao beans, sugar and cocoa butter.

The chocolates sold at Cococlectic are vegan, non-GMO, fair trade and ethically sourced. They do not contain any soy, gluten, dairy or nut, but they may be produced in a facility that handles these ingredients.

We sell only dark chocolate bars in our chocolate shop. One-time gift boxes or corporate gift boxes containing your choice of dark bars only or mixed bars are available with the purchase of the Office Box. Each chocolate box comes with 4 full-size dark chocolate bars that are made in the US.


Sign up for our chocolate-of-the-month subscription club and join us for a free virtual chocolate tasting with our featured chocolate maker of the month.