The Rainforest Alliance is creating a more sustainable world by using social and market forces to protect nature and improve the lives of farmers and forest communities. For more than thirty years, we have been working to change the way the world sources, produces, and consumes. We have always been an Alliance, but now more than ever collaboration is needed to get closer to our vision of a world in which people and nature thrive in harmony.
In June we published our brand new 2020 certification program, signaling an improved, smarter, even ambitious journey ahead. We are confident in our strong program as well as the commitment of our many partners, who form an integral part of our past, present and future.
While our new standard was published, it was also announced in the UK that Nestlé’s two and four-finger KitKats will switch from Fairtrade to Rainforest Alliance certification, news that we are proud of and delighted to celebrate.
The announcement has generated a lot of interest, including some questions, and in addition to , we would like to take a moment to address some of the issues raised.
Questions & Answers
What is the Rainforest Alliance response to Nestlé UK’s decision to work with the Rainforest Alliance over Fairtrade?
We are delighted Nestlé is strengthening its position in the cocoa sector and unifying its responsible cocoa sourcing commitment across all its portfolios, and we look forward to building on our already long-standing partnership. This announcement comes at an exciting time for the Rainforest Alliance having just released a new seal and also the new, improved Sustainable Agriculture Standard in June. Our certification programs continue to connect companies, consumers, farmers and businesses committed to protecting the health of ecosystems, workers, and communities by using social and market forces to protect nature and improve the lives of food producers.
Was the decision from Nestlé UK made because of costs?
Nestlé UK & Ireland has stated that it made the decision to transition to Rainforest Alliance certification for its two-finger and four-finger Kit Kat bars because the Rainforest Alliance approach to the sector closely aligns with their approach: “Nestlé and the Rainforest Alliance already have a long-standing partnership and will continue to work together to build farmer resiliency, tackle key social and environmental issues such as child labor, and empower farmers with the knowledge and skills to negotiate for themselves in the global marketplace; all of which are fundamental to the long-term sustainability of the sector.”
Additionally, according to Nestlé, “The amount we spend on premiums and investment in additional projects with the farmer cooperatives in the year ahead will significantly exceed the Fairtrade premium we would have paid.”
Source: Nestlé Press Release and FAQ
Several media outlets in the UK have reported that Nestlé UK is moving away from Fairtrade certification for their KitKat bars. Does that mean cocoa farmers will no longer be certified?
No, that is not the case. Nestlé will offer to pay for any farmers who currently have only Fairtrade certification to get to the level required by the Rainforest Alliance*. This will include providing farmer training and helping with the completion of necessary paperwork. If they are not able to do this in time for the next crop, Nestlé will also provide them with financial support for the coming year.
Similar to the Fairtrade Premium, Nestlé will also pay the Rainforest Alliance premium on top of the farm gate price for cocoa, and the Living Income Differential (LID) which is a mechanism introduced by the Ghanaian and Ivorian governments.
* Rainforest Alliance certification includes the UTZ certification program.
Are the Fairtrade farmers going to be financially worse off following this decision?
We don’t believe that will be the case. Through the Nestlé Cocoa Plan, Nestlé will continue to support the livelihoods of cocoa farmers and work together with all stakeholders to improve farmers’ income. Nestlé was one of the first companies to pay the Living Income Differential (LID) of $400 introduced by the Governments of Ghana and Côte d’Ivoire. Funds raised by the living income differential are used to help increase payments to farmers. This is on top of the premium Nestlé pays for high quality.
To ensure cocoa farmers are supported through this transition, Nestlé will provide financial assistance to farmers and farmer cooperatives to help their farms adhere to the UTZ standard. Nestlé will also invest £1.5m in projects to increase farming household income through a Living Income pilot project and in community projects, as the partnership with Fairtrade Foundation ends.
Our vision at the Rainforest Alliance is for all farmers to be able to produce in a way that is both ecologically and economically sustainable, allowing them to earn a living income, and in turn ensuring they can pay their workers a living wage. This is one of the goals of certification that we work to achieve by promoting both sustainable farming and responsible business practices. The Rainforest Alliance is one of the co-founders of the Global Living Wage Coalition (GLWC), a group of NGOs which works to identify how much a living wage needs to be for a worker in a certain sector in a certain place.
Does the Rainforest Alliance certification program also include a mandatory premium?
The Rainforest Alliance* cocoa certification programs require premium payments for all purchases of certified cocoa from farmer groups in Côte d’Ivoire. This premium amount is not set but is negotiated between cocoa producers and buyers. However, rather than emphasizing price, Rainforest Alliance certification works to improve the entire spectrum of farming practices.
A farmer’s success depends on crop quality, productivity, and efficiency, as well as sales price, which is why we address these four areas. Certified farmers learn to increase their bottom lines and conserve their soils and natural resources, all of which empowers them to become better business people and gives them more control over their future. Long-term planning and investments are needed, not just a price hike. Therefore, we are working on long-term, systemic solutions that link producers, supply chains, and governments to support sustainability transformation in the cocoa sector.
Our vision for a sustainable cocoa sector is one where farmers and certificate holders (groups) play a more financially equitable part in the supply chain. Our requirements are designed to strengthen the farmers’ ability to negotiate and to achieve a higher price, whilst maintaining access to markets that allow them to achieve this price. New requirements in the 2020 Rainforest Alliance Sustainable Agriculture Standard address the need to both reward individual farmers for their commitment to sustainable agriculture, as well as create access to resources needed at the group level to implement effective group management. Read more about the required Sustainability Differential and Sustainability Investments.
*Rainforest Alliance certification includes the UTZ certification program.
In October 2020, both the Ivorian and Ghanaian governments will introduce the Living Income Differential (LID), which is a premium that will add $400 per ton on all cocoa contracts sold by either country. The funds raised by the LID will be used to help increase the price paid to farmers. How does the LID relate to a Rainforest Alliance premium?
The Rainforest Alliance is constantly working to improve the economic impact on cocoa farmers. For instance, in our new certification program, we have introduced a mandatory Sustainability Differential in our cocoa program. This consists of a cash amount per metric ton to be paid to individual farmers. In Côte d’Ivoire and Ghana, the Sustainability Differential will be required in addition to the Living Income Differential mandated by the national governments.
What is the Rainforest Alliance doing to protect farmers? How are you investing in the sector?
The Rainforest Alliance continues to strengthen its cocoa certification program, which is the world’s largest scale initiative to drive more sustainable cocoa farming. Our strengthened cocoa certification program includes stricter audit rules and enhanced traceability and performance monitoring systems. In order to drive supply chain accountability, the improved certification program also features clear metrics on shared responsibility, including a new minimum amount for a Sustainability Differential in cocoa, which will be introduced through a three-phase process that started in April 2020.
The Rainforest Alliance has encouraged all actors in the global cocoa supply chain to take a more proactive role in creating improvement through stronger interventions. Cocoa producers should have the knowledge, resources and incentives to produce in an environmentally, economically and socially responsible fashion.
The Rainforest Alliance has committed to invest more than $2 million in improving the approach to assurance and transparency and has launched a new $5 million Cocoa Sector Transformation Fund to support more sustainable cocoa farming in West and Central Africa.
For more information, please see our Measures to Strengthen the Cocoa Sector.
What is the volume that KitKat was sourcing as Fairtrade certified and how much does Nestlé source as Rainforest Alliance Certified?
While the Rainforest Alliance cannot speak to the volumes of cocoa that Nestlé sources, we know that this switch refers to the two and four finger KitKat varieties only. All other Nestlé UK brands, including other KitKat varieties like KitKat Chunky are already Rainforest Alliance certified. Nestlé UK & Ireland has shared that they have sourced 100% certified cocoa since 2015. This sourcing will now be 100% Rainforest Alliance Certified across all the brands in the Nestlé UK & Ireland portfolio with the switch of the two and four-finger KitKat bars from Fairtrade to Rainforest Alliance Certified.
Is the switch from Fairtrade to Rainforest Alliance for all cocoa farmers and does the change go into effect immediately?
The transition applies to all farmer groups choosing to become Rainforest Alliance Certified, rather than individual farmers. Not all farmer groups can be transitioned right away because of restrictions of our Cocoa Assurance Plan, which is a requirement of the Rainforest Alliance, not Nestlé UK.
If Nestlé is supporting farmers to recertify, does this mean they have to choose between Fairtrade and Rainforest Alliance?
No, farmers have the absolute right to choose whether they want to become Rainforest Alliance Certified, in addition to or instead of Fairtrade certified. Most of the farmers and cooperatives Nestlé UK works with currently are dual certified and Nestlé UK will look to expand this dual certification to all farmers who would be interested in pursuing it.
People are saying Fairtrade is better than the Rainforest Alliance and that this is a race to the bottom. Is this true?
It is not a question of one program being better than the other. Both the Rainforest Alliance and Fairtrade believe in the urgent need to transform agricultural practices and share the belief that certification by credible systems such as ours can help with that transformation. So, we are both working towards a similar goal, but the programs differ in the focus and strategy to reach their missions.
Companies are free to choose the program that best suits their sustainability needs. The focus should be on creating market demand for certified products that support improved farmer livelihoods, and advance sustainable farming and responsible sourcing. And that ultimately consumers have the choice to purchase certified goods over non-certified goods, so everyone can play their part.
Still have questions?
Please refer to Nestlé’s FAQ or reach out to your regular contact at the Rainforest Alliance.