Annual FAIR Report 2019-2020
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chapter one: fight chapter two: equalityfor and fairness one page 6 team, chapter three: one serious mission page 12 about chapter five: farmers page 30 govern chapter four: ment page 50 big choco industry chapter six: page 46 re chapter seven: choco chapter eight: tailers fans page 56 the page 62 numbers, the chapter ten: chapter nine: numbers numbers hello page 74 deep future dive page 90 page 94 preface: page 4 important appendices: page 146 these are hectic times.. Pretty scary actually, when you consider that we are borrowing the earth from future generations. Our intention is to pass it on better than how we received it. But what is happening today shows a different picture: global climate change, ever- growing financial inequality, in which Apple has a larger market value than the Gross National Product of the whole of the Netherlands and in which multinationals pay hardly any profit tax. Add to that the Covid-19 pandemic: that gives little confidence in the future. In my opinion, we just go ahead and do no more than shut down the economy almost completely with an (intelligent) lockdown, only to hope for economic recovery and a vaccine in a society of social distancing. I am skeptical about a vaccine against a mutating virus. Anyway, who am I, at least not a doctor or a politician? Banks are rapidly printing money, so that for the time being nothing seems to be going on from an economic point of view. But nothing could be further from the truth. Looking at inclusivity and equity.. We, as a society, don’t dare to enter the discussion about Black Lives Matter. We are ducking away! We’d rather talk about the risks of Covid-19 infections than about why millions of people all over the world take it to the streets to demonstrate against extreme police violence and systemic racism. In the Netherlands the BLM discussion centers around the firm words about Black Pete (Zwarte Piet, a racist black face caricature) by the Amsterdam-Ghanese rapper Akwasi. Or about the ‘vandalistic PR stunt’ by Tony’s Chocolonely at the statue of J.P. Coen on the corner of Tony’s Chocolonely Chocolate Bar at the Beurs van Berlage in Amsterdam.. For the latter I was in jail for 4 hours, to my horror. As an international impact company we do not walk away from our responsibility. Change is difficult, but necessary. In my opinion we have to stand up together against (racial) inequality, Black Pete really needs to go. Black Pete is really not ok, sorry that we are only now taking a clear stand on this. Take care of each other and our planet, please, we only have her on loan. And in spite of everything, we, Tony’s Chocolonely, are grateful. Even though we’ve had a few Covid-19 cases, Team Tony’s is healthy. We’re making the impact we’re so striving for in West Africa. And even though we haven’t realized 2 out of 3 financial KPIs (50% revenue growth year on year, 40% gross margin, 4% net result), we’ve grown solidly in revenue over the past 12 months. Just before Covid-19 struck, we brought Verlinvest and JamJar on board as investors. That led to a full cash-box and gives me confidence in sustainable international growth. Unfortunately, we had to temporarily pause the realization of our chocolate factory Tony’s Chocolonely Chocolate Circus (TCCC) because we did not have a timely deal with a real estate investor. At the moment, we are busy with 4 GRI 102-14 Avignon Capital to move the TCCC project ahead. We have anchored our partnership with Barry Callebaut for the long-term – together we want to structurally change and improve the cocoa value chain. We have more good news, because we have a new Tony’s Open Chain mission ally: Aldi. I am proud of the team. For the safety of our team, we decided – with a job guarantee for everyone – to work from home for a long time, but our Super Stores and the Chocolate Bar in Amsterdam remain closed. This is definitely requires a different way of working. That’s why we optimize working from home for everyone. We pay a lot of attention to (in)equality, #BLM, inclusivity and equality – because we, too, are not without shortcomings. From a business point of view, the organizational structure has changed; the Netherlands and Homebase are separated. Homebase is the foundation on which the markets (NL, US, UK, DACH – Germany, Austria and Switzerland – and Beyond) are built. Our Supervisory Board has a new composition with 2 seats for the new shareholders. Choco Co-Captain Anne-Wil was absent for a long time due to a traffic accident, but she is back since 1st of October. We missed you! Same goes for our Impactus Prime Paul, who’s beaten malaria not once, but twice last year, after a work trip to West Africa. Good to have you back! We are looking forward to the new financial year. I can’t tell you everything, but there will be such cool bars coming in January! We want to continue to grow internationally to be able to take steps on our roadmap to slave-free chocolate. We are going for profitability, especially the US and DACH and Tony’s Bars (that’s our Purchasing B.V.) will have to be able to carry the burden of Homebase in the long run. Next year should be a year in which after 2 years we can finally pay Team Tony’s a 13th bonus month (tantiéme). I’m really looking forward to it, are you in? Henk Jan Beltman Chief Chocolate Officer Tony’s Chocolonely Derk-Jan (left), Henk Jan (middle) and Anne-Wil (right) 5 chapter one: fight equalityfor and fairness 6 Hello there friend.. At Tony’s Chocolonely our mission is: together we’ll make chocolate 100% slave-free. Not just our chocolate, all chocolate worldwide. We are an impact company that makes chocolate and we are changing the industry from within. Because, as you will read on the following pages, there are still a lot of things terribly fight wrong in the cocoa sector. n this annual FAIR report, we will tell you about which issues we fight, what we managed to achieve and where we did not succeed yet. Because there is still a lot of work to be done to make all chocolate 100% slave-free. Everyone in ithe cocoa chain, all key players, must act. In this report, we will explain what needs to be done to tackle the inequalities in the chocolate industry, so we can all enjoy delicious chocolate without the bitter taste of injustice. equality this was quite the year.. The pandemic and the economic consequences of worldwide lockdowns have uncovered how much inequality there still is in this world, where many people have been badly affected financially and phisycally. All the while a few made enourmous profits. These unequal structures are created by businesses that prioritize profit over people’s rights and the planet’s wellbeing which results in poverty, generating wider fairness gaps in our society. Black people worldwide continue to suffer under the oppressive weight of systemic racism. The rise of the Black Lives Matter Movement fills us with hope for a more equal future. We are moved by the many people that globally stand up to fight for equality. It is this systemic injustice, especially the current rules of business, that Tony’s has vowed to change. More specifically, we focus our efforts on the people working in the cocoa industry in West Africa and our mission. The huge profits of Big Choco are the result of exploitation at the beginning of the cocoa supply chain, which traps people in extreme poverty. The cocoa farmers in West Africa are paid far too little for their beans to be able to escape the vicious cycle of poverty. Desperate to make a living, many West African cocoa farmers resort to illegal and dangerous child labor or make use of unpaid, forced labor on their farms (Cocoa Barometer, 2018). This has been known for decades and the industry is still nowhere near achieving the goals of the Harkin Engel Protocol (2001) to eradicate illegal child labor and modern slavery. After 20 years, the industry has failed to take responsibility and to implement progressive measures. Commitments to change remain voluntary with no repercussions if the objectives are not met. The numbers speak for themselves: chapter 1 fight for equality GRI102-1 and fairness 7 2,50o,o0o Ivory Coast Ghana 6o% In 2 West African countries, Ghana and Ivory Coast, about 2.5 million cocoa farming families produce more than 60% of the world’s cocoa (CocoaAction, WCf/Cacao Barometer, 2018). 1,56o,o0o In Ghana and Ivory Coast, 1.56 million children work under illegal conditions because their parents are unable to earn enough (NORC report, 2020). Cocoa farmers receive $ 1.37 per kg beans in Ivory Coast and $ 1.52 in Ghana. These excessively low prices lead to a farmer income of only approximately $ 0.78 per day (Cocoa Barometer 2018), which is way below the extreme poverty line of $ 1.90 per day (World Bank standard). This is why Tony’s pays a Living Income Reference Price (LIRP) per kg beans of $ 2.20 in Ivory Coast and $ 2.10 in Ghana. This enables cocoa farmers to earn a living income, which is set at $ 2.19 per person per day in Ghana and $ 2.49 in Ivory Coast (Living Income Community of Practice, 2018).