Halloween is a month away. And over the next few weeks, a lot of cheap chocolate is going to get bought in preparation for the ringing doorbell.
Cheap chocolate is made from beans picked by poor kids in dangerous conditions.
And cheap chocolate is made from beans that don’t even taste that good, but come from more hardy trees, so it’s more reliable to grow.
Some of the poorest people in the world raise cacao beans, and the market is driven by the low bidders. The low bidders are the folks who have no room for flexibility in their supply chain because the end product they sell is so price sensitive. For forty years, it’s been a race to the bottom, one that has led to plenty of ignored pain.
On the other hand, expensive chocolate turns the ratchet in the other direction. The folks who make the bars, particularly those who do direct trade, keep paying higher and higher wages. They keep children out of the system. And they encourage their growers to use the tastier artisanal Criollo and Trinitario varieties, keeping them from extinction.
The race to the top often creates more winners than losers. That’s because instead of seeking to maximize financial returns at the expense of everyone in the system, they’re focused on something else.
PS Today’s a fine day to sign up for The Marketing Seminar. Even if you don’t market chocolate, but especially if you do.