valentines day chocolate supply chain

Chocolate and the Supply Chain

Valentine’s Day and chocolate go hand in hand for much of the western world. Americans alone consume 2.8 billion pounds of chocolate each year! This means that the supply chain needs to work hard to keep up with the demand. The chocolate supply chain isn’t as palatable as the tasty treat, however. It’s riddled with issues that span from fair trade concerns to sustainable harvesting practices. Once it reaches the continent it will be sold on, supply chains battle with temperature control and getting the final products onto store shelves before major holidays like Valentine’s Day.

chocolate infographic

A Brief History

Chocolate has been consumed by humans dating back as far as 1900 BC, and the practice isn’t likely to end any time soon. The Olmecs (modern Mexico) were the first to start using ground cocoa seeds for consumption. In fact, most of the Mesoamerican people used cocoa to make chocolate beverages. The English word for chocolate is derived from the Classical Nahuatl word “chocolātl”.

Fair Trade Initiatives

Thousands of years later, consumers like their chocolate in a myriad of forms. Whether it’s hot, cold, mixed into a dessert, or in bar form, chocolate is almost universally loved. It’s tragic, therefore that some supply chain practices aren’t as ethical as others. There are growing concerns about the treatment of laborers in countries like Côte d’Ivoire, where roughly 43% of the world’s cocoa is harvested.

New fair trade and sustainability initiatives began to gain support in the 2000s as many chocolate producers seek to address concerns about the marginalization of cocoa laborers in developing nations. International producers like Hershey have put out commitments to source 100% Certified and Sustainable Cocoa by 2020. Other companies like Aldi, a German discount supermarket chain, are using more fair trade cocoa in their assortment of products.

Manufacturing Process

Once the cocoa beans have been harvested, they’re transported by ship to the continent they will be produced and sold on. The cocoa beans are sifted for foreign materials, roasted in large rotating ovens, and cracked open. Once the shells are blown away, all that’s left are crushed and broken pieces of cocoa beans which are called “nibs.” These bits can be found in specialty chocolate shops and are ready for consumption, though quite bitter.

The cocoa nibs are then ground into a thick paste known as chocolate liquor, though they don’t contain any alcohol. Cocoa butter is either removed at this point to produce cocoa powder or other ingredients like milk and sugar are added to improve the flavor of the end product. The chocolate is rolled through a series of mixers at this point to achieve the smooth, silky texture associated with chocolate, otherwise you’d be left with a grainy texture in your mouth. From here, the chocolate is tempered with heat and put into molds before being packed and prepared for shipment!

Final Mile

Transporting the final product to the end consumer is a challenge for supply chain professionals. In order for chocolates to retain their shape, they need to be in temperature controlled areas at all times. This means reefer units and quick load and unload times at every dock. Leaving chocolates idling in the yard can ruin the entire shipment.

Since the supply chain is so long and usually involves international harvesting, the time between initial order to final sale can span months. Valentine’s Day chocolates may have been originally purchased by a retailer’s procurement department about the time Halloween candy hit store shelves. The nature of specialized product makes the time constraints even more difficult. If chocolates are even a few days late, they could miss their designated holiday and need to be sold at a reduced price.

No matter where you get your chocolate from, it undoubtedly has a long history of where it came from and how it finally arrived in your hands. It’s important to understand how the supply chain plays a role in getting everyday objects many take for granted to their end destination.

Circular Supply Chain

Circular Supply Chain – The Missing Link

The phrase ‘input equals output’ has been flipped on its head. Now, modern supply chains are seeing the benefits of ‘output equals input’ in their operations.

In the past, supply chains were architected in a linear fashion. They started with raw material suppliers shipping materials to a manufacturing facility or assembly plant, which in turn shipped finished goods or parts further down the supply chain to a distribution center to be delivered to end customers. The workflow was point-to-point, linear in fashion, and end-products, after a while, typically ended in the trash.

Today’s supply chains are becoming circular by adding a link to connect the beginning and end of the chain. This link encompasses returns and recycling, improving sustainability and the environment. The circular supply chain is “lean” in nature, eliminating waste and reducing the carbon footprint. It also lowers costs while passing on sustainability benefits to trading partners.

Ever heard the quote, “One man’s trash is another man’s treasure?”

That is what the circular supply chain is about – taking apparent waste materials and returned goods and turning them into products which can be resold. Circular supply chains turn waste into opportunities as regulations on recycling and proper disposal of manufacturing byproducts become tighter. Often byproducts can be reclaimed and re-used within the manufacturing process where companies can develop new revenue sources for products that were previously discarded.

Many government regulations are pushing businesses to adopt the circular supply chain by creating laws and regulations around recycling and waste disposal. These include:

• EU Packaging Directive – requires all countries in the EU to recycle 50% of their packaging waste.
• Japanese Recycling Laws – require businesses to recycle packaging materials into something reusable.
• California Recycled Content Laws – no plastic bags, 25% of all plastic containers must be recycled, and more.
• UK Landfill Directive – all UK-based companies must recycle or treat their waste products, regardless of their size and turnover.

Supply chain sustainability is becoming more and more important as new regulations and social initiatives impact shippers. There are many ways to reduce the carbon footprint of shipping freight, to learn more about how Kuebix helps shippers reduce their footprints, click here.