{"id":8848,"date":"2016-11-03T18:47:36","date_gmt":"2016-11-03T22:47:36","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/a-world-without-hershey-kisses\/"},"modified":"2016-11-03T18:54:09","modified_gmt":"2016-11-03T22:54:09","slug":"a-world-without-hershey-kisses","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/a-world-without-hershey-kisses\/","title":{"rendered":"A World without Hershey Kisses?"},"content":{"rendered":"

Chocolate lovers are familiar with the term \u201cdeath by chocolate,\u201d but what about death to chocolate? Regions where a vast majority of cocoa powder is harvested, primarily West Africa, are expected to rise in temperature by 2 degrees Celsius by 2050 and decrease in precipitation (1). Unfortunately, cacao trees, the trees that produce cocoa powder, have a very narrow temperature range and can only grow within 20 degrees north or south of the equator (1). Cacao trees are unusually sensitive to changes in environment because of limited genetic variation, which makes them unable to adapt (2). As seen below in Exhibit 1, climate change will significantly reduce the area where cacao trees can flourish, thereby reducing overall yield for cocoa powder.<\/p>\n

EXHIBIT ONE<\/strong><\/p>\n

\"Image<\/p>\n

Yield is already shrinking, but demand for chocolate is rising because India and China are consuming more every year (4). In 2013, the world consumed 70,000 more metric tons of chocolate than it produced (3). Mars, Inc. believes that this gap will increase to 1,000,000 tons by 2020 if action isn\u2019t taken. In fact, overall\u00a0demand for cocoa powder is expected to rise by 30% by 2020 (5).<\/p>\n

On Valentine\u2019s Day alone, Americans consume over $1.7 billion in chocolate, a drop in the bucket compared to the $98 billion-dollar industry (2). U.S. confection companies have a lot to lose so they\u2019re fighting climate change. The Hershey Company occupies a dominant market position, comprising 44% of the U.S. chocolate industry (see Exhibit 2) (6). To protect its interests and the environment, Hershey is addressing these climate change challenges by (1) ensuring cocoa farmers have the right tools and training for their farms, and 2) building aggressive sustainability programs throughout global operations.<\/p>\n

EXHIBIT TWO<\/strong><\/p>\n

\"hsy-us-chocolate-market-share_1_large\"<\/a><\/p>\n

Hershey believes that if they give farmers the right tools and training their business will be stronger going forward (7). Hershey\u2019s \u201cLearn to Grow\u201d (LTG) initiative spans 31,102 farmers across 464 cocoa communities (7). The program rewards farmers who receive certification for sustainable practices with premium payments, encouraging farmers to share best practices (7). Hershey also partnered with the Rainforest Alliance to train farmers across West Africa (8). LTG\u2019s signature feature is a mobile-phone application called CocoaLink that provides relevant information on farming techniques and uses GPS mapping to determine the appropriate spreading of fertilizer. CocoaLink informs farmers about farm safety, pest and disease prevention, crop marketing, and post-harvesting techniques (7). Farmers using CocoaLink have on average improved their cocoa production levels by 40% (7). The program also includes two research centers, a school, and four clean water projects (7). LTG will not only maximize yield long-term for cocoa farmers, but also reduce climate change by improving their health, income, schooling, and farm efficiency.<\/p>\n

In addition to cocoa sustainability, Hershey engages in an overall environmental sustainability policy. The company was one of the first to sign on to the White House\u2019s American Business Act on Climate Pledge (9). Hershey made a significant number of commitments, such as: reducing greenhouse gas emissions by 50%, improving recycling rate to 95%, and reducing water usage by 25%\u2013all by 2025 (9).<\/p>\n

In addition to those commitments, Hershey is already engaging in sustainable practices, including:<\/p>\n