A $140 billion chocolate industry still can't pay its farmers a living wage

Food & Farming 5 min 80 sources

Lindt sourced all its cocoa from certified farms this week, even as its own program admits low farmer income is a structural problem. The same gap shows up across the food system — a grocer cuts shelf prices while keeping its margin, dairy and grain growers take the hit. Who sits in the middle decides who keeps the money.

Key takeaways

Lindt now sources all its cocoa from certified farms but still calls low farmer pay a structural problem — certification fixes how cocoa is grown, not how the money is split.
Kroger cut shelf prices to win shoppers yet held its gross margin near 23%, showing the middle of a food chain keeps its cut even when prices fall.
In a chain from grower to eater, leverage sits with whoever can switch suppliers and set terms — rarely the farmer growing one crop in one place.

The chocolate on your shelf rides on a chain that runs from a smallholder farmer in West Africa to a Swiss confectioner worth billions. This week the gap between those two ends got a fresh number.

Lindt sources all its cocoa from certified farms — and still flags farmer pay as a problem

On Thursday, Lindt & Sprüngli — the Swiss maker of Lindor truffles — said 100% of its cocoa now comes from farms certified by the Rainforest Alliance, a group that audits farms on labour, environment, and pest control [30]. The company is also funding agroforestry, where cocoa grows alongside other trees, plus “living income pilots” — small trials aimed at lifting what farmers earn [30].

That last phrase is the tell. Lindt’s own program lists “low farmer incomes” as one of the “most persistent structural challenges in cocoa production,” alongside deforestation [30]. The certification fixes how cocoa is grown. It does not fix how the money is split.

Here is the scale of that split. The global chocolate industry takes in more than $140 billion a year [34]. The crucial ingredient — the cacao bean — comes mostly from millions of smallholders in West Africa. In April 2024, after poor harvests there, the bean price passed $10,000 per tonne for the first time [34]. It has since fallen back but stays high [34]. Even at a record bean price, the farmer’s slice of a $140 billion industry is thin enough that a global confectioner has to run a pilot just to test whether its growers can earn a living.

The system underneath. In a long food chain, the people who keep the most money are rarely the ones doing the growing. Value piles up where the leverage is — and leverage sits in the middle, with the processors, traders, and brands who can switch suppliers, set terms, and own the name on the wrapper. A farmer who grows one crop in one place has no such options. That is why the price at the farm gate and the price on the shelf can move in almost opposite directions, and why a price spike at the bean rarely shows up as a windfall in the grower’s pocket.

A grocer cuts prices, keeps its margin

The retail end of the chain made the point a different way this week. On Thursday, Kroger — the largest standalone US supermarket chain — reported quarterly sales of $46.12 billion, beating estimates [3]. To win back shoppers from Walmart and Costco, Kroger has been slashing prices on thousands of items [3].

But cutting shelf prices did not cut Kroger’s slice. Its gross margin — the share of each sales dollar it keeps after paying for the goods — came in at 22.7%, barely down from 23% a year earlier [3]. The chain funds the price cuts partly by buying direct and using technology to squeeze cost out elsewhere — not by giving up its cut [3]. Shoppers, facing US grocery inflation at its fastest in three years, are “trading down” to cheaper store-brand goods [3]. The grocer holds its margin; the shopper economises; the question of who upstream absorbs the squeeze sits one layer further back, at the supplier and the farm.

When the middle pulls out, the farmer has nowhere to sell

The starkest version of the squeeze is when the middle simply closes the door. Dairy Farmers of America — a cooperative owned by dairy farmers — said it will idle its plant in St. Albans, Vermont, affecting 80 workers [25]. A milk-processing plant is the gate between a farm and the market: raw milk spoils fast and has to be processed nearby. When a plant idles, the farmers who shipped to it lose their buyer and scramble for another within driving distance. The farmer holds a perishable product and a fixed location; the processor holds the choice of whether to run the plant at all. That imbalance is the whole story of who has leverage in this chain.

Demand, meanwhile, is reshaping which part of milk is worth most. The world wants more high-protein food, and there is not enough whey — the protein-rich liquid left over when milk is made into cheese — to meet it, pushing protein-powder prices up [38]. The extra value lands with the processors and brands who turn whey into powder and sell it in a tub, not automatically with the farmers who shipped the milk.

Also this week

Grain prices fell off a cliff. After a months-long spring rally, corn, soybean, and wheat prices peaked in early May and slid hard, as fast planting and a coming wheat harvest pushed traders to dump long positions [17][0]. December corn dropped to about $4.44 a bushel by Thursday [0]. A grower who didn’t lock in the spring high watches the value of an unsold harvest fall — another reminder that the farm gate moves to its own clock, not the shelf’s.

A weight-loss-drug dent in the grocery bill. British households with someone taking a GLP-1 weight-loss drug have knocked an estimated £780 million off their annual grocery spend, a survey found, as users eat smaller portions [54]. The number of UK users tripled in two years [54]. If the trend holds, it is demand quietly leaving the food system from the eater’s end — a shift food makers are now watching closely.

The bug behind the bean. Researchers confirmed this week that cacao plants are pollinated mainly by tiny biting midges — meaning the entire $140 billion chocolate industry rests on the unpaid work of an insect most people have never heard of [34]. A reminder that the cheapest, least-visible inputs in a food chain are often the ones holding it up.

02 · Lesson · why it matters

Why the people who grow your food keep the least of what you pay for it

In a long chain from farm to plate, the money pools where the leverage is — in the middle — and the grower at the start almost never sits there.

A record price the farmer barely felt

In 2024, the price of a tonne of cacao beans passed $10,000 for the first time. A historic spike. You would think the farmers who grew those beans had a windfall year.

Most did not. The global chocolate industry takes in more than $140 billion a year, and this week a Swiss maker that just certified all of its cocoa still listed “low farmer incomes” as a structural problem it is running pilots to fix. A record bean price, and the people growing the bean still need a trial program to test whether they can earn a living.

That gap is not a glitch. It is how long food chains are built.

Where the money pools

Picture the chain. A farmer grows the crop. A trader buys it. A processor turns it into something — chocolate, powder, flour. A brand puts a name on it. A grocer puts it on a shelf. You pay at the till.

The money does not split evenly along that line. It pools where the leverage is. And leverage means options: the power to say no, to switch to another supplier, to set the terms, to walk away.

Count the options at each step. The brand can buy beans from a dozen countries. The grocer can stock a different supplier next week. The processor can run its plant or idle it. Each of them has somewhere else to go.

Now count the farmer’s options. One crop. One harvest. One patch of land that can’t be moved. A product that rots if it isn’t sold soon. The farmer has the fewest exits of anyone in the chain — and the one with the fewest exits takes the price the others offer.

Why the farm gate and the shelf don’t move together

This is why two prices that seem like they should rise and fall as one — what the farmer gets, what you pay — can drift in opposite directions.

Look at the grocer’s side this week. Kroger, the biggest standalone US supermarket chain, cut prices on thousands of items to win back shoppers. Prices on the shelf went down. But its gross margin — the cut it keeps from each sales dollar — barely moved, holding near 23%. It funded the price cuts by squeezing cost out elsewhere, not by giving up its slice.

So the shelf price fell and the grocer’s cut held. Something upstream absorbed the difference. The squeeze travels back down the chain toward whoever has the least power to refuse it — and that is usually the farm. The farm gate isn’t tied to the shelf. It’s tied to how much leverage the grower has, which is almost none.

When the middle just closes the door

The clearest proof of where the power sits is what happens when the middle pulls out.

Dairy Farmers of America said this week it will idle a milk plant in Vermont. Raw milk spoils within days and has to be processed nearby, so a processing plant is the only gate between a dairy farm and the market. When it idles, the farmers who shipped there lose their buyer overnight and have to find another within driving distance — if one exists.

Notice the asymmetry. The processor holds a single decision: run the plant or don’t. The farmer holds a perishable product, a fixed location, and a herd that needs milking twice a day whether or not there’s a buyer. One side has a choice. The other has a deadline. That imbalance, repeated at every link, is the whole reason the money ends up in the middle.

You are standing at the far end of this chain

Here is the part that’s easy to miss while pitying the farmer: you’re in the chain too, at the other end.

When you economise at the grocery store — buying the store brand, skipping the pricey item — you’re doing exactly what the farmer does. You’re taking the terms offered, because at the till you have few options too. The same shelf-price squeeze that pushes back toward the farm also pushes forward toward you. The grocer’s margin holds; the shopper trades down; the farmer takes less. Two people at opposite ends of the same chain, both absorbing a cost set by the people in the middle, neither able to see the other.

That’s the thing no single seat in this chain can see. The farmer doesn’t know why your bill went up. You don’t know why their pay went down. The trader, the processor, the brand each see only their own link. The chain that connects a smallholder’s harvest to your weekly shop is real and load-bearing, and almost nobody standing in it can see the whole of it — which is exactly how the money keeps pooling where it does, quietly, while everyone at the ends blames the weather, or inflation, or themselves.

03 · Lab · your turn

Who Can Say No?

Sit in each seat of a food chain and try to refuse a price squeeze — feel how leverage means options, and the grower and the eater have the fewest.

04 · Hope · carry this

The fact that a chocolate maker now runs trials to lift what its farmers earn means someone, finally, is measuring the gap — and a gap you can see is a gap you can close. Chains this long were built by people, which means they can be rebuilt by them too.