‘In Debt’ Example

February 25, 2009

Here is an example of calculating and paying the true cost for something we consume, be it food, furniture, entertainment etc. I just want to say that we may want to stick up our noses at the arrogance of high-priced items we can find cheaper elsewhere, but just remember that what we now consume like water and air were once marvelous and precious luxuries to the people who came before us, to the people who traded in chocolate like gold and where sugar was reserved for royalty.

As posted by Treehugger.com:

Pioneering chocolate company Original Beans has based their business model on true cost pricing, including often overlooked ecological and social costs. “The mental inspiration comes from the challenge of building a business that results in more than zero sum, and actually gives back more to the Earth than it takes,” says company co-founder Philipp Kauffmann.

With a marketplace used to cheap food, pricing a product based on what it actually costs to maintain a sustainable industry can seem outrageous. A 3.5oz bar from Original Beans costs the consumer $13. I’ll admit sticker shock when I first heard that price as well, but once Kauffmann explained what goes on behind the scenes at Original Beans I was sold on paying the true environmental and social cost for my chocolate.

True cost pricing means that ALL costs are being considered and internalized into the product. Or shorter: we leave the Earth to next generations as we found it, and perhaps even healthier. This requires honesty (transparency), analytical accuracy, and the ability to continuously innovate. Simple rule: no shortcuts. So we have made a life cycle analysis of our product and chain. Consider a few examples:

Rain: Our product has a rather large water footprint. 2400 l per 100g. This is almost entirely water used to grow the cacao trees, in our case, rain. Of course, we could say, well rain comes from the heavens and so why bother. Except that we couldn’t get cacao from the places we do, if forests wouldn’t evapotranspire the humidity, which then rains down again on the cacao. So how many trees do we have to protect or plant to guarantee this amount of rain for one chocolate bar? The answer will be on our website. (JN-Coming April 09)

Package: We have created the first fully non-toxic, naturally degradable packaging in the chocolate industry. Made from FSC certified recycled paper, with soy inks, and natural glues. Should one take consideration of the energy used to produce the packaging? Of course. The packaging factory runs on 100% certified wind energy.
We are still working on the foil. Right now, we use a conventional fossil-fuel based foil, which takes 12 years to decompose and leaves traces of nonorganic compounds.

Quality: As a rule of thumb in the chocolate industry, 50% of quality of the end product, i.e. our chocolate bar, stems from nature: variety, terroir, etc.; 25% from on-farm processing (fermentation and drying); 25% from manufacture. Thus, we pay farmers exceptionally high prices for ecological conservation and quality processing. And we invest together with them in improving what can still be improved.

That to us, is the meaning of full cost accounting.

And the chocolate industry? To date, the historic design of this industry, based on slave labor and massive deforestation, are largely still in place. And so are the price levels. Most people inside the industry know that a tectonic shift has to happen. The bar literally has to be raised much higher.

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