Business school case study: Tony's Chocolonely's secret to tackling slavery
In the pursuit of ethical and sustainable production, one chocolate company has taken an unconventional approach: sharing its playbook. Tony's Chocolonely, a Dutch company founded with the specific goal of eradicating slavery and child labor from the cocoa industry, has pioneered an "Open Chain" model that details its sourcing approach for competitors to follow.
While most corporate sustainability efforts focus on polished narratives and consumer-facing credentials, sharing supply chain practices is less common. Materials and procurement strategies are often viewed as proprietary assets, essential for brand and product differentiation. Tony's Chocolonely, however, is avowedly not focused on selling more chocolate bars but on ending exploitation in the cocoa industry.
The company's mission is to reduce child labor rates, establish living income benchmarks, and enhance co-operative capacity. Its key measures of success differ from the sales- or margin-first focus of traditional businesses. Tony's Chocolonely prioritizes scaling impact over protecting intellectual property, a strategy adopted by other sustainable brands like Allbirds and Patagonia.
The question arises: can a company scale impact faster by giving away part of its "secret sauce"? How do companies balance growth, differentiation, and returns while pushing for industry-wide change? Is it realistic to expect larger companies to adopt the practices of their rivals? Tony's Open Chain treats ethical sourcing not as a competitive edge but as a pre-competitive foundation for responsible business.
The framework is built around five core sourcing principles: traceable cocoa beans mapped using GPS, a higher price including Fairtrade and living income premiums, strong farmer co-operatives supporting training, governance, and bulk purchasing, long-term relationships with minimum five-year sourcing commitments, and improved quality and productivity to boost yields and incomes.
The Open Chain platform includes contract templates, the BeanTracker tool, and data-sharing protocols that allow all supply-chain actors to input and access real-time data on bean volumes, locations, and payments. This approach discloses prices paid above the average and tracks progress towards living incomes for farmers, designed to be scaled and adopted by other companies.
This model has attracted a growing coalition of food sector "Mission Allies," including Ben & Jerry's, Aldi, Pleese, Jokolade, and Holie Foods. In the 2023/24 season, 20 companies sourced over 17,000 tonnes of cocoa via the platform, a nearly 20% year-over-year increase. As of 2023, the company estimated that Open Chain supplied 0.5% of the West African cocoa market.
Among Tony's longest-standing co-operative partners, the child labor rate is 3.9%, compared to an industry average of nearly 50%. Tony's pays Ghanaian farmers an extra $330 per tonne on top of the Fairtrade premium, closing the gap towards a living income. The company's approach is designed to bypass intermediaries and ensure more value reaches farmers.
However, Tony's Chocolonely is candid about its limitations. With thousands of farmers across remote areas, the company cannot guarantee that every chocolate bar is 100% child-labor-free. The goal is to reduce harm structurally, not to pretend perfection. Despite progress, broader challenges remain, as the global cocoa market faces mounting strain due to rising input costs, crop diseases, and climate volatility.
The ambition is to scale without compromising impact, but whether this is financially sustainable remains unanswered. In 2023, Tony's revenues grew 23% to €150 million, but it posted a €2.7 million loss due to higher premiums paid to cocoa farmers and continued investment in global expansion. The question is not whether Tony's model is perfect but whether it can shift how businesses think about their role.
Across sectors plagued by extractive practices, from seafood and cotton to lithium and coffee, the idea of companies co-investing in open, pre-competitive infrastructure could be a blueprint for collective accountability. Instead of guarding supply chains like trade secrets, companies could share the scaffolding that makes ethical sourcing viable at scale. Success would likely require a cultural shift, viewing transparency and collaboration as levers for system change.
Can companies scale their impact faster by open-sourcing and giving away part of their advantage? In a world of climate instability, price shocks, and inequality, can they afford not to?
