#TradeXpresso Lungo: the global supply journey of your healthiest addiction

Chocolate. Apparently, a healthy addiction you should not try to resist. Working and living in Belgium makes any such resistance futile anyway. Blame the theobromine, a psychoactive alkaloid that makes chocolate mildly stimulating and slightly addictive. Although we have consumed xocolatl (the Aztec word for "bitter water") for centuries, we're still discovering its complex properties and its potentially positive health effects. Hence, this #TradeXpresso Lungo is a break from caffeine (another popular alkaloid) and a bitter-sweet indulgence. Anyway, Christmas is already in the air, and it is impossible to dissociate it from hot chocolate . In fact, it is hard to dissociate chocolate from our lives. Hence, chocolate is another great way to illustrate why we are all dependent on trade, even if you are not addicted to theobromine.

Trade and chocolate, where to start? There are so many trade-related aspects linked to chocolate that it's hard to cover all. So, consider this #TradeXpresso Lungo like a box of chocolates, in which you may only get a flavor of global trade and its complex supply chains, all coated in premium Belgian chocolate. Forrest Gump had a nice way of putting it: "Life is like a box of chocolates. You never know what you're gonna get". Well, if you live in Belgium, life is not that surprising. You will surely get top quality pralines, no matter what box you choose.

But even Belgium can be surprising sometimes, if you dig deep enough, despite what some people say . The economic history of Belgian chocolate and its global trade success is quite surprising. "Belgium and chocolate? Why? How?", you may wonder. One theory has it that Spanish occupation brought chocolate to the region, during the 17th century. Spain was by far the country in Europe most addicted to (hot) chocolate during those days. To lack chocolate in Spain was as bad and unacceptable as to lack bread in France, apparently. Despite the historical and cultural preeminence of chocolate in Spain, it is Belgium today (along Switzerland) that is famous for its chocolate worldwide. Funnily though, in the long history of chocolate, the Belgian success story is an extremely recent phenomenon and, probably, critically dependent on a couple of technical innovations.

That makes chocolate another perfect example for the importance of "trade and technology ", my favourite theme these days. So, let's unwind the relatively short and phenomenal Belgian chocolate success and mark a few key moments. While today Belgium is a global leader in chocolate exports, until 1960 Belgium was a net chocolate importing country. Go back further and nothing would predict Belgium's success with chocolate. In fact, the jury of the Exhibition of Belgian Industry held in 1847 in Brussels declared that chocolate manufacturing will never become an important sector in Belgium since the country had no particular comparative advantage, given that all the key chocolate ingredients are imported.

Those days, decisions on what makes a country competitive along global supply chains in a particular sector were difficult to make. Who could have guessed that ten years later, a certain Jean Neuhaus would move from Switzerland to Brussels? Who could have guessed that his son, a Master Confectioner with good knowledge of the techniques developed in late 19th century by Swiss chocolatiers, would develop a new manufacturing technique that led to the invention of the praline in 1912 ? And who could have guessed that Octaaf Callebaut would diversify from beer into chocolate and in 1925 would invent a new technique to produce "couverture chocolate" (the key ingredient of pretty much every chocolate in the world) making Barry Callebaut the leading player in the global cocoa-chocolate supply chain, with activities worldwide in more than 30 countries?

None of this was easily predictable. And yet, the success of Belgian chocolate resides not in "Belgian terroir" but in well functioning global supply chains. From cocoa beans to Belgian pralines, chocolate has a long and complicated journey around the world. Farmers in Ivory Coast and Ghana produce 70% of cocoa beans worldwide. The Netherlands is the biggest importer and largest processor of cocoa beans and Belgium is home to the largest chocolate factory in the world. Yet, Belgian pralines are also a sector where small businesses are born "global".

Out of over 250 chocolate companies in Belgium, the vast majority are micro-enterprises or small businesses (SMEs) exporting from Belgium to many global customers. Few of them became "SMEs on steroids" being acquired by large foreign multinationals, listed on the stock market and with commercial presence and franchises in over 100 countries.

Yet, there is a slightly more bitterness than what you would normally expect in chocolate. Commercial success does not always mean that the chocolate journey is problem-free. Several criticisms were voiced against negative effects affecting certain actors in the chocolate supply chain, notably small-scale cocoa farmers whose income remained close to extreme poverty levels , and capturing a meagre share of the total value-added. There were also strong concerns linked to child labor in cocoa plantations and deforestation. Several certification schemes have been introduced to address these negative consequences. One could see for instance fair trade labels on chocolate products (e.g. Max Haavelar , Ecocert , etc.) or other sustainable certification schemes, like UTZ and Rainforest Alliance. Despite tangible results, existing schemes did not manage to alleviate all the problems affecting the chocolate supply chain. However, like in the past, there is hope from new technological innovations that could improve the functioning of global supply chains, from cocoa beans to chocolate bars.

One such innovative technology with great promise for traceability and sustainable global supply chains is "blockchain for trade ". Blockchain is usually known for its bitcoin application, but there is more to it than cryptocurrencies. Traceability is in fact the greatest blockchain promise for global supply chains. Cocoa trade has already been singled out as a practical example. Several NGOs have tested a "Cocoblock" pilot project in Ivory Coast, involving 161 small cocoa farmers, covering over 300 hectares of cocoa plantations and tracking over 500 kg of cocoa beans along the various stages, from farm to ship. The blockchain app also offered a digital organic certification. This pilot project clearly demonstrated that the cocoa supply chain chain is ripe for blockchain adoption, with tangible benefits for several policy objectives, including the recently adopted EU proposal to promote the consumption of 'deforestation-free' products , aimed at reducing the EU's impact on global deforestation and forest degradation. The introduction of blockchain technology will also enhance logistics efficiency across all stages of production (e.g. harvesting, packaging, warehousing, processing, distribution, etc.).

This is all to say that, just like its taste, chocolate remains a complex economic sector. So far we've just managed to scratch the surface of what the future might bring to chocolate making. But chocolate, like #TradeXpresso (even the Lungo version), is best consumed in moderation. I hope you got a flavor of the complex trade and global supply chains that bring your favourite xocolatl to your palate over Christmas. Let your trade and chocolate addictive thoughts now slowly melt under your tongue. And remember: life is like a box of Belgian chocolates, one never knows how chocolate might look or taste in the future!