The Rejection of Third-Party Certification Schemes in Bean-To-Bar Chocolate

Abstract

We examine why entrepreneurs in the emerging bean-to-bar chocolate market segment fail to adopt socially-oriented certification schemes such as Fair Trade, Rainforest Alliance, and USDA Organic. Despite the widespread acceptance in other domains of third-party certification schemes, which signal firms’ non-market social and environmental goals, our quantitative data show that their use is negligible among even explicitly socially-oriented bean-to-bar chocolate makers. We find that three beliefs underlie the rejection of certification: the cost of label adoption is too high relative to its efficacy; certifiers’ enactment of professed values is fundamentally flawed; and many labeling schemes have become commercialized and watered-down. Our qualitative data demonstrate that the very entrepreneurs who reject certification are working to shape their market by engaging in the disruption of the global cacao supply chain, exerting informal influence within their market segment, and building connections directly with customers. Taken together, these results suggest limit conditions to certification schemes with implications for the study of non-governmental market regulation and socially-conscious consumer markets.