Guilt-free chocolate.

Perhaps unrecognized by the confectionery industry, chocolate bars over the past 10 years have morphed from the dentist's scourge to a health food store staple.

Cacao cultivation has become an environmentally correct tropical forest product, earning the moniker, "green bean." Organic chocolate

To the traditional health food store habitue, chocolate is a pariah, condemned by high fat content and refined white sugar. But the virtues of chocolate could not be ignored for long. By the beginning of this decade, its reputation became rehabilitated. Health food nuts, despite their convictions, couldn't resist this one indulgence.

Wim Rabbie, a leading Dutch organic cocoa broker, explains the process. "People's first impulse was to buy organic grains and produce. Then, they moved on to buying organic milk to avoid all the chemicals and hormones. Finally, when they discovered their lives were dull, they bought chocolate."

Germany-based Rapunzel was the first company to cater to this indulgence. In 1989, the company decided that if their customers were going to eat chocolate, they might as well eat Rapunzel-brand organic chocolate rather than run to a comer convenience store. Such early market diligence paid off and now Rapunzel is one of the world's leading marketers of organic chocolate.

In the U.S., the first organic chocolate producer was the Organic Commodity Project. Since its first organic chocolate sales in 1994, this company has grown to become the largest domestic provider of organic chocolate and cocoa products, such as chips, panned goods, and ice cream coatings.

The acceptance of organic chocolate, in large part, was due to the concurrent admission into health food stores of other products containing sugar lightly processed to retain many of its natural nutrients.

There are eight organic chocolate marketers with retail sales over $500,000. A ninth company, the OS3 Swiss Fairtrade Foundation, had bigger sales but was excluded - its all-natural bars are not yet certified organic.

There are a dozen others that are too small to make this list. None of the world's leading chocolate makers - Hershey, Nestle, M&M/Mars - have entered the market.

With a few notable exceptions, almost all of these companies had existing organic and/or natural food lines before branching out into chocolate. Chocolate from six companies is distributed in the U.S. Of the remaining two, CFCC is under negotiations with potential distributors, and Bonbon Jeanette is exploring its options.

U.S. retail sales of organic chocolate is estimated at $15.4 million, a small drop in the much larger $13 billion retail chocolate market, reports the Chocolate Manufacturers Association. Yet the sales are respectable considering this sector's youth. Half of these companies have been marketing organic chocolate less than two years.

Total organic chocolate sales are about $18.2 million in Europe and $0.1 million in Asia. World total confectionery sales are $33.4 million, with 40 percent of the sales generated in the U.S.

The organically certified processors/manufacturers include ADM Cocoa, Barry Callebaut, Maestrani, Dutch Cocoa, Chocolat Bernrain and Nestle.

Significant supplies of certified organic cocoa are being produced in Central America (Costa Rica and Panama), South America (Bolivia, Ecuador, and Brazil), the Caribbean (Dominican Republic), and Africa (Cameroon).

Organic sugar, both from cane and beet, is produced in Paraguay, Burma, the Philippines, Mauritius, and Slovakia. Organic vanilla is available from Madagascar, Mexico, and Costa Rica, while organic milk comes from a number of U.S. and European dairies.

The growth of the organic chocolate market is driven by the same dynamics directing the organic market as a whole - concerns over health and the environment, both issues entwined with social responsibility and politics.

The European Fair Trade Organization calculated that cocoa farmers were receiving only five percent of the profit of the sale of the chocolate, with 70 percent of the profits going to the international trading organizations and chocolate industry. To rectify this income imbalance, fair trade guidelines were established to promote a fair chance for small scale producers in developing countries. Setting fair prices includes a "social premium" to producers as compensation for costs associated with maintaining environmentally and socially sound practices.

These higher producer costs, often 30 percent higher than international market rates, sometimes are off-set by eliminating middlemen mark-ups. Long-term contracts are used to provide economic security and to remove the uncertainty of fluctuations in world cocoa prices.

Josephine Fairley, founder of Green & Black's, describes her company's fair trade policy. "We hope that by showing how it can be done, we can help to establish a new blueprint for fair trade with the Third World."

Efforts to inform customers of the nature of the product's origins has led to the development of independent trademarks. The first such mark was issued in 1991 on Mascao chocolate bars produced by El Ceibo, a Bolivian cocoa cooperative, and OS3.

The U.K.-based Fairtrade Foundation in 1994 placed its trademark on Mayan Gold chocolate made from beans grown in Belize and marketed by Green & Black's. The Max Havelaar Foundation has licensed its fair trade symbol to five chocolate manufacturers for products sold in the Netherlands.

Of all the cash crops produced in this tropical belt, cacao is regarded as resulting in potentially the least dislocation of indigenous species. That is, cacao can grow under partial original forest cover displacing only a small footprint of vegetation. This low-impact agriculture fosters bio-diversity and minimizes soil erosion.

Plantation or mono-cropping, in contrast, requires extensive forest removal with its attendant soil depletion, environmental degradation, and health problems.

To meet the growing demand for more supplies, the Organic Commodity Project has become a leading provider of technical assistance on sustainable agricultural practices to cocoa farmers in Central and South America.

Says President Joe Whinney, supporting sustainable farming to promote bio-diversity results in "soil conservation, increased nutrient recycling, fertility, reduced fungal diseases, and increased beneficial insect population."

The end result is that cacao farming is increasingly seen as an attractive eco-friendly cash crop. Recognizing this benefit encouraged Nell Newman, partner in Newman's Own Organics, to introduce a line of organic chocolate products, much of which is grown in Costa Rica.

She explains, "I was drawn to this project because it meant supporting sustainable agriculture in Costa Rica. Growing cacao in this ancient way meant that no rain forests would need to be destroyed. We want to encourage this method by supporting the farmers economically."

Until recently, production of organic chocolate was constrained by the lack of certified raw materials, thus driving up costs. Even now, prices for some ingredients trade at levels much higher than conventional ones.

This may soon change. More producing countries are investigating organic certification, as many plantings are de facto organic due to relatively high costs of chemical inputs. These and other new sources of supply will allow for more sophisticated liquor blends and continued product quality improvements.

The price of some key non-cocoa organic ingredients has dramatically fallen. Organic sugar prices have decreased 30 percent over the last three years owing to a higher volume of quality product on the international market. Also, processing efficiencies due to higher volume throughput have squeezed manufacturing costs.

Lowered ingredient costs could translate to lower retail prices, helping organic chocolate compete in the conventional confectionery market.

What is exciting about the organic chocolate sector is its anticipated growth rate. Companies interviewed for this study are estimating U.S. annual growth at 20 percent for chocolate bar sales, a figure that mirrors the expansion of the entire organic market.

European growth forecasts are 1015 percent and Asian sales are 40-50 percent, albeit from a very small base.

Can the supplies of organic cocoa keep pace with this anticipated demand? At the moment, with petrochemical inputs too expensive for many indigenous farmers to afford, half of all cacao grown today is organic by default. But organic cultivation does not automatically meet sustainable agricultural methods.

The fair trade organizations, together with organic advocates, have been working to reconcile their individual agendas. When this happens, everyone gains a fair return - growers with better prices, consumers with healthier product, and the earth with sustainable utilization.

But will fair-traded, organically-grown chocolate compete with conventionally produced chocolate? Consumers will pay more for products with perceived higher value. This price premium should gradually deflate as greater supplies of good quality cocoa come on the market. Continued diligence on the part of the organic growers, and monitoring by certification authorities should yield successful results in new markets.

That brings us back to the title of this article. Healthy and delicious chocolate produced without compromising the social and environmental integrity of production is truly guilt-free chocolate!

about the author: C. Curtis Vreeland Vreeland & Associates, has been manager of International Operations (cocoa) for Hershey. He is based near Hershey, Pennsylvania.