I should cocoa

Craig Sams supplied muesli at the first ever Glastonbury festival and has been called one of Britain's greenest men. So why is he selling his Green & Black's chocolate firm to Cadbury's?

The following correction was printed in the Guardian's Corrections and clarifications column, Monday May 23 2005:

'In converting the price of a "four shilling dish of rice and vegetables" in 1967 to 20p in today's money we forgot to allow for its relative value. Taking into account changes in the retail price index it would now be worth £2.23. '

Craig Sams has an unimpeachable organic pedigree. He opened Europe's first macrobiotic restaurant in 1967 in London. John and Yoko, Marc Bolan, the Rolling Stones and Terence Stamp were regulars at Seed in west London, savouring the the four shilling (20p) dish of rice and vegetables. In the same year, he and his brother Gregory set up the Whole Earth grocery range, which even now supplies arguably the best organic peanut butter around. In 1971, Sams and some friends did all the food at the first Glastonbury festival, offering muesli, brown rice, red bean stew, porridge, unleavened bread and a reportedly ripping tahini/miso spread. Their fare was so popular that festival-goers blocked the route of local hot dog vendors' vans to the site, shouting "Out! Out! Out!" In 1972, he published About Macrobiotics, which became one of the great wholefood bibles of that decade. And in 1991, he and his wife Josephine Fairley, a former glossy magazine editor, set up Green & Black's, an organic, low-sugar, high cocoa-solids chocolate and Britain's first Fair Trade product. He chairs the Soil Association. He is a small-scale organic producer with a chestnut coppice and mixed fruit orchard near Hastings.

These are just a few of Craig Sams's counter-cultural credentials. Last week, though, the chocolate and soft drinks conglomerate Cadbury Schweppes announced that it was buying up his Green & Black's enterprise for an undisclosed sum. All five executive directors are understood to have made £5m between them from the deal. Sams, now a non-executive director along with his wife, says he has made a few bob from it too, though he declines to say how much. "Let's just say I will be able to pay off the mortgage a lot quicker." When he has his picture taken, he says: "This is my 'I'm laughing all the way to the bank' pose."

On the face of it, this seems a distasteful move for a wholefood guru who, as we drink a very good cup of tea with soya milk in the kitchen of his vast Georgian rectory in Hastings, is even wearing organic clothes. Hasn't he sold out to the Man, just as Ben and Jerry did when they flogged their totally rad ice-cream business to Unilever? Sams brushes back his grey quiff. "No. Look, I don't drive a car. If Shell and Exxon are the Man, I haven't sold out to the Man." In any case, this Nebraska farm boy doesn't really buy the implied line that organic food retailing and capitalism are inimical. "You'll find the organic movement is just teeming with sharp entrepreneurs." Sams himself holds a BSc in economics from the University of Pennsylvania and is regularly called on to give talks about his business philosophy.

The 60-year-old American contends that the sale of his organic low-sugar chocolate to one of the world's leading purveyors of non-organic, high-sugar chocolate, is necessary for Green & Black's development. "It's like in 1999, when I sold Green & Black's for the first time. We needed investors who could sustain short-term losses so we could be profitable later." Those investors were led by William Kendall, formerly chief executive of the New Covent Garden Soup Company. Sams and Fairley sold 80% of the business to them. "I've effectively sold the business twice, but I can say that I'm getting more for the remainder than I did when I sold a larger proportion of the business in 1999, because it's a much bigger business now." Sams will remain Green & Black's chairman, though he says it is chiefly an ambassadorial role.

Green & Black's has 30 employees and an annual turnover of £22m, hardly a chocolate button next to Cadbury's, but enough to make it the biggest organic chocolate brand in the UK and now the US. It is the fastest-growing UK confectionery brand, with year-on-year growth of 69%.

But why do you need Cadbury's, I ask Sams, who is wearing a purple shirt that cunningly echoes the Dairy Milk livery. "We're bumping up against the available supply of cocoa beans, and we need their help to expand. We have a planting project in Belize to put cocoa beans under the rain forest canopy, which will provide £1m income for growers there. We are managing our business on a shoestring. If we really want to make a difference to the level of operation and really support the farmers there, we need Cadbury's." That said, he shows no interest in taking a bite from the bar of Dairy Milk that I bought on the train from Charing Cross.

Cadbury's will also help UK and US market penetration. "We sell best in supermarkets, and that isn't good enough. Supermarkets have 80% of the food market but only 60% of the confectionery market. Most sweets are sold at newsagents because they are impulse buys. We got into supermarkets quite early - Sainsbury's in 1992, the rest of them in 2000 - but the distribution in those stores was patchy until recently. The point now is to get into the smaller shops and its very hard without the sales force that Cadbury's has at its disposal. In the US and Australia there are very long supply lines which are difficult for a small outfit like ours."

But isn't there a bitter irony behind all this? Surely the only reason Green & Black's has taken off so much in the UK is because Cadbury's was hitherto dominating the market with its sugary product in a way that made Britons feel increasingly deprived whenever they crossed the Channel and tasted what was on offer there. After all, before Green & Black's first product, the 70% cocoa-solids Mayan Gold, came on the market, the leading dark chocolate had 34% cocoa solid and enough sugar to make your teeth hurt.

Green & Black's [Green = organic; Black = extra dark] was established by Sams and his wife 14 years ago. "Jo and I got married in the same year. It was the business baby of that marriage. When we floated shares it was like sending the child off to university. Our responsibility diminished as we became non-executive directors." And now? "Now it's graduated with honours and gone off to the blue-chip multinational with a promising career." Nice analogy. But hardly the kind of image one would have expected from a man whom the Observer described only last year as one half of Britain's most organic couple and who has been one of the key defenders of the Fair Trade mark, which last year celebrated its 10th anniversary.

Sams first embraced macrobiotic food in India in 1965 after being cured of hepatitis through a diet that included barley with yoghurt and unsweetened tea. "That stopped the dysentery, and it made me make the connection between what was going on in my gut and what I was eating. But it wasn't until I got home and spoke to some macrobiotic friends that I was turned on to macrobiotic food in a big way. I realised it was powerful medicine. It made me feel fantastic."

The career-defining moment, though, came in 1966 when he was standing in a New York macrobiotic restaurant and decided he would not, as planned, join the Peace Corps, but wanted to run a similar establishment, ideally in London, where he had been to school on and off since the early 50s thanks to travelling parents. "I may sound American," he says, "but I spent much of my childhood in London. I've been here a long time. I was at a dinner party recently where I was the only person who remembered the day sweets came off the ration. That was a good day." And a very sugary one. "Oh yeah."

He had been a vegetarian too during much of his childhood. "My father had had some problems that a Japanese doctor sorted out in Hollywood in the late 40s by means of sensible vegetarian food. So I was raised a vegetarian child, which was difficult at university in the early 60s. I had to have three letters: one from my parents, one from my high school principal and one from my doctor. Because in those days people were so brainwashed with the idea that meat protein was essential and sugar was necessary for energy ... It wasn't me but Plato who said that vegetarianism is the way to world peace. The constant fighting for pasture and now oil is what really disrupts world peace."

This radical philosophy underpinned his business practices. In the past 40 years he has run several successful organic restaurants, written a number of successful macrobiotic food books and published Seed magazine from 1972 to 1977. But it was Green & Black's that captured the imaginations and tastebuds of a burgeoning British demographic. The project was born when Sams heard that some Belizean cocoa farmers had lost their American buyer and risked ruin as a result. He offered to buy their cocoa beans for 63 cents a pound - about 10% higher than the market rate. More importantly, he and Jo promised to continue buying at this price year on year, irrespective of market fluctuations. If market prices rose, however, they undertook to increase the prices they would pay the farmers.

This price guarantee to producers became the central plank of Fair Trade philosophy, and one that some have derided. Nestlé's chief executive Peter Brabeck-Letmathe, for instance, argues that the Fair Trade model in the long term lures farmers back into a market attracted by artificially high prices, leading to over-production, which in time forces prices ruinously low.

In fact, says Sams, the real problem is subsidies to developed-world farmers at the expense of developing countries' producers. "Fair Trade really is free trade, and it is much more efficient at improving the lot of the developing world than aid. Once protectionism collapses, as it will do because of what is happening at the World Trade Organisation, that will become clearer."

But for the meantime, we live in a world dominated by rich-world protectionism and yucky chocolate. What if, tomorrow, Cadbury's decided to ditch Green & Black's Fair Trade commitment and make chocolate that exploited Latin American farmers? "They wouldn't do that. Green & Black's will be a stand alone business in that respect. They would be insane to interfere that way, because the whole point of our product is that is good in terms of taste and successful because of consumer loyalty. Customers would not be loyal to a product that did not hold to the principles that made them buy it in the first place."

Aren't your organic products just needles in a culinary haystack of turkey twizzlers and obesity-inducing snacks? "I don't see it that way. Lenin once said, give me 5% of the population supporting Bolshevism and I will give you revolution. In the end he didn't even have that high a percentage. We have 13% of Waitrose shoppers buying organic food and bestselling books like Gillian McKeith's. Sales of aduki beans and miso are going through the roof."

And, in Hastings, there is now an organic bakery. "We have taken it over. It's gone organic and the customers haven't noticed, except for the fact that the bread and the Scotch eggs taste much better."