Chocolate Ignorance Is Bliss
Hello and good day!
There is something very true about the old saying that ignorance is bliss.
In many cases if you were fully aware of the implications of what you think you want to achieve, you might not even get started in the first place.
Had we known going in how many different problems we'd have to solve, we probably would have walked away from our chocolate business in its nascent phase.
It wouldn't have seemed feasible.
We set out 16 years ago to make a world class chocolate and to find a way to pay our cacao farm partners much more than they'd previously been receiving.
To make a world class food product, you need world class ingredients.
As it pertains to chocolate, that means finding a genetic variety with high flavor potential.
80% or more of the world's chocolate is made with industrial hybrid varieties of cacao that have been bred for high yield and disease resistance.
The flavor potential has literally been bred out of these plants.
Even in zones where flavorful, heirloom, native varieties of cacao exist, the trend worldwide is towards pulling them up and replacing them with high yield plants for economic reasons.
Given a low fixed price, the only way out of poverty is to increase the volume of your harvest.
So, the first challenge is to find a good variety of cacao.
We lucked into that by a series of serendipitous encounters that took my dad and brother out to the northern Peruvian jungle.
There is wonderful, native, pure Nacional cacao growing all throughout the district of Huarango where we operate.
We showed up at a good time, because the farmers out there were starting to replace their native trees with an industrial and tasteless variety called CCN-51.
Had our paths crossed with our wonderful cacao farm partners a few years later, the trend might have already gone too far and there may not have been enough of the native variety left.
But working with a good variety of cacao is only the very tip of the spear.
Before we showed up on the scene, this rare cacao with wonderful genetics was being sold into industrial supply chains and used to make low quality chocolate.
The good genetics didn't make the bad chocolate taste any better.
And that is because no cacao will taste good, no matter how unique and exquisite its genetics, if the post-harvest processing isn't done properly.
My brother Brian took on the challenge of learning how to ferment and dry cacao well.
This process took a year and a half with many failures and false starts along the way.
I won't have space to go into too many details but suffice it to say that post-harvest processing has roughly 50 steps, each of which requires proper execution.
Once we had learned how to process cacao well, another problem reared its head.
How do you process large quantities of cacao according to the processes my brother had developed?
Our experimentation phase was carried using small test lots of cacao in a small space.
To build a sustainable business, we'd need to process large quantities of cacao in a big facility and using cacao purchased from hundreds of farms dispersed throughout a large canyon with terrible road and bridge infrastructure.
How to go about building a big enough facility out in the middle of the jungle was a problem to solve.
As was how to get freshly harvested cacao from farms back to our centralized processing facility the same day.
Both were especially tough challenges because Brian had never managed a construction project or a transportation team.
By the way, if you are getting the sense that my brother Brian is a special human being, your hunch is accurate.
But even solving those problems wasn't enough.
Had we stopped there, we wouldn't have figured out how to sustainably pay higher prices to our cacao farm partners for their cacao.
The most obvious way for us to generate revenue would have been for us to sell the well processed cacao to a premium cacao distributor who then would have sold the cacao to a premium chocolate maker.
The premium chocolate maker would have made chocolate and then sold it to confectioners, who would have sold their confections to distributors, who would have sold the confections to retail outlets, who would have sold it to customers.
All those markups put backwards pressure on the cacao price and when we saw the price that premium cacao brokers were willing to pay, we couldn't make it pencil out.
Our only option was to make and sell chocolate and cut out a bunch of middlemen.
Just one little problem with that.
None of us had the slightest idea about how to make chocolate and the guy most suited to figure that out was in the jungle running our cacao buying and processing operation.
Neither me nor my dad are engineering types.
Thankfully, my dad is a master networker, and we networked our way into a relationship with our Swiss chocolate making partner Max Felchlin AG.
Now we knew how to make chocolate but didn't know how to sell it.
This was my problem to solve and over time we learned how to win limited victories selling head to head against big companies like Valrhona, Callebaut, and Guittard.
At this point, it sure seemed like we had figured out everything there was to figure out.
But not yet.
The pandemic hit in 2020.
Restaurants and chocolatiers were shut down worldwide and overnight nearly our entire market disappeared.
From selling chocolate in 30 countries to very few purchase orders whatsoever in a matter of weeks.
There was one more big problem to solve.
How could we control our own destiny by interacting directly with the customers who enjoy our chocolate?
As wholesalers, we were reliant on the relationships that our customers had with their customers.
Our fate was in their hands.
By selling direct, our fate is in our own hands.
And that is what we've been figuring out from 2020 through the present.
I have a master's degree in accounting and passed all parts of the examination to become a tax attorney.
Ignorance is bliss sometimes.
Had we known going in all that we'd have to figure out, we probably would have walked away from it.
I'd be in tax court right now and not sending this message to you.
Usually when I tell people about our story, I have to choose just one little sliver of what we do that is special.
There are too many things to tell in a short burst.
Thank you so much for time today.
I hope that you have a truly blessed day!
Adam
Click here for wonderful chocolate made with pure Nacional cacao.
Learn About The Fortunato Chocolate Newsletter.
Follow us on Instagram - @fortunatonochocolate