How Most Chocolate Is Distributed
Hello and good day!
About 15 years ago, my dad and brother visited a cacao farm for the very first time. The farm was located about an hour and a half southeast from where we currently buy cacao. They were taken there by a government worker who was in charge of promoting exports from the region.
The area around the city of Jaen, in northern Peru, is home to many hundreds of small agricultural villages. The main cash crops in that zone are rice, coffee, and cacao. The farms are lush and have all kinds of delicious fruits and medicinal plants growing on them, but the way farmers make money is by growing and selling cash crops.
On that first trip, my dad and brother were hosted by the sweetest family in the world, a husband and wife, with several teenage kids. While touring the farm, the husband showed my dad and brother a small post-harvest processing station that he'd built.
This was not common. Most of the cacao farmers out in that zone wouldn't bother spending the time and money on building something like that. It would be an investment with no hope of a profitable outcome.
But this farmer was an interesting person who wanted to be innovative. Unfortunately, my dad and brother saw that the station was spotlessly clean, as if it hadn't been used in a long while. There were nicely built, wooden fermentation boxes.
And there was a raised dryer bed with plastic tarps over it to protect cacao from the rain. The farmer built all of that with hopes that if he did the fermentation and drying in a better way, he might be able to fetch a better price for his cacao.
Afterall, better fermented and dried cacao makes better chocolate, which can in theory be sold for more money. When asked why the farmer stopped using his post-harvest processing station, the farmer motioned for my dad and brother to follow him out into a cacao grove.
Under a break in the canopy of banana trees, where thin rays of sunlight penetrated down and illuminated the shaded farm floor, there was a tarp on the ground, covered in drying cacao.
As the humans walked into the grove, so did a procession of animals, dogs, chickens, geese, ducks, and turkeys. The animals were following the people around, probably hoping that scraps of food would materialize along the way. Once the animals became aware of the drying cacao, they worked their way over to the tarp and started investigating.
They sniffed and licked and clawed and traversed. A duck walked over the tarp, dragging its filthy little backside over the top of it.
But that wasn't all.
Brian walked over to investigate and saw that there were ants and beetles and worms circulating within the drying cacao as well. It is common to dry cacao in this way, on the ground, on top of a tarp.
It's not the best way though. A raised bed is much better. Jungle floors are not the cleanest places. And the cacao can be rained on as well, which causes mold.
Leaning up against trees, there were thick plastic bags tied in knots. The farmer showed my dad and brother the inside of those bags. The smell of vinegar and alcohol, laced with the faintest aroma of chocolate, came drifting out.
This was the fermentation methodology. The farmer explained that since he didn't get more money for doing it right, it behooved him to spend as little effort as possible on post-harvest processing. As long as the cacao had gotten down below a certain moisture level, a guy in a pickup truck would come and buy it and take it away.
This is how most cacao is handled worldwide. It is treated as nothing more than a word to list in the ingredients section of a package.
The flavor in the chocolate bar is not derived from the cacao used. It can't be. Cacao treated in this way tastes awful. Without neutralizing the flavor through a severely dark roast, the product would be inedible.
The flavor is then engineered using additional ingredients to make the product taste how you expect it to taste.
Frankly, the cacao could be forgone all together, except for the fact that legal requirements require companies to use a certain amount of cacao if they want to call the product chocolate. Given the low quality of the chocolate, these companies have no choice but to sell the chocolate pretty cheap and distribute widely. They make money on mechanization and volume.
These factors work their way all the way back to cacao farms all over the world, and the result is farmers treating cacao as described above.
The guy in the pickup truck just wants to sell the cacao at a profit to the next person in the chain. And the next person wants to do the same, and so on.
In all, there are 8 or 9 players in the standard chocolate supply chain who take a markup. When it is all said and done, the final product is sold cheap in drug stores and gas stations, sometimes two for the price of one.
The low price a lot of people pay for chocolate has to accommodate 8 or 9 markups and whatever is left over is what the cacao farmer gets. This is the standard way of doing things in the chocolate industry.
It keeps farmers in a vicious economic cycle that is hard to break out of. And it also strips these fine folks of the opportunity to do work they can be proud of.
They know they are cutting corners and producing an inferior result, but there is no alternative. In chocolate, and I suspect in many other food supply chains, there are three things that need to be done.
First, post-harvest processing must be centralized. It is something that should be taken off the plate of the individual farmers. A co-op can do it, or a private company like ours. Larger quantities of good cacao make finding a large-scale buyer more likely. A one-off individual farmer with better cacao in a region won't create a market. There has to be an organized effort amongst many farmers.
Second, as many players as possible should be cut out of the supply chain. This means that as far as possible, a farmer and the person who will eat their produce, should be as close to each other as possible.
In the case of making good chocolate, sophisticated machinery is required, so there usually will have to be at least one middle person.
At Fortunato Chocolate, the middle person is us. But we're the only one, and we've deeply integrated ourselves into the farming community.
We own the cacao and chocolate until the time our customers buy it.
We contract with the chocolate maker to make chocolate for us. We don't sell them cacao beans at a profit.
The third part of this puzzle, which I just mentioned above, is that a fine flavor chocolate should be produced. The resulting chocolate can't be sold at a rock bottom price.
In our case, the per ounce price of our products are about the same as a mid-range chocolate product in the grocery store. We're not the cheapest, but we are by far not the most expensive.
But given the quality, we are a great value. Not being at rock bottom puts more money in the supply chain. Cutting out middlemen sends a higher percentage of the money in the supply chain back to cacao farmers.
It is a very nice and cohesive system. Buy direct. Sell direct.
More money for cacao farmers. Better quality and fair prices for customers. There are only a handful of chocolate companies out there who operate in this way.
And there are a handful of clothing and food companies out there who do something similar. They are definitely worth supporting.
To find out who else uses this model requires some research and legwork, but it is worth it. You get to know you are doing something good for the world, and you get a good deal on a premium product.
Anyhow, I am running out steam for now.
I thank you so, so much for your time today!I hope that you have a truly blessed day!
Adam
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