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The Premium Chocolate Movement: Effecting Change With The Creation Of Value 3

21 Oct

ALTERNATIVE TRADE LINKS FOR QUALITY COCOA GROWERS

Raymond Bonnat, Stephane’s father and the second family member to act as manager, celebrated the hundredth anniversary of the Bonnat Chocolate company in 1984 with a world-first idea: single-origin bars. Stephane describes how difficult it was in those days to source quality. Bonnat paid growers premium prices for their top quality beans, he said, but they bought in such small volumes they couldn’t keep these plantations afloat. Family owned plantations of less than two hectares comprise 85% of global cocoa production and when cocoa prices tumbled in the years after market liberalisation, many small plantations were forced out of business. The premium chocolate movement is changing this, driving demand for quality cocoa to
levels that are sustainable for small plantations. The ICCO noted that while the volume of chocolate consumption is increasing at a very slow rate in mature markets such as Europe and the US, the volume of cocoa consumption is increasing rapidly: “The new trend in chocolate consumption has been characterized by the increasing appeal of premium chocolates and, in particular, of high cocoa content dark chocolate…

According to Euromonitor, in the past five years up to 2008, the growth has been mainly driven by single-origin chocolate which grew by over 20% per annum and dark chocolate (up by over 15%).”

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Larry Slotnick, co-founder of Taza Chocolate, said that the only way to ensure a supply of high quality beans, and that the premiums they paid made it into the hands of the farmers, was to go to the plantation level.They practice “Direct Trade”, a term used to describe a system of purchasing developed by specialty coffee roasters in the US. It means that Taza chocolatiers visit the plantations that provide their beans, develop long-term relationships with growers, and teach them how to achieve the standard of quality that Taza require for their chocolate. They sign contracts with these growers that guarantee a minimum price per pound that is considerably higher than the average price of the commodities market. The benefit of these relationships to growers is enormous. Firstly they learn how to improve the quality of their cocoa, information lost when the
marketing boards and other government bodies were dismantled. Secondly they offer the growers
a guaranteed buyer for their crop, empowering them to invest in long-term activities that will further improve the quality of their beans.

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The International Cocoa Association (ICCO), recognising the potential of this system, have initiated several projects to help reestablish a premium trade chain. These include a supply chain management initiative called “Total Quality”, that separates cocoa bean lots so that quality beans can be identified and sold directly to buyers.  They have also initiated a competition called “Cocoa of Excellence”. These awards are modelled on the highly successful Cup of Excellence (COE) awards in the specialty coffee industry, in which small batches of quality coffee are blind tasted by a panel of experts, and given a rating out of 100. The coffees that score over 90 are auctioned to speciality buyers who attend the event. Consulting firm McKinsey & Company audited the award system in Nicaragua in 2006, and determined that it helped Nicaraguan coffee producers, cooperatives and exporters to earn an additional $USD1.1 million profit, and considerably strengthened Nicaragua’s specialty coffee industry. Whilst the ICCO initiatives are in their infancy, they are positive steps to the creation of an alternative system of trade, one that rewards growers financially for quality beans.

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next time: THE THREAT OF CENTRALISATION

Thanks to a friend Susan Hoban who shared this Final Thesis: Master of Food Culture and Communication

 

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