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#SourcingSeason - Dominican Republic: Direct Trade in Depth

The Food of the Gods' journey begins with five million cacao farmers worldwide. These men and women, 90% of whom are smallholders with an average of 3 hectares of land, grow about 1 MT of cacao per year. Taza Chocolate alone uses over 200 MT of cacao per year, which presents a real challenge. With our factory in Somerville, Massachusetts, there is no way we can collect cacao from 200 or more small farms across Bolivia, Belize, Haiti and the Dominican Republic.

From Latin America to West Africa, enterprising individuals have developed a profitable solution to this supply chain problem. With a motorcycle or pickup, local traders drive from farm to farm, paying producers for their cacao. Often, they deliver the beans to a larger trader who purchases the product and in turns sells it to an even better capitalized one. This aggregation process continues until the beans reach a cacao exporter, often the subsidiary of a large multinational corporation that can ship the beans across the globe.

For the major manufacturers of chocolate candy bars, this system works well enough. The supply chain delivers huge quantities of cacao to their factories where it is usually mixed with a heavy dose of dairy, sweetener and artificial flavoring (for instance, a Hershey's milk chocolate bar contains only 11% cacao.) The fact that different farmers have fermented and dried the beans differently - and often poorly - goes unnoticed by the consumer.

Adriano of OKO Caribe observes my less than graceful descent "Adriano of OKO Caribe observes my less than graceful descent."

For Taza Chocolate, however, masking poor quality cacao is not an option. In order to make minimally-processed, stone-ground chocolate, our ingredients have to be seriously good. After all, when you dig into a Super Dark Chocolate Mexicano Disc, 85% of what you taste is organic cacao beans, and the other 15% is organic cane sugar.

In order to guarantee an exceptional product, we need complete visibility into our cacao supply chain. We need to select partners who are on-the-ground 24/7, working with farmers to properly harvest the cacao and then bringing it to a centralized facility for a consistent fermentation and drying. We need our Direct Trade program.

Taza Chocolate's co-founder, Alex Whitmore, launched the Direct Trade program nearly a decade ago in the Dominican Republic. Our first partner was a cooperative called La Red Guaconejo. Made up of 165 smallholder farmers in the country's northeast, the cooperative's management purchased member farmers' cacao and expertly fermented, dried and exported it. In exchange, Taza paid at least $500 per metric ton over the world market price, and often nearly double that - a 30% premium in exchange for consistent high-quality cacao.

Eventually, however, La Red Guaconejo ran into many of the problems that sink cacao cooperatives worldwide. Lacking management capacity, corporate governance and financial controls, the cooperative made large loans to unscrupulous farmers. When they refused to pay the money back, the cooperative fell into default with the bank and lost the trust of its members. Taza Chocolate lost its original Direct Trade partner.

Fortunately, by this time Alex had formed a second relationship in the region, this one with a small private exporter called OKO Caribe. The company's owners, Gualberto Acebey and Adriano Rodriguez, brought over 20 years experience working with the country's largest cooperative. Now, they set up their own fermentation and drying operation, partnering with three local communities and over 150 farmers.

 Gualberto of OKO Caribe shows off a beautiful cacao pod"Gualberto of OKO Caribe shows off a beautiful cacao pod."

Today, Taza sources over 100 metric tons (half its total) from Gualberto and Adriano. We appreciate their transparency, commitment to quality, and professionalism. They develop long-term relationships with local producers, and this year, are in the process of launching a nursery program that will provide farmers with cacao seedlings at cost.

Taza's final partner in the Dominican Republic, Finca Elvesia, represents a third type of Direct Trade partner. While the first two models involve local processors aggregating beans from multiple smallholders, the third depends on production from one large farm.

The farm managers of Finca Elvesia and I page through the 2015 Transparency Report together"The farm managers of Finca Elvesia and I page through the 2015 Transparency Report together."

The primary benefit of this sourcing strategy is its simplicity. Unlike La Red Guaconejo or OKO Caribe, Finca Elvesia does not need to develop extensive producer outreach and logistics. Rather, the farmer manages her own production and conducts her own fermentation and drying on site. In the case of Finca Elvesia, the process is perfected from start to finish.

This year, as I visited our partners in the Dominican Republic, I considered the pros and cons of each of our Direct Trade models over the years. In the case of La Red Guaconejo, I appreciate the concept of a producer-owned cacao cooperative, but I wish it would function as well in practice as in theory. OKO Caribe does not give producers the same voice, but it has proven more stable and reliable to date. Meanwhile, Finca Elvesia does not involve smallholder producers at all, but should the hardworking farmer and his staff be ruled out by its larger size?

The reality is that for Taza and our Direct Trade program, any of these models can work. And moreover, choosing our cacao partners is not an academic exercise. When Taza decides to begin sourcing from another country - usually on account of a new product needing a different taste profile - I end up weighing dozens of factors, from model to track record to gut feeling. The challenge and the reward of Direct Trade lies in grappling with precisely this puzzle.

Fair for all


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