We at the Fine Cacao and Chocolate Institute (FCCI) are a Massachusetts-based non-profit organization dedicated to research and education on the fine cacao and chocolate industry. Usually, we spend our time investigating the cacao and chocolate industries. Covid-19 changed our plans. We put a temporary halt ongoing research programming. The situation was urgent, we felt.
Our response to the situation was to develop a platform to gather data and help people in the cacao and chocolate industries to make decisions concerning the impact and response to Covid-19. During the months of March, April and May, a team of researchers at FCCI worked to conduct flash polls—lightning surveys informed by news analysis and key informant interviews—among several hundred cacao production and trade organizations, small chocolate companies and pastry and chocolatier professionals, all segments of the global cacao-chocolate value chain, to better understand the impact of Covid-19 on their businesses and livelihoods. The preliminary results of this research are available online here.
In the case of Latin America and the Caribbean, sales of sales of cacao dropped; chocolate production declined, and many faced an imminent risk of having to close their businesses, as cases of Covid-19 cases soared in several key countries such as the United States, Brazil and Mexico. While FCCI researchers continue to collect accounts from dozens of operations, it is essential to consider the experiences of those impacted in their own words. This article presents a written panel discussion on the impact of Covid-19 to the cacao-chocolate value chain in the Latin American region.
Below you will read the accounts of several prominent actors in fine cacao and chocolate in Latin America. Contributing to the discussion are experts from five different countries: Aline Etlicher, development manager of Pisa Cafe et Cacao, an agro-industrial company in Haiti; Gonzalo Gout, co-owner with Chef Enrique Olvera of Ticuchi Restaurant in Mexico City, Mexico; Adriana Reis Ferreira, researcher with the Cocoa Innovation Center of Brazil; Freddy Salazar, director of Costa Esmeraldas Cacao Company in Ecuador; and Carlos Ignacio Velasco, CEO of Cacao de Colombia and Cacao Hunters. Here they describe their efforts to support their businesses and communities during the pandemic, and provide testimony on the experiences of Latin American researchers and entrepreneurs in Covid-19 response.
What are the three biggest impacts Covid-19 has had on your operation?
|Aline Etlicher, Pisa Café et Cacao—Haiti||Haiti seems to be hit by the Covid-19 with a delay compared to its commercial partners for cocoa which are the United States and Europe; also, so far, it has not been hit as hard either. This situation affecting the markets globally with a drastic slowdown in retail purchases and a drop-in demand and prices, is impacting PISA’s cocoa operations seriously. The uncertainty of export sales brought by the pandemic led to the decision to suspend cacao purchases at the peak of the harvest. In fact, sales and chocolate production for the fine cacao segment PISA services seem to have slowed down and customers had already enough beans in inventory before the Covid-19 crisis.|
|Freddy Salazar, Costa Esmeraldas— Ecuador||The biggest impact we have felt has been the loss of sales. We understand this is attributed to many of our buyers relying heavily on revenue coming from retail foot traffic. At the same time, we have heard comments about online sales increasing. We are not sure if the increase will be substantial enough to sustain purchasing as we’ve seen in the past. We believe we have been impacted to a lesser extent by the disruption in supplies given the logistical challenges and travel restrictions.|
|Carlos Ignacio Velasco, Cacao Hunters —Colombia||The pandemic brought to a minimum level the foodservice business in April, a key channel for us to sell our professional line of chocolates, although we’re starting to see some signs of recovery. Most craft chocolate makers around the world are struggling with the same situation, we’re not the exception, so it’s not surprising that our sales of specialty cocoas in April were almost nonexistent. It’s encouraging though, that we’re starting to see signs of recovery in Canada and Europe.|
|Adriana Reis-Ferreira, Centro de Inovação do Cacau (CIC)—Brazil||The main impact of COVID was the reduction in sales of our cocoa quality analysis services; the reduction of the internal work team; and the reduction of the cocoa buyer market.|
|Gonzalo Gout, Ticuchi Polanco—Mexico||The first two weeks of the lockdown, the uncertainty of the future felt the strongest, or at least the most unmanageably disrupting. I remember having difficult and despairing calls with many of our purveyors. During one of these, with Lucio -a social entrepreneur who established a produce co-op with wonderful farmers who care deeply about their fruits and vegetables- I remember the frustration in his voice as he heralded the amount of produce that was going to go bad in the fields because restaurant demand simply dried up. I heard countless stories like this one. Bonfilio, a dairy producer, was afraid his milk was going to go bad and had to dramatically up his cheese-making to avoid such a fate. I must confess I was very pessimistic about the future of these projects that I had come to cherish so, both individually and for what they represented as a collective. I was not expecting, however, the abrupt change that came right after.|
Where are you finding the most support?
|Freddy Salazar, Costa Esmeraldas— Ecuador||
As a business we rely on our customers. Bigger buyers remain committed to purchasing the amounts offered at the beginning of the year. However, some have advised there could be issues with payments to manage cash flow; others have inquired about the possibility of cancellation of orders. There is a real threat that cancellations could happen at some point and we would be affected to a point where we will be forced to take strong measures.
As a start-up struggling business, we have relied exclusively on our ability to communicate our story to the press for sales. We have reached out to some government institutions in regards to starting initiatives to encourage consumption along the chain, but of course, this will benefit chocolate products mostly. The Ecuadorian Government is facing one of its biggest economic challenges of the past few decades.
|Carlos Ignacio Velasco, Cacao Hunters—Colombia||
We took an early decision during the crisis that we would minimize the impact on our partners in the cocoa-producing regions by honoring our purchasing contracts and by providing safety kits that would allow them to run their operations in a safe manner. Nonetheless, transportation in the field has become difficult and expensive, limiting the amount of cacao we’ve been able to buy in regions like Tumaco.
Our partner in the United States, Uncommon Cacao, has been of unparalleled support keeping their purchasing commitments and helping us to raise cash to support the associations we work with. We’re making use of technology to keep in close contact with our specialty cacao buyers and to build a closer relationship with our chocolate buyers too. Our online chocolate sales have doubled every month since March; it’s still a small amount, but gives us an idea on how the retail businesses might have forever changed.
The Colombian government is doing as much as it can to protect our health and support our economy; we’re doing our part by continuing buying cacao and making chocolate, making sure no jobs are lost.
|Adriana Reis-Ferreira, Centro de Inovação do Cacau (CIC)—Brazil||The greatest support comes from associations, both from the Brazilian chocolate industry, which continue to buy cocoa, and from producers. That even with insecurities in this delicate moment, through their class unions they are being encouraged to continue the production and processing of cocoa. Creating new ways to communicate and share knowledge, both on technical topics and on the pandemic and the necessary care in the field to produce cocoa.|
|Gonzalo Gout, Ticuchi Polanco—Mexico||Restaurants tapped into their well-established communities and customer bases to spread the word about these wholesome products that were previously used in their professional kitchens and now could be used in anyone’s home. Lucio’s CSA audience doubled in size, Bonfilio couldn’t catch up with home-delivery order. From cauliflower to honey, vanilla beans to mezcal, restaurants spread the word and even became points of sale for these products. Suddenly, what used to be only available when we partook in the whole restaurant dining experience was now at every home cook’s fingertips|
What is one thing you want readers to know regarding the vision of your operation?
|Aline Etlicher, Pisa Café et Cacao—Haiti||Haitian cacao is grown in “creole gardens”: small diversified plots where smallholder farmers also produce food crops for themselves and for the local market. Shaded cocoa production protects the watersheds from deforestation and erosion in Haiti. PISA is the first private company to centrally ferment fresh cocoa beans in the North of Haiti. Starting in 2014, PISA built a partnership with APROCANO, a smallholder farmers organization in the region, and started a farm-gate buying system to reach directly the producers closest to their plots, saving them time and reducing the risk they assumed when selling to intermediaries. APROCANO counts approximately 1,500 growers spread over 7 communes. The average size of their “creole gardens” is 0.75 ha of a diversified shaded cocoa ecosystem mixed with food crops like yam, plantains and fruit trees. Through a strictly controlled and standardized post-harvest treatment, PISA produces an organic-certified, high-quality cocoa. This process and focus on quality allow PISA to pay higher prices to the farmers which in turn has helped raise local market prices for all cacao in the North.|
|Freddy Salazar, Costa Esmeraldas— Ecuador||We are seeking to produce the best cacao in the world; we are aiming for excellence. We are young driven professionals that want to see technology, labor, and investment go back to the rural areas of Ecuador. I started the project when I was 25 and four years in, I remain as committed as the first day. We believe we can be sustainable through reaching profitability— but most importantly providing training, and employment, and development opportunities to our communities. In this short time, we have ticked all those boxes and hope to do this for as long as possible.|
|Adriana Reis-Ferreira, Centro de Inovação do Cacau (CIC)—Brazil||Creating new ways to communicate and share knowledge, both on technical topics and on the pandemic and the necessary care in the field to produce cocoa. Brazil is a traditional origin of cocoa and has a great genetic diversity within its territory due to the extensive work of genetic improvement after the witches’ broom crisis. Its cultivation areas are within important environmental preservation biomes, such as the Amazon and the Atlantic Forest, which creates a great challenge to keep these systems sustainable. Cocoa is an important crop for the country and everything that is produced is consumed domestically, in a market that is still on the rise.|
What do you imagine might be the impact of the Covid-19 pandemic on the future of specialty cacao production and trade overall?
|Freddy Salazar, Costa Esmeraldas— Ecuador||From the developments in the past months and from talking to big industry players in Ecuador it seems like there won’t be a demand disruption of cacao beans. However, this is in large part driven by the bulk industry and bigger buyers. Specialty chocolate makers are having a very hard time selling their products. What this translates into for specialty cacao producers is a reduced purchase volume for existing suppliers, it also means that chocolate makers are very unlikely to consider new origins to add to their lineup. From a market size perspective, we believe it will shrink for all specialties as after the crisis people may be more careful with what they spend their money on; a contrasting perspective from a chocolate maker says they expect specialty chocolate to remain an affordable luxury. In addition, the Salazar Family is in the process of setting up the Salazar Foundation, this non for-profit organization aims to bring relief for the Covid19 as its first task, on the medium and long term it is aiming to bring further sustainable development opportunities to vulnerable groups of society. We are in the process of raising USD$ 100,000 for Covid-19 relief.|
|Carlos Ignacio Velasco, Cacao Hunters—Colombia||The difficult economic situation many people are facing is going to have an effect on the consumption of luxury goods, but inexpensive luxuries like a craft chocolate bar will become the perfect opportunity for consumers to bring a new experience home. It will take a few difficult months to adjust, but in the long run, I believe this could have a positive impact in the development of the specialty cacao and chocolate industries as a whole.|
|Adriana Reis-Ferreira, Centro de Inovação do Cacau (CIC)—Brazil||I believe that Covid-19 initiates a new era for the world of respect and care for others, especially for those who produce food that must increasingly adopt quality control measures and traceability in production. We need to build strategic marketing in Latin America for cocoa, encouraging consumers to eat real chocolate, talking about the benefits of consuming high cocoa percentage chocolate to improve mood and maintain vitality especially during isolation, because, as we know, eating chocolate brings countless health benefits and can also help the Latin American communities that live from this culture to overcome this crisis that we still don’t know the proportion.|
|Gonzalo Gout, Ticuchi Polanco—Mexico||
Although there is still a lengthy journey ahead while we figure out the impact on our industry, it brings me peace to see the quality-producer culture consolidating itself in the mainstream and not just in chef’s kitchens. It is heartening to see how those producers that have supported us as an industry throughout so many years are now carried on the backs of the very institutions they helped build. I could not think of a better definition for community and I am profoundly proud to be part of it.
Right before Covid-19 hit, we collaborated with the bean-to-bar atelier TACHO, a beautiful chocolate project, to make a corn masa chocolate bar which would be available to diners as a petit-four at the end of the meal. Since our doors closed, Pujol and other Olvera restaurants are selling that chocolate bar, along with tortillas, avocados, eggs and other products that would previously hardly made it out of our venues.
As cacao and chocolate businesses around the globe attempt to weather the Covid-19 crisis, it is necessary to address the distinction between those enterprises where work has been temporarily interrupted, with social safety nets and support, and those where systemic inequalities that made them vulnerable to begin with now find themselves facing magnified existential challenges. For many cacao producers, Covid has confirmed what they already knew—that their lives are at the edge of precarity and insecurity. What cacao producers report to us as now reduced or inaccessible — sales, revenue, cash flow reserves, credit, emergency medical care, paid sick leave, training for women, childcare—were already in too short supply. The Covid-19 pandemic has simply exposed the already deep weaknesses of the supply chain.
The five accounts offered above, with examples of valiant attempts by businesses to survive the ongoing disruption, and efforts to safeguard the human lives that make cacao and chocolate possible, point to two major challenges. First, the profoundly unequal distribution of wealth and power that accompanies commodity production necessarily means that the primarily Black and brown people who produce cacao experience the negative impacts of Covid-19 disproportionately when compared with the primarily white people who consume chocolate.
Second, that the notion that if consumers in the Global North would only choose the right chocolate to buy, they could significantly improve the lives of those in the Global South is far too simple mathematically to address the stark calculus of life, death and the economy during a global pandemic or anytime. What we need are practical, compelling alternatives to the status quo that allow for the transformative shake-up of this supply chain, the types of solutions being imagined by the companies represented here. We are proud to consider these panelists our colleagues and friends; their hopes are ours too.
Fall 2020, Volume XX, Number 1
Carla D. Martin, Ph.D. is a lecturer at Harvard’s Department of African and African American Studies and the Founder and Executive Director of the Fine Cacao and Chocolate Institute
José López Ganem is a research fellow at the Fine Cacao and Chocolate Institite in Cambridge, Massachusetts, and a research assistant to Carla D. Martin at Harvard University.
Aline Etlicher is the development manager at Pisa Cacao et Café in Haiti
Freddy Salazar is the Co-Founder and Owner of Costa Esmeraldas Cacao Company in Ecuador
Adriana Reis Ferreira, Ph.D. is a researcher with the Cocoa Innovation Center in Brazil.
Carlos Ignacio Velasco is CEO of Cacao de Colombia/Cacao Hunters in Colombia.
Gonzalo Gout is the Co-Founder and Owner of Ticuchi Polanco in Mexico.
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