Ecuador’s niche cacao business looks to expand

Global Cacao Trade

The global cacao trade remains highly dependent on multinational behemoths who dominate purchasing. Three companies — traders Cargill and Olam and Swiss cocoa giant Barry Callebaut constitute some 60% of the global marketplace. They are taking advantage of low prices to stockpile inventory, which means that the cacao trade might stay depressed for some time.

Even in the best of times, a transformation to value add and quality isn’t easy, either. Among persistent difficulties: Most farms in Ecuador are small, with its impoverished farmers still wholly dependent on a series of middlemen.

At the other end of the value chain: Competition among high-end chocolatiers for marketshare is fierce. The equipment to process cacao is expensive, with success dependent on economies of scale. Ecuador must compete not only with the giant global cocoa processors, but with countries such as Malaysia and Indonesia, where governments have subsidized equipment costs.

Some large-scale growers of CCN-51 maintain that they can add value, as well, although not to the degree Nacional brings, and export in far greater quantities. “What is achievable is to differentiate the production of these very uniform, very transformative beans into something that’s very good,” said Miranda, whose operation grows CCN-51.

One differentiator, said Miranda, is an emphasis on exacting fermentation and drying processes, which increase the value of the beans. Another is the focus on environmentally and socially sound growing practices.

“As demand for sustainable cocoa has been growing in the world, we have found our niche,” said Miranda. This “gives it a value add compared to what West Africa is currently doing.”

Better working conditions mean that farmers and their families gain more income, become better educated, and benefit from improved infrastructure, said Miranda.

The diversity of the Nacional bean makes for deep, complex flavors so prized by chocolate connoisseurs, can be problematic for larger-scale chocolate makers. The Port of Guayaquil offers container consolidation for beans coming in from smaller shippers. Guzman estimates it could take 70 small-scale growers to fill up one 20-foot container. In theory, that could mean 70 different varieties of Nacional, since the bean is actually not one genetic variety, but a combination of hundreds. What Victoria offers, Guzman continued, is uniformity of bean type as well as quality. “We’re giving the chocolate makers consistency,” he said, then adds: “Single estate cacao is the future.”