I’m excited to say that we have finished our fourth annual(ish) Sourcing Report! These were huge years of growth for us and the industry at large, but also years when we learned some tough lessons. The first lesson was that it takes a lot longer to write a sourcing report than you might imagine, so we’ve decided to combine two years together. As always, our goal for this report is to help you learn and understand more about us and our chocolate, but more importantly, learn about the producers with whom we work. Each section of this report is dedicated to a single producer and we’ve tried our best to represent them in the way that they feel is most appropriate. This includes having each producer guide, contribute to, and review the content.
The first thing you might notice in this report is that we bought more cocoa in 2017 than we did in 2018. Does this mean that we’re shrinking? No, we are still growing, but this was our next big lesson: building in San Francisco takes a long time. We thought our new 16th Street Factory was going to be finished in 2018. Since we buy all of our cocoa one year in advance, this meant that we needed to buy a lot of beans in 2017 to prepare for our new facility, which is designed to use up to 200 tonnes of beans per year, and to supply our Valencia Street factory, which uses approximately 25 tonnes of cocoa annually, and our Kuramae factory, which uses around 30 tonnes. In 2017 we were excited to finally start buying larger quantities of beans and the producers with whom we work were thrilled. For cacao producers, having a customer buy more is almost always a great thing. The specialty cocoa industry is growing quickly and most producers have more supply than they have demand. Unfortunately, we were wrong about how long it would take to complete our new factory. The good news is that our new factory is open as of April 2019. The bad news is that we started buying larger quantities of beans too early, which means that we are still working through our backstock. This also means we incorrectly set expectations with the producers with whom we work. They have all been very understanding, but this is why we bought more beans in 2017 than in 2018. Our goal in working with producers is to buy the same quantity of beans from them or more year over year. We are not trying to find the cheapest cocoa that tastes good. We are trying to build longterm relationships with producers that grow over time so that we all benefit. Fortunately, our plan is to buy more beans in 2019 so we can get back on track with our producers.
In 2017 we also started our customer trip program in earnest. While we’ve done periodic customer trips over the years, we’ve now turned this into a consistent and core part of what we do. We’ve decided to visit three producers regularly: Maya Mountain Cacao in Belize, Zorzal Cacao in the Dominican Republic, and Kokoa Kamili in Tanzania. Each trip allows us to introduce our customers to a different view of cacao. Belize allows us to highlight cacao as an integral part of the local Maya culture. The Dominican Republic allows our customers to see what it is like to have cacao as a core part of a country’s economy. Tanzania allows us to bring people to an operation so far off the beaten path you have to drive two days to get there. I’m excited to lead each trip and to get to share a part of my life with people who are interested in learning more about cacao and the people who produce it. For more information, please check out our website.
While things have changed here, there have also been changes in the industry. As an industry we are getting closer to having quality metrics for specialty cocoa, inspired by the work done for specialty coffee. Specialty coffee has a system known as Q grading developed by the Specialty Coffee Association that provides a well understood, trainable, and consistent methodology for scoring coffee. This score allows coffee producers to negotiate a price based on an understanding of how their coffee compares to the rest of the beans on the global market. Cocoa does not have a similar grading system. Several chocolate makers and industry members have developed systems over the years, but none of them are universally accepted as of yet. We haven’t even agreed on what to call specialty cocoa, er, I mean fine flavor cocoa. While we have our work cut out for us, we are making progress. My sense is that the goals of a unified system for cocoa evaluation are:
– To analyze unroasted beans to allow producers to evaluate small lots of cocoa in a very short time frame.
– To rely on cheap equipment (so that even small, poorer producers can use the methodology if they would like to).
– The ability to be trainable everywhere in the world.
– To yield a consistent score for cocoa beans that everyone can agree upon.
If we could accomplish these goals we’d be well on our way. Carla Martin and the Fine Cacao and Chocolate Institute have developed a protocol that gets us much closer than we’ve ever been before. We are now working on the last mile to agree on a way to use the protocol in order to create a score that can be used by everyone. I hope that our next sourcing report will start with a discussion of how great this new methodology has become.
Lastly, the biggest challenge that the specialty cocoa industry is facing now is that it has grown faster than the demand from chocolate makers. There are great beans everywhere! The overall quality of what we taste as samples has gone up dramatically just since 2014. But, there either needs to be larger makers or there needs to be a larger number of makers willing to buy these beans at a premium price. While I believe this will happen eventually, right now it is a struggle for many cocoa producers to sell everything they produce. In this report we’ll talk about some of these situations and how it has impacted the producers.
While we continued to grow in 2017 and 2018, 2019 is the year that we finished our new factory. This means that we’ll be able to increase our consumption of cocoa as we had planned to do two years ago. We are now connecting our customers to cocoa producers more closely than ever before through our trips, and we are on the verge of having a consistent system for evaluating cocoa from around the world. The specialty cocoa and craft chocolate industry are both growing, and I couldn’t be happier. With growth comes more learning, better livelihoods for producers, and, of course, more chocolate!
Chief Sourcing Officer, Dandelion Chocolate