Transparent Trade

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Transparent Trade

We believe our process should value the community of growers, producers, and makers whose livelihoods depend on cacao and chocolate. It takes an entire village of individuals, literally stretching across cultures and continents, to make every delicious bar. As chocolate makers, we’re at the end of this supply chain closest to the customer. This allows us to tell some of the stories behind each bar we make.

Some of these stories are told through flavor: where the cacao came from, the conditions it was grown in, and how it was processed into chocolate are all expressed through taste. But some of these stories aren’t fully expressed through flavor: the stories of the growers, the workers, the exporters, the makers, and so on. It’s up to us to make sure our customers have access to those stories, too. This is what transparency is all about.

This page will be long. If you'd prefer to skip to each origin's page, scroll to the bottom.

You’ve been forewarned! The global chocolate supply chain is, to understate things, very complicated. We’ve done our best to break it down for you in a way we think makes sense without making your head hurt too much or worse, dumb the information down. Alas, we are small chocolate maker with limited resources, so consider this a work in progress.

Still with us? Good.

We’ll start with us: we created Raaka because we knew there was a better way to make chocolate: from scratch; with traceable, high quality, single origin cacao; transparently sourced; and crafted into something uncommonly delicious. This model doesn’t quite fit into any of the current certifications, so we built our own. We call this model Transparent Trade; we’ve based on the following principles: 

Direct Purchasing:  We purchase cacao directly from cooperatives and grower organizations that focus on quality, sustainability, field support, market access, and premium prices for farmers.

Price Stability: We will always purchase cacao at stable, premium prices that are higher than commodity market and Fair Trade prices and protected from market fluctuations.

Transparent Pricing: We publish each transaction on our website for verification and accountability.

The following pages offer a look into each of the producers we work with, some stories about our relationship with them, what we pay for their cacao, and what the supply chain from farmer to us looks like.

But wait, there’s more!

There’s actually quite a bit more. But we trust you’re curious, so we’re going to dive right in. See, those three principles are deceptively simple. When we talk about cacao trade, we’re talking about working with micro-economies with different needs. We’re not just talking about comparing apples to oranges, we’re talking about comparing them to bananas, peaches, mangos, and blueberries, too. While the data we’ve published here tells a story, some context is required to understand it.  

As individuals who like to think of themselves as responsible, we kindly insist you bear with us and read through these pages to familiarize yourself with some concepts and terms.

  Do you buy directly from the farmer?
Most of the time we are not buying cacao directly from a farmer for a couple of reasons: (1) most cacao is grown by smallholder farmers who yield volumes far too small to supply a single chocolate maker with enough beans, and (2) processing cacao, bringing it to buyer *and* managing a plot of land is no small task. This is where farmer-owned cooperatives and producer/exporters come in.
  So who do you buy from?
We purchase cacao from cooperatives, grower centric organizations, and sometimes single estate farms. We often refer to them as “producers” or “exporters”. These organizations purchase cacao from smallholder farmers prices, then ferment, dry, and sort the beans with a focus on quality and consistency, and finally market the finished beans to craft chocolate makers, connecting growers with quality buyers who wouldn’t normally be able to make those connections. The idea here is that we want to have the fewest nodes in our supply chain as possible and purchase from producers who are focused on building a stable market.
  Please explain what “Grower Centric Organization” is.
Of course! It’s a term we decided upon while discussing what to call our partners at Kokoa Kamili and Öko Caribe. Both purchase “wet” cacao (freshly harvested) from farmers, then ferment, dry, and export the finished cacao to craft chocolate makers. Their mission is to get more money to farmer’s hands by focusing on quality over quantity. Technically, both Öko Caribe and Kokoa Kamili are fermentaries and exporters, but this is an oversimplification of work they do to improve the quality of life for Dominican and Tanzanian farmers, respectively, so we settled on “grower centric/centered organization”. It’s a mouthful, but it’s more accurate. Read more about Öko Caribe Kokoa Kamili here and here (but open a new tab and finish this first).
  Can you tell me a little about farmer-owned cooperatives?
We’d love to. Farmer-owned cooperatives are exactly as they sound: a group of individual farmers organized under one name brand. Farmers form cooperatives in an effort to benefit from economies of scale, making logistical challenges like distribution and transportation easier, and maintain ownership over how their crop is sold and marketed. For cacao farmers, monitoring the post-harvest process and transporting cacao to market are huge challenges on an individual level. Within a cooperative, farmers can centralize the post-harvest process and designate individual workers and teams to manage quality, logistics, transportation, and marketing. Proper management of all these efforts can improve the quality of the cacao, resulting in a higher price for farmers. Our partners at CAC Pangoa in Peru are a farmer-owned cooperative.
  You keep referring to the post-harvest process, what is that?
The post-harvest process is the fermentation and drying of cacao for superior quality and flavor. This process happens immediately following the harvest, or as soon as possible. Cacao beans are actually fruit seeds, and when the sugary pulp of the fruit is consumed by microbes in a contained environment, the seeds go through all sorts of changes that result in a more complex and delicious flavor.

The specific details of fermentation and drying will vary from origin to origin but the basics remain the same: first cacao beans are packed in an enclosed environment, such as wooden boxes covered with banana leaves, allowing native yeast to consume the fruit pulp’s sugar, creating alcohol. The noble yeast die in the process, making room for bacteria to take over and create acids. This process can be anywhere from four to eight days.

Once the fermentation is complete, the cacao beans are dried in the sun or in drying tunnels to end the fermentation process and continue flavor development. This can take anywhere from four days to two weeks. The result is a cacao bean with more flavor and complexity.
  Okay, so what do you pay and who do you pay?
Yes, let’s get back on subject. We buy cacao from cooperatives and grower organizations that focus on quality, sustainability, field support, market access and stability, and premium prices for farmers. We call these organizations “exporters” or “producers”. The price we pay them is officially called Freight on Board (“FOB”). This is what you see on the inside of every Raaka bar.

FOB includes the post-harvesting process and transportation to the nearest port of shipment. The FOB price is different for each producer we work with because the market prices and administrative fees change with each region. Remember, we’re talking about several different micro-economies, and therefore this is not an apples-to-apples comparison (unless we’re talking Honeycrisp, Gala, Granny Smith, Fuji… you get the idea). Essentially, the FOB reflects everything from market competition, cost of living and operating within that market, and shipping. For example, the port of shipment in Tanzania is much farther from Kokoa Kamili’s facilities then the port of shipment in the Dominican Republic is from Zorzal Cacao’s facilities, which makes it harder and more expensive for Kokoa Kamili to ship their cacao, so their transportation and logistic fees will be different from Zorzal’s.

Additionally, the market for fine flavor cacao in the Dominican Republic is far more mature, heavily incentivized by the government, and competitive than, say, Peru, so those two markets will have different prices. This can make comparing market prices difficult; it’s often a situation of apples and oranges, which is why we focus on market price stability.
  Wait, so what does the farmer actually make?
This is the most important question, and likely the question you came here to answer. The farmer is paid a farmgate price by whoever they sell their cacao to, whether that be a cooperative like CAC Panoga or grower-centered organization like Kokoa Kamili. Like the Freight on Board price, the farmgate price will vary depending on the microeconomy at each origin (remember: apples, oranges, mangos, bananas, etc). It can be tempting to take the farmgate price at face value, but often the price doesn’t tell the whole story.

All of the producers we purchase cacao from provide added services beyond simply acting as buyer, processor, and exporter. Take CAC Pangoa, who provides technical support against disease prevention, sells cacao seedlings at or below cost, and distributes an additional 70% of the FOB price to participating farmers of the coop (30% of the FOB price goes towards running the cooperative, which includes all post-harvest processing, sales, export, and logistics labor).

You’ll find farmgate prices in each partner’s profile. We've chosen to compare the farmgate prices of producers we work with to the most recent farmgate price paid to farmers in the Ivory Coast, the country that produces the majority of the world's cacao. This is not to discourage purchasing chocolate made from Ivorian cacao, but rather to contextulize the data. We encourage you to take the time to contextualize the farmgate price for each origin so that you can have a better understanding of the impact each producer has within their community.
  So why aren't you fair trade?
The simple answer to this question is that, with a few exceptions, the producers we purchase from have chosen not to become Fair Trade certified. We know this “simple” answer begs the question of “why not?” so we’ll explain further.

Certifications are a great way to simplify shopping. They provide a verified seal of approval that gains our trust because someone has already vetted something for us. There’s nothing inherently wrong with certifications; many of them open up new, more valuable markets, and we have some of them. But certifications often fail to realize the needs of micro-economies, especially when it comes to farmgate price.

As a chocolate maker, we strive to be a good partner to cacao producers we work with. This means understanding the individual needs of every community we work with. We find that the Fair Trade minimum is too low and doesn’t provide enough protection from market fluctuations. This is why we focus on price stability and transparency.
  This whole thing requires a lot of trust... How can you be sure everyone is treated fairly?
We establish real relationships and visit producers as often as we can. As a small maker with limited resources, we can’t visit as often as we like, but we’ve established close relationships with each producer so that we can have direct and transparent communication you can see.
  Can you explain the commodity market a little more?
Most cacao is produced in West Africa and sold at the commodities market. The export (FOB) price is set by the market and will swing dramatically depending on all sorts of variables that affect the supply and demand for cacao. Many of these variables are out of direct control by farmers, such as weather and political climate. Even worse, sometimes what results in a higher commodity price is actually quite detrimental to a producing region: if there’s a drought in West Africa that results in a significantly low harvest, the price will increase with a low supply and high demand, but those farmers in West Africa might not have enough cacao to reap really the benefits of that higher price because their yield might be too low. Only farmers whose crop is not affected by the drought will benefit.

This is why we focus on price stability: it allows our producer partners to rely on us as a reliable buyer year after year, improving their quality of life.

WHAT WE PAY FOR CACAO

The graph below displays the prices we pay to each producer we worth with, as well as the minimum Fair Trade price for organic cacao and the commodity price since 2016. The purpose of this graph is to illustrate the fluctuations in the commodity and Fair Trade prices, and thus the importance of price stability for both farmers and producers.

WHAT WE PAY FOR CACAO

OUR PRODUCER PARTNERS

The following pages offer a look into each producer partner we work with. Each producer has their own story, and we've done our best to present a meaningful portrait of each. We're always updating these pages with new producers and new stories from our existing partners. We hope you find these pages educational. Don't hesitate to reach out to us with any questions you might have about our producer partners and our sourcing practices at info@raakachocolate.com.

CAC Pangoa, Peru Zorzal Cacao, Dominican Republic Kokoa Kamili, Tanzania Öko Caribe, Dominican Republic