Candy and Snack TODAY November/December 2013 : Page 40

COCOA SUSTAINABILITY Committing To Fine Flavor Cocoa Production Peruvian chocolate isn’t exactly new, with a history stretching back thousands of years, but recent developments and new cultivation programs are bringing it to the forefront in the artisan market. Candy & Snack TODAY talks to Jose Iturrios, director of the Peru Cocoa Alliance. P ERU IS NOT A COUNTRY immediately linked to cocoa, but that could change in the next several years as development programs take hold and production doubles. Already chocolatiers are taking notice and Peruvian cocoa is being heralded as a growing source for fine chocolate, as evidenced at the 2013 Sweets & Snacks Expo, where a number of upscale items were shown. While in Peru, as in other cocoa-producing areas, sustainability lies at the heart of programs allied with farmer welfare and other aspects of social responsibility, the situation is heightened by coca-versus cocoa-growing considerations. The fight against illegal drugs and the attraction of Peru’s fine flavor cocoa makes the case for development doubly compelling. Jose Iturrios, director of the Peru Cocoa Alliance (PCA), tells Candy & Snack TODAY : “Peru has been recognized worldwide for its unique cocoa quality, having won several international awards for its native, fine flavor cocoa varieties.” For example, he reports, Peruvian cocoa won five awards at the 2009 Salon du Chocolat in Paris, including first place in the aroma category and second place in both the floral and cocoa-flavor categories. Importantly, a chocolate bar made with Peruvian cocoa took first place as the preferred entry in the French market, and, he says, at the Paris event this past year Peruvian cocoa took honors for the best chocolate in the Americas. 40 Candy & Snack TODA Y N o v e m b e r / D e c e m b e r 2 01 3 w w w . c a n d y a n d s n a ck t o d a y. c o m

Committing To Fine Flavor Cocoa Production

Peruvian chocolate isn’t exactly new, with a history stretching back thousands of years, but recent developments and new cultivation programs are bringing it to the forefront in the artisan market. Candy & Snack TODAY talks to Jose Iturrios, director of the Peru Cocoa Alliance.<br /> <br /> PERU IS NOT A COUNTRY immediately linked to cocoa, but that could change in the next several years as development programs take hold and production doubles. Already chocolatiers are taking notice and Peruvian cocoa is being heralded as a growing source for fine chocolate, as evidenced at the 2013 Sweets & Snacks Expo, where a number of upscale items were shown.<br /> <br /> While in Peru, as in other cocoa-producing areas, sustainability lies at the heart of programs allied with farmer welfare and other aspects of social responsibility, the situation is heightened by coca- versus cocoa-growing considerations. The fight against illegal drugs and the attraction of Peru’s fine flavor cocoa makes the case for development doubly compelling.<br /> <br /> Jose Iturrios, director of the Peru Cocoa Alliance (PCA), tells Candy & Snack TODAY: “Peru has been recognized worldwide for its unique cocoa quality, having won several international awards for its native, fine flavor cocoa varieties.”<br /> <br /> For example, he reports, Peruvian cocoa won five awards at the 2009 Salon du Chocolat in Paris, including first place in the aroma category and second place in both the floral and cocoa-flavor categories. Importantly, a chocolate bar made with Peruvian cocoa took first place as the preferred entry in the French market, and, he says, at the Paris event this past year Peruvian cocoa took honors for the best chocolate in the Americas.<br /> <br /> Although Peru’s cocoa production of about 50,000 metric tons only amounts to five percent of the world’s total, its fine flavor varieties represent 35 percent of the world’s production. Cocoa quality in Peru is traded on a scale of one to three, and quality is assessed on the degree of fermentation and health of the beans, with flavor additionally determined by aroma.<br /> <br /> Making the case for Peruvian cocoa, Iturrios points out that the world cocoa market distinguishes between two broad categories of cocoa beans: “fine or flavor” cocoa beans and “bulk or ordinary” beans. He explains: “As a generalization, fine flavor cocoa beans are produced from Criollo or Trinitario cocoa tree varieties, while bulk cocoa beans come from Forastero trees. Fine flavor beans are generally characterized as having stronger floral and aromatic undertones and they also tend to have a theobromine/caffeine ratio higher than in bulk cocoa.”<br /> <br /> He says the Peruvian Amazon naturally possesses the ideal climatic conditions for production of fine flavor varieties, which are native to the region.<br /> <br /> Importantly, the country has a strong productive base of approximately 74,000 acres of cocoa, and Iturrios points out the fact many farmers are already organized into producer groups. Peru also possesses large areas for expansion and thousands of families eager to become farmers or who want to expand their cocoa production, he says.<br /> <br /> CONVERTING FROM COCA TO COCOA<br /> “Peruvian cocoa farmers are generally committed and enthusiastic partners,” he tells Candy & Snack TODAY, “with many moving out of illegal coca production and becoming proud of contributing to the economic and social progress of their families and communities.”<br /> <br /> In fact, the past decade had already seen tens of thousands of farmers and acres of land moving out of the illicit economy and sources tell Candy & Snack TODAY that there are thousands more producers poised to commit, but who lack the financial means, technology and know-how.<br /> <br /> And, with knowledge of good agricultural practices and post-harvest handling relatively advanced compared with other global sources, and the structure of the local cocoa market involving far fewer intermediaries and making source verification through traceability systems much easier and more cost effective, Peru is primed for development, Iturrios claims.<br /> <br /> With all this in mind, Peruvian cocoa is currently a priority sector for both the Government of Peru and the US Agency for International Development (USAID), and with an eye to sparking innovation and capitalizing on economic development opportunities, they worked in conjunction with the supply chain consulting firm CARANA Corp. to form the PCA.<br /> <br /> The Alliance is said to be the largest public-private partnership of its kind in the Americas, bringing together the efforts and investments of numerous actors along the cocoa supply chain. It comprises a diverse set of local and international private sector groups working in coordination with the Peruvian government through the National Commission for the Development of Life without Drugs (DEVIDA) and the Ministry of Agriculture.<br /> <br /> Therefore, with the very considerable political and financial support available to help the sector grow, there is a real opportunity for investors to offset the expenses of developing a new origin by collaborating with the Alliance, Iturrios says.<br /> <br /> Initial investments from founding partners in the PCA were committed in late 2012, and during the past year these have materialized in the form of technical assistance and provision of input materials such as seeds and genetic material.<br /> <br /> During the course of the next three years and beyond, the program will require additional investments for expanding sourcing options for fine flavor cocoa in the areas of plant material, agricultural inputs and technical training.<br /> <br /> The Alliance facilitates direct access to, and long-term relationship building with, suppliers ready to tailor production to buyers’ needs. In addition, participation in the PCA allows investors to affiliate with a socially and environmentally responsible program.<br /> <br /> PROMOTING FINE FLAVOR BEANS<br /> Looking to the future, the PCA is currently promoting eight Trinidad Select Hybrids (TSH) and Imperial College Selection (ICS) fine flavor varieties native to the Americas, which are universally recognized as high yielding with exceptional flavor profiles.<br /> <br /> Through collaboration with the Colombian chocolate company Casa Luker, the Alliance selected from the more than 100 varieties that exist in this genetic category based on their yield, disease resistance and flavor profile when produced in an agro-forestry system environmentally similar to the Amazon River Basin of Peru. The selection has been validated by the PCA’s Germplasm Committee of experts from Pennsylvania State University and other commercial partners.<br /> <br /> With beans selected and farmers motivated, the PCA program aims to plant some 70,000 acres of fine flavor cocoa across the regions of San Martin, Huánuco and Ucayali before September 2016, working with some 23,000 small holder farmers. Given the three- to four year time frame for new plants to reach production, Iturrios estimates that in the next five to six years Peruvian cocoa production will increase from its current level of about 50,000 metric tons per year to somewhere between 80,000 and 100,000 metric tons annually.<br /> <br /> In total, the Alliance is channeling more than $142 million in private and public investment, with only one quarter of these funds provided by USAID, and the rest coming through co-investment by other public and private partners.<br /> <br /> INTEGRATION LEADS TO SUCCESS<br /> More than 80 percent of the farmers reached by the PCA will be small-scale growers working an average of about 7.5 acres. To address the lack of technology, low productivity and the difficulty of access to the necessary funding, Iturrios says the Alliance offers a holistic approach in contrast to previous programs that tended toward paternalism. “A sense of ‘skin in the game’ moves forward shared enthusiasm and the accountability needed to drive long-lasting change,” he says.<br /> <br /> The PCA’s integrated program is based on three key principles. The first is the adoption of agro-forestry systems, technology transfer, modernization of agricultural practices, and crop diversity to ensure both the profitability of the producer in the short- and long-term and the protection of natural resources.<br /> <br /> The second is access to finances for farmers in order to make the necessary investments for the adoption of the system, and the third is promotion of traceability, vital for farmers to access the demanding niche markets of fine flavor cocoa.<br /> <br /> Iturrios tells Candy & Snack TODAY the Alliance continually establishes new agreements with buyers and micro-finance institutions and the first year of the program saw placement of $9.5 million in micro-finance loans to some 4,400 small farmers. The PCA has also set up agreements with four major agribusiness firms to source from the project area so farmers can build relationships with steady buyers, such as Armajaro Trading Ltd., to ensure that growers build direct relationships with a steady buyer. PCA membership levels are roughly based on three tiers of commitment with varying levels of benefits, and Iturrios says: “Custom-designed programs are developed with partner-based needs and goals.<br /> <br /> “If the cocoa industry is to boost global production to the levels needed, it is going to take game changing, holistic models such as the Alliance to reach these targets. In this case, it took a catalyst such as USAID to bring all the players to the table.<br /> <br /> “In parallel,” he says, “the fight against drugs in the Peruvian Amazon Basin has meant change for farmers previously caught in the drug trade as illegal coca growers. Cocoa has opened the way to improving their lives by providing profitable alternatives.”<br /> <br /> “Cocoa is a profitable business. It assures our future. The education of my sons and our general quality of life has improved since we decided to grow cocoa.<br /> <br /> “I participate in the Peru Cocoa Alliance for the access to the banks in order get credit for my cocoa production. Also for the assistance in obtaining planting material for plantain and cocoa of high quality, and for the access to a secure market.”<br /> <br /> “We took up cocoa as our flagship crop because before we only had coca. We decided to switch to cocoa because it is legal, profitable and provides a high quality of life. I was motivated to participate in the Peru Cocoa Alliance because I realized that it could help me with technical assistance and with selling my crop.<br /> <br /> “I was also motivated by incorporating new crops, such as plantain and forestry species, that will help me diversify my income. Economically, in the long run, my family will appreciate it because they will benefit from the hardwood species and we will recoup the entire investment as well as preserve the environment.” <br /> <br /> With the Alliance we are learning new designs for planting cocoa and plantain together and learning how to grow fine flavor cocoa. These varieties are very good and profitable, and they will increase the water that is retained in the soil.”

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