Uncommon Cacao: A High-Impact Supply Chain

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Uncommon Cacao: A High-Impact Supply Chain: Proudly growing prosperous farming livelihoods through meaningful market access

BelizeGuatemala
Year Founded:
2010
Organization type: 
for profit
Project Stage:
Growth
Budget: 
$1 million - $5 million
Project Summary
Elevator Pitch

Concise Summary: Help us pitch this solution! Provide an explanation within 3-4 short sentences.

Uncommon Cacao works directly with cacao farmers globally to deliver premium quality, high impact cacao to chocolate makers. Together, we are building a radically transparent supply chain that drives maximum value to farmers and creates long-term meaningful impact for communities at origin.

WHAT IF - Inspiration: Write one sentence that describes a way that your project dares to ask, "WHAT IF?"

What if cacao farmers could earn a living income (or more!) by selling into the chocolate supply chain?
About Project

Problem: What problem is this project trying to address?

90% of the world’s cocoa is produced by 5 million small producers who are living on less than $2 per day. The commodity cocoa system is broken: while demand for cocoa is growing, farmer incomes aren't and supply is declining. Traditional certifications haven't worked because the farmgate price does not cover costs of production or incentivize farmers to improve yields or quality. Cocoa farmers, lacking resources, are locked in a cycle of poverty.

Solution: What is the proposed solution? Please be specific!

Uncommon Cacao is building the world's first vertically integrated specialty cacao supply chain based on direct, transparent relationships. For producers, Uncommon Cacao offers access to a stable, transparent and high value market with the ability to participate in informed, annual price negotiations. For chocolate manufacturers, Uncommon guarantees the highest quality, transparently sourced and traded cacao. We facilitate direct connections to farmers and producer groups, creating meaningful impact for farmer families. Uncommon is building a supply chain based on quality and extreme transparency, where farmers and chocolate manufacturers can collaborate to take pride in their work.

Awards

Ashoka fellowship, McNulty fellowship of Agora Partnerships, Heirloom Cacao Preservation designation, Mott Green Sustainability Award at the Northwest Chocolate Festival, finalist in World Wildlife Fund Tropical Forests Conservation Initiative
Impact: How does it Work

Example: Walk us through a specific example(s) of how this solution makes a difference; include its primary activities.

Tumaco, Colombia has been devastated by narcotraffic. Farmers want to transition their illicit coca crops to cacao. They were selling their cacao to Corpoteva, the small local coop, which paid farmers 75 cents/ lb. Corpoteva fermented and dried the cacao, sold it for 90 cents/ lb to an exporter, who sold to an importer, and then to a big manufacturer at the low and volatile world market price. Uncommon trained Corpoteva in quality processing, offered logistical support, financing, and connections to the stable, higher value specialty market. Farmers are now making $1.41 per lb, and Corpoteva is making $2.32 per lb. Farmers can reinvest in their farms, increase yields, and cacao is now a sustainable business for all actors at origin.

Impact: What is the impact of the work to date? Also describe the projected future impact for the coming years.

Uncommon Cacao has been measuring and reporting on impact under three categories (social, environmental, and product) since its first year of operation in 2011. In 2013, we saw an 85% increase in rate of farmers' children attending secondary school in Belize. In 2014, annual farming family income in Belize increased 92%, as a result of price increases, yield improvements, farm expansions, and market connections. More than 185 Belizean farmers have received over $133,000 in affordable Kiva microloans since 2014. Since founding, Uncommon's operation in Belize grew and supported the planting of over 100,000 subsidized cacao seedlings, and certified 1175 acres organic under USDA regulations. Within the next five years, we seek to dramatically scale our impact to 10,000 farming families across 15 countries, the goal being that all these families earn a living income through cacao farming.

Spread Strategies: Moving forward, what are the main strategies for scaling impact?

A combination of strategies to scale impact: (1) Growth of Uncommon Cacao Source + Trade to deliver social and environmental impact for our primary beneficiaries, rural cacao farming families, by connecting them with meaningful market access that empowers them to thrive in a farmer-friendly, highly-transparent supply chain (2) Train and consult strategic partner organizations to replicate best practices at origin, and (3) Establish industry standards on transparency and quality that equalize the conversation on trade for farmers and buyers, shifting market dynamics and empowering farmers.
Sustainability

Financial Sustainability Plan: What is this solution’s plan to ensure financial sustainability?

Uncommon is creating the first vertically integrated specialty cacao supply chain. We earn revenue by selling cacao to premium chocolate makers. We have a strong brand and market traction, having successfully brought two new origins to market at 2x commodity price while building a waitlist of 100+ customers. By vertically integrating, we can capture maximum value in the supply chain, which we then equitably distribute to all supply chain actors.

Marketplace: Who else is addressing the problem outlined here? How does the proposed project differ from these approaches?

Historically this problem has been "addressed" by Fair Trade certification, which tacks a $200 per ton premium onto the commodity price, payable only to a farmer coop. The premium can only be spent by the coop on social projects, and often does not cover the high cost of certification. This approach does not drive any additional income directly to farmers and creates no long-term incentives for delivering quality. Also, some US brokers buy and resell beans to specialty chocolate makers, marking prices up by up to 400% but failing to pass value down to the farmer or coop in country of origin.
Team

Founding Story

In 2010, Emily Stone co-founded Maya Mountain in Belize to create meaningful market access for smallholder cacao farmers. After catalyzing unparalleled impact for farmers, and receiving enormous demand for the product and process, in 2013 she grew the business to Cacao Verapaz in Guatemala. These companies revolutionized local economies by linking small holder farmers to the specialty cacao industry. Today, with continued demand, Uncommon Cacao is growing further into the supply chain to drive maximum value to producer groups at origin. Uncommon Cacao enables us to collaborate with more producer groups on delivering the highest quality cacaos, to build a fair and sustainable supply chain.

Team

Uncommon has assembled a dream team of industry players who share our vision, and bring to the table an incredible diversity and depth of experience. Emily started Maya Mountain alongside indigenous Maya cacao farmer Gabriel Pop, who is an owner of the company and has enormously shaped the company's farmer-focused strategy. Our founding team and board includes Alex Whitmore, also founder of Taza Chocolate and Direct Trade cacao pioneer. Jeff Pzena, chocolate manufacturer and business owner in Belize, is Uncommon's other founder and board member. David Guendelman, Uncommon's part-time CFO, has driven the company's financial strategy and understanding of risks and opportunities as we grow. Maya Granit, previous director of Maya Mountain Cacao, will be Managing Director of Uncommon Cacao Source + Trade arm. She additionally was head of sales at Dandelion Chocolate, and has deep connections within the market. Other key team members include: In-Country Management: Minni Forman, Managing Director of Maya Mountain Cacao in Belize; Marlon Ac, Managing Director Cacao Verapaz in Guatemala. Advisors: Richard Falotico, head cocoa merchant at Atlantic Trading; Dan O'Doherty, leading industry cacao agronomist and founder of Cacao Services Inc.; Jim Villanueva of Eleos Foundation; and Morgan Simon of Pi Investments and Transform Finance.
Background
Please confirm how you heard about the Unilever Awards:

Ashoka

Please confirm your role in the initiative (eg Founder/co-Founder) and your organisational title:

Co-founder and CEO

Which of the 8 UN Global Goals (Sustainable Development Goals) pre-selected for this competition does your solution relate most closely to? [select all that apply]

No Poverty, Decent Work and Economic Growth, Responsible Consumption and Production.

Leadership and the Unilever Awards
Please provide examples of any previous entrepreneurial initiatives you have pioneered.

My "previous life" was working as an environmental and social justice advocate. Through my work with the Green Corps Field School for Environmental Leadership, I launched four climate and environmental activism campaigns across the U.S. within one year, including two brand-new organizations that were able to achieve results on environmental impact within the first 6 months of launching. I also started a family restaurant in a village in southern Spain as a study abroad student there in 2006, which helped equip me with the language skills I have used and will continue to use to grow my cacao supply chain business.

Beyond your existing team, who else are you working with to achieve your objectives, eg partners, advisors, mentors?

Uncommon has access to unique resources and industry relationships that strategically position us to seize the market opportunity and scale our impact model. We have a multi year relationship with Kiva, and have provided hundreds of small microcredit loans to farmers in Belize. We're exploring an industry expansion of this partnership, that would be the world's first ever, full supply chain lending partnership focused on quality and impact. Additionally, I was named an Ashoka Fellow in 2015, and was selected for the Globalizer Program, opening Uncommon's network to Ashoka's robust and deep network of advisors and partners. In 2013, I was named an Agora McNulty Fellow, which similarly provided invaluable advisors, consulting, and financing opportunities. Our team has been working closely with the large commodities tradehouse Ecom Trading since 2011, which is the largest player in specialty cacao importing in the U.S. Ecom provides trade finance to Maya Mountain Cacao and Cacao Verapaz, and has imported 100% of our exported beans. Ecom has committed to providing logistics and financing services in coming years, and will be key strategic advisors as we grow. We're additionally connected to Dan O'Doherty of Cacao Services Inc, the leading specialty cacao agronomist in the world, who is a direct partner in Uncommon Cacao. Finally, Morgan Simon of Pi Investments and Transform Finance is a key advisor and thought partner, guiding our work on community empowerment through innovative governance and ownership models.