PERU: THE RISING S TA R O F T H E C H O CO L AT E I N D U S T RY
A BEAN´S JOURNEY
PERU CACAO ALLIANCE
PHOTOGRAPHS: Nina Fine Chocolates. SOURCES: Good environmental practices manual, Cacao Alliance, Integrated Nutrition and Timely Pruning, CACAO ALLIANCE.
2018 Lima, Perú
Contents
01 02 03 04
Presentation 5 World Cacao Production The largest biodiversity of cacao is in Peru
Peru Cacao Alliance 8 Surface Area The Alliance’s Scope of Work The Cacao Route
Cultivation and Transformation of Cacao 16 Great Chocolate Starts in the Field The Process Step by Step
Industrial Production of Chocolate
22
What happens inside factories? The Process Step by Step
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4 THE JOURNEY OF THE SEED
Presentation Approximately four million tons of cacao are produced around the world every year. Africa, Asia and the Americas produce 74%, 15% and 11% of total cacao respectively. Of the ten cacao varieties grown in South America, six are already grown in Peru. Peru is the world’s second largest producer of organic cacao in the world, exporting ninety percent of its production. The Peru Cacao Alliance operates in the San Martin, Huanuco and Ucayali regions to improve the good
agricultural and manufacturing practices of smallholder producers, improve post-harvest quality in line with international standards, and promote new investment in the cacao industry, contributing to a more sustainable supply chain of fine flavor cacao.
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World Cacao Production Estimates are that demand for cacao will exceed supply in the coming years. Regions such as Latin America and the Middle East have strong growth potential that should be further exploited. International chocolate markets are searching for new, raw material sources outside of Africa to limit their risk exposure. Product quality is also gaining in importance due to consumer demand.
Marañón
Contamaná
Nacional
74%
Curacay
Africa ÁFRICA
Nanay
2.81 million tons
Asia
15 %
America
11 %
418 thousand tons
570 thousand tons
5%
Quality America, Asia, Africa 190 thousand tons
PERU: GREATEST BIODIVERSITY OF CACAO IN THE WORLD In Peru, 6 out of 10 cacao clusters have been identified.
MÉXICO
BELICE
G UAT E M A L A
VARIETIES OF CACAO IN PERU
HONDURAS NICARAGUA PA N A M Á CO S TA R I C A VENEZUELA G U YA N A FRANCESA COLOMBIA
Iquitos ECUADOR
Amelonado
Criollo
Guiana
PERÚ
N
BRASIL
BOLIVIA
Pa c i fi c O cea n
PERU CACAO ALLIANCE
Purús Map prepared by Juan Carlos Motamayor, Eng.
7
Peru Cacao Alliance An initiative supported by USAID and the business sector linked to the cacao and chocolate value chain. The Peru Cacao Alliance is a public-private partnership supported by USAID and managed by Palladium that increases the incomes of 20,000 farming families in the regions of San Martin, Huanuco and Ucayali. We improve farmer incomes by fostering dynamic agroforestry market systems in collaboration with actors on all sides of the cacao industry, including banks, donors, individual producers and local governments. Private sector actors in the Alliance span the supply
8 THE JOURNEY OF THE SEED
chain, from producers and cooperatives deep in the Amazon jungle to American chocolatiers. The Peru Cacao Alliance was created in 2012 to promote a viable economic alternative to illegal coca production in Peru’s Amazon. During the first phase of this project, the Alliance planted over 28,000 hectares of mostly fine flavor cacao benefitting over 17,000 farmers. The cacao and chocolate industry will only be sustainable if cacao farmers can lift themselves
out of poverty. The Alliance does not believe in helping farmers be marginally less poor in a “sustained poverty” trap. Rather, we have designed the Alliance to support farmers navigate a pathway out of endemic poverty by creating a business model that generates significantly more value for all actors involved. For cacao farmers, that means providing them with longterm access to differentiated, high value markets for fine flavor cacao, and facilitating the necessary inputs (capacity building, credit, technology, genetic varieties, etc.) so they can produce more cacao on less land while meeting stringent international market standards. The Peru Cacao Alliance is designed to achieve five objectives: (1) use of new technologies at scale, (2) improved market access to differentiated markets,
(3) improved access to financing and investment tailored to producer and other value chain actor needs, (4) improved economic empowerment of women in the Amazon, and (5) improved environmental sustainability of cacao production. The Peru Cacao Alliance is unique, in that it brings together over 30 private and public partners involved in different aspects of the cacao supply chain. Each of these partners co-invests in the Alliance’s work, generating new economic and social value for all actors in the supply chain. The Alliance is one of the most impactful and sustainable alternative development programs in Latin America, and is also the world’s largest donor-supported, public-private alliance promoting fine flavor cacao expansion.
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The Alliance’s Model Built on the concept of a collaborative business model, the Alliance provides cacao farmers the tools they need at sufficient scale to lift themselves out of poverty. By facilitating credit, appropriate technology, expertise and access to differentiated higher value markets concurrently, the Alliance provides interested producers a genuine path to economic stability and an empowered (not exploited) role as the foundation of the cacao supply chain.
PROMOTION OF NEW TECHNOLOGIES To significantly increase productivity, the Alliance collaborates with private sector technology partners such as Yara, Husqvarna, Naandanjain and San Fernando to design appropriate technology packages to promote good practices among cacao farmers in fertilization, pruning, soil management, integrated pest management and crop irrigation. These training modules are given by private sector technology representatives directly to farmers via “Schools of Excellence” which the Alliance created in different zones of the Amazon to expand appropriate use of technology. At the end of each training session, producers are given the opportunity on the spot to apply for credit among the Alliance’s financial partners to purchase required items (i.e. pruning equipment, fertilizer, irrigation equipment, storage containers, etc.). These products, designed specifically for small scale cacao farmers and approved by the Alliance, allow producers to - within one planting season - significantly increase cacao yields and quality. This collaborative business model with private sector involvement is “win win” and not donor dependent; farmers access the technology and credit they need on a timely basis, and technology providers establish new, “last mile” sales channels among lead farmer “technology agents” based in the field, ensuring that the capacity building will continue after project closure. The Alliance also hires financial transaction advisors on pay for performance contracts to actively identify and support deal closure of new investments in the cacao supply chain in Peru, especially in post-harvest processing centers and the application of international standards at these aggregation points. Improved post-harvest processing is critical to improving the quality of cacao beans so they can successfully reach differentiated, higher-value markets that represent better prices for farmers and cooperatives.
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SPECIALIZED WORK Participation in the Peru Cocoa Alliance leads to improved quality of agricultural products, allowing producer partners to reach more lucrative, differentiated, higher-value markets. With end markets and higher prices secured for them via the Alliance, producers have a viable path out of poverty and away from illicit activities. There is strength in the number of actors in the Alliance and their commitment to the unified goal of lifting farmers out of poverty. The Alliance is a long-term and sustainable effort, because the relationships built between banks, private sector actors, cooperatives, farmers, technology providers and government agencies create significant value for all, and thereby can be sustained without future donor support.
ENVIRONMENTAL SUSTAINABILITY Mitigating the effects of climate change is a principal objective of the Alliance. We promote sustainable agriculture by focusing farmers on achieving higher yields rather than simply planting more cacao and relying on slash and burn techniques that destroy the already dwindling Amazon jungle.
INCREASED ACCESS TO FINANCE The Peru Cacao Alliance uses an array of pay for results methodologies to promote increased access to financing for farmers (so they can invest in improved technologies and thereby increase yields of cacao, so they can further increase sales, exports, and quality of sustainably produced cacao.
EXPANDED ECONOMIC EMPOWERMENT OF WOMEN The Alliance actively empowers female cacao farmers so they can increase their access to resources via expanded market opportunities. The Alliance facilitates learning spaces that allow women to improve their skills and technical abilities in subjects such as agroforestry production, business management, financial literacy, and soft skills.
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NATIONAL SURFACE AREA 1.285.22 km2
TUMBES
LORETO
AMAZONAS Peru's amazon covers 782,880 km2 of PIURA the national territory and harbor wide CAJAMARCA biodiversity, SAN MARTÍN 38.985 ton demonstrated by the genetic variability of its cacao. cacao grown in the wild as well as produced on HUÁNUCO farms and plantations can be 14.200 ton U C AYA L I P A S C O 11.854 ton found throughtout the country.
P E R Ú JUNÍN
93%
OF Peru's total cacao production is grown in the regions of San Martín, Cusco, Ucayali, Ayacucho, Amazonas and Huanuco.
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CUSCO
Peur's cacao industry is one of the most socially-responsible, environmentally sustainable and economically viable in the world. Its cacao industry is also experiencing the highest growth rate in the world, increasing its cacao exports by 25% over the past 10 years.
MADRE DE DIOS
APURÍMAC AYA C U C H O
PUNO
TARAPOTO
The Alliance’s Scope of Work
SAN MARTIN
The Peru Cocoa Alliance operates in the regions of San Martin, Huanuco, and Ucayali, transferring technology to existing farmers, and generating new, rural businesses operating cacao farms using an agroforestry model. The Alliance has created a new business model to provide technical assistance at scale via “Schools of Excellence for Cacao Productivity and Quality” involving private technology partners that train farmers to obtain improved yields and quality. The Alliance partnership encompasses an estimated 60% of Peru’s cacao industry, meaning it is not dependent on any single organization or funding source, creating new and sustained value to its members.
PUCALLPA
Regional Offices
TINGO MARIA
ANCASH
HUÁNUCO
LIMA
U C AYA L I
JUNIN
MADRE DE DIOS CUSCO Escala: 1:1846,276 0 12.5 25
50
Km 75
Characteristics of Alliance farming families.
70 %
3
Have access to an average of 3 hectares per family, producing 668 kilos of cacao/hectare
Live above the poverty line
A per capita, annual household income of
US $ 5,060.00
100
thousand MT
JOURNEY OF THE 14 THE Source: Peru Cocoa Alliance's Monitoring andSEED Evaluation Management
The Cacao Route
EXPORT
In
Peruvian production is mainly set aside for international markets. In recent years, exports of added-value cacao have had an important and sustained growth, particularly cacao butter.
Industrial and Artisanal Companies
37,8 thousand MT
Production dent n pe e d REGIONAL COLLECTION
LICOUR, BUTTER, POWDER
14,8 thousand MT INTERNAL MARKET
14,3 thousand MT EXPORTS
CHOCOLAT
6 thousand MT INTERNAL MARKET
2,7 thousand MT
LOCAL COLLECTION
INDUSTRIAL AND TRADITIONAL COMPANIES
INDEPENDT CACAO PRODUCERS
47,2 thousand MT
85
thousand MT
PRODUCTORES ASOCIADOS
15,3 mil TM
As so
c iated cacao production
REGIONAL COLLECTION
LOCAL COLLECTION
EXPORT
INDUSTRIAL PROCESS
300 TM
LIQUOR, BUTTER, POWDER
15 thousand MT EXPORT
280 thousand MT INTERNAL MARKET
20 thousand MT
Cultivation and Transformation of Cacao Several requirements must be met to successfully grow and transform cacao. First, aggregators must identify and collect beans with unique aromas and flavors that can be exported to markets with high quality standards. To obtain these exportable cacao beans, sustainable agriculture must be practiced, including all guarantees and certified practices both during the harvesting and post-harvesting stages. Transformation at post-harvest centers and processing facilities must be conducted adhering strictly to buyer needs and international standards. 16 THE JOURNEY OF THE SEED
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Good Chocolate Starts in the Field
Plantain plants protect plantations while they are growing and are the natural habitat of the mosquito that facilitates its fertilization.
2 months
1
NURSEY: Seeds are planted in polyethylene bags. Maintenance is performed to control pests. They are watered every two to three days. They are ready to be planted in the field after 5 months.
2
PLANTING: The seedlings
produced in cacao nurseries are planted during the rainy season, using a density plan of 1,111 cacao plants per hectare
7 months
After seven months, a bud with specialty genetics is grafted on to an existing cacao tree to ensure high quality of future cacao pods.
Cacao plantations are usually protected from the sun and the wind by trees such as the bolaina, cedar and guaba. Its cultivation also prevents soil erosion. 2,40 m
The pods are cut from the trees and sliced in half, and the cacao beans and pulp are extracted from the pods and collected in sealed containers.
3m
4 years
2 years
After two years the grafted cacao tree produces up to 5,000 small flowers on its trunk and branches.
3
HARVEST: Cacao trees begin to bear fruit the second year following grafting, and their production is stabilized in their fourth or fifth year.
4
TRANSPORTATION: The wet beans are transported in containers by road and river to collection centers where the post-harvest process continues.
The beans are then placed in wooden crates and covered with banana leaves to facilitate their fermentation, where they rich 45° c (113° f)
5
FERMENTATION: This process lasts between 3 and 5 days, depending on buyer requirements. The cacao beans and pulp change color, reduce in bitterness and astringency, and emit a fine aroma as they decompose.
6
DRYING: The fermented
beans are spread on large, flat drying sieves, which are exposed to the sun and air, reducing humidity of the beans from 70% to 7%.
7
STORAGE: The dried beans are placed in 50 kg jute fiber bags, and stored on wooden pallets in ventilated buildings isolated from moisture, ready for distribution.
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Chocolate Production The secret to quality industrial cacao is the type of bean used and the way it has been dried and fermented.
Cacao quality depends principally on two things: (1) the bean type, and (2) the drying and fermentation process. Cacao must also go through a grinding and refining processes which also contributes to
22 THE JOURNEY OF THE SEED
improved quality. To create chocolate, cacao byproducts are sometimes mixed with a variety of ingredients, such as sugar, grains, fruits, nuts, herbs, spices or essence.
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What happens inside factories?
1
4
BLENDING: Depending on the
product to be made (cacao liquor, cacao butter, sugar, milk, etc.), certain ingredients are mixed and blended together..
ROASTING: Strict time
and temperature controls define the flavor, aroma and color of chocolate.
2
GRINDING: Once the seed in de-hulled, it is ground until small particles called “nibs” are obtained.
3
MILLING AND PRESSED: The nibs
are heated to release their high fat content. The solid fragments become a paste known as “cacao liquor”. This liquor is pressed in order to extract two additional products: cacao butter (chocolate) and cacao “cake” (cacao powder).
5 REFINING: The
mixture is processed to make the final product smoother and more palatable, reducing any granular texture.
6 CONCHING: The refined mix is further
mixed for several hours to remove volatile components that add bitterness and astringency to chocolate.
7
MOLDING, PACKAGING: For chocolate bars, the final product is molded and formed. They are then sealed in aluminum foil or parchment, and then wrapped in labeled paper.
The Process Step by Step
Dried Cacao Beans
The Cacao fruit
Fermented Cacao Beans
Cacao Beans With Mucilage or Pulp 26
The Journey of the Seed
Fotos: NINA FINE CHOCOLATES
Conching
Dehusked Cacao
Chocolate Bar
Toasted Beans
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28 THE JOURNEY OF THE SEED