High quality Peruvian cocoa for fine chocolates

High quality Peruvian cocoa for fine chocolates

We professionalise producer organisations so their members produce high quality cocoa for fine chocolates, and work hand in hand with rural youth. We also create commercial and inclusive links with cocoa companies, reaching a higher impact through the collaboration with strategic partners.

Globally, chocolate consumption has been booming in the course of the last decade. Between 2008 and 2013, consumption in Switzerland increased with 20%, in Asia and Latin America with respectively 51% and 23%. Currently, the European Union and North America represent 60% of the world's chocolate consumption. Specifically the consumption of dark chocolate, with a high cocoa percentage, has drastically increased. As a consequence, cocoa production and processing has increased substantially all over the world.

In Peru, the cocoa chain is an important economic activity which continues to grow. Currently, it generates 7.2 million daily wages, and involves more than 90,000 families across Peru. Cocoa is the second most important agricultural product after coffee, in terms of people involved; it thus has a significant socio-economic impact.

The export of Peruvian cocoa experienced an annual growth of 38.5% between 2012 and 2015. In 2016, it reached 79,300 metric tons of cocoa, of which 23% was organic and 75% can be classified as cacao fino de aroma, i.e. fine flavour cocoa. Peru is among the 17 countries producing high quality, fine flavour cocoa, and accounts for 36% of fine flavour cocoa produced at a global level, after countries such as Ecuador, Papua New Guinea and the Dominican Republic.

CAC Pangoa has been a strong partner of Rikolto since 2011, and is one of the pioneers in including youth in the cooperative within the country's cocoa and coffee sector. The cooperative used to focus on cofffee, but as a result of the coffee rust crisis, has chosen to diversify towards fine flavour cocoa.

The cooperative distinguishes itself at a national level because of its cooperative model which balances out business profitability with social interests, to improve the quality of life of its members, the producers. It trains staff to strengthen the participation of women and youth and meticulously accompanies its managers. New processes of technical assistance have been introduced, for instance mobile coffee cupping labs and the installation of information systems to enhance the cooperative’s management and decision-making. Furthermore, they have worked on strengthening the services they offer to their regional committees.

Rikolto wants to improve the level of professionalism of each organisation of fine flavour cocoa producers and the quality of the cocoa they produce, for their cocoa to be used in fine chocolates. We do this by collaborating with rural youth, creating inclusive commercial links with cocoa buyers and by working together for more impact with strategic partners in the Peruvian cocoa sector. These partners include APPCACAO, the Peruvian Association of Cocoa Producers, and CIC, the Cocoa Innovation Centre.

Challenges

As of 2008, cocoa production has been a booming business in Peru, but some important challenges remain to be tackled:

  • Currently, the global demand for cocoa is unmet and growing. A huge gap between the production and consumption of chocolate is projected for the next five years.
  • The cocoa cooperatives are not very sustainable: the average age of a cocoa farmer is 50 years old, and year after year there are less young people in the field.
  • Draughts and plagues as a consequence of climate change harm the crop.
  • Quality standards in the cocoa sector have not evolved in the same way as they did for coffee. Peru has the opportunity to regulate and standardise the quality parameters. The challenge resides in enhancing the quality of the cocoa so it can be used for fine chocolates. This means that the post-harvest and quality control practices have to be improved.

This is what CAC Pangoa does to face these challenges:

  • Innovate to become more professional and competitive in the market: improve internal and financial management capacities.

  • Better respond to the market demands with regards to fine flavour cocoa.

  • Better knowledge management through research.

Strategies

1. Professionalising farmer organisations

  • We strengthen the socio-entrepreneurial capacities of CAC Pangoa, and measure them by using the SCOPE tool. Furthermore, the Peruvian National Quality Institute will evaluate the organisation's management.
  • We support a close interaction between CAC Pangoa and the Cocoa Innovation Centre (CIC), amongst others for the development of a garden with fine flavour cocoa heritage trees, in which agro-forestry practices can be demonstrated. This should allow the CIC to share these practices with its other partners.
  • Together with Cafedirect Producers Foundation, we support the creation of an Excellence Centre for Leaders, which will provide the service of training potential leaders and managers of other cooperatives.

2. Improving the quality of fine flavour cocoa

  • We trail an information system for cupping with APPCACAO, and later on open up its usage towards other organisations.
  • We strengthen the cocoa cupping capacities and the quality management capacities of technicians and field staff of the 26 member organisations of APPCACAO.
  • We support the development of a database of fine flavour cocoa varieties.

3. Promoting commercial and inclusive relationships

  • We promote inclusive commercial relationships between CAC Pangoa and its clients, so as to have a more efficient and sustainable social and environmental impact over time. The learnings of these experiences can help us make a case on how to build bridges between farmer organisations and private actors.
  • We encourage start-ups of rural youth linked to the cocoa sector, and stimulate learning through apprenticeships and events.

4. Creating impact

  • We bring more dynamics into multi-actor cocoa platforms, by focusing on the professionalisation of producer organisations, the development of sustainable and inclusive business models, quality management and the inclusion of women and youth. The goal is to work towards policies and knowledge instruments at sector level, which are beneficial to small-scale cocoa producers and the sector's sustainability.

Duration of the programme

Rikolto's cocoa programme in Peru has a duration of 5 years, from January 2017 until December 2021.

Rikolto partners with CAC Pangoa from January 2017 until December 2019.

Beneficiaries

Direct beneficiaries:

The programme will impact the 680 members of CAC Pangoa cooperative, located in Junín, Selva Central, Perú. Of these 680 members, 545 are men and 135 are women.

Indirect beneficiaries by 2021:

Indirectly, the programme will have 26,797 beneficiaries, of whom 24,570 men and 5,430 women.

Expected results

1. Professionalising CAC Pangoa's organisational and entrepreneurial management, with co-management by young people, so as to improve the cooperative's positioning in different markets for high-quality cocoa.

By 2019:

  • CAC Pangoa has improved its socio-entrepreneurial management capacity;

  • CAC Pangoa increases the active participation of young people by at least 15% (of which at least 20% women);

  • CAC Pangoa has a Center for Excellent Leadership, which provides services to other producer organisations in the cocoa and coffee sectors;

  • CAC Pangoa's members manage their plantations of fine and aromatic cocoa with agroforestry systems, which makes them more resilient to climate change;

  • CAC Pangoa has earned a guarantee seal proving its organisational capacities and professionalisation.

2. Increase the supply of fine flavouur, high quality cocoa, for a better positioning of Peruvian cocoa at the national and international level, through the active participation of the National Network of Tasters of APPCACAO.

By 2021:

  • 60% of the producer organisations linked to APPCACAO implement a quality control system and a cupping system, to improve the quality of its fine flavour cocoa;

  • the image of Peru as fine flavour cocoa export country has improved, and the countr maintains its market positioning and quota of 75%.

3. Activate a group of private sector actors working in the cocoa chain to implement sustainable and inclusive business models, with a focus on the participation of youth and women in their supply chains: By 2019:

  • Companies buying cocoa from CAC Pangoa develop sustainable and inclusive business models and share their learnings with other private actors.

  • Cocoa buyers develop strategies that strengthen the shared value with youth belonging to APPCACAO's member organisations.

4. We bring more dynamics into multi-actor cocoa platforms, and promote policies and knowledge instruments at sector level, which are beneficial to small-scale cocoa producers and the sector's sustainability.

By 2021:

  • we have obtained knowledge and policies stimulating the professionalisation, competitivity and positioning of fine flavour cocoa, which are adopted throughout the sector;

  • we have contributed towards an enabling environment for the development of inclusive business models, with an emphasis on youth inclusion;

  • CAC Pangoa becomes an exemplary model for APPCACAO, the Technical Round Table for Cocoa and the Group for Rural Dialogues in Peru, with regards to the way it handles youth inclusion.

Belgian Directorate General for Development

Paola Mercado
Paola Mercado
Program Coordinator Peru