Ecuadorian Cocoa Farming

The goal of this campaign is to fund a family-owned company based in the coastal area of the Guayas Province (Ecuador), active in the aggregation, processing, and sale of cocoa products to Europe, North America, and Asia. The Company sources its produce from 2.500 cocoa farmers in the 4 provinces of Los Ríos (the area with the highest production of the world-renown ‘Cacao Nacional’, also named as “Cacao Arriba”), Sucumbios and Orellana (where cocoa produce is differentiated by the area of influence of the Yasuni Biosphere Reserve), and El Oro.

When European traders found Cacao Nacional in the Gulf of Guayaquil, with floral aroma profiles, they asked the merchants where these amazing beans came from. The locals answered “Arriba” – “up-river”, meaning further up the watersheds of the rivers that reach the gulf. The name stuck, and to this day, this cacao is known in Ecuador as “Cacao Arriba”.

The Company is focused on shortening the long supply chains that hinder farmers' market access and on improving their productivity and quality controls through two “capacity-building” programs, which benefit 5.000 families. Its mission is to export the best fine Ecuadorian cocoa beans and its derivatives to the world, promoting fair trade with small producers and traders, while integrating the whole value chain and guaranteeing high-quality standards and responsibility for its human resources and care for the environment.

The Company believes to be one of the leading national companies exporting Ecuador's finest cocoa aroma, special semi, and premium gourmet chocolates - with an industrial process "bean to bar".

On top of this, the Company has established a sustainability program that offers farming communities the following services: technical assistance and training to improve productivity; advice and support to improve the quality of post-harvest; training to develop management, financial, and trading capacities in communities; fair trade practices to improve life quality in the communities. The goal is to maintain a record of the cocoa until its final delivery to the consumer, guaranteeing traceability on each of its processes from the production, postharvest handling, and cocoa distribution.

The Company has also established a second sustainable project whose main goal is to improve the productivity of small producers of cocoa and enhance their quality of life, by using tools such as technical training and delivery of agricultural inputs.

The Company established the first “ECA” (Field Schools for Cocoa) in coordination with the main small farmers' associations. As of today, 680 cocoa producers enrolled in the Company’s ECAs.

Overall, Ecuador is the 2nd producer of cocoa in Latin American after Brazil, and for many years, it has been recognized as the largest fine or flavoured cacao producer in the world.

There are two general categories of cocoa beans in the world: “fine or flavour” and “bulk or ordinary”. Fine cocoa production represents less than 5% per year of the world’s cocoa bean production and Ecuador is the largest producer of “fine or flavour” beans, producing over half of the world’s production – the raw material that is required in the European and American industries for fine chocolate production. Evidence from Ecuador suggests that the cocoa premium over the New York Stock Exchange price of fine or flavour cocoa beans is 20% to 30%.

Cocoa production in Ecuador has experienced an overall upward trend in recent years, reaching an estimated 328,000 tons in crop year 2019/2020, for a value of c. USD700m worth of exports. Production in Ecuador is forecast to continue growing, reaching 340,000 tons in the 2020/21 season.

In Ecuador, approximately 360,000 hectares of cocoa are cultivated by approximately 90,000 farmers. Most of these farmers are relatively poor and operate on less than 10 hectares of land (according to representatives from non-governmental organizations in Ecuador). Their incomes are largely dependent on agricultural production with almost half generated by the sale of cocoa beans. 85% of cocoa production occurs in the coastal plain region of Ecuador.

The funds raised through this campaign will be used as Transactional Working Capital to provide liquidity to the Company from its procurement and processing stage, all the way through its exports. This is the fifth campaign promoted by WCA with Goparity.