Presentation during the Bureau of Agricultural Research (BAR) 15th Agriculture and Fisheries Technology Forum and Product Exhibition Seminar Series on August 15, 2019 at BAR Grounds, cor. Visayas Ave., Elliptical Rd., Diliman, Quezon City

1. Prepared & Presented by
JosephineV. Ramos during the
National Technology Forum
held on August 14-16 , 2019 at
the Bureau of Agricultural
Research Compound,Visayas
Ave. Quezon City
LIVELIHOOD OPPORTUNITIES
FOR CACAO GROWING
COMMUNITIES

2. Cocoa year
(Oct-Sep)
2017/2018 2018/2019 Year-on-year change
Revised
estimates
Previous
Forecasts a/
Revised
Forecasts
(thousand tonnes) (Per cent)
World
production
4 652 4 799 4 834 + 182 + 3.9%
World grindings 4 596 4 712 4 750 + 154 + 3.4%
Surplus/deficit
b/
+ 9 + 39 + 36
End-of-season
stocks
1 723 1 773 1 759 + 36 + 2.1%
Stocks/Grindin
gs ratio
37.5% 37.6% 37.0%
May 2019 Quarterly Bulletin of Cocoa Statistics
Summary of revised forecasts and estimates

3. Company Net Sales 2018 (US$ millions)
Mars Wrigley Confectionery,division
of Mars Inc (USA)
18,000
Ferrero Group (Luxembourg / Italy) 12,390
Mondelēz International (USA) 11,792
Meiji Co Ltd (Japan) 9,662
Hershey Co (USA) 7,779
Nestlé SA (Switzerland) 6,135
Chocoladenfabriken Lindt & Sprüngli
AG (Switzerland)
4,374
Ezaki Glico Co Ltd (Japan) 3,327
Pladis (UK) 2,816
Kellogg Co (USA) 1,890
The main manufacturers of chocolate in the world
Reference:
Candy Industry,
January 2019

4. 90% Mainstream chocolate
(i.e. Hershey’s, Snickers or Baby Ruth)
70% Premium chocolate
(i.e. Lindt, Ghirardelli or Ferrero)
27% Fine/artisan chocolate
(i.e. made by chocolatiers, like hand-made truffles)
Types of chocolates consumed

5. Farmers
Collectors and/ Traders
Grinders
Chocolate manufacturers

6. APPROXIMATELY, ONE CACAO FRUIT IS NEEDED
TO PRODUCE A 50- GRAM MILK CHOCOLATE
BAR…

8. 1- Genetics (Seedlings, planting materials)
2- Environment (Suitable farm land area,etc)
3- Farm management (Pruning, Fertilizers, Farm tools, pod
sleeves, labor/workers, technology & extension services)
4- Pest/diseases (farm Management, farmer and environment safe
practices)
5- Post harvest practices (fermentation and drying facilities)

9. UF18

11. X

13. What drives Filipino farmers’ decision to grow
cacao?

14. CACAO
Industry in the
Philippines
*Cacao is more than a mouthwatering confection.
*It is more than the sum of interesting phytochemicals.
*To us Filipinos, cacao spells heritage, a
connection with people and events in the past.

15. Principle routes of cacáo movement: 1 ) 1660-70 Mexico to Philippines; 2 ) 1664 Amazon to Martinique; 3 ) Philippines -> Indonesia; 4 ) 1757
Amazon -> Trinidad; 5 ) Early 19th Century Indonesia -> Ceylon (Sri Lanka); 6 ) 18th & 19th Centuries Amazon -> SE Brazil; 7 ) 1822 Brazil -
> San Principe; 8 ) 1840s Dublin -> Sierra Leone; 9 ) 1861 Ecuador -> Guatemala; 10 ) 1880-1 Trindad -> Ceylon (Sri Lanka); 11 ) 1883
Trinidad -> Fiji; 12 ) 1892-3 Trinidad -> Nicaragua & back; 13 ) 1898 Trinidad -> Costa Rica & Colombia; 14 ) 1890 Venezuela -> Ecuador;
15 ) 1930s Ecuador -> Costa Rica & Panama; 16 ) 1880s Trinidad, Venezuela, & Ecuador -> São Tomé; 17 ) 1899 Trinidad, Venezuela,
Ecuador & Central America to Cameroon; 18 ) late 19th Century Indonesia to Samoa (Source: The Genetic Diversity of Cacao, B.G.D. Bartley)

16. There is remarkably little published work on cacao industry and chocolate manufacturing in the
Philippines that flourished in the 18th century. In 1784, the Philippines’ Company (Real
Compañía de Filipinas) was formed with the King of Spain as a major shareholder. The
Philippines Company obtained a monopoly on exports from South America to the
Philippines, and continued to benefit from their position as importers and distributors of cocoa in
Cadiz, Madrid and northern Spain (Parrón Salas 1995: chs 5–6; Diaz-Trechuelo 1965). At the
domestic trade scene, Chinese Mestizos bought cocoa in the Visayas and northern Mindanao,
sending it to Manila (Mallat 1983:186–7, 202). Muslim traders fed into this network, bringing
beans from Sulu to northern Mindanao (Mas 1843:II). Alternatively, Filipinos in the Visayas
pooled their resources to make a locally rigged sailing ship, took cocoa and other
produce to Manila, settled their accounts on return to their villages, and took the ship apart for
use in the next trading season (Moor 1968:83). By 1903, chocolate was the
(Philippines) twenty-seventh largest industry in terms of units
of production, and thirty-ninth in terms of employment (United States
1905:IV, 506ff.). Manila boasted twenty-nine chocolate ‘factories’ in 1915,
employed 102 people, working an eight-hour day. Contrasting with the
usual gender balance in the West, ninety-nine of these workers were men
(Miller 1920:470).

18. • Many farmers are aware, that fermented beans are better, yet farmers do not ferment,
or ferment inadequately, do not sort completely and do not dry thoroughly.
• The recommended fermenting period is five days. Drying will take five to seven days or
more, and sorting may take another day. Sorting is often not done because the farmers
do not have use for the bad beans and so would rather get something for them instead of
nothing.
• Many farmers cannot or do not want to wait that long to be paid and therefore sell
immediately, even if the price is lower. Not only because they need money
immediately, but every day waited increases the chance of something going wrong and
their beans getting spoiled.
• In addition, traders often wanted to capture the value added benefit themselves and
therefore do not offer premiums for fermented beans.
These factors influence farmers’ reluctance to wait and add value to cacao beans.

20. LEGEND:
DRIED COCOA BEANS:
Processed cocoa products
(liquor, butter, cake, powder) :
Chocolates and chocolate products:
THE
PHILIPPINE
CACAO
BUSINESS
CHAIN
A
B
C
D
E
F
G
H
Gourmet/
Specialty
Chocolatiers
Chocolate/
Confectionery Markets
Cosmetic /
Pharmaceutical
Markets
Regional Processors (Asia)
Multinational Processors and Manufacturers
(e.g. Nestle, Delfi, Mars, body shop, etc)
Local Processors
of cocoa Butter,
Liquor, powder
Local chocolate
and chocolate
products
manufacturers
Tablea
makers
Local
markets/
consumers
Regional Traders/
exporters
Local Traders/Exporters
Local Collectors/Assemblers/
Cooperative
Smallholder Farmers, individual or
Coop members
Source: The Philippines' Cacao Road Map

21. TABLEA

22. CRAFT FINE
gourmet
Premium artisan
Specialty

23. Exploring…cacao processing into
fine chocolate requires a different
level of engagement…
… Less sugar, lighter roasting
profiles and single origins create
inevitable flavor variation…
..Craft chocolate offers a more
sophisticated and interesting
experience…

24. • Touting higher cacao content, cleaner
ingredient, and unique flavor profiles…
…..and offer consumers a sense of people and
place through compelling single-origin
storytelling.
• Stunning packaging from many producers is another
big plus that can be seen as a luxury indulgence.

26. It’s Expensive …
Relatively high cost raw materials, labor and packaging combined
with small production volumes = painfully small profit margins
consumers find themselves blinded by comparatively higher
prices and overwhelmed by multiple brand choices —a challenge
to being competitively priced on shelves in conventional stores.
 Direct or online sales offer a promising platform, but shipping of
chocolate and maintaining competitive profit margins continues to
be challenging

27. • “Focus production to FINE FLAVOR cacao”
• Pursue processing
Cacao production and Chocolate making is ripe for
innovation in nearly all aspects.
• Aside genetic difference, the farming practices applied by
cacao farmers strongly influence several quality
parameters of the finished chocolate.
• Engaging storytelling to highlight chocolate’s journey from
the bean to the finished bar
• Add value to production

28. • Product consistency is key for repeat
purchases.
• Opportunity to enrich cocoa producer livelihoods
around the world, principally by promoting
‘differentiated’ cacao at higher prices.
THE (NOT SO) SECRET RECIPE FOR A POSITIVE
FUTURE FOR THE CACAO SECTOR: ADD MORE
WOMEN!
WINCC Forum @ WCC4, Berlin, 23 April 2018

30. MARAMING SALAMAT PO….