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Cacao in the Colombian Amazon pitch deck in English

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Growing, processing, and selling cacao has the potential to economically transform the Colombian Amazon. Cacao is a product that will see an increasing demand at a time of decreasing production. High profits may be realized by the development of this environmentally friendly crop through socially-conscious business.

Published in: Investor Relations

Cacao in the Colombian Amazon pitch deck in English

  1. 1. Reducing poverty through a sustainable, environmentally-conscious, profitable business Cacao in the Colombian Amazon Promoting sustainability through socially conscious business in indigenous villages of the Amazon Benjamin Angulo, Executive Director La Libertad, Amazonas, Colombia (57) 311-223-3274 13 Sunset Street Thomaston, ME 04841 USA (1) 207- 354-6231 benangulo@outlook.com
  2. 2. Problem -poverty • The indigenous village of La Libertad has an unemployment or underemployment rate of 90% • Average income per villager is less than $1.90 USD/day, the World Bank’s definition of extreme poverty • The villagers suffer from malnutrition, poor sanitation conditions, contaminated water, poor health Local Governmental Solution -giving things • Small amount of public assistance (welfare) and gifts • Monthly or bimonthly village visits from health or social workers • Healthcare services that are difficult and expensive for the villagers to access (35 kilometers downriver) • Village education until 5th grade
  3. 3. • To help the villagers to develop sustainable business to earn the money that they need to improve their lives • We will do this primarily through the production of organic, rainforest-friendly, indigenously-grown, high-quality chocolate Our Solution “Give a man a fish, feed him for a day. Teach a man to fish, feed him for a lifetime.”
  4. 4. Concept of Chocolate Products
  5. 5. BusinessModel PROBLEM 1) It is difficult to find suppliers of high-quality Cacao. 2) Chocolate companies desire an organic, fair trade, Rain Forest Certified Product. 3) High-quality, specialty cacao may be overly expensive for the buyers. EXISTING ALTERNATIVES 1) Buy from high-priced Suppliers. 2) Contact associations to help find growers meeting the buyer's needs. 3) Travel to cacao producing areas to find qualified growers. SOLUTION 1) We will work with our buyers to meet their specific needs whenever possible. 2) Our product will be very cost- competitive. The cacao growers independently work their land. They will then process their cacao with the assistance of the association, according to strict quality standards. 3) The association will sell the cacao for the growers, insuring fair-trade practices at competitive prices. UNIQUE VALUE PROPOSITION A high-quality, organic, non-GMO, fair trade, Rain Forest Certified cacao produced in an indigenous village of the Colombian Amazon. Our non-profit association of cacao growers gives the people of the village the income they need to lift themselves out of poverty, while producing a sustainable chocolate with their hearts and the soul of the jungle. HIGH-LEVEL CONCEPT We are the small-scale Starbucks of sustainable chocolate growers. UNFAIR ADVANTAGE 1) Produced economically on an indigenous reservation.. 2) An abundance of no-cost land and water for expansion of production. 3) Easily marketed and identifiable region of production: Amazon Jungle. 4) Worker training supplied by many governmental business development agencies at no-cost. 5) Area resilient to global climate change. CUSTOMER SEGMENTS 1) Artisan chocolate Makers. 2) Bean-to-bar makers. 3) Micro-producers. 4) Chocolate-maker hobbyists. 5) Sales of artisan baking chocolate directly to consumers. EARLY ADOPTERS Small, artisanal chocolate companies that output a high quality and more costly product.KEY METRICS 1) Amount of cacao produced 2) Production rate 3) Reject ratio 4) Cycle time 5) Downtime CHANNELS 1) Inbound: website, blog, social media, public Presentations. 2) Outbound: direct business contact, trade show exhibits, social media. COST STRUCTURE Fixed costs: Management salaries, accounting costs, legal expenses, utility bills, building depreciation, taxes, licenses and fees. Variable costs: Energy costs needed for growing and processing, fertilizer, organically-approved insecticides and fungicides, maintenance and upkeep of tools and equipment. Human family costs are not included in the cost structure, as the workers are members of a nonprofit, cooperative association. No land costs are included in the cost structure. All land is communally owned and used at- will by the members of the village. REVENUE STREAMS 1) Initial funding with public funds, grants, and donations. 2) Selling beans to bean-to-bar makers. 3) Selling high-quality baking chocolate to chocolate makers. 4) Selling high-quality baking chocolate directly to buyers on Amazon.com. Cacao in the Colombian Amazon
  6. 6. Underlying Magic –page 1 Why in the Colombian Amazon? Land • Over 150 hectares of farmable land available per village. • Land owned communally and worked by individual families. Water • No adverse affects of climate change on water are predicted for the western Amazon. Climate • Cacao is believed to have originated in theAmazon region. The climactic condition for its growth are highly favorable. Agricultural Workers • Many experienced agricultural workers are available and currently seeking employment. Product Transport • A large cargo ship passes La Libertad, bound for Huston,Texas, every 40 days. It is mostly empty.
  7. 7. Underlying Magic –page 2 Increasing Demand • The world consumption of cacao has increased by 32% within the last 10 years, especially in dark chocolate. • Emerging markets (China, India, Brazil) are expect to further increase this demand. Decreasing Supply • Global climate change is expected to make many areas of current cacao production (mainly in Africa) unusable. • Many of the world’s cacao trees are reaching the end-stages of their productivity. New trees must be planted to avoid severe shortages. World-wide Shortage • It is estimated that there will be a 1 million ton shortfall in world cacao production by the year 2020. • These shortages will cause dramatic increase in prices. Cacao Clones (non- GMO) • Clones are now available that may produce up to 4 times the amount of cacao (of high-quality) per tree. • These same clones have natural resistances to many of the sicknesses that affect non-clones. Why now?
  8. 8. A good example of a highly- productive cacao tree cloneA non-clone cacao tree
  9. 9. Competition Where do we exist in the larger overall Market Space? •We are small growers in Colombia. The growers of high-quality cacao in Colombia are very few. We have a very desirable, highly marketable product. What are our Advantages? •We are to be less- affected by drought due to climate change. •Our plantation is of high- quality, highly- productive, disease resistant cloned cacao trees. •Easy transportation of product on the Amazon River. •We are working with the help of Colombian governmental agencies, agricultural institutions, and other cacao-growing cooperatives with over 100 years of experience. How is your place in the market unique to you, and the right one for your company growth and customers? •We can expand our production of cacao to grow in other indigenous communities of the Amazon. This would allow us to greatly scale- up our production and to attract larger contracts. Who are the competitors, why have they succeeded, and how do you truly differentiate from them? •In the eastern Colombian Amazon we, currently, have no competitors. In the western Colombian Amazon is a farmers co- operative (with over 2000 small cacao growers) with whom we are partnered.
  10. 10. Marketing and sales Where are our customers looking today and finding help? •Cacao association and federations •Internet •Trade shows Where will we get in front of them? •Internet •Direct phone communication •Trade shows •Joining organizations like the Fine Chocolate Industry Association and Direct Cacao •Competition like the annual International Chocolate Awards in Paris. How will we achieve our target growth rates? •Publicity •Clear channels of communication with industry leaders •Attendance at trade shows and industry events What are the most important and unique channels and methods we will use to find and win customers? •Social media platform used by our nonprofit foundation How are we doing it differently than others in the space? •Organic •High-quality product •Rain Forest Certification •Fair-trade •Indigenously produced socially conscious business
  11. 11. Project Associates NationalTraining Service Cacao Growers Association from Western Amazon Office of International Relations and Secretary of Agriculture BusinessAlliance to Transform the Region Chamber of Commerce of the Amazon Amazon Institute of Scientific Research Corporation for Sustainable Development Association of Farmers, Fishermen, and Artisans of the Community of La Libertad Fundacion Amazon Pueblo National Cacao Growers Federation
  12. 12. Financial projections Year 1 –clone nursery, planting 10 hectares cacao and plantain • Initial investment: 20,000 dollars Year 2 –tending trees, harvesting plantain, buying and setting up processing plant • Crop and business costs: 12,000 dollars • Processing plant costs: 15,000 dollars • Income from plantain sales: 12,000 dollars Year 3 –tending trees, harvesting plantain, first year of cacao production • Crop, plant, and business costs: 15,000 • Income from plantain sales: 10,000 dollars • Income from cacao sales: 5,000 dollars Year 4 –tending trees, harvesting plantain, second year of cacao production Crop, plant, and business costs: 20,000 Income from plantain sales: 5,000 dollars Income from cacao sales: 15,000 dollars Year 5 –tending trees, harvesting plantain, third year of cacao production Crop, plant, and business costs: 30,000 dollars Income from plantain sales: 0.00 dollars Income from cacao sales: 35,000 dollars Year 6 –tending trees, harvesting plantain, fourth year of cacao production Crop, plant, and business costs: 40,000 dollars Income from cacao sales: 60,000 dollars (income is a combination of selling as a commodity and selling high-quality, artisanal baking cacao) All profits will be used to plant additional cacao trees and to support educational and social projects in the village.
  13. 13. Investment Clone nursery, 10 hectares of cacao, business operations Amount: $30,000 Use of proceeds in %: Seedlings 33%, business operations 16.5%, nursery 16.5%, fertilizer and pest control 16.5%, tools 9%, transportation 9% Second planting of 10 hectares of cacao Amount: $20,000 Use of proceeds in %: Seedlings 50%, fertilizer and pest control 20%, tools 10%, transport 10%, business operation 10% Initial planting of 4 hectares of exceptionally high-yield, high- quality, plague resistant CATIE-R6 clones (estimated planting at year 3) Amount: $50,000 Use of proceeds in %: Clone costs and rights to sell 70%, business operations 15%, tools 5%, transport 5%, fertilizer and pest control 5% PHASE1PHASE2 PHASE4PHASE3 Production building, production equipment, labor Amount: $35,000 Use of proceeds in %: Processing equipment 50%, building construction 40%, business operation 10%
  14. 14. For example; Dagoba 100% baking chocolate sells for $38.00 kilogram on Amazon.com.
  15. 15. References: Fair Trade Cocoa Cooperatives, http://www.globalexchange.org/fairtrade/cocoa/cooperatives Chocolate Shortage Spurs Revival of Cocoa in Amazon, http://www.bloomberg.com/news/articles/2015-01-07/chocolate-shortage-spurs- revival-of-cocoa-in-amazon-commodities The Impact of Plant Diseases on World Chocolate Production, http://www.apsnet.org/publications/apsnetfeatures/Pages/WorldChocolateProductio n.aspx Chocolate liquor, https://en.wikipedia.org/wiki/Chocolate_liquor Overcoming the Main Limiting Factors of Cacao Production in Central America through the use of Improved Clones, http://www.icgd.reading.ac.uk/ref_data.php?refcode=PHI09A&table=yield DAGOBA Unsweetened Baking Chocolate Bar , http://www.amazon.com/DAGOBA- Unsweetened-Baking-Chocolate-6-Ounce/dp/B004NSMS96 Too Hot for Chocolate? Climate Change Could Decimate the $9 Billion Cocoa Industry, Study Finds, http://thinkprogress.org/climate/2011/09/30/332951/chocolate-climate-change- cocoa-industry-study/ Climate & Chocolate, https://www.climate.gov/news-features/climate-and/climate- chocolate Artisanal, hand-crafted chocolate is a growing niche, http://www.latimes.com/business/la-fi-artisan-chocolate-20150228-story.html Bean-to-Bar 'Craft' Chocolate Makers in the United States (list by State), http://ultimatechocolateblog.blogspot.com.co/2014/03/bean-to-bar-craft-chocolate- makers-in.html Cacao Genetic Enhancement Program, http://www.catie.ac.cr/en/products-and- services/collections-and-germplasm-banks/international-cocoa-collection.html Costa Rica's chocolate comeback, http://www.ticotimes.net/2014/01/27/costa-ricas- chocolate-comeback

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