Understanding Ecuador and Cacao

By Jeffrey Stern, Gianduja, July 10, 2012
Ecuador is known in the cocoa industry for being the world’s largest producer of both the heirloom quality and fine flavor Nacional and CCN-51, an increasingly prevalent hybrid of standard or mass-market quality and flavor.

Today, Nacional is increasingly scarce and has been genetically diluted. Moreover, its reputation for superior quality and flavor (highly floral with notes of jasmine and orange) has suffered for several reasons, a major one being the lack of proper post-harvest and fermentation techniques and another the lack of a price premium for it on world markets. With no price differential for fine aroma Nacional beans over commodity grade CCN-51 beans and with small farmers at the bottom of the supply chain, they receive little benefit for their efforts.

Nacional should not be confused with the overused term Arriba Nacional or simply Arriba, which has lost any significance due to its overuse and abuse by marketers. Arriba can mean chocolate made from not only Nacional but also CCN-51, which popular for its high-yields (3-4 times more per hectare over Nacional), high cocoa butter content, and disease resistance.

CCN-51 was invented sometime in the 1960s and developed in the 1970s in Ecuador by Homer U. Castro (CCN-51 is also sometimes referred to as “Don Homero”), but it did not become widely planted in Ecuador until the 1997-98 El Niño event, which (according to an interview with Cristian Melo, Researcher Universidad San Francisco, Quito, 2011), wiped out most of the Nacional crop and prompted many growers to switch to CCN-51.

Post-harvest and fermentation issues aside, a price premium for Nacional beans could help not only preserve Nacional cacao but also help support small farmers.

With help primarily from the Ecuadorian government and international development funding from around the world, growers’ cooperatives or associations are gaining traction in Ecuador and working to preserve Nacional cacao. When successful, growers’ cooperatives help improve bean quality by establishing centralized post-harvest fermentation and drying centers with standardized protocols and uniform post-harvest treatment, they allow hundreds of farmers to band together to create a superior quality bean for sale to external markets.

During the June Ecole Chocolat trip to Ecuador, we were fortunate to meet with one such cooperative in the Los Rios region called Tierra Fertil. With both government funding, and assistance from a well-respected industry veteran and cacao farmer Samuel Von Rutte, Tierra Fertil is working to improve post-harvest processes and seeking to sell directly to foreign buyers.
The challenges they described to us by Tierra Fertil are similar to so many cooperatives and farmers throughout Ecuador. While gains in quality may allow Tierra Fertil to charge a premium over standard commodity prices to a few appreciative buyers, the cooperative faces the same issues as individual farmers – primarily, intermediaries or brokers who control access to external markets and still do not offer cooperatives a premium for a superior pure Nacional beans (as distinguished by the absence of any CCN-51 beans, with good fermentation and overall bean quality). In addition, Tierra Fertil does not currently have the know-how or language ability to export directly to foreign buyers.

With help from initiatives like that of the HCP and farmers like Samuel Von Rutte, small farmers can learn to better understand and improve the flavor profile of their beans. Cooperatives and small farmers can learn to link directly to foreign buyers who are willing to pay substantial premiums for increasingly scarce fine flavor beans.

Growers can also benefit from third-party verification from a trusted source that attests to the quality of the beans after fermentation and drying and upon shipping. This process can help establish trust between direct buyers and sellers and remove the need for intermediaries. The premiums delivered to small farmers and cooperatives will then go directly to them, undiluted by intermediaries that were unwilling to pay a premium in the first place.
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These are just some of the ways direct trade and the HCP will become important components for preserving fine flavor cacao and increasing the incomes of small farmers in countries like Ecuador.