‘The new Nacional’: Chocolate majors urged to join Dominican Republic cocoa awakening

The United Nations Development Programme (UNDP) –which joined with the National Cocoa Commission - has helped the nation develop its cocoa program. It says the chocolate industry can benefit from fine flavor cocoa and a pre-established National Action Plan​​, aimed at growing yields on a sustainable platform.

Mondelēz began a pilot in the Dominican Republic under its Cocoa Life initiative two months ago and UNDP says more chocolate companies should consider sourcing cocoa from the Latin American nation.

CocoaAction members encouraged to source from DR​

“Other actors that we want here are the CocoaAction members from the World Cocoa Foundation (WCF), and others big buyers of Dominican cocoa,” ​Soraya Rib, Dominican Republic cocoa platform coordinator for the UNDP, told ConfectioneryNews

Rib, who met with major chocolate companies at a recent industry event, said no stakeholder could tackle deep-rooted social and environmental conditions in Dominican cocoa alone.

“The chocolate industry can bring to the table their influence, networks, financial resources and technical expertise,” ​she said.

Rib said this would help companies address complex social issues beyond their supply chains, which are becoming a greater concern for consumers globally.

“Another benefit is that ultimately there will be a more secure and sustainable fine flavor cocoa supply,” ​she continued.

Factfile: Dominican Republic cocoa

Cocoa is the country’s third largest agricultural crop behind sugar and tobacco.

• 40,000 farmers
• Average farm size: Three hectares
• 80% of producers have less than three hectares, 5% have over 10 hectares, and the the rest has between three and 10 hectares
• Average age of farmers: 60 years
• Average income: $500 per month
• Average price: $2,500 per MT
• Average yields: 361.4 kg of dried cocoa beans per hectare.
• 10,000 organic cocoa producers
• 20% of exports are organic
• 30% of exports are fermented
• Main crop in Apr-Jul and mid-crop in Oct-Jan
• Exports of dry cocoa beans worth $261.5m in 2014/15 cocoa year

Fine flavor ambitions​

The ICCO recognizes 40% of the Dominican Republic’s cocoa exports as fine flavor.

Dominican Republic recently hosted the 3rd World Cocoa Conference. The country’s minister of agriculture Angel Estevez Bourdierd said at the event: “Our country will be one of the major exporters of fine flavor cocoa in the world.”​

Dominican Republic is the world’s ninth largest cocoa producer and accounts for around 2% of global production.

It was forecast to produce 82,000 metric tons (MT) for the 2015/16 cocoa season, according to the International Cocoa Organization (ICCO). In the last decade, the country has increased production and exports by 10-15% annually, says the UNDP.

Rib said: “We cannot compete with African beans in quantity. In quality we are the new Venezuelan beans or the Nacional in Ecuador.”​

The UNDP hopes chocolate makers will continue to source from Africa for bulk cocoa beans, but will look to countries like Dominican Republic to add flavor in formulations.

Caribbean flavor: Cocoa types in DR​

Dominican Republic has two types of cocoa: Hispaniola, which is fermented, and Sanchez, which is not.

Rib said around 30-40% of cocoa bean exports are Hispaniola, but she said the US market prefers Sanchez.

“In Dominican Republic you could find different flavors in different regions because our cocoa trees are a mix of cocoa trees from Ecuador, Venezuela and Trinidad. For that reason our cocoa has a distinctive Caribbean flavor,” ​she said.

The country does not cultivate high-yielding variety CCN-51. The Ministry of Agriculture has prohibited all imports of cocoa trees to guard against diseases, such as Witch's Broom, which has never been present in the country.

Cocoa for developed markets​

Dominican Republic is traditionally a cocoa exporter. The US was its only major market in the 1990s but it has since expanded exports to the EU and Japan.

It now exports around 60,000 MT of cocoa beans a year, 90% of its production, according to the UNDP.

Only 6% of production is processed domestically and the other 4% is exported as semi-finished goods such as cocoa butter.

The nation’s cocoa price has averaged S2,500 per MT in recent years – which is slightly lower than average global prices since 2014.

“The Dominican cocoa producer received near the 90% of this price,”​ said Rib.

The country has around 40,000 producers, who have an average income of $500 a month, according to the UNDP.

“Many of them are organized in cooperatives,”​ said Rib, adding this made it easier to disseminate training materials and inputs.

But the average age of farmers is around 60 years old and the UNDP fears the next generation may sell the land or explore other crops, which have a greater detrimental environmental impact.

UNDP partnership​

The government partnered with the UNDP’s Green Commodities Programme in 2013 to create a National Cocoa Platform.

The platform presented a 10-year National Action Plan​​ last year. The goal is to triple yields between 2017 and 2027.

UNDP says a typical cocoa farm can support 1,120 trees per hectare, but Dominican plantations tend to be at 60% capacity.

“In this case we are not going to pull out the trees,”​ said Rib.

Around half of existing trees will be rehabilitated by pruning and farmers will be supported to plant the other 40% (480 trees) needed for farms to reach full yield potential.

Breaking the ‘vicious cycle’​

ICCO estimates global cocoa yields averaged 0.5 MT per hectare in 2013, but average Dominican yields are at around 0.36 per MT, according to the national government.

“The main reason for the low productivity we have for smallholders is 20-25 years ago the cocoa price was very low and small producers left their cocoa farms alone. They didn’t have any incentive to pick up their cocoa,”​ said Rib.

She said this led the country’s cocoa production to decline rapidly. Rib said when prices recovered farmers began to pick up the pods and sell again, but they generally didn’t take care of the trees.

“It maintained a vicious cycle,”​ keeping producers in poverty, said the UNDP cocoa coordinator.

The Government’s Action Plan says 2.5 MT per hectare is possible in optimal conditions and says most farmers can achieve 1-1.5 MT per hectare.

For now the national Cocoa Platform has not set a metric to raise household income for cocoa producers, but the government and the UNDP recently held meetings to discuss performance indicators and Rib said income may become a component of the Action Plan.

Domestic chocolate scene​

“The local market is not used to consuming chocolate,” ​said Rib.

The country is home to only around 10 million people. The domestic chocolate confectionery market is led by Mercasid, which distributes Hershey brands. It accounted for 22% of retail value sales in 2015, according to Euromonitor.

Rib said American and European brands such as Hershey, Mars and Ferrero products dominate the market, but there are growing domestic chocolate players.

Last year the top domestic chocolate confectionery brands posted +8% compound annual growth, compared to +6% for international brands, says Euromonitor.

Rib pointed to two flourishing domestic companies, Munne SRL and Cortes Hermanos, which produce cocoa ingredients as well as their own chocolate brands. Both have been in business for more than 80 years in the country.

Rib also highlighted Xocolat, in the market for 20 years, and Kah Kow, in the market for five years, as other domestic chocolate brands to watch.

The biggest post-harvest facilities in the country belong to Rizek-Cacao, CONACADO, Roig Agrocacao, Munne, Cortes, and Biocafcao.