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Direct Trade

Direct Trade Farmer Partners in Tanzania

Check Out Our Transparency Report

Davao, Philippines Profit Share

One of the many benefits of Direct Trade is the ability to spot and correct any issues, whether at the farm or during post-harvest, before the beans arrive at our factory. If we worked with a broker or purchased beans sight unseen, we wouldn’t be able to ensure high-quality beans to make premium chocolate.
—Shawn Askinosie

Tastes Good, Does Good

Direct Trade

It’s not about the chocolate. It’s about the chocolate.

Everything starts with quality--and an appreciation of farmers. We honor farmers as experts and craftsmen, so we treat them as such and consider them partners in our business. We work together with our farmer partners to create exceptional chocolate from exceptional cocoa beans. To do this, we're dedicated to Direct Trade. This means we not only know the communities from which we source our cocoa beans, but more significantly, we can build long-term and mutually supportive relationships with these farmers who grow some of the world’s best cocoa. So how does this affect our farmers and your chocolate? And why do we practice Direct Trade?

Our Direct Trade Tenets 

Excellent Cocoa Beans

photographing beans
  • Cocoa bean quality must be perfect and meet our standards for sourcing. The farmers adhere to our very detailed specifications, not those of a broker, which means we have input on all of the facets that impact flavor, such as fermentation and drying (both of which have the greatest impact, actually). We are intimately involved with these processes, which means modifications can be made early on to ensure the resulting beans taste as perfect as possible.
  • We have the opportunity to reject defective beans at the farm, and we have done this before. This does not mean that the farmers can’t sell those beans to someone else; it simply means that we won’t buy them.
  • We have input on how the beans are stored before shipment, another detail that has a big impact on flavor.
  • We control the types of bags that the cocoa beans are are shipped in, which impacts air flow, moisture content and ultimately the flavor of the bean.
  • We control the actual importation of the beans ourselves because we are the importer. This is almost unheard of in the chocolate world. This impacts flavor because we can make sure the beans are not “inadvertently” mixed up with other beans at origin, that they are kept safe in transit all the way to our factory from the farm and finally that the beans are stored safely in our warehouse, which is 50 feet from our factory.
  • All of this means that in the end, you get better chocolate.

Financial Transparency, Open Books, & Profit Sharing

  • Our chocolate is 100% traceable. This means we know the name of every farmer in the groups we work with and can trace our beans directly back to the farmers from whom we purchased them. In some cases we buy from just one farmer, like Vitaliano Sarabia in Ecuador. In other cases, like Tanzania, we work with a small co-op of smallholder farmers. You can’t profit share with people you don’t know!
  • We pay the cocoa farmers significantly above the per-ton Fair Trade market price for their cocoa beans. Read more about this in our Transparency Report.
  • On top of that, we also profit share with these farmers. At the end of the selling cycle, which also happens to be the time to inspect the new crop, we visit the farmers and pay them directly, in cash. Because we also do not use a broker, this is just another example of removing layers of middlemen. With our model, it’s just us and the farmers. This way, we both have more control and the farmers make more money. In many cases, we even help them set up their first bank accounts.
  • Quality beans are key. We share a percentage of our profits based on the sales of products made with those beans (for that selling cycle), which encourages farmers to produce the highest quality cocoa beans. Higher quality = more sales = more profit share.
Tanzania Profit Share
  • We practice the same open book management policy with our farmers as we do in our factory. At the factory, we hold regular finance meetings and share and teach the numbers in our bi-weekly staff huddle, involving each and every Askinosie Chocolate team member. We review financial statements and discuss the company’s condition. At origin, we employ similar practices. That means we share our financial statements with them in their language and explain, in-person, how we arrive at the profit share calculation. This ensures clarity and transparency about how the bean purchase impacted the net profits of the company.
  • Our Open Book Management policy shows them how we reached a profit using their beans and explains how they can influence that profit through superior farming methods. These conversations enable the farmers to connect the quality of their beans to the outcome of each chocolate bar. Through this process, we are able to collaborate with them on how to improve post-harvest techniques to ensure an even greater profit margin in the future, which means more opportunities for the farmers to share in a success they helped create.
  • Whereas the fair trade industry pays a price for the goods on the front end, our Direct Trade approach pays above Fair Trade market price on the front end and returns to the farmers and profit shares with them after chocolate from their beans is sold. The more the farmers see our—and their—profits increase, the more inspiration they have to continue improving the harvesting process and deepen their relationship with us and our company.
  • After receiving their profit share, the farmers typically elect to invest it back into their business by purchasing better equipment and supplies, which stimulates their local economy. Our farmers partners collaborate with other farmer groups and teach them the techniques they learn from us, from moisture reduction to proper storage. In turn, this creates better beans. Because the beans are better quality and because our company pays more for them, this allows the farmers to leverage a better price for them. In some cases, this has created a ripple effect that raised cocoa bean prices for the entire country to a much more fair and reasonable price.

Sustainability

Drying Cocoa Beans, Tanzania
  • Our farmers sign a contract agreeing that they are committed to healthful and responsible cultivation method.
  • Although many of our farmers cannot afford organic certification, our cocoa beans are grown using organic practices that are ecologically responsible. We know this because we see it firsthand!
  • All of the farmers we work with employ organic practices. For example, in the Philippines the farmers use a mixture of goat urine and fish entrails around their cacao trees to protect against insects as well as common cacao diseases like pod rot.
  • Our cocoa farmers also practice a commonly-used ecologically sustainable planting technique called intercropping. This means their cocoa trees are planted among other fruits like lemons, bananas, and sometimes even coffee!

Socially Sound Practices

  • Our contract with our cocoa farmer partners also stipulates that they use ethical business practices.
  • This means there is no child or slave labor, and that fair wages are paid to laborers.
  • At origin, our farmers partners collaborate with other farmer groups and teach them the techniques they learn from us, from moisture reduction to proper storage. In turn, this creates better beans. Because the beans are better quality and because our company pays more for them, this allows the farmers to leverage a better price for them. In some cases, this has created a ripple effect that raised cocoa bean prices for the entire country to a much more fair and reasonable price.
Drying Cocoa Beans, Tanzania

Yearly In-Person Visits

  • Shawn visits our farmer groups at least once each year. During our visits, we evaluate cocoa beans, discuss post-harvest and fermentation techniques that might be affecting flavor, compare last year’s crop to this year’s in terms of flavor variance, profit share, provide an extensive chocolate tasting, which includes tasting and discussing each step of the bean-to-bar process, and in most cases work together on community projects in the areas of education and nutrition.
  • We visit our farmer partners regularly because it's good business--to see their small farms, taste the cocoa pods, smell the fermenting cocoa beans, share profits--and also because we have a kinship. In some origins, like Ecuador, Shawn has been business partners and friends with our lead farmer partner, Vitaliano, for over a decade. In the case of Mababu, Tanzania, every other year we shepherd Chocolate University students from our hometown to work alongside our farmer partners for a week, harvest cacao and experience their way of life.
  • Regular visits to each of our cocoa origins are paramount to sustaining healthy Direct Trade relationships.
So, why do we practice Direct Trade? Because you get better chocolate, because it’s better farmernomics, and because we all get better communities. Few chocolate makers practice direct trade and almost none go to the lengths we do to be involved every step of the way. It’s certainly not cheaper, easier or simpler, and it definitely doesn’t carry less financial risk for us. We practice Direct Trade because we think it’s the right way and the best way.