CFC invests $1m for producing high quality cocoa from communities in Colombia
We’re glad to announce our USD 1 million investment to support Cafexport’s impact-driven vision! Sourcing cocoa from rural communities in Colombia, Cafexport operates under the brand name Colcocoa to supply certified cocoa beans to an international confectionary producer.
While the prosperity of cocoa growing communities’ is essential for Colcocoa, so is achieving positive environmental impact. In this regard, the CFC trade finance facility will help upscale Cafexport’s cocoa trading activities and cocoa production, ultimately benefiting more farmers.
As we begin this new collaboration, we take the opportunity to share the insights from our interview with Colcocoa co-founder, Gabriela Alvarez, who explains the challenges of scaling a business while creating social and environmental impact.
Colcocoa: A vision that creates real impact for cocoa farmers in Colombia
The first thing that strikes you about Gabriela Alvarez, co-founder of Colombian cocoa bean exporter Colcocoa, is her determination. The second is her commitment to creating something that leaves a positive, permanent mark.
Gabriela is straightforward about the challenges of creating a business from scratch. But she will also tell you that Colcocoa was founded with a very clear vision: Building a company that could bring an impact-oriented approach to rural development.
Practically speaking, this approach means that Colcocoa’s growth is inextricably linked to its social impact. In Gabriela’s words: “Growth is not the goal, it should be part of the process, the proof that the business model is strong.” Colombia is famous for its coffee, but cocoa beans often provide additional income and resilience, especially when coffee production has been compromised by climate change.
Colcocoa’s business model starts with sourcing cocoa beans: “We have partnerships with 8 or 9 different cooperatives and we source beans from over 2000 smallholder farmers across Colombia,” explains Gabriela. “Cooperatives are the perfect partners because they have good geographic spread and are trusted by the farmers.”
Colcocoa has very high standards when it comes to quality, and their cocoa beans undergo numerous quality controls before they are shipped to clients in Europe. Colcocoa also provides all the tools and resources that farmers need to grow great produce. Not only that – it is Colcocoa’s goal to make sure that farmers are happy growing cocoa, and that they are paid fairly and can truly benefit from it.
“How do you measure people’s happiness?” Gabriela asks. “People are happier when they feel that their stability is not at risk, whether we are talking about climate risk or risk of becoming ill and not being able to work.”
In other words, people need to know that their future is not at risk.
In order to do exactly that, Colcocoa set up a program called Echar Pa’lante to integrate productivity and quality with economic, social and environmental prosperity. The program is a type of certification measured against very specific goals. The more farmers grow on this certification scale, the more personalized social and professional development benefits they receive. This means Colcocoa can access top-quality produce while allowing farmers to grow and develop in a sustainable way, for themselves and the environment.
“There’s a story that I like to tell to show what the program does,” says Gabriela. “One of the farmers we work with and his wife called us one day and told us that their daughter was looking for a job in Germany, in food lab technology, and asked us if we had any advice or connections. We were so happy that we could help, of course, but for us the real achievement was the fact that their daughter had the chance to make that jump. We were excited to hear that thanks to the work of her family growing cocoa, she was able to dream of a job in the sector. She wanted to work in the sector. For me that’s real growth.”
But growth also requires innovation. That’s why, in 2015, Colcocoa established Hacienda la Tentación, a 137-ha agroforestry plantation where the company experiments with different methods of growing cocoa before asking farmers to implement them. “The farm was created on what used to be a cattle ranch,” explains Gabriela. “We repurposed it and turned it into a plantation, a sort of living laboratory where we can try different cocoa varieties or do soil analysis without putting the farmers’ livelihoods at risk by asking them to implement something we haven’t tested first.” If successful, farmers get to utilize the results.
The establishment of Hacienda la Tentación also offered Colcocoa a new way to make an impact. Reforesting the farm gave Colcocoa the idea of planting trees as a way for companies to offset their carbon footprint. Through a partnership with the University of Bern, Colcocoa measured how much carbon companies could offset for each tree that was planted.
The new initiative allowed Colcocoa to reforest the area using funds from the sale of carbon offsets. It worked so well that they had to purchase an additional 200 ha of land to continue planting trees. After that, they started involving farmers, allowing them to receive payment for planting trees on their land.
“When we decided to involve farmers, we created a slightly different payment system to give them a regular income flow,” explains Gabriela. “Once they plant trees on their land, farmers are not able to work that land anymore, so it’s important that they are compensated. That’s why we measured the carbon offset per year and farmers are paid accordingly and not only for planting the trees. They often joke that these trees are their retirement plan.”
As always, Gabriela has a clear vision: In the near future farmers will be able to sell their environmental services as well as their cocoa. “This vision couldn’t happen without our partnership with the Common Fund for Commodities,” explains Gabriela. “Not only because of the loan, which obviously allows us to grow comfortably, but because it’s a relationship based on common values.”
The CFC’s Managing Director Ambassador Sheikh Mohammed Belal was highly appreciative of the story of Colcocoa, as it effortlessly practices what the organization has been preaching all along. The CFC is always there where purpose and profit are employed to benefit both people and the planet.
If the story of Colcocoa can teach us anything, it’s that strong values and a clear vision can go a long way. The world needs more companies like Colcocoa as society increasingly demands that businesses also serve a social purpose.