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Theo: the small chocolate company taking big strides in the DRC

 
Cocoa Farmers in DR Congo

Most cocoa comes from Africa but the average income of farmers there is $1-2 a day. Photograph: Greenshoots Communications / Ala/Alamy

 

Powered by Guardian.co.ukThis article titled “Theo: the small chocolate company taking big strides in the DRC” was written by Marc Gunther, for theguardian.com on Thursday 16th January 2014 16.25 UTC

Buying a Theo chocolate bar will not put a stop to the long-running conflict in the Democratic Republic of the Congo. But it will help, at least a little.

Seattle-based Theo sources cacao beans from war-torn eastern Congo and pays premium prices for them. By doing so, the chocolate maker provides a livelihood to about 2,000 farmers and indirect benefits to perhaps another 20,000 people in the Congo.

As a small company, with revenues of about $12m last year, Theo can only do so much. But its work in the Congo demonstrates how companies, big or small, can find ways to attack some of the world’s most intractable problems, if they have the will to do so.

“We’re trying to build a business that can change the way an entire industry conducts itself,” says Joe Whinney, Theo’s founder and CEO. His hope is that other chocolate companies invest in the livelihood of cacao farmers, as Theo has.

I met recently with Whinney, 47, when he visited Washington DC. A high school dropout from Philadelphia, he told me that he stumbled into the chocolate business when he was in his twenties and on a sailing adventure with a friend. Landing in Belize, Whinney volunteered with a conservation group that worked with cacao farmers. “It’s a beautiful plant,” he says. “I just fell in love in with it.”

He decided that the farmers, whose average income is $1-$2 a day, deserved better. “Especially in Africa, where most cocoa comes from, the farmers are very impoverished,” Whinney says.

Finding his place in the industry took time. He worked for a decade or so as an importer and broker, selling beans from Belize, Ghana and the Ivory Coast to socially-responsible businesses including Newman’s Own and Cascadian Farms. But he could not command high enough prices to pay farmers what he thought they ought to earn, and the business failed. “The big lesson was, if you don’t have a financially sustainable business, nothing else matters,” Whinney says. “I was all about the mission.”

Still, he learned enough about the industry and made enough contacts to raise $2m to start Theo in 2006. The company sources its own beans, roasts and mills them, molds them into bars, and packages them at its factory, which was once a local brewery.

Its three-ounce bars, which sell for $4-$5 apiece online but less in stores, are distributed by more than 4,000 retailers, including Whole Foods, REI, Kroger and Safeway.

Although Theo obtains organic and Fairtrade certifications for its bars, those are mostly signals to consumers in a hurry, Whinney explained to me. He said Fairtrade requires a premium of just $200 above the world cacao price per ton, which is currently about $2,800 according to the International Cocoa Association.

By comparison, Theo pays a minimum of $3,800 per ton, and as much as $4,500 per ton, with top prices going to farmers who produce higher quality beans. That way, the farmers who supply Theo are no longer as dependent on the fluctuating world market price, as the company explains on its website, where it posts prices.

The reward, for Theo, is access to a reliable supply of high quality beans from farmers who are trained in best agricultural practices. “It’s just good business,” Whinney says. “I’m securing my supply.”

How did the company wind up in the Congo? Credit there belongs to the actor Ben Affleck, who visited Theo’s factory after starting a non-profit called the Eastern Congo Initiative aimed at promoting peace and economic development in the region. Wars in the DRC have claimed an estimated three million lives during the past 20 years, either as a direct result of fighting or because of disease and malnutrition.

Soon after, Whinney made the first of about a dozen trips to the eastern Congo, accompanied by Affleck and philanthropist Howard Buffett. Theo eventually bought about 340 tons from the Congo last year. It will nearly double that in 2014.

Other chocolate firms also sources from there, but Theo is by far the DRC’s biggest customer. “Three years ago, the entire country exported 600 tons,” Whinney says. “We’re buying that much ourselves this year.”

Paul Fagan, the executive director at the Eastern Congo Initiative, hopes Theo’s success will attract others. “We’re encouraging investors to come into the Congo and see what they can do, although it’s difficult environment, to be sure,” he says. “Cocoa is an area of potential growth. Coffee, too”.

 

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