El Ceibo: How One Chocolate Producer is Redefining Corporate Contribution

In an industry as overcrowded as chocolate, Big Chocolate companies may justify the negative impact they make on cocoa farmers, consumer’s waistlines, and overly sexualized advertisements as necessary evils to beat their competition. El Ceibo chocolate cooperative separates itself from this bittersweet approach to business by creating a culturally informed product and corporate organization that positively affects farmers, consumers, and countries.

El Ceibo’s tree-adorned packaging and name reference the native ceiba tree renown for its strong, deep roots. The tree serves as a worthy metaphor for the cooperative’s mindset and accomplishments. Producing chocolates since 1977, El Ceibo claims to be the only chocolate brand in the world produced entirely by the cocoa producers themselves from tree to bar.[i] The company’s product line includes drinking chocolate, cocoa powder, and chocolate bars. True to their mission of supporting local culture and products, their bars feature other Bolivian ingredients such as uyuni salt from the flats in southwest Bolivia and Andean royal quinoa from the highlands of the country.

From El Ceibo’s official Facebook page, this tree is composed of El Ceibo’s chocolate bar packages. Since El Ceibo was named for the ceiba tree, the metaphor of the product compiled as a tree is powerful.

The cooperative’s innovative and effective management organization has positively impacted the lives of over 1,200 cocao-producing families.[ii] Spurred by a foundational understanding of self-reliance and inclusiveness, El Ceibo introduced an assembly system of representation, equal wage policy, leadership rotation pattern, and training programs. In the rotating governing council, half the members change each year.[iii] Farmers in the El Ceibo cooperative receive a fair wage, optional job training (such as accounting and pruning), and a voice to instruct how the cooperative progresses.

These practices stand in stark contrast to commonplace activities abounding in world cacao production today. Numerous recent reports convict farms in the Ivory Coast and neighboring Ghana of using slave labor, borderline or outright child abduction practices, physical abuse and providing unfair work conditions.[iv], [v] On-site reports claim that most (if not all) farmers interviewed had never tasted the chocolate for which their labor produced the ingredients.[vi] In this practice, the vast majority of bulk cocoa purchased by Big Chocolate is produced in West Africa, then made into chocolate and sold in Europe. Even if wages and working conditions for these West Africans farmers were fair, the fact that they do not know and cannot reasonably afford to purchase the final product of their labor turns chocolate into a product made from the sweat of black bodies, transformed by the factories of Europe, into desserts for white tongues. El Ceibo breaks from this downward spiral and produces chocolates from their homegrown beans that locals and farmers can actually enjoy.

The first stage of breaking this cycle began before El Ceibo became a cooperative. At the time, most cacao farmers in the region were forced to negotiate against one another to win chocolate producers’ business. Now under El Ceibo, farmers’ livelihoods improved through their ability to earn higher returns from their beans. By forming the cooperative, famers have significant leverage over the cacao market in La Paz. The company has been so effective in price stabilization and “spillover benefits” for farmers throughout the Alto Beni region that experts estimate that, “without the presence of their service program and industry, famers would be receiving one half to two thirds of their current cacao income and probably would have abandoned the crop.”[vii] In this way, El Ceibo uses their organizational structure as a cooperative to stabilize the price of cacao and thus enable a more secure livelihood for farmers.

This photo of El Ceibo farmers and leadership together communicates their cooperative’s themes of community-incorporating and tradition-inspired products. The traditional clothing shown conveys that El Ceibo has not allowed their entrance onto the global marketplace to take away the reminders of where they came from.

This market power has also changed farmers’ expectations of fair payment for their product. When La Paz buyers delayed payments or attempted to block price regulation, the then El Ceibo President said, “a taste of higher prices made our people more defiant than ever and determined to resist the efforts by these business groups.”[viii] This “change of taste” for the farmers and their response provides hope to African cacao famers who hedge that if prices go high enough, African farmers’ tastes will change and they will refuse to sell low again, shifting the entire cacao bean market to a level that will reduce the need for unfair labor practices.

Furthermore, the bargaining power in the cacao market has given dignity to farmers and allowed the lower classes to access a new role in society. “Peasant managers had become shrewd negotiators for dealing with a host of institutions, from public bureaucracies to municipal governments, private banks, and business firms,” says El Ceibo observer Kevin Healy.[ix] Seen this way, El Ceibo’s chocolate company is changing not just livelihoods but also the status of farmers as members of society.

The cooperative also provides training that enables the farmers’ future success. A six-week course in accounting, taught by El Ceibo staff, is reportedly always well attended.[x] Through the program for agricultural training called the “Co-Operative Education and Agricultural Extension Division,” twenty-two peasant professionals are taught pruning techniques to fight the cacao-devastating witch’s broom disease. The program also supplies member co-ops and federation programs with “bookkeepers, treasurers, accountants, and savvy officers” who all enable the farmer to focus on his cacao trees.[xi] As a result of these educational investments, El Ceibo had become more knowledgeable about cacao production than the local agricultural research program organized by the Bolivian government. The farmers also practice sustainable farming to invigorate and replenish the cacao trees’ habitats.[xii]

While El Ceibo’s front panel packaging does not list any certifications, this image from their Facebook fan page mentions nine including FDA, USDA Organic, Fairtrade, and Fine Chocolate Industry Association. From our class lectures, we’ve learned that many of these certifications bring satisfaction to consumers more than financial benefit to individual farmers.

El Ceibo’s impact on farmers goes beyond paychecks and training, though. After the cacao beans are sold at market, El Ceibo fills the empty truck beds returning from La Paz with staples not available in the Alto Beni region. This enables stable access to standard goods and helps regulate prices. In this way, El Ceibo fills the gap between what local markets in the outskirts of Bolivia need and what the “invisible hand” or government programs can consistently supply. Taken together, El Ceibo’s cooperative has helped famers financially, professionally, and socially while regulating markets.

Consumers also benefit from El Ceibo’s corporate existence and products. A “Quinu Coa” product made of Andean grain quinoa with cocoa was incorporated into national school breakfast in increase nutritional content in children’s meals.[xiii] Outside of the nation, according to El Ceibo member Gualberto Condori, a Swiss firm sells El Ceibo, “to consumers willing to pay a slightly higher price for Third World products that increase employment and other benefits for small farmers like ourselves. They say it’s a way to rectify some of the major social injustices…and open new markets for them as well, so there is mutual interest involved in these arrangements.”[xiv] The 2.8 ounce bars retail for $13 USD.[xv]

This American Whole Foods employee poses with EL Ceibo chocolate bars to celebrate the arrival of the bars to American shelves in Virginia. While the just over 2-ounce bars retail for $13, high-end health markets like Whole Foods seem to match buyers who are willing to pay more for a great product that enables farmers better livelihoods with El Ceibo, a cooperative that is redefining corporate contribution.

El Ceibo’s success as a cooperative and chocolate producer has extended beyond the borders of its cacao farms. The company has been designated among Bolivia’s top ten most important exporters of non-traditional products making it an icon of Bolivian pride. The company remembers its roots, too. Former president El Ceibo Leoncio Tipuni mentions that ancestral Aymara, Quechua, and Moseten cultural practices153 inspired the company’s organization. The cooperative reinvests in local cultural festivals that bring together music and dance from various highland traditions of the farmers to preserve their unique cultural identities and traditions. Chocolate expert Susan Terrio explains how companies like El Ceibo’s products are able to shape the national cuisine of Bolivia in the minds of foreign consumers, “In an era of global markets and instantaneous linkages, chefs and cookbooks circulate globally, and the national cuisines they represent shape and are shaped by transnational culture and taste.”[xvi] In this way, El Ceibo is not only creating a product from their farmer’s past to maintain their history, they are influencing the current cuisine of Bolivia.

Inside Bolivia’s borders, the democratic governing structure of El Ceibo teaches good civil education and engagement practices for farmers. The system of self-governed democratic management “derived from local Andean political order”[xvii] and combines democratic assemblies with rotating community leadership. Commentator on democracy and food movements D Schugurensky argues that “one of the best ways to learn democracy is by doing it and one of the best ways to develop effective civic and political skills is by observing them in the real world and exercising them (2003a)”[xviii] Further, academic Charles Levkoe explains how engagement in these governmental structures, “create[s] changes in people that inspire and prepare them to participate in a wider society.”[xix] By teaching good governance, El Ceibo lays the foundation for a stronger democracy and democratic participants in Bolivia.

The cacao-producing cooperative solved another serious government problem—drug production. Farmers report that if El Ceibo didn’t act as buffer and the cacao bean price dropped too low, farmers would cut down their cacao trees and harvested coca. In this way, El Ceibo reduced the supply of regional narcotics by providing legal, alternative forms of income for farmers.

El Ceibo has undoubtedly added great value to the lives, national identity, and taste buds of Bolivians and international customers. However, challenges still persist. Natural disasters such as flooding and tree infections plague farmers. Since only 10% of the total cocoa beans produced annually are fermented and dried in the technical center of Sapecho, the other 90% is fermented and dried by the producers themselves.[xx] While El Ceibo mentions that they visit these farms periodically to check on practices, exposure to nearby dust, rubbish, or fuel exhaust could tarnish the quality and infect the purity of their beans.

As El Ceibo looks to expand to international markets, they may face pressures to change the recipes of their products to match certain national pallets. Further, competing with the Big Five chocolate producers would require slitting their price by nearly $10 or 77%. A 77% decrease in revenue would likely force the company to make many of the poor compromises that the Big Five have—price, cocoa quality, labor payment, purity, and taste would all decline.

The company’s hiring of external auditors to ensure good book keeping and financial prudence[xxi] shows a first step in recruiting outside experts to manage or oversee aspects of the business. According to Oxfam, the average chocolate bar pays farmers only 3% of the final mark-up price while 43% goes to retail and supermarket margin. While El Ceibo’s bean-to-bar business structure may have different ratios, the Oxfam finding shows that retail is the profit sweet spot. If El Ceibo wants to increase profits or expand around the world, they may need experts or partners in the retail realm that could take central decision-making out of its countryside origin and overshadow the opinions of small-time farmers.

As demand for El Ceibo beans and chocolate grows, more talented or highly trained workers may insist on higher wages. This could destabilize the “one famer, one voice” and all-equal pay foundation that attracted so many famers initially. If the better producing or better-trained talent is not compensated for their expertise, they may leave the cooperative and become competitors. This would reduce the bargaining power El Ceibo has over the cacao market in La Paz and incentivize other farmers to set out on their own, effectively returning the region to their original fragmented state. Perhaps the camaraderie and benefits of El Ceibo are enough to keep farmers within the organization, though.

The success of El Ceibo casts chocolate as a tool for developing previously untouched corners of the world. Since lesser-developed nations are the main producers of chocolate today, following El Ceibo’s model of production and organization can serve as a tool for bettering farmers, consumers, and nations. El Ceibo’s example is proof that chocolate can be sustainably produced and sold without the problems of child slavery, unfair wages, and unhealthy products that benefit the chocolate companies at the expense of the supply chain and consumers, as is the case in many cacao plantations in West Africa and their Big Chocolate buyers. Further, ethical practices are not only attainable, but also yield benefits for those outside the direct production. True to the tree in their name, El Ceibo has created strong, deep roots to shade and nurture all those under its canopy. Perhaps as it grows larger, the cooperative will prove that chocolate can truly make the world a better place.

To support the positive impact El Ceibo is making and join in on the sweetness, visit their website at www.elceibo.org.

Special thanks to Carmen Segales and her associate Pastor R Payllo of El Ceibo Chocolates for participating in an interview that informed this paper.

[i] El Ceibo website. Accessed March 25, 2015. http://www.elceibo.org/ceibo/en/catalogue/catalogue2009.pdf

[ii] One World Award by Rapunzel. 2010 Finalist. Accessed March 25, 2015. http://www.one-world-award.com/el-ceibo.html

[iii] Healy, Kevin. Llamas, Weavings, and Organic Chocolate. University of Notre Dame Press, Notre Dame, Indiana. 2001.

[iv] Mistrati, Miki. The Dark Side of Chocolate. 2010.

[v] Off, Carol. Bitter Chocolate: Living and Dying for Cocoa in West Africa. 2008. Pages 129-133.

[vi] Off, Carol. Bitter Chocolate: Living and Dying for Cocoa in West Africa. 2008. Page 7.

[vii] Healy, Kevin. Llamas, Weavings, and Organic Chocolate. University of Notre Dame Press, Notre Dame, Indiana. 2001. Page 138.

[viii] ibid

[ix] Healy, Kevin. Llamas, Weavings, and Organic Chocolate. University of Notre Dame Press, Notre Dame, Indiana. 2001. Page 133.

[x] Healy, Kevin. Llamas, Weavings, and Organic Chocolate. University of Notre Dame Press, Notre Dame, Indiana. 2001. Page 136.

[xi] ibid

[xii] Healy, Kevin. Llamas, Weavings, and Organic Chocolate. University of Notre Dame Press, Notre Dame, Indiana. 2001.

[xiii] Healy, Kevin. Llamas, Weavings, and Organic Chocolate. University of Notre Dame Press, Notre Dame, Indiana. 2001.

[xiv] Healy, Kevin. Llamas, Weavings, and Organic Chocolate. University of Notre Dame Press, Notre Dame, Indiana. 2001. Page 144.

[xv] El Ceibo website. Accessed March 25, 2015. http://www.elceibo.org/ceibo/en/catalogue/catalogue2009.pdf

[xvi] Terrio, Susan. Crafting the Culture and History of French Chocolate. University of California Press, London, England. 2000. Page 55.

[xvii] Healy, Kevin. Llamas, Weavings, and Organic Chocolate. University of Notre Dame Press, Notre Dame, Indiana. 2001. Page 137.

[xviii] Schugurensky, D. “Three Theses On Citizenship Learning And Participatory Democracy.” Accessed September 2003. 2003. From Levkoe, Charles. “Learning Democracy Through Food Justice Movements.” From Food and Culture. Edited by Counihan, Carole and Van Esterik, Penny. Routledge. New York, New York. 2013. Page 593.

[xix] Levkoe, Charles. “Learning Democracy Through Food Justice Movements.” From Food and Culture. Edited by Counihan, Carole and Van Esterik, Penny. Routledge. New York, New York. 2013. Page 599.

[xx] El Ceibo website. Accessed April 8, 2015. http://www.elceibo.org

[xxi] Healy, Kevin. Llamas, Weavings, and Organic Chocolate. University of Notre Dame Press, Notre Dame, Indiana. 2001.

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