Taza Chocolate and TCHO: A case study on the evolving applications of direct trade

When someone says “direct trade”, we’re inclined to think “ethical practices” and, in the context of our class, “Taza Chocolate”. Generally, direct trade in the chocolate industry is a form of sourcing where companies work directly with the farmers who provide their cacao, often paying above market price (Martin, Lecture 10). However, it is important to note that direct trade can serve purposes beyond fostering communication within the supply chain or paying farmers higher wages. By contrasting Taza Chocolate with TCHO, pronounced “choh”, I hope to demonstrate direct trade’s evolving applications. Instead of emphasizing direct trade as a platform to promote ethical practices, as Taza does, TCHO focuses on the role of technology to empower their farmers to improve their product’s taste. Although TCHO and Taza are both companies striving to change the way chocolate is made, they utilize direct trade in vastly different ways, signaling that there is not yet an industry-wide interpretation of what direct trade means.

As background, Taza Chocolate was founded in 2005 by Alex Whitmore and Kathleen Fulton after a trip to Oaxaca, Mexico (About Taza, 2015). Whitmore loved the traditional stone ground chocolate he had tried on the trip and decided to start Taza with his wife, Fulton, as a way to bring this style of chocolate to the United States (About Taza, 2015). Today, their chocolate is known for its minimal processing, use of traditional Mexican stone mills, and gritty, unrefined texture (About Taza, 2015). Below is a video produced by Taza detailing their unique chocolate process.

Whitmore and Fulton opened the Taza factory, seen in the video above, in Somerville, MA in 2006 and continue to operate from this location today (About Taza, 2015). Their products can be found across the United States, most notably in Whole Foods. Overall, the company has three main aims: 1) produce a unique tasting stone ground chocolate, 2) promote ethical cacao sourcing through direct trade, and 3) create a certification for direct trade that can be used throughout the chocolate industry.

In contrast, TCHO is much less about a founding story and much more about their business model. In fact, they are so much less about how they were founded, that you have to look at the third to last question on the bottom of their FAQ page to figure out who founded TCHO. Here, you will find that they were founded by Timothy Childs, a NASA space shuttle contractor, and Karl Bittong, a 40-year chocolate industry veteran, in 2005 (FAQ, 2017). They are based in the San Francisco Bay Area and are self-described as a “Silicon Valley start-up meets San Francisco food culture” (Our Vision, 2017). Below is a video produced by TCHO that gives a brief overview of their company.

TCHO produces high-end chocolate centered on the flavor of the cacao it comes from. Rather than focusing on the percentages of cocoa in each bar, TCHO creates dark chocolates based on cacao flavor profiles (Our Vision, 2017). TCHO believes that its chocolate is bringing to life terroir, or the characteristics imparted on cacao by where it is grown, similar to how terroir is used with fine wines (Nesto, 135). For example, its “Fruity” chocolate is single source from Peru, its “Citrus” bar from Madagascar, its “Chocolatey” bar from Ghana, and its “Nutty” bar from Ecuador (FAQ, 2017). TCHO wants to educate its consumers on how to taste chocolate with emphasis on how cacao can impart such differing flavors. TCHO even put together an interactive taste wheel for its consumers to understand TCHO’s thought process when making each bar.

In comparison to Taza, TCHO’s process, while important, is not their proudest achievement; rather, it is the high-quality beans they source from across the world. Like Taza, their products can be found throughout the United Sates, most notably in Whole Foods, Wegmans, and on private label at Starbucks (FAQ, 2017). Overall, TCHO has three aims: 1) create products that cultivate the terroir of cacao beans, 2) use direct trade to help farmers improve their product, and 3) employ technology every step of the way.

The clear commonality between Taza and TCHO is that they both utilize direct trade to source their cacao beans. However, how they advertise and promote their direct trade methods are significantly different. For example, Taza’s emphasis is on constructing a uniformly accepted definition of direct trade for the chocolate industry. In fact, they created the first direct trade certification program for the industry, Taza Direct Trade, that they certify all their products with (Taza Direct Trade, 2015).

The Taza Direct Trade program calls for 5 commitments including, 1) develop direct relationships with cacao farmers, 2) pay a price premium to cacao producers, 3) source the highest quality cacao beans, 4) require USDA certified organic cacao, and 5) publish an annual transparency report (Taza Direct Trade, 2015). More details on these commitments can be found here. Overall, these commitments hit all the key tenets of direct trade; however, they are vague, incomplete, and, in effect, don’t do enough to prove ethical practices. This isn’t to say that Taza doesn’t have an ethical sourcing program, only that Taza Direct Trade is not a foolproof certification program.

For example, how does one define “develop direct relationships with cacao farmers”? For Taza Direct Trade, this means that company staff must visit their farmers at least once per year and provide flight receipts of these trips (Taza Direct Trade, 2015). But, does this really mean that a company has good relationships with their farmers? Providing flight receipts isn’t a personal or appropriate indicator of productive relationships like, for example, feedback or comments from the farmers themselves would be. Taza, as a certified Taza Direct Trade company, makes up for this by detailing their trips and relationships with their farmers in their transparency reports, but it is unclear if other companies certified under Taza Direct Trade would go through the same effort.

Similarly, what does “source the highest quality cacao beans” mean? As Taza Direct Trade explains, their requirement is that the beans have an 85% fermentation rate or more and are dried to 7% moisture or less (Taza Direct Trade, 2015). While these are important factors, they aren’t sufficient measures for high-quality cacao as they miss other crucial aspects such as growing conditions, pH levels during fermentation, or sorting efficiency (Martin, Lecture 4). Again, this isn’t to say that Taza’s cacao isn’t high-quality, only that Taza Direct Trade does not have a stringent enough standard.

However, Taza Direct Trade does make a significant contribution to defining direct trade with its transparency report requirement. Direct trade is all about companies being personally involved in every step of the supply chain. Because of this, physical requirements, like providing flight receipts, to detail personal relationships are not adequate. As alluded to before, the transparency report allows companies more creativity and flexibility in showing consumers these relationships. Taza’s transparency report from 2016 does an excellent job of illustrating this point. By using personal details and compelling stories, this report clearly demonstrates that Taza has direct relationships with each of their farmers.

While I am convinced Taza is a direct trade company, I am not convinced Taza Direct Trade is the right certification for direct trade. In fact, a traditional certification may not be appropriate for direct trade right now at all. Because of direct trade’s emphasis on company built supply chains, it appears that company communication, like Taza’s transparency report, is really the most effective means to prove direct trade. In contrast to Fair Trade, where companies aren’t involved in every part of the supply chain, certification can be useful because it signals to companies that a certain level of quality is ensured with their cacao providers (Martin, Lecture 10). Because direct trade companies are active with all their suppliers, they are personally ensuring quality. In this sense, direct trade companies should focus on demonstrating their relationships with their farmers to their consumers, like with Taza’s transparency report, rather than seeking a uniform certification. A vague list of commitments can be applied to direct trade companies, but it doesn’t follow the essence of direct trade.

TCHO just does this with its commitment to direct trade, “individuals and companies have the power and responsibility to act directly to make a better world, not just buy a logo” (TCHOSource, 2017). TCHO makes it clear that they participate in direct trade not only because it is ethical, as Taza does, but because it is a mutually beneficial system for them (TCHOSource, 2017). Unlike Taza, TCHO details not only their relationships with each farmer, but the ways in which they help each farmer to produce a higher quality product. Whereas Taza pays a premium price to farmers because it is part of their ethical commitment with Taza Direct Trade, TCHO pays farmers more because they produce a certifiably higher-quality product that garners the price premium.

Key to TCHO’s mutually beneficial relationship with their farmers is their use of Flavor Labs. Because TCHO’s chocolate is produced to capture the natural flavor of cacao, TCHO buys cacao with the best natural flavor. But, to do this, they need farmers to understand what these natural cacao flavors are. However, cacao farmers have often never tasted chocolate (Off, 7). To train their farmers, TCHO installs Flavor Labs, 10 across the world so far, where farmers can make small batches of chocolate from their own cacao to learn the flavor profile of their beans (TCHOSource 2017). By understanding how to taste chocolate and cacao, farmers learn the lexicon essential to talk about the quality of their product (Stuckey, 140). Because farmers have the knowledge to understand the goals for their cacao, like “fruity” or “nutty”, they can actively work to create a higher-quality product themselves. TCHO’s chief chocolate maker, Brad Kintzer, gives a brief overview of how these Flavor Labs create a mutually beneficial direct trade system for TCHO.

Besides giving their farmers access to Flavor Labs, TCHO gives their famers strategies to improve their cacao. For example, fermentation and drying are crucial stages in cacao processing where most of the flavor profile is determined (Presilla, 108). While most farmers don’t have access to extensive tools and practices to improve or monitor their fermentation practices, TCHO gives their farmers tools to measure variables such as pH, temperature, and Brix (TCHOSource, 2017). Interestingly, these are some of the exact measurements for high-quality cacao that were missing from Taza Direct Trade’s commitments. TCHO continues to follow their farmers through cacao processing and helps them set up solar drying stations to reduce the moisture in the beans and to continue developing flavor (TCHOSource, 2017). Finally, TCHO gives their farmers a cloud-based software, Cropster, that allows them to upload their data concerning fermentation, drying, and flavor so that they can track their cacao and so TCHO can communicate with their farmers and give them adjustments as conditions change (TCHOSource, 2017).

Cropster confronts Taza Direct Trade’s requirement that company staff visit farmers yearly to ensure direct relationships. Is it necessary for TCHO staff to visit their farmers yearly if they are communicating through Cropster almost daily? Similarly, if the farmers have been trained in the Flavor Labs and have the tools to improve their cacao themselves, what is TCHO’s role when they visit? TCHO’s business model takes away the need to visit their farmers yearly, pushing back against Taza Direct Trade’s limited and rigid definition of direct trade. TCHO’s technology-based model also allows them to have far more direct trade relationships, an argued weakness of direct trade in general (Martin, Lecture 10). Not only does TCHO have more direct trade relationships than Taza, but they also span more of the cacao producing region worldwide. While Taza is confined to South America, TCHO has farmers across South America, Ghana, and Madagascar (TCHOSource, 2017). TCHO’s model makes their farmers more independent, sustainable, and profitable, a key goal of direct trade and ethical sourcing, but also gives TCHO access to the highest quality beans.

Overall, Taza and TCHO both accomplish the key tenets of direct trade. They have personal relationships with their farmers, pay price premiums, and source high-quality cacao. However, while they are both direct trade companies, they utilize direct trade very differently. While Taza focuses on creating an industry-wide certification program, Taza Direct Trade, TCHO is more company oriented, focusing on the technological advancements they can provide their farmers with. While neither company’s use of direct trade is unambiguously better, TCHO’s direct trade method conflicts with the Taza Direct Trade certification in a way that suggests the interpretation of direct trade is still evolving. Because of this uncertainty, it seems that for today’s direct trade companies, it is less important to create a unified certification program, as Taza is doing, and more important to further explore the beneficial aspects of direct trade. In fact, this may be the reason that no other direct trade company has become Taza Direct Trade certified or created a certification program of their own (About Us, 2015). Altogether, TCHO demonstrates that direct trade is a practice that can provide higher quality beans and increased profitability, signaling that the applications of direct trade expand beyond just an ethical practice.

 

Works Cited:

“2016 Transparency Report.” Taza Chocolate, 2015, https://www.tazachocolate.com/pages/2016-transparency-report. Accessed 4 May, 2017.

“About Taza.” Taza Chocolate, 2015, https://www.tazachocolate.com/pages/about-taza. Accessed 4 May, 2017.

“FAQ.” TCHO, 2017, http://www.tcho.com/faq/. Accessed 4 May, 2017.

“Flavor Focus.” TCHO, 2017, http://www.tcho.com/tchois/flavor-focus/. Accessed 4 May, 2017.

Martin, Carla. “Lecture 4: Sugar and Cacao.” Aframer 199x. CGIS, Cambridge, MA. 25 Feb., 2017. Lecture.

Martin, Carla. “Lecture 10: Alternative Trade and Virtuous Localization/Globalization.” Aframer 199x. CGIS, Cambridge, MA. 5 Apr., 2017. Lecture.

Nesto, Bill. “Discovering Terroir in the World of Chocolate.” Gastronomica Vol. 10, No. 1 (Winter 2010), pp. 131-135. Online.

Off, Carol. Bitter Chocolate: The Dark Side of the World’s Most Seductive Sweet. The New Press, 2006.

“Our Direct Trade Program Commitments.” Taza Chocolate, 2015, https://cdn.shopify.com/s/files/1/0974/7668/files/Taza_DT_Commitments_Aug2015.pdf?2533070453853065353. Accessed 4 May, 2017.

“Our Vision.” TCHO, 2017, http://www.tcho.com/tchois/our-vision/. Accessed 4 May, 2017.

Presilla, Maricel. The New Taste of Chocolate, Revised: A Cultural & Natural History of Cacao with Recipes. Ten Speed Press, 2009.

Stuckey, Barb. Taste What You’re Missing: The Passionate Eater’s Guide to Why Good Food Tastes Good. Free Press, 2012.

“Taza Direct Trade.” Taza Chocolate, 2015, https://www.tazachocolate.com/pages/taza-direct-trade. Accessed 4 May, 2017

“TCHOSource.” TCHO, 2017, http://www.tcho.com/tchosource/. Accessed 4 May, 2017.

 

Videos:

“Taza Chocolate ‘Bean to Bar’.” Taza Chocolate, 2012, https://vimeo.com/33380451.

“TCHO.” TCHO, 2013, https://vimeo.com/50330693.

“TCHO Chocolate Factory Tour: How Farmers Help Boost Flavor.” San Francisco Business Times, 2017, http://www.bizjournals.com/sanfrancisco/video/50cTl3dDq8a0Iv_aMWVc9xGlDjkP27XC.

 

 

 

 

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