Tag Archives: Kallari

What future for the Arriba terroir?

In the primary chocolate consumption markets, the demand for mainstream milk chocolate bars has stagnated amid health concerns from consumers. This new market behavior has in turn been boosting the fine or flavor cacao segment, whose beans are used to produce a less fat, high-end, more expensive chocolate. Ecuador is the first exporter of fine or flavor cacao in the world and his star cacao, internationally renowned for his specific flavor, is the Arriba cacao. This leaves us to wonder what is so specific about the Arriba Terroir? What is the country doing to preserve its traditional beans? And what developments can we expect in the production of chocolate from those beans?

Overview of the cacao industry in Ecuador

There are two varieties of cacao currently produced in Ecuador: the Nacional (fine or flavour cacao, “FFC”) and Colección Castro Naranjal 51, “CCN-51” (a bulk or ordinary cacao).

The CCN-51 was created by the Ecuadorian agronomist Homero Castro who grafted in 1965 few strains of cacao to fight against the plagues that were destroying the traditional cacao cultures. The result is a clone resistant to diseases created from the Iquitos (Ecuadorean- Peruvian 45.4%); Criollo (Amazon, 22.2%) and Amelonado (Ghana and Central America 21.5%) strains. For many years the cacao industry marginalized this variety for its acidity and astringency. The following article provides additional information on the CCN-51 origins and its current recognition on the international cocoa market : www.elcomercio.com/actualidad/negocios/cacao-ccn-51-paso-de.html

On the other hand, the Nacional has been cultivated for centuries in the areas of the upper basin of the Guayas river in which estuary the city of Guayaquil can be found. Guayaquil is still today the main export port in Ecuador in which all exports of cacao are being made. Since this time, the Nacional was known as Arriba cacao (“the cacao from above/up the river”). It is known for being exclusively produced in Ecuador, for having a very short fermentation and for producing a chocolate that is soft, with an intense savor that provides complex aromas. It is described as having « a floral profile with blackcurrants and spice» by Sarah Jane Evans, founding member of the Academy of Chocolate, in her book “Chocolate Unwrapped” (2010).

Both the cultivated area for cacao and the cacao production have increased in the past 10 years reaching 388,000 Ha [1] and 260,000 MT in 2015 [2]. Approximately 600,000 people are involved directly in the cacao production chain (4% of the economically active population and 12.5% of the agri EAP) [3]. In 2015, 87% of the total cacao exports were beans’ exports (raw product), 30% of which from the CCN-51 type, 47% from the Arriba type of less quality ASE (mainly to the USA), 23% of the Arriba types of better quality ASS and ASSS (mainly to Europe and Japan) [4].


Fig. 1

The FFC market represents 6 to 8% of the total world production of cacao, and Ecuador, leader in this sector, produces 54% of this segment [5]. In 2015, the FFC Panel of the ICCO reviewed the Annex « C » of the International Cocoa Agreement 2001 and confirmed Ecuador as a 75% partial exporter of fine and flavor cacao:Fig 2Fig. 2

 The production of Arriba cacao throughout history

The Nacional cacao has been cultivated at least since the 1600s along the Daule and Babahoyo rivers’ shores when it was already known in international markets for its strong and distinctive floral aroma. Until 1890 it was the only strain cultivated in the coastal region of Ecuador (with the exception of Esmeraldas province) [6] when pods from Trinidad called « Venezuela » were introduced. Following the frosty pod and witches’ broom diseases, foreign strains were introduced in a larger quantity in Ecuador. More than 95% of the original area previously planted with Nacional cacao had been replaced by hybrid material involving foreign clones, particularly of the Trinitario types[7]. This has led to the dilution of the Arriba flavor in the Nacional cacao population.

According to Cristian Melo, Researcher Universidad San Francisco, Quito, 2011, in an interview with the Heirloom Cacao Preservation Fund (“HCP”): “In 1997-98 El Niño event, wiped out most of the Nacional crop and prompted many growers to switch to CCN-51”.

Multiple genetic analysis and research have been conducted in the 2000s in privately-owned plantations or national parks and forests by organisations such as the HCP or the Instituto Nacional de Investigaciones Agropecuarias (“INIAP”) National Institute for Agri-fishing Investigations to identify trees of the Nacional strain[8] [9]. In 2009, INIAP collected DNA samples from cacao trees throughout Ecuador, and only 6 trees (out of 11,000 samples) were genetically pure Nacional. That’s a mere 0.05% of the cacao trees that were analysed [10]. Those studies have proven that most of the Nacional cacao today is genetically a mix between many different varieties with the original Nacional strain. To highlight this diversity, a classification system of the Ecuadorian Nacional cacao has been proposed [11]:

  • Ancient Nacional (aka Antigüo Nacional): genetically pure Nacional cacao tree
  • Landrace Nacional: young plantings of genetically pure Nacional cacao
  • Heirloom Nacional: open-pollinated coastal Ecuadorian cacao trees whose DNA is at least 80% Nacional
  • Complejo Nacional: trees that are at least 50% Nacional but does not include CCN-51
  • Modern Nacional: Nacional-based clones and hybrids, as well as descendants therefrom, developed by INIAP or other agricultural institutes in the interest of increasing yields for commercial production, excluding CCN-51

The characteristics of these Nacional hybrids differ from those of the Ancient Nacional – the most visible differences being the pods’ color and shape as highlighted by the pictures below:

Fig 3Fig. 3

Differentiation of the Arriba Cacao

More generally, there are many factors that make the Arriba cacao from the Nacional hybrids differ from other types of cacao and define the Arriba Terroir, unique to Ecuador [12]:

  • Polycultures is required
  • High sensitivity to climatic changes
  • Specific soil composition (volcanic close to the Andes becoming more alluvial close to the ocean)
  • Longer Maturation period
  • Beans of bigger size
  • Less fat (for example the Complejo Nacional is assumed to have less than 48% fat while Forasteros have more than 50%)
  • Human factors during harvest have a bigger impact on the yields and quality of the beans: the Arriba beans have to be harvested in the morning and opened latest on the following day to not harm the fermentation process
  • The post-harvesting process requires natural tools such as wooden tools, jute bags, natural light to not risk alteration of the Arriba savour
  • Short fermentation period: 1-2 days of fermentation when other types of cacao require on average 6 days

Although the Arriba taste is unique and distinctive, there is much more to this product than meets the eye (the tongue?): multiple genetic passports impacting on the size and the weight of the beans, soil compositions, harvest and post-harvest processes even within the same country that constitute the complex Arriba Terroir. As explained by Prof. Carla D. Martin, Department of African and African American Studies at Harvard University in her interview for Formaggio Kitchen “Chocolate and the Cost of Terroir” (2014): « To put it simply, there are many complicating variables – climate, soil type, bean variety, post-harvest conditions, chocolate manufacturing, etc. – that play into the expression of flavor from a variety of cacao of a certain origin ». It is thus impossible to propose a single quality definition (and price premium) for the Arriba cacao and the ICCO had to classify it as below (from the highest to the lowest quality).

  • ASSPS Arriba Superior Summer Plantation Selecta
  • ASSS Arriba Superior Summer Selecto
  • ASS Arriba Superior Selecto
  • ASN Arriba Superior Navidad
  • ASE Arriba Superior Epoca

All these qualities are recognised and dictate a premium on the NY and London stock exchanges.

Fig 4Fig. 4

As we can observe on this chart, the higher Arriba qualities (ASS & ASSS) have always managed to attract a premium above the CCN-51 in the past five years.

Government support for the Arriba cacao

As explained above, the Arriba cacao in Ecuador faces many challenges : scarcity of genetic content, high sensitivity to climate changes and diseases, low production rate etc. which made it difficult for small producers (49% of the cacao producers in Ecuador cultivate less than 10 Ha [13]) to sustain its production, switching to CCN-51 or other crops and putting the country at risk of losing its competitive advantage and leadership in the international cacao market for FFC. As highlighted by Susanne van der Kooij in her “Market study of fine flavour cocoa in 11 selected countries – revised version”, Royal Tropical Institute (2013): « In 2005, the ICCO downgraded Ecuador’s cocoa from being rated as 100% fine aroma to 75%, due to the introduction of- and problems with the CCN-51 variety, especially the mixing of CCN-51 with the Nacional ».

Thereafter the Ecuadorian government decided to work on the revalorisation of the Arriba Cacao and that same year the Ministry of Agriculture, Livestock, Aquaculture and Fishing (“MAGAP”) signed the Ministerial Decree No. 70 which declares cacao as a Symbol Product of Ecuador (highlighting its importance in the history of the country, and in its social, economic and political development as well as for its unique qualities recognized internationally). Again in 2005, the MAGAP signed the Ministerial Decree No. 60 in which it is declared that the Nacional and CCN-51 beans cannot be mixed and appointing the ANECACAO as responsible body for issuing the Certificates of Commercial Quality for Cacao Export [14].

Fig 5Fig. 5

In 2012, the MAGAP launched another project of « Reactivation of National Fine and Flavor Coffee and Cacao» with the primary objective of boosting the Nacional cacao production. The project’s timeline is of 10 years with the first focus 2012-2016 being on the promotion of the cultivation and the second focus 2017-2021 being on the other segments of the value chain (such as transformation). For the first phase, the government has committed on the rehabilitation of 150,000 Ha and to increase the production from 5 to 25 qq/ha/year in order to reach a total export volume of 700,000 MT/year. The project will provide plants, technical tools, pruning to plantations older than 10 years (50% of the plantations), and promotion of cloning gardens with a total investment of 66.8 millions USD [15]. The government has made a video to promote this initiative:


In 2014, the Ecuadorian Institute of Intellectual Property (“IEPI”) approved the first use of denomination of origin (“DO”) for the Arriba cacao as detailed in the following publication from the Institute: https://www.propiedadintelectual.gob.ec/iepi-entrega-primera-autorizacion-de-uso-de-la-do-cacao-arrib/

The government also declared an agricultural emergency in 2015 due to the unusual excessive humidity of the dry season (due to el Niño) which created an explosion of Monilla (cacao disease). The MAGAP implemented a plan that allowed the recovery of the whole country’s production particularly through distribution of kits to fight against Monilla. The ministry also started a campaign of information directed to 200,000 families of producers providing free input and technical training.

As explained above, in 2015 the government has also managed the renewal of the classification of Ecuador by the ICCO as a 75% partial exporter of fine and flavor cacao and has now the objective of achieving 85%.

Through all these actions, the Ecuadorian government have provided a strong support to the Arriba Terroir and is not only providing confidence to the small farmers to invest in further production but also to the international markets (ICCO, buyers etc) that the country will maintain its level of Arriba exports while preserving the quality of the product. Its efforts to reverse the trend that the Arriba cacao would disappear by 2025 have been working so far as described in the following article: https://www.eltelegrafo.com.ec/noticias/economia/8/ecuador-vendio-usd-750-millones-en-cacao-en-2015

 Demand for FFC

Defining the demand for FFC is a difficult task particularly « due to the niche character of craft chocolate and specialty cacao » as described by Prof. Carla D. Martin, Department of African and African American Studies at Harvard University, in her article “Sizing the Craft Chocolate Market”, Fine Cacao and Chocolate Institute (“FCCI”).

The demand for FFC is multiple:

  • From the big traditional chocolate-makers which have some Premium quality products (well established for many) and that need FFC from specific origins to maintain the distinctive savour or colour of their chocolate.
  • From the craft chocolate-makers, a smaller segment that is however growing, who create gourmet chocolate for which they almost uniquely use FFC.
  • From the direct trade chocolate-makers that work directly with producers of FFC.

In general, the chocolate consumers’ demand has changed in the past years with the following criteria becoming more important:

  • The quality of the product with consumers looking for stronger or specific flavours
  • The health and nutritional properties of the aliments
  • The origin, traceability and production process (and to a certain extent the sustainability and impact on the environment)

Chocolate consumers require thus a higher content of cacao with specific origins and terroirs (where the savour and quality of the grains are critical) [16].

This extract from the article “Premium chocolate ‘leg up’: how to win fine flavor cocoa status “ by Olivier Nieburg, 2016, Confectionarynews.com summarizes the FFC market mood today:

Laurent Pipitone, director of the ICCO economic division, said at the Cocoa Revolution conference there was « strong growth in demand » for fine flavour cacao. It comes amid premiumization in chocolate within developed markets as manufacturers experience growth in dark chocolate tablets with high cocoa percentages. « We have more and more chocolate tablets and consumers willing to pay a higher price for chocolate tablets » said Pipitone. « We are far from the wine market but the wine market can be an example on how the trade can develop in future years ».

The demand for cacao in general is also expected to grow with the increase of the world population, particularly in emerging countries where the chocolate consumption is still low today[17]. This might not however benefit directly the FFC market but will certainly put pressure on bulk cacao production and prices. What is unclear at this stage is whether this effect will push all cacao prices upwards or reduce the spread between bulk and FFC, which could lead to more farmers switching to CCN-51 in Ecuador (which might consequently create a bull market for FFC too as it becomes scarcer).

Domestic transformation industry

Only 10% of the cacao beans produced in Ecuador are actually processed locally, even for semi-transformed products (butter, liquor etc). Only 1% are processed into chocolate (Bars, powder etc) [18]. These new chocolate-makers are creating a trend in the country and are led by groups such as:

As mentioned by Paul Richardson in his article « The choc of the new », The Economist 1843 (2017): «We are not talking mass-market slabs: these are chocolates that take you on a journey, carrying the palate on intense flavour-waves of citrus and red berries punctuated with earthy notes of walnuts, cedar and tobacco»

Such a culinary journey that travelling bloggers dedicated they blog on Ecuador to the tasting of 21 local bars : https://www.livingthedreamrtw.com/2014/07/the-21-chocolate-bars-we-ate-in-ecuador_14.html

Arriba cacao SWOT analysis

Fig 6


With a flavour appreciated by all cacao connoisseurs around the world, the Arriba cacao presents many opportunities for Ecuador (the only country in which it grows with this distinctive flavour and quality), as long as the local regulatory bodies and the main actors of the cocoa value chain maintain their current efforts of preserving the Nacional genetics and quality while increasing its production and productivity in a sustainable and environmental manner. The government intervention through its Arriba Rehabilitation Program and potentially the implementation of technology for quality control will in that respect be crucial to the future of the Arriba cacao in the world. Still very under-developed is the local transformation industry that has however started to gain ground with award-winning chocolate such as Pacari bars. If more investments are made into this industry domestically, developing more Ecuadorian high-end single origin bars, it seems safe to predict that the Arriba Terroir will soon become to chocolate what the Bourgogne is to wine: a classic!


Sources and References:

Fig. 1: ANECACAO website

Fig. 2: ICCO website

Fig. 3: www.nacionalcacaoconservation.org

Fig. 4: M. Acebo Plaza, Escuela Superior Politécnica del Litoral ESPOL, « Industria de Cacao », Apr. 2016

Fig. 5: FAO, IICA

[1] Instituto Nacional de Estadísticas y Censos (“INEC”) National Institute of Statistics and Census

[2] Asociación Nacional de Exportadores de Cacao – Ecuador (“ANECACAO”) National Association of Cacao Exporters

[3] Ramírez, Pedro: “Estructura y dinámica de la cadena de cacao en el Ecuador: sistematización de información y procesos en marcha”, GTZ (2006)


[5] The International Cocoa Organisation (“ICCO”)

[6] Van Hall, (1932)

[7] Loor et al. (2002)

[8] Loor & Risterucci & Fouet & Courtois & Amores & Suarez & Jimenez & Saltos & Cros & Rosenquist & Vasco & Medina & Lanaud: “Genetic diversity and possible origin of the Nacional cacao type from Ecuador”, CIRAD, INIAP, USDA, UTEQ (2010)

[9] Loor & Risterucci & Courtois & Fouet & Jeanneau & Rosenquist & Amores & Vasco & Medina & Lanaud: “Tracing the native ancestors of the modern Theobroma cacao L. population in Ecuador”, Tree Genetics & Genomes (2009)

[10] Christian, The Mother ‘F’ Tree (2012)

[11] Nacionalcacaoconservation.org

[12] E. Quingaísa: “Estudio de caso: Denominacion de Origen “Cacao Arriba””, Instituto InterAmericano de Cooperacion para la Agricultura « ICCA » (2007) InterAmerican Institute of Cooperation for the Agriculture

[13] National Census for Agriculture and Livestock 2000, Ecuador

[14] E. Quingaísa: “Estudio de caso: Denominacion de Origen “Cacao Arriba””, ICCA (2007)

[15] ICCO & MAGAP, update presentation Sept 2013 Wembley

[16] Centre for the Promotion of Imports from developing countries (“CBI”) & Euromonitor & https://www.reuters.com/article/us-cocoa-demand-innovation/chocolate-makers-innovate-to-entice-health-conscious-consumers-idUSKBN1ED1PZ

[17] M. Acebo Plaza: « Industria de Cacao », Escuela Superior Politécnica del Litoral (“ESPOL”) (2016)


The cacao production workforce in Ecuador throughout history

For its historical role in the growth and agrarian features of the country and its print on the national culture, the production of cacao constitutes without a doubt a relevant subject with regards to the Ecuadorian economy and society. As central to the nation as the cultivation of cacao can be, it seems however that this has not been reflected on the life conditions of its main producers.



The origin – 3300BC

As explained by Professor Martin, Carla D. from Harvard University, the cacao tree (Theobroma cacao L.), is native from the Amazonian basin on the foothills of the northern Andes, a region that spreads on what are now Ecuador and Colombia. A ceramic pottery dating 3300BC and found in Ecuador’s southern Amazonian region of Zamora Chinchipe, contained microscopic remnants of cocoa, suggesting that cocoa beans were being harvested and consumed there more than 5,000 years ago.


The beginning of the colonial period (1530- 1750)

Cacao production became a business under the colonisation of the territory by the Spaniards. «Around 1600, the collection and exploitation of the cacao beans constituted one of the most important activities of the old province of Guayaquil. Almost 9 boats were leaving annually the port transporting cacao» (Chiriboga, 2013: 27).

The agrarian structure then developed trough the system of Encomiendas, large land concessions (Haciendas) received by the colons with a right of serfdom over the native population. Theoretically they were in charge of educating and baptizing the Indians under their guardianship, in practice they were reducing them to slavery through the necessary tribute (gold, chicken, maize, cacao and other foodstuffs) as well as through services of personal nature. Thousands of Indians died. In 1600 there were approximately 500 Encomiendas in Ecuador.

Meanwhile, the trade of slaves had started in the middle of the XV century in Spain. Slaves were brought by the colons mainly as workforce for the agricultural labour. In fact, native populations (often coming from the highlands) were not considered as performant for such hard labour under the hot and humid climatic conditions of the coastal area where most of the cocoa cultivation was taken place. Mortality rate amongst slaves was high and average life expectancy extraordinarily low. Approximately 30% of the slaves died in the process of adaptation to their new life (environment, diseases) therefore the system of control and repression was extremely hard as it had to face rebellions and escapes from the slaves.


The First Cacao Boom (1779-1842)

Following the Bourbon reforms, the departure of the Jesuits and the authorisation in 1789 by the king Charles IV to cultivate and export cacao from the region, the food crops and tobacco plantations turned into cacao plantations (in high demand in Europe). Cacao production then spread all over the country and the first large cacao Haciendas were born. Exports went from 5,600 metric tons (MT) to 15,700 MT in 1843. Spain was the first market, then England and Germany.

The cacao crop did not require year-round attention and it was often just as profitable for an owner to let his slaves buy themselves and then hire them to work for wages during the high-season. It is estimated that between 1780 and 1820 several hundred slaves took advantage of this new reality.

More details on the slavery and manumission in Ecuador are available in the following article:


This first boom, led by the exports to foreign markets, was also achieved through the movement of the workforce from the highlands. Indeed, an important migration of the native people from the highlands to the coastal area took place that was entirely related to the cacao production. Around 1830 there were many more day laborers than small landlords/producers on their own piece of land.


The second cacao boom (1870-1925)

During the Second Cacao Boon the production increased consistently up to 100,000 MT annually and Ecuador became the first world producer supplying 15 to 25% of the international demand.

Soon appeared a reduced group of 20 families that controlled more than 70% of the producing area. These Hacendos were known as the « Gran Cacao » and accumulated land that were initially acquired by indigenous people during the colonial period. These appropriations – often dishonest –concentrated power and created an even bigger contrat between this new oligarchy and the workforce made of farmers brought from the highlands and former slaves (abolition of slavery was in 1861).


Source: Anecacao website (Asociación Nacional de Exportadores de Cacao – Ecuador)

 Indeed, the « Gran Cacao » enjoyed the increased world demand, high prices but above all, the cheap domestic workforce that were scarcely remunerated and submitted to high debts.

« Indians and negros of Ecuador do the work of cacao and other plantations. These unfortunate creatures are slaves. They are not called slaves. Slavery is not permitted by the constitution of the Republic. […] The explanation is very simple: every plantation worker must buy what he needs at the plantation store. He is given credit and encouraged to get into debt. Once in debt, he is a slave. He has no hope of clearing his debt. » (People of All Nations: Their life today and story of their past, J.A. Hammerton P.1627)

In this context, arose new popular revendications and the first workers associations and syndicates were created.


The cacao crisis (1920)

The increase of the world production in the new colonies such as Ivory Coast or Indonesia as well as in Brazil (trees had finally reached maturity) and the start of the First World War led to a market saturation, lower demand and falling prices. Finally, an outbreak of Monilia and Witches’ Broom diseases (1915-1920) finished to depress the cacao industry locally. The production dropped to 15,000 MT in 1930 and soon plantations were abandoned by their owners.


The current model (since 2000)

Nowadays the country is a major player in the international cocoa market not due to volumes but to quality. The demand for specialty cocoa is growing and outweighs supplies which creates a very attractive niche market. Ecuador’s cacao annual production is above 230,000 MT since 2013 and continues rising:


Ecuador counts approximately 100,000 cacao producers (not always exclusively), out of which 85% cultivate less than 10ha, 15% between 10 and 20ha and 5% more than 20ha.

The increasing demand for organic and Fairtrade cocoa also helps to improve small producers’ income. A survey made with a representative group of cocoa producers in the Manabí province showed that 69.8% produced or have produced at one point with a Fairtrade label.

However, one of the representatives of the Kallari association (https://www.kallari.com.ec/), explained that the annual cost, some non-adapted procedures and the lack of selling premium were the reasons why they stopped their Fairtrade certification. Hence extent of Fairtrade certification locally is not necessarily representative of the actual treatment of the producers. What is more representative is the rise of producers’ associations, sometimes establishing their own bean to bar transformation and selling onto the domestic or foreign market. As such they control the whole value chain and ensure fair revenues for the whole community. One representation of this trend on the domestic market is Kallari, composed of 850 producers (mainly Quechua families) from 21 communities of the Tena region in the Ecuadorian Amazon:




Although slavery and forced labour constitute a large part of the history of the commercial cacao production in Ecuador (for 3 centuries), Ecuador’s cacao industry has taken a drastic turn in the last 100 years placing it in the top 10 world producers targeting the niche market of specialty cacao produced mainly by small farmers more and more organised into producers associations that allow them to capture a fairer revenue for their cacao beans or a bigger part of the value chain through transformation of the raw products and marketing of the bars.



Works Cited

Martin, Carla D.“MesoAmerica and the « food of gods »”, Harvard University, AAAS E-119, 2018

Martin, Carla D.“Slavery, abolition and forced labour”, Harvard University, AAAS E-119, 2018

Chiriboga, Manuel (2013). Jornaleros, grandes propietarios y exportación cacaotera 1790-1925. Quito: Universidad Andina Simón Bolívar.

Vassallo, Miguel Diferenciación y agregado de valor en la cadena ecuatoriana del cacao / Miguel Vassallo. — 1ª. ed. — Quito: Editorial Instituto de Altos Estudios Nacionales IAEN, 2015

Wilmer S. Sepúlveda, Irinuska Ureta, Claudia Mendoza & Louiza Chekmam (2017): Ecuadorian Farmers Facing Coffee and Cocoa Production Quality Labels, Journal of International Food & Agribusiness Marketing, DOI: 10.1080/08974438.2017.1413612. P 7

Radi y Martínez, 2008: 4.

Melo & Hollander, 2013


Web Sources