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  and 260,000 MT in 2015 . 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) . 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) .
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 . 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. 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)  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. 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 . 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 . 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 :
- 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:
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 :
- 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.
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 ) 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 .
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 . 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) .
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. 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) . These new chocolate-makers are creating a trend in the country and are led by groups such as:
- Pacari (which has won various awards in Europe) https://www.pacarichocolate.com
- Hoja Verde http://hojaverdechocolate.com
- Republica del Cacao https://es.republicadelcacao.com
- Kallari https://www.kallari.com.ec and
- Mindo Chocolate Makers https://mindochocolate.com
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
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. 4: M. Acebo Plaza, Escuela Superior Politécnica del Litoral ESPOL, « Industria de Cacao », Apr. 2016
Fig. 5: FAO, IICA
 Instituto Nacional de Estadísticas y Censos (“INEC”) National Institute of Statistics and Census
 Asociación Nacional de Exportadores de Cacao – Ecuador (“ANECACAO”) National Association of Cacao Exporters
 Ramírez, Pedro: “Estructura y dinámica de la cadena de cacao en el Ecuador: sistematización de información y procesos en marcha”, GTZ (2006)
 The International Cocoa Organisation (“ICCO”)
 Van Hall, (1932)
 Loor et al. (2002)
 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)
 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)
 Christian, The Mother ‘F’ Tree (2012)
 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
 National Census for Agriculture and Livestock 2000, Ecuador
 E. Quingaísa: “Estudio de caso: Denominacion de Origen “Cacao Arriba””, ICCA (2007)
 ICCO & MAGAP, update presentation Sept 2013 Wembley
 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
 M. Acebo Plaza: « Industria de Cacao », Escuela Superior Politécnica del Litoral (“ESPOL”) (2016)