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Ecuador and the Fine Chocolate Industry

I just returned from the World Cocoa Foundation Partnership Meeting that took place last Wednesday and Thursday at the Hotel Oro Verde in Guayaquil. The link at the head of this post will take you to a recent article on the conference. The WCF is made up of large cocoa commodity trading firms, chocolate and confectionery manufacturers, cocoa producers, and exporters. Over 300 attendees participated in the conference.

It was a great opportunity to hear about the cocoa trade in neighboring countries such as Peru and Colombia, and the problems with Ecuadorian cocoa, namely the mixing of the CCN-51 variety with fine cocoa variety, which has hurt the quality and reputation of Ecuadorian cocoa on world cocoa markets. I had no idea this was such a controversy, the big problem being that CCN-51, while being a high yielding variety of cocoa, does not have the flavor and aroma characteristics of “Nacional” or Arriba cocoa as its known in Ecuador. Rather, it imparts a lot of astringency to the final product, denigrating the flavor profile of nacional cocoa. Since many growers often mix the two (in part because CCN-51 has much higher yields than nacional), it’s no longer a sure thing that you are buying pure nacional cocoa, even though it may be labeled as such. And thus far in Ecuador, there are no controls or means of ensuring that cocoa labeled nacional is purely nacional cocoa. Another large part of the problem is that much of the cocoa produced in Ecuador is gathered by small landholders who may have no more than 5 or 10 hectares. Many of these small farmers lack the know-how and knowledge to distinguish between different varieties, don’t know much about fermentation and drying, and lack knowledge of standards in order to get the best price for their cocoa.

I was the only actual producer of artisan chocolates at the conference. The rest were either cocoa growers, or in farther removed positions like commodity buyers, management level people in chocolate manufacturing companies, or people in charge of cocoa purchasing at companies like ADM. So it was an interesting mix of growers, corporate, and industry people. But I was surprised at the lack of high-end chocolatiers who are a large part of the “end-user” market for fine chocolate, and who should be making their voice heard when it comes to issues of quality, sustainability, and fair trade.

The day after the conference we made a visit to one of the biggest producers of actual chocolate and cocoa products in Ecuador. Most of their production line is Carle & Montanari, a high quality Italian maker to this day of chocolate production equipment. Most of it looks like it’s at least 50 or more years old, which makes no difference in the quality of their product. We hope to eventually work with them on a product.

Here it´s very difficult to find anything, be it product-wise or service-wise, so I spend a lot of time just searching people and things out. I have discovered more just keeping a sharp eye out when driving around Quito than I have using the yellow pages. I guess this is something like what a pre-internet economy looks like.

It took me three weeks to get glucose wholesale, and it took me two months to find it. I could only find one place in Quito that would sell me the 10kg I wanted. The price-$1.15 per kg. Otherwise I would have had to pay $5 for 600g at the lame-o cake shop or buy a 300kg barrel for a two lifetimes supply of glucose for $300 something dollars. I had to call the shop that sold me the 10 kgs nearly every other day for three weeks, until the guy finally tired of telling me they hoped to have it tomorrow, took my name and number, and said they’d call when they got it in. Just when I had almost given up hope, they called.

Calendar year two of operation and we have to get our health permit renewed. Health permits run only on a calendar year, so if you get your first one December 1, you’ll have to review it during the first three months of the following year; they do allow a three month grace period.

It’s hard to really call it a permit since all the bureaucrats in charge of anything, especially permits, seem to run a “consulting business” on the side to help you get the permits they are officially supposed to get you. You have to pay them their “consulting fees” to help you get the permits, which in plain language are really bribes, and if you don’t pay them the consulting fees, you may just spend eternity waiting for them to issue the required permits. This time around our health permit was tied up closely with our sanitary registry, allow me to explain.

If you have been reading regularly, you will recall that back in August I submitted product samples for my sanitary registry. The lab work is all done now, but before the lab analysis can be submitted to the “National Hygiene Institute” also known as Instituto Izquieta Perez (I will look into who Izquieta Perez for those of you who are curious to know after whom this obstructionist bureaucracy was named), my health permit has to be up to date.

When we first were issued our health permit last year, they classified us as “small industry.” They have a number of classifications for businesses here, from “artisan” to “small industry” to “large industry” and I don’t know how many others. But chocolate makers, especially if you are small scale like us, are usually “artisan”. Having an artisan classification saves time and money; you don’t have to charge sales tax on your items, you don’t have to maintain an accounting system (though that should be your business anyway, the government mandates that you MUST have an accounting system and an accountant if your revenues are over $60,000 annually), and your sanitary registries cost less.

We had been contemplating becoming artisan for sometime. To be officially classified as artisan you’ve got to be registered with the local chamber of artisans. I’ll save that for another story, but anyway…on the recommendation of the consultant who is doing the “registro sanitario” we asked the Ministry guy to reclassify our Health Permit as “artisan”. This would also save us money as the cost for each “registro sanitario” if you are an artisan is one third of what it is if your are “small industry”.

Keeping it brief, the guy from the Ministry insisted, despite our repeated requests for a change, that there was no way he could change us to artisan status. We had no choice but to accept the decision, since we need our sanitary registry to be able to export, and we weren’t about to offer him more money or seek someone else out who might help us change it.

So we are currently registered as small industry until we can either find an expediter who might be able to help us change our status sometime in the coming year, or until next year when we will renew our permit and perhaps have found away around this ridiculous set of regulations. We’ve paid for the sanitary registry for our products, which is valid for five years, so we at least won’t have to worry about those again for a while. Onward we march.

I met with a publisher of a restaurant guide earlier this week to discuss placing an advert, and to discuss other marketing possibilities. We talked up a bunch of ideas, and reasonably so, they wanted to try the chocolates before perhaps helping market them to some of their current clients. I was glad to oblige.

The response I got was a little cool-“You have an interesting product.” Well, that’s not saying much, either negative or positive.

I began to think this over, and realized, that while they might save me a great deal of time by being able to market and “endorse” my product, I don’t see any reason why they should be the arbiters of taste. Especially when I have gotten a positive response from all my clients. They would, of course, also be interested in taking a cut of the sales they generate for me.

In our discussions it quickly became apparent, as is often the case here, that they know little about chocolate production in Ecuador and that the lack of quality chocolate is probably the greatest barrier to making a high quality bonbon or truffle. I work with the best stuff that is available, in my judgement, and have had only positive comments, both here and in the US. So why they were so quick to judge the product as “interesting” did not please me.

I will continue to market on my own and given the current demand and interest in the product, I’m sure we’ll do just fine.

We, well, my designer, finally got the website for the company up a few days ago. Still a few typos and quirks to work out, but we’d be delighted for you to go see it. Definitely the visuals are the strongest point. I like the simple, uncluttered look of it-the photos speak for themselves. We’re not total perfection, the product is handmade and there’s no shame there. Please pass it on to your friends and if you’re not in Quito and plan to come, please visit. If you’re in Quito and haven’t come over yet, then do so right away.

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Welcome to Destination Ecuador!

Welcome to Destination Ecuador! My family and I have been living in Ecuador for the last four and a half years. We’ve dealt with the worst kinds of red-tape, searched out or ended up making hard-to-find ingredients ourselves, imported equipment for making chocolate confections, learned the import-export business...Continue >>

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