packaged goods

USDA Organic Emblem
Aequare Chocolates gets frequent inquiries as to why we’re not organic. It’s not because we don’t want to be, or don’t support organic. It’s because we simply can’t, for all practical purposes, be organic.

Organic Chocolate For Bars And Organic Couverture

First off, all organic chocolate actually produced here in country is shipped abroad and almost none of it is for sale here. It’s shipped abroad directly by its producers because there is a market for it abroad. Consumers in North America and Europe, as well as many other places, have the disposable income that allows them the choice and provides them the ability to choose between organic or conventional products. Here in Ecuador, personal income levels are not high enough and consumption patterns are not adapted to supporting organic products.

Were the local manufacturers of organic chocolate to try and sell organic chocolate here, they’d probably go broke. Most consumers would not see the value in paying a higher price for an organic product. It would have no additional recognized value in the local market and simply would not sell for a higher price. Organic producers would be forced to compete on price alone, and they would lose money.

Since we don’t actually make our own chocolate, and don’t have the volume needed to have someone process organic beans into chocolate for us locally, we can’t make organic chocolate here. We have approached two of the companies that do make certified organic chocolate about purchasing organic couverture from them. One is a large contract manufacturer and simply can’t sell us what organic chocolate they produce because the production is for another company’s product that is shipped abroad. The other offered to sell us couverture, but at a price that was so high it would be impossible to make money from.

Our main supplier of chocolate, who is also the grower of the beans, uses minimal amounts of pesticides and fertilizers on the cacao plantations he manages. This is the case for most cacao growers in Ecuador; the majority of beans come from small landowners who usually can’t even afford pesticides or fertilizers, and cacao is basically a gathering activity from plants that are growing in a semi-wild state on their properties. To become certified organic is a lengthy, costly and complicated process that the majority of growers probably can’t afford. In no way do we mean to belittle the value of organic; but the certification process can be more exclusive than inclusive.

What About Confections With Organic Ingredients?

You can already see why we can’t make organic bars, and for many of the same reasons, organic confections. We can’t even get the most important component, the organic chocolate, to start with.

Beyond the chocolate, which is difficult enough to obtain, many other organic ingredients are simply not available in Ecuador. Let’s start with sugar. The local manufacturers or organic chocolate temporarily import their organic sugar from abroad. Temporary importation is a very complex, bureaucratic, and costly process. Temporary importation allows the user of the product to avoid paying duties on it by guaranteeing the product is going to be shipped out of the country again within a certain time frame. Since it’s only coming into the country as an input for a specific product that is destined for export, no duties are levied on it. This also means that it’s not for sale on the open market.

Organic dairy products are non-existent in Ecuador. While for practical purposes many dairy products could be considered “organic” because of the non-industrialized nature of most of the dairy industry here, that’s obviously not good enough for consumers in industrialized countries looking for an official seal of approval. So getting organic cream and butter in Ecuador with an internationally recognized organic seal?…forget it.

Then there are other items that go into our products, such as fruit purees, citrus zests, and essential oils, most of which are sourced locally but very few of which are organic, with the exception of the lemongrass oil from Fundación Chankuap used to flavor our lemongrass bars.

So due to costs, volume constraints, regulations, and lack of availability of organic ingredients, it’s difficult if not impossible to do organic confections here in Ecuador. Finally, making 100% organic chocolate, as well as confections, is not compatible with our direct trade efforts. But more on direct trade in a later post.

Ecuador’s Trade Secrets

Walking through the supermarket with my camera, I surreptitiously managed to take several shots. I say surreptitiously because management definitely would not approve. If you’ve read much of this blog before, you already know that most businesses here in Ecuador are highly protective of their information, and that includes pricing and products. Anyone seen gathering such information purposely would be highly suspicious…why, I don’t know. Do you?

Unrefrigerated Eggs?

One food handling practice that constantly pokes me in the eye is the eggs. Eggs are not refrigerated in Ecuador-not ever, not anywhere.
Eggs On The Shelf In Ecuador-No Refrigeration
Even on the coast, where temperatures average in the 80s and 90s, you’ll find eggs on the supermarket shelf without cooling, eggs in the local store, eggs in the corner market, all just sitting out. And even if you buy eggs from the big producers, who do run egg farms, they still stamp them with dates that are 30 days out! Incredible, and I say it doesn’t work. I often get eggs which have 30 days on the “use by” label, and upon cracking them, the yolks immediately break, a sure sign of an egg which is not fresh.

Alcohol-Truly, A Luxury

Wines (and liquors) are expensive here and became extremely expensive a few months back, when Correa, Ecuador’s president, implemented some draconian import duties on most everything to save the country from running out of hard currency-the dollar, that is. Ecuador was importing far more goods than it was exporting, and so of course the dollars to pay for those imports were leaving the country faster than they were coming in. Once we put this crisis behind us, duties may come down again and some items might, just might, approach reasonable again.
Wine Shelf At Supermaxi-One Of Ecuador's Largest Supermarket Chains

World’s Largest Banana Producer

On the other hand, bananas are cheap, and I mean so cheap, they’re almost giving them away. As the world’s largest exporter of bananas, it should be that way.
Bananas-About $0.45/lb, Pineapples-About $0.25/lb
And these are high end bananas-you can find them cheaper elsewhere. You can buy pineapples on the roadside for as little as 3 for $1, sometimes less in the growing zones. You’ll see bananas, the defective ones, sometimes piled high in the back of a truck or on the side of the road-they’re used to feed the cows. However, these are not the Cavendish variety that are exported.

Of course, most of the time the bananas you find are not the blemish-free, spotless, even-colored ones we are accustomed to in the US. All the perfect ones get shipped abroad. I wasn’t able to confirm the current price for the 43 pound box of bananas that are the standard for shipping to the US and Europe, of the Cavendish variety, but it seems to be around $5.25 a box, and was recently as high as $11-$12 due to heavy rains in other parts of the world that decimated banana crops.

Chocolate Dominates-Flash Without Flavor

Plenty of chocolate fills the supermarket shelves, but not a whole lot of it is world-class, nor is much of it consumed here. Caoni has now taken up the majority of shelf-space in the chocolates section, next to Nestle, a few other mass market imports, and other sweets. Caoni has first-class packaging that belies what is to be found inside. It’s produced by Tulicorp, a local processor of cacao based in Guayaquil. Hearsay has it that one of the main investors behind it is Pronaca, Ecuador’s largest poultry, pork, and general mass food processor.

The rest of the mass market chocolates are either locally produced or imported from Colombia, and most contain vegetable fats and hydrogenated oils but no real cocoa butter. As far as appreciation for chocolate goes, most Ecuadorians think chocolate is chocolate. Per cents mean nothing to most consumers, and where it comes from-who cares? As long as it comes in a pretty package, is cheap, and there’s a good amount, most local consumers are happy.
Caoni Chocolate Rules The Shelves Of Supermaxi

Instant Gratification

While there is still plenty of basic home cooking going on and the pace of life is much slower here than in the so-called industrialized world, Ecuadorians love their instant soup mixes too. And soup, being part of the daily lunchtime ritual, is a highly popular item. Nestle again dominates the market here, under its Maggi brand of soups and condiments.
Maggi (A Nestle Brand) Dominates The Instant Soup Market

Cows-Loving Grass, Not Corn

Finally, Ecuadorians are very big on cheese and dairy items. Locally made cheeses are abundant and the most popular kinds are fresh cheeses which keep only a few days after being opened and cannot be aged. There is also a Swiss contingent that has been here for decades, that produces a decent Gruyere, among other cheeses. Variety is thin, not the hundreds of regional cheeses like those found in France; there are no more than a dozen or so different types. Imported cheeses are costly as import duties are in place to protect local industry. Almost all dairy products here, especially the fresh ones, have a rich, deep flavor-probably because all the cattle here is free-roaming and grass-fed.

Cream and milk is most commonly purchased in UHT boxes; Nestle also seems to have major control over this sector. Fresh milk and cream can be spotty in quality; because Ecuador’s dairy cattle are almost purely grass fed, flavor and fat content tend to vary depending on the time of year. Also, fresh products are not homogenized so you often get fat separation.
Dairy Section Of Supermaxi

This op-ed piece in the NY Times today sure got me thinking. It makes a lot of points relevant to Ecuador.

Not that Ecuador is a magnet for immigration, even if it did open its doors. However, if Ecuador were to overcome a few minor obstacles-lack of a transparent, non-politicized judicial system, arbitrary and whimsical interpretation of laws, general lack of political and economic stability, protectionist policies, etc. etc-it could attract investment, which it desperately needs. As it stands, the current policies of Correa´s government only seem to perpetuate Ecuador´s image of a country where arbitrariness, uncertainty, and fear of the unknown dominate. 

The one point that resonated with me most from the article, however, was this, from  Subhash B. Dhar, a member of the executive council that runs Infosys, the well-known Indian technology company that sends Indian workers to the U.S. to support a wide range of firms:

Do you know that for an Indian company, it is still easier to do business with a company in the U.S. than it is to do business today with another Indian state?

The same has been my experience in Ecuador. It is easier for me to do business with a company in the U.S. than it is to do business with a company in Ecuador. Why is this?

First, since there is almost a total lack of third-party credit providers (i.e. banks, credit card companies), everyone here operates on credit. All my clients want 15 days, 30 days, or more, and the 15th or 30th day comes and goes, and they still often don´t pay. They don´t pay simply because either the boss isn´t around to sign the checks (electronic transfers are rarely used here, and there´s too much distrust to allow anyone but the business owner the authority to transfer funds), or they don´t have the money, or they need just a few more days for whatever reason. If they don´t pay, or don´t pay on time, it´s almost impossible to charge and collect on interest, because there is no judicial system to back up contracts and agreements.

Second, because of the high duties and tariffs paid for imported goods, many of the products clients might want are priced out of reach of the local market. There are a few clients who recognize and will pay for quality and uniqueness; but most want what is the slogan for doing business in Ecuador-it has to be ¨bonito, barato, y bastante¨. That would be a attractive, cheap, and a lot, the second factor being key. The only factor most people/businesses pay attention to here is price. Not value, not uniqueness of the product, not packaging, but price. For our business, this means that while some of my inputs might have a higher cost here than elsewhere, these costs are still offset by the overall lower cost of doing business here, making my product competitive in the U.S. market, where quality, value, and packaging are all parts of the mix that makes our products unique.

Finally, despite a few onerous bureaucratic hoops that I have to jump through to ship a product out of the country, it’s no more difficult, if not easier, than delivering a $200 order to somewhere in Quito, collecting payment, and making sure the client is happy. Customs/freight brokers take care of all the red tape for a reasonable cost, my U.S. based clients pay 50% up front and 50% on delivery with no questions asked, and I ship an order 10x or 20x or 40x the typical order placed here.

Another good point from the article mentions the dangers of protectionism. As is not unusual in this part of the world, Ecuador has now implemented further protectionist measures, with the aim of protecting the dollar, by limiting imports. While preserving the dollar, which has brought unprecedented stability to the economy here, may be worthwhile, the side effects of this policy will only increase prices locally and hurt business. Case in point: recently, a property next door to my business was purchased by the rep for a foreign tire brand. He was going to open a new tire location based on his agreement with the company. Soon after the purchase, Correa implemented policies putting quotas on the import of certain items. Due to the quotas, it’s no longer cost effective for this man to import tires, and he had to shutter his plans to open the new location. It goes without saying, jobs are lost, sales are lost, the cost of tires (and so many other goods now limited by the quota system) are going up, and this is being repeated throughout the economy in various sectors.

,,,,,

front-violin-pitcairn

Aequare Chocolates recently completed its first export transaction successfully. We produced a co-branded box for a U.S. based client, Ms. Elizabeth Pitcairn. The project involved the design and printing of a 20 piece, half-pound box of gourmet filled chocolates, as well as the production of the chocolates themselves.

We used a local designer who also happens to be the in-house designer for the printer we also use; we had used him on other projects and his skills and creativity were really top notch. Besides, it was much easier to work with a designer already in-house with an excellent printing company, as it made coordinating all the work much easier. He also produced a stunning four page mini brochure which included information about Aequare as well as photos and descriptions of the chocolate pieces.

I had never been so closely involved with printing before and was able to visit the printer the day they planned to run the press. The press is a huge machine probably two meters wide, one and a half meters tall, and at least 15 meters long. They had several copies run off for me when I got there to inspect under the light table. I asked for some minor adjustment in the color to be made…of course,this is not a machine that you can just run off one copy at a time, so they had to spit out maybe another twenty or thirty prints before the actual color change was noticeable. I signed off on it and it was a supposed go.

But because of the complexity of the box shape, there were some delays and I later learned from my sales rep they had to rerun the whole printing. I gathered they had overlooked something in the design that required them to reprint. And since the box consists of five separate pieces of paper, each one had to be hand assembled, which delayed the delivery by several days.

We also used a local plastics company to design and produce the thermoform trays which hold the chocolates with in the boxes. They were able to produce an excellent quality tray as well as form-fitting plastic sheet which covered the tray before the box was closed.

Despite this being our first major project for export, we  it done in time and out the door smoothly, with no major hitches in shipping despite the product going out the day before Thanksgiving. We used  very competent customs/freight brokers on both ends; our local broker took care of all the paperwork and bureaucracy and got it on the plane. Once the shipment arrived in Houston, our US broker took over and got it smoothly through customs and to the client’s door. Shipment time is usually between 3-5 days. 

If you are interested in a custom co-branded product or simply our stock packaging, in 6, 12, or 21 piece boxes, please do not hesitate to contact us via www.aequarechocolates.com. Currently, we do not offer a private label program. We will be happy to discuss your project with you, pricing and promotional programs, shipping, and any other details or concerns you may have. 

To see and purchase the violin box, please see the links below.

https://www.metzlerviolins.com/p-220404-red-violin-chocolates.aspx

http://www.elizabethpitcairn.com/html/CD.asp

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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