tReducing poverty through a sustainable, environmentally-conscious, profitable business

Cacao in the Colombian Amazon

Promoting sustainability through socially conscious business in indigenous villages of the Amazon

Benjamin Angulo, Executive DirectorLa Libertad, Amazonas, Colombia(57) 311-223-3274

13 Sunset StreetThomaston, ME 04841USA(1) 207- 354-6231benangulo@outlook.com

Problem -poverty• The indigenous village of La Libertad has an

unemployment or underemployment rate of 90%• Average income per villager is less than $1.90

USD/day, the World Bank’s definition of extreme poverty

• The villagers suffer from malnutrition, poor sanitation conditions, contaminated water, poor health

Local Governmental Solution -giving things• Small amount of public assistance (welfare) and gifts• Monthly or bimonthly village visits from health or

social workers• Healthcare services that are difficult and expensive

for the villagers to access (35 kilometers downriver)• Village education until 5th grade

• To help the villagers to develop sustainable business to earn the money that they need to improve their lives

• We will do this primarily through the production of organic, rainforest-friendly, indigenously-grown, high-quality chocolate

Our Solution

“Give a man a fish, feed him for a day.Teach a man to fish, feed him for a lifetime.”

Concept of Chocolate Products

Busin

ess

Mod

el

PROBLEM1) It is difficult to findsuppliers of high-qualityCacao.2) Chocolate companiesdesire an organic, fair trade,Rain Forest CertifiedProduct.3) High-quality, specialtycacao may be overlyexpensive for the buyers.

EXISTINGALTERNATIVES1) Buy from high-pricedSuppliers.2) Contact associations tohelp find growers meetingthe buyer's needs.3) Travel to cacaoproducing areas to find qualified growers.

SOLUTION1) We will work with our buyers to meet their specific needs whenever possible.2) Our product will be very cost-competitive. The cacao growers independently work their land. They will then process their cacao with the assistance of the association, according to strict quality standards.3) The association will sell the cacao for the growers, insuring fair-trade practices at competitive prices.

UNIQUE VALUEPROPOSITIONA high-quality, organic, non-GMO, fair trade, Rain Forest Certified cacao produced in an indigenous village of the Colombian Amazon. Our non-profit association of cacao growers gives the people of the village the income they need to lift themselves out of poverty, while producing a sustainable chocolate with their hearts and the soul of the jungle. HIGH-LEVELCONCEPTWe are the small-scaleStarbucks of sustainable chocolate growers.

UNFAIRADVANTAGE1) Produced economically on anindigenous reservation..2) An abundance of no-costland and water forexpansion of production.3) Easily marketed andidentifiable region ofproduction: AmazonJungle.4) Worker training supplied by many governmental business development agencies at no-cost.5) Area resilient to global climate change.

CUSTOMERSEGMENTS1) Artisan chocolateMakers.2) Bean-to-bar makers.3) Micro-producers.4) Chocolate-makerhobbyists.5) Sales of artisan bakingchocolate directly toconsumers. EARLY ADOPTERSSmall, artisanal chocolate companies that output a high quality and more costly product.

KEY METRICS1) Amount of cacaoproduced2) Production rate3) Reject ratio4) Cycle time5) Downtime

CHANNELS1) Inbound: website, blog,social media, publicPresentations.2) Outbound: directbusiness contact, tradeshow exhibits, social media.

COST STRUCTUREFixed costs: Management salaries, accounting costs, legal expenses,utility bills, building depreciation, taxes, licenses and fees.Variable costs: Energy costs needed for growing and processing,fertilizer, organically-approved insecticides and fungicides, maintenanceand upkeep of tools and equipment.Human family costs are not included in the cost structure, as the workers are members of a nonprofit, cooperative association.No land costs are included in the cost structure. All land is communally owned and used at-will by the members of the village.

REVENUE STREAMS1) Initial funding with public funds, grants, and donations.2) Selling beans to bean-to-bar makers.3) Selling high-quality baking chocolate to chocolate makers.4) Selling high-quality baking chocolate directly to buyers on Amazon.com.

Cacao in the Colombian Amazon

Underlying Magic –page 1Why in the Colombian Amazon?

Land• Over 150 hectares of

farmable land available per village.

• Land owned communally and worked by individual families.

Water• No adverse affects of

climate change on water are predicted for the western Amazon.

Climate• Cacao is believed to

have originated in the Amazon region. The climactic condition for its growth are highly favorable.

Agricultural Workers• Many experienced

agricultural workers are available and currently seeking employment.

Product Transport

• A large cargo ship passes La Libertad, bound for Huston, Texas, every 40 days. It is mostly empty.

Underlying Magic –page 2

Increasing Demand• The world consumption of

cacao has increased by 32% within the last 10 years, especially in dark chocolate.

• Emerging markets (China, India, Brazil) are expect to further increase this demand.

Decreasing Supply• Global climate change is

expected to make many areas of current cacao production (mainly in Africa) unusable.

• Many of the world’s cacao trees are reaching the end-stages of their productivity. New trees must be planted to avoid severe shortages.

World-wide Shortage• It is estimated that there will

be a 1 million ton shortfall in world cacao production by the year 2020.

• These shortages will cause dramatic increase in prices.

Cacao Clones (non-GMO)• Clones are now available

that may produce up to 4 times the amount of cacao (of high-quality) per tree.

• These same clones have natural resistances to many of the sicknesses that affect non-clones.

Why now?

A good example of a highly-productive cacao tree clone

A non-clone cacao tree

Competition

Where do we exist in the larger overall Market Space?• We are small growers in

Colombia. The growers of high-quality cacao in Colombia are very few. We have a very desirable, highly marketable product.

What are our Advantages?• We are to be less-

affected by drought due to climate change.

• Our plantation is of high-quality, highly-productive, disease resistant cloned cacao trees.

• Easy transportation of product on the Amazon River.

• We are working with the help of Colombian governmental agencies, agricultural institutions, and other cacao-growing cooperatives with over 100 years of experience.

How is your place in the market unique to you, and the right one for your company growth and customers?• We can expand our

production of cacao to grow in other indigenous communities of the Amazon. This would allow us to greatly scale-up our production and to attract larger contracts.

Who are the competitors, why have they succeeded, and how do you truly differentiate from them? • In the eastern

Colombian Amazon we, currently, have no competitors. In the western Colombian Amazon is a farmers co-operative (with over 2000 small cacao growers) with whom we are partnered.

Marketing and salesWhere are our customers looking today and finding help? • Cacao association

and federations• Internet• Trade shows

Where will we get in front of them?• Internet• Direct phone

communication• Trade shows• Joining

organizations like the Fine Chocolate Industry Association and Direct Cacao

• Competition like the annual International Chocolate Awards in Paris.

How will we achieve our target growth rates? • Publicity• Clear channels of

communication with industry leaders

• Attendance at trade shows and industry events

What are the most important and unique channels and methods we will use to find and win customers?• Social media

platform used by our nonprofit foundation

How are we doing it differently than others in the space?• Organic• High-quality

product• Rain Forest

Certification• Fair-trade• Indigenously

produced socially conscious business

Project Associates

National Training Service

Cacao Growers Association

from Western Amazon

Office of International Relations

and Secretary of Agriculture

Business Alliance to Transform the Region

Chamber of Commerce of the

Amazon

Amazon Institute of Scientific Research

Corporation for Sustainable

Development

Association of Farmers, Fishermen, and Artisans of the

Community ofLa Libertad

Fundacion Amazon Pueblo

National Cacao Growers

Federation

Financial projectionsYear 1 –clone nursery, planting 10 hectares cacao and plantain• Initial investment: 20,000 dollars

Year 2 –tending trees, harvesting plantain, buying and setting up processing plant• Crop and business costs: 12,000 dollars• Processing plant costs: 15,000 dollars• Income from plantain sales: 12,000 dollars

Year 3 –tending trees, harvesting plantain, first year of cacao production• Crop, plant, and business costs: 15,000• Income from plantain sales: 10,000 dollars• Income from cacao sales: 5,000 dollars

Year 4 –tending trees, harvesting plantain, second year of cacao productionCrop, plant, and business costs: 20,000Income from plantain sales: 5,000 dollarsIncome from cacao sales: 15,000 dollars

Year 5 –tending trees, harvesting plantain, third year of cacao productionCrop, plant, and business costs: 30,000 dollarsIncome from plantain sales: 0.00 dollarsIncome from cacao sales: 35,000 dollars

Year 6 –tending trees, harvesting plantain, fourth year of cacao productionCrop, plant, and business costs: 40,000 dollarsIncome from cacao sales: 60,000 dollars (income is a combination of selling as a commodity and selling high-quality, artisanal baking cacao)

All profits will be used to plant additional cacao trees and to support educational and social projects in the village.

Investment Clone nursery, 10 hectares of cacao,

business operations

Amount:$30,000

Use of proceeds in %:Seedlings 33%, business operations 16.5%,

nursery 16.5%, fertilizer and pest control 16.5%, tools 9%, transportation 9%

Second planting of 10 hectares of cacao

Amount:$20,000

Use of proceeds in %: Seedlings 50%, fertilizer and pest control 20%, tools 10%, transport 10%, business

operation 10%

Initial planting of 4 hectares of exceptionally high-yield, high-quality, plague resistant CATIE-R6

clones (estimated planting at year 3)

Amount:$50,000

Use of proceeds in %:Clone costs and rights to sell 70%, business

operations 15%, tools 5%, transport 5%, fertilizer and pest control 5%

PHAS

E 1

PHAS

E 2 PH

ASE

4PH

ASE

3

Production building, production equipment, labor

Amount:$35,000

Use of proceeds in %:Processing equipment 50%,

building construction 40%, business operation 10%

For example; Dagoba 100% baking chocolate sells for $38.00 kilogram on

Amazon.com.

References:

Fair Trade Cocoa Cooperatives, http://www.globalexchange.org/fairtrade/cocoa/cooperatives

Chocolate Shortage Spurs Revival of Cocoa in Amazon, http://www.bloomberg.com/news/articles/2015-01-07/chocolate-shortage-spurs-revival-of-cocoa-in-amazon-commodities

The Impact of Plant Diseases on World Chocolate Production, http://www.apsnet.org/publications/apsnetfeatures/Pages/WorldChocolateProduction.aspx

Chocolate liquor, https://en.wikipedia.org/wiki/Chocolate_liquor

Overcoming the Main Limiting Factors of Cacao Production in Central America through the use of Improved Clones, http://www.icgd.reading.ac.uk/ref_data.php?refcode=PHI09A&table=yield

DAGOBA Unsweetened Baking Chocolate Bar , http://www.amazon.com/DAGOBA-Unsweetened-Baking-Chocolate-6-Ounce/dp/B004NSMS96

Too Hot for Chocolate? Climate Change Could Decimate the $9 Billion Cocoa Industry, Study Finds, http://thinkprogress.org/climate/2011/09/30/332951/chocolate-climate-change-cocoa-industry-study/

Climate & Chocolate, https://www.climate.gov/news-features/climate-and/climate-chocolate

Artisanal, hand-crafted chocolate is a growing niche, http://www.latimes.com/business/la-fi-artisan-chocolate-20150228-story.html

Bean-to-Bar 'Craft' Chocolate Makers in the United States (list by State), http://ultimatechocolateblog.blogspot.com.co/2014/03/bean-to-bar-craft-chocolate-makers-in.html

Cacao Genetic Enhancement Program, http://www.catie.ac.cr/en/products-and-services/collections-and-germplasm-banks/international-cocoa-collection.html

Costa Rica's chocolate comeback, http://www.ticotimes.net/2014/01/27/costa-ricas-chocolate-comeback