The Bittersweet Business of Cacao

In just over a year from now, DMCC will turn twenty, and with it the opportunity to reflect on two decades of work that has seen our community leap from a burgeoning consumer market to a $75bn-a-year global trade centre, covering a broad range of asset classes varying from gold and diamonds to tea and coffee. As executive chairman and CEO, it has been my privilege to get to know our 18,000+ member community, which includes multinational giants such as Rio Tinto, Colgate-Palmolive and Bvlgari through to disruptive start-ups, such as those working with our Google-partnered tech hub, AstroLabs Dubai, and in so doing, receive direct feedback on how to improve our customer experience. I am certain that in part, this level of communication has helped DMCC retain its title as ‘Global Free Zone of the Year’ by Financial Times fDi Magazine six years in a row, while also contributing towards its record-breaking levels of growth and trade in a year that has been anything but easy. One of the additional benefits of being able to regularly converse with a community of likeminded multinationals is a consistent flow of information on the latest trends and opportunities, which have not only helped to keep me informed, but also identify new commodities that are not only likely to grow in demand, but furthermore benefit from an enhanced trading environment. As part of my travels before the pandemic, I was able to visit several key coffee producing nations around the world in support of DMCC’s Coffee Centre, before being inadvertently introduced to cacao.

Through producers such as Gonzalo Dassum and Carolina Ward, I learned more about the full scope of the industry and understood why more people are turning towards the traditional methods of consumption but before going into cacao’s extensive health benefits, it is perhaps best to understand its cultural significance, where it comes from and what are the headwinds currently facing the industry.  

While no one knows the exact date, it is estimated that cacao trees have been in existence for approximately five thousand years. What we do know is they thrive almost exclusively within 20 degrees of the equator, with more than three quarters grown within just eight, as such, its major producers today are located in South East Asia, Latin and South America and Western Africa, with Côte D’Ivoire being the world’s largest producer by some margin, yielding in excess of two million tons per year, or approximately 40% of the global supply. As the foundational ingredient in chocolate, cacao’s demand has gone from strength-to-strength over the years, however, more recently, greater awareness of health and nutrition has seen a return towards more traditional uses.

According to Hayes Lavis, cultural arts curator for the Smithsonian’s National Museum of the American Indian, traces of theobromine (derived from the Greek words, ‘Theos’ and ‘broma’, literally translated as ‘Food of the Gods’), a stimulant compound found in chocolate and tea, have been discovered in Olmec pots and vessels from around 1500BC. From this point it is highly likely that the Olmecs passed their knowledge on to the Mayans, who repeatedly referenced the use of cacao-based drinks, often blended with chili peppers, honey or water, being consumed at general celebrations or to mark important events. Other indigenous civilizations to use cacao extensively were the Aztecs, who considered the fruit even more valuable than gold; often using the beans as currency. How cacao made the leap to Europe is uncertain, however the three most popular theories include Christopher Columbus intercepting a trade ship in 1502, the Spanish conquistador, Hernan Cortes receiving the beans directly from the Aztecs, or King Philip II of Spain being gifted the beans by clergy members in around 1544. Certainly, a direct connection with Spain would appear to be the most likely as by the end of the 16th century, drinking chocolate had become a popular indulgence throughout the Spanish court, where it spread to other parts of Europe. It wasn’t until the 19th century when cacao began to deviate towards the mass-produced chocolate many of us are familiar with today. Starting with the Dutch chemist, Coenraad Johannes van Houten, he discovered that by treating the beans with alkaline salts, a fine chocolate powder could be produced that was more soluble with water. He is also widely credited with “Dutch processing”, by which cocoa butter could be inexpensively separated from roasted cocoa beans to make cocoa powder on a mass scale, thereby making chocolate more accessible. Further developments by Swiss chocolatier, Daniel Peter and his friend Henri Nestlé, firmly secured the wider distribution of milk chocolate to the world, with other product-synonymous names such as Rudolf Lindt later developing aerated chocolate, creating the first, “melt-in-your-mouth” adaptation. No doubt, chocolate in its highly refined and processed form remains popular around the world, however, thanks to higher processing temperatures and the addition of sugar and dairy, much of the nutritional value is lost.  

While more bitter than its refined counterpart, cacao certainly comes packed with a list of health benefits including improved digestion and the reduction of risk and symptoms associated with irritable bowel syndrome. Thanks to cacao’s high flavonoid count, regular consumption has shown to lower blood pressure while reducing the risk of diabetes and heart disease. It has also been shown to reduce inflammation in the body thanks to its powerful antioxidant properties, helping to defend against certain types of cancer, arthritis, depression and Alzheimer’s.  

Unfortunately, as with many crops or products that become globally popular coupled with ongoing demand, the temptation to turn a higher profit often comes at the cost of those most vulnerable. As highlighted in several docuseries, most notably Netflix’s fifth episode of the second season titled, ‘Bitter Chocolate’, supply chain slavery is still widely used throughout the industry with some workers receiving as little as $200 for a full year’s work. Worse yet, it is estimated by International Labor Rights Forum that more than 109,000 children are working in the “worst forms of child labor” in Cote d’Ivoire’s cocoa industry, and about 10% of those were victims of human trafficking or forced labor.”

It ought not need to be said, but it is absolutely unacceptable in 2021 and it is the responsibility of end-product nations, most notably Belgium, Switzerland and the U.S to find solutions to this type of modern-day slavery, at the very least by sourcing from farms that are Fairtrade certified.

After understanding the extent of the problem, coupled with DMCC’s potential to bring meaningful change to the industry, creating DMCC Cacao Centre was the logical next step and while we are currently in the process of operating from the DMCC Coffee Centre, plans are already underway to deliver a dedicated facility that will not only offer a competitive solution for all stakeholders, but also a sustainable one.

In understanding the various types of processing involved to yield different products, coupled with an ever-increasing demand, DMCC remains in a unique position in terms of both geography and experience. Thanks to its location, beans can be shipped to a globally central location, meaning easy access for European, African and Asian farmers and consumers. In addition, DMCC’s experience, particularly in coffee means a lot of lessons learned in terms of processing through a dedicated, controlled warehousing facility which could include supplemental benefits such as packaging, storage and distribution. In addition to all this, DMCC can ensure that beans are tracked from farm to end-product, meaning tighter controls on sourcing, thereby helping to stop the sort of human rights abuses that are currently being allowed to continue.

If you’d like to do your part as a consumer, purchase only chocolate which has the Fairtrade stamp on its packaging, otherwise boycott all major chocolate brands, until they learn that non-compliance with basic human rights is unacceptable. While there are several downsides to being permanently connected to our devices, one of the upsides means that there is no place to hide for corporations who elect profit over the fair treatment of its supply chain. Remember, as a consumer, you and your friends, neighbours and community always have the power to dictate the terms. Make sure your voice is heard.