Direct Trade vs. Fair Trade - Importing Cacao
Thursday, March 4th, 2010Shawn Askinosie of Askinosie Chocolate talks about Direct Trade vs. Fair Trade
The following is an excerpt from the FAQ page of Askinosie Chocolate’s website. Shawn Askinosie, the founder, has traveled extensively in cacao-growing regions and he has a direct relationship with the farmers he purchases cacao from. I really appreciate his “first-hand” explanation of “direct trade”, and the sharing of his experiences importing cacao into the U.S. (Shawn is the tall one in the back of the photo.)
I shop fair trade as much as possible. How do you pay your farmers and how do they share in the profits?
I love the Fair Trade idea. I believe that we have to be vigilant that Fair Trade does not become a marketing gimmick or reduced to a bumper sticker. We must ask the questions and dig deeper to find out how the company treats those that supply them raw materials AND how they treat their own employees. Fair Trade has been scrutinized because some question if the money ever finds its way to the farmer in the field and not coop bureaucrats. My chocolate is not “certified” Fair Trade mainly because the farmers I deal with cannot afford the certification and they are very loosely organized. They are very poor. I go way beyond Fair Trade and here is how I do it:
- I deal DIRECT with the farmers 100%. I have a rule that I will not buy beans from farmers I have not met - in person. This is hard because I travel a lot and while it is fun it’s not always easy. The travel is not the hard part; it is the complicated nature of importing that I do myself. I have a local company that handles shipping and customs clearing, but other than that it is all me. I am the only chocolate factory in the US (that I am aware of) that sources 100% of their beans direct. There may be one other person who does this, but I cannot verify this and he is a much smaller company. When I go to these origins I see the farms and determine myself the issues that a Fair Trade certifier would look at. The main thing is that I am building relationships with the farmers and their families. This is hard and takes time, but it is worth it.
- I pay far above the Fair Trade market price (which is set above the world market price) for beans.
- I have implemented a program called Stake in the OutcomeTM (a profit sharing program for the farmers) which is described on our website at “The Farmers”. This guarantees to the farmers open books. This is not a negotiation tactic to get them to lower the price on the beans; it is in ADDITION to what I pay them for the beans. I know the name of every farmer who contributed to the crop in both locations. This is something that I doubt any other chocolate maker in the world can say. You can’t share with someone if you don’t know their name. I distributed my first profits in Ecuador in December 2007 and in Mexico in January 2008. These were, by far, my best days yet in the chocolate business! They said that nobody had ever come back to thank them, let alone share money with them and show the books.
- Why is Stake in the Outcome important? This directly affects the quality of the cocoa beans I buy. It affects quality in a way that Fair Trade never will. One day farmers will give me higher quality beans to my specifications when they see that they will make more money if I make more money. They will literally share in my success. I have a very detailed specification now for the beans I buy, but I know that what I buy will be even higher quality than what I have now. I have done this with my law practice for nearly a decade. My secretaries, for example, knew the details of our income statement and made more money when I did. Why should companies in the US buy raw materials, jack up the price, and not share the profits with those who they source from? My prayer is that one day a small company from another industry will ask me how to implement this model. If I can inspire even one other company to adopt Stake In the Outcome, then I will have been a success in this business. I have had the “career” and it is not about that now. If I was doing this business to get rich I would have stayed in my law practice. This program will not change the world but it might change the life of a farmer or two or three.
The tasty secret of the cacao (kah KOW) tree was discovered 2,000 years ago in the tropical rainforests of the Americas. The pods of this tree contain seeds that can be processed into chocolate. The story of how chocolate grew from a local Mesoamerican beverage into a global sweet encompasses many cultures and continents. The first people known to have made chocolate were the ancient cultures of Mexico and Central America. These people, including the Maya and Aztec, mixed ground cacao seeds with various seasonings to make a spicy, frothy drink. Later, the Spanish conquistadors brought the seeds back home to Spain, where new recipes were created. Eventually, and the drink’s popularity spread throughout Europe. Since then, new technologies and innovations have changed the texture and taste of chocolate, but it still remains one of the world’s favorite flavors.
