An Indian wins the Olympic 100-metre dash. Indian beer becomes the toast of the world. Indian cocoa is selected by finicky Swiss chocolate company for use in its sweets—all seemingly improbable events on a global stage that may never happen in the foreseeable future. Except that the last bit about the Swiss chocolate company is—as unbelievable as it sounds—true. Fifty years after India started growing Cocoa in Kerala—currently still the largest cultivator of the crop in the country—a Swiss company has begun importing Indian-grown cocoa for use in its dark chocolate, while clearly advertising its source country on the wrapper.
Chocolat Stella is a family-owned business with a long history of producing quality chocolates in Switzerland and is globally recognised as a specialty chocolate maker. For the last fifteen years the company has been focusing on making organic chocolates, especially from developing countries such as Ecuador and Brazil. Stella’s Indian version—a 70 gm bar comprises of 72 per cent cocoa—was released globally in January at the International Confectionery Fair held in Cologne in Germany. The event was called ‘Incredible India’—a suitable moniker considering the country has never met the rigorous quality benchmarks for cocoa production that the Swiss are famous for.
However, what makes this story truly incredible, perhaps even bizarre—and heartwarming—is the extraordinary efforts that the Swiss company took in reaching out to Kerala’s farmers, educating and guiding them—despite repeated failures—in order to make this event a reality. It is as much a story about winning cross-border alliances and stick-to-itiveness as it is about sound business practices.
The eighties weren’t the rosiest of times for cocoa farmers, who found that demand for the crop plummeted after their one primary buyer stopped procuring from them, causing many to hack their plants down and use the land for other crops for lack of a better alternative. This tortured memory was probably a major incentive for Kerala farmers, in the 2000s, to begin searching for other ways to market their produce for better prices. They soon came to know that organic products got better prices abroad, but realised that achieving such standards would require an organised effort. Thus, the Indian Organic Farmers Producer Company Ltd (IOFPCL) was born.
The IOFPCL started with 800 farmers and today has 2,000 of them from Pallakad, Kannur, Waynad and Idukki districts of Kerala. The company’s 1500 shares are now held by these farmers. It wasn’t an easy beginning. Between 2004 and 2008, the company was not able to find a single buyer overseas, and customers who were interested were not able to match the price that the company was quoting says P J Chackochan, chairman, IOFPCL, who was with MS Swaminthan foundation earlier and is now a farmer in Waynad.
Consequently, the company began selling its products in the domestic market for four years and soon racked up debts of Rs 25 lakh with the State Bank of India. The bank ended up lending money to the company against Chackochan’s property and was used to procure pepper. Again, the company could not sell it due to the mismatch in prices.
The big break
The real break for the Kerala farmers came in 2008 when the company decided to participate in a fair in Germany. There, IOFPCL got an order to supply coffee to an agent. In 2009, the same agent also procured cocoa from these farmers, which was supplied to chocolate manufacturers including Stella, one of the oldest chocolate brands in the World.
Fifteen years ago, Chocolat Stella did try and import cocoa products from a Kerala company but the venture fizzled out because the cocoa was of poor quality. Yet, for whatever reason, it decided not to give up on the country. It had first become interested in India because of Antony Panakal, one of its export managers, who has worked with Chocolat Stella for 30 years. When Panakal came to know about IOFPCL, he approached the company directly and asked them to send samples. “When we first sent the sample, it was not accepted due to some processing issues. Moisture level in the Cocoa was 20 to 30 per cent, whereas Stella wanted the same in the range of 6 to 8 per cent, which is essential for the chocolate to taste better,” said Joykutty Vincent, Director, IOFPCL.
Stella then sent one of its technical heads along with Panakal to India to appraise the situation on-ground. The Stella team ended up giving farmers valuable tips for improving the drying and fermenting of beans which are important post-harvest processes. IOFPCL then exported the lot—only to find them of sub-par quality again. This should have effectively buried any chance of the Kerala farmers making any progress with international sales.
Yet, it didn’t. Not only did Stella decide to keep at it—in fact, it upped the ante. It invited four Kerala farmers—PJ Chakochan from Wayanad, Joykutty Vincent from Kannur, Dr Joshy V Cherian from Coimbatore and Vivek Mathew from Mannarkad—to its Switzerland-based factory for a one-week training stint. There, they got some first-hand experience of how delicate the process of working with Cocoa beans is, where a slight error in processing or methods could mar the entire effort. Technical assistance to the farmers continued for a year or so. “We are now able to maintain that level, thanks to Stella’s efforts. Today, among the 20 countries which supplies cocoa to Stella, Indian cocoa is on the top of the table,” Chackochan said.
Stella even went one step ahead and gave the farmers interest-free loans to set up nurseries, processing centres and transportation. 2009 was a historic year for the Kerala farmers—a batch of their beans was finally accepted by the discerning company. “Our relationship is only with Stella, whatever we produce they take and it will continue to remain the same,” says Chackochan. Stella’s requirement is 5,000 tonnes every year, of which 23 tonnes are currently supplied by IOFPCL which doesn’t deal with middlemen but with companies like Stella directly. The estimated value of the business to Stella is around Rs 1.2 crore and the company expects this will triple in the next three years. According to Chocolat Stella, the fruits, spices and cocoa grown by the members of the IOFPCL cooperative are of high quality, organic and Fair-Trade certified.
The Fair-Trade premium prices guarantee the small farmers better revenues, enabling them to improve their living conditions and enhance the welfare of their communities and consequently contribute to sustainable development. “We made a profit of Rs 26 lakh last year, of which we paid back the loan of Rs 25 lakhs, now we are a debt-free company and next year we are planning to give 15 per cent bonus to the members,” said Chackochan.
This should be sweet music not just to Kerala cocoa growers, but to anyone who believes that fairytale stories such as this are possible today.