Sustainable platform for production and export of inclusive high-quality Colombian cacao beans

We aim to increase Colombian cacao farmers’ income by 4x while developing a market-based solution for cacao production sustainability issues

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I confirm that I am fully aware of the eligibility criteria, and based on its description, I am eligible to apply to the CSV Prize 2017.

  • Yes, I'm eligible

Preferred language

  • English

Organization name

Impulsa Bacao SAS

Year founded

2016

Initiative stage

  • Start-Up (a pilot that has just started operating)

Annual budget in 2017 (USD)

  • $100k - $250k

Number of beneficiaries impacted so far

  • 500 - 1,000

Organization type

  • Social enterprise

Secondary Focus Area

  • Water
  • Rural development

Headquarters location: Country

  • Colombia

Headquarters location: City

Bogotá

Location(s) of impact

Colombia: San Pablo de Borbur, Pauna, Otanche, Buena Vista, Maripi, Muzo, Quipama, and Coper (Boyacá Department)

Website

http://impulsabacao.com/

Problem: What problem is this initiative trying to address?

~90% of Colombia´s cacao production comes from smallholder farmers who live in poverty and report notably low productivity in their crops – approximately 1/3 of their full potential. We estimate that our target communities in Colombia have a daily income of only US$1.85 per person per day which clearly sets them below the poverty line.

This is the result of their lack of technical knowledge, limited access to financing, inappropriate infrastructure, and restrained access to high value markets.

Solution Summary: What is the proposed solution? What do you see as its most promising aspects for creating shared value?

We are proposing a shift in the supply chain to increase its efficiency and transfer a larger portion of the value created to our beneficiaries.

We aim to operate under a vertically integrated business model focused on the commercialization of high quality cacao beans. By serving the growing demand of premium cacao, we expect to fetch high price premiums and generate revenues to benefit farmers through 1) higher prices, 2) technical assistance, 3) access to financing, 4) appropriate infrastructure, and 5) direct access to high value export markets in the U.S, Europe, and Asia.

Our goal is to quadruple the income of our farmers over the next 5 years through productivity increase, production area expansion, and higher farm-gate prices. We target to increase their income from US$1.8/person/day to US$6-8 while supplying much needed volumes of consistent high-quality cacao beans to international markets.

Impact: What is the impact of the work to date? Specify both the social and the environmental impact of your work

Our main impact to date, is to enable farmers to become shareholders of a social enterprise.

We are the first Colombian cacao company built in partnership by the cacao growing community and private entrepreneurs. These two parties are co-investing in the company, therefore changing the traditional relationship between private investors and the sourcing communities. In order to do so, we worked jointly with one farmer cooperative aggregating 1,200 farmers to obtain a grant of US$100,000 from the Colombian Ministry of Commerce. This capital was used by the coop as their equity contribution to the company (JV) thus cementing the partnership with us. This capital, as well as Impulsa Bacao’s founder’s contribution, will be used to develop the first post-harvest center and execute our go-to-market strategy starting in Q4-2017. By having the coop as a shareholder of the JV, they would contribute to the consolidation of the business and benefit from the future profits of the operation.

Financial sustainability plan: How is this initiative financially supported? How will you ensure its financial sustainability long-term?

Andean Cacao (ACL) is an institutional cacao plantation and our founding partner. ACL has supported our development since inception and will continue to support us in the long run. Additionally, our partner cooperative aims to raise additional capital to invest in the escalation of our operation. We also target to bring on board impact investors and donors who can support us with mission aligned-capital and adjacent value.

Impulsa Bacao has confirmed US$350,000 of its seed capital round from ACL and the farmer cooperative. Also, we aim to raise US$650,000 from grants and impact investors. With this capital, we would achieve the break-even point in the third year of operation and consolidate our market position to continue growing organically in the long run.

Unique value proposition: What makes your initiative innovative? How does your project differ from other organizations working in the same field?

First, we are the 1st social enterprise directly partnering a cacao farmer cooperative. This structure enables the farmers to take part on the value created in the business and support the execution of the impact and business strategies.

Second, we are the first vertically integrated cacao company in Colombia which secures sourcing and enable us to deliver consistent volumes of high quality cacao to the market. This value proposition has never been developed and can be replicable elsewhere.

Founding story: Share a story about the "Aha!" moment that sparked the beginning of this initiative.

When traveling around Colombia to understand the state of the local cacao supply chain, it was evident that all farmers had the same story to tell. They had received aid funds from NGOs over decades, but they were still living in poverty as their crops had low productivity and the marketplace of their production was limited to the local bulk market. Also, many farmers were beneficiaries of programs that aimed to replace illegal coca crops with cacao crops as alternative source of legal income. Multiple programs provided farmers with technical assistance however, these efforts were ineffective as they were disjointed and disconnected from the market.

We concluded that to help cacao farmers in Colombia overcome poverty, we need to ensure that the farmer pain points are addressed under one integrated platform that ensures all efforts are intertwined.

Where did you hear about the Nestlé Creating Shared Value Prize?

  • Upon recommendation from others

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Photo of Samir

Farmers are the backbone of our civilization and need to be protected. Awesome efforts towards that goal. Best wishes