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From Bean to Bar

Krakakoa's ethical journey in the cocoa industry

Chocolate holds a special place in our hearts and often dominates our grocery lists, standing out as one of the most beloved confectionaries worldwide. Yet, while discussions about sustainability progress in various industries, the cocoa sector frequently finds itself overshadowed.

A primary factor contributing to the lack of dialogue around sustainability in the cocoa industry is the scant awareness among consumers. Many chocolate lovers are unfamiliar with the fact that cocoa is often sourced from areas with high deforestation rates, underpaid farmers, and poor working conditions. Without this knowledge, conscious consumers cannot actively demand ethically sourced products. Another reason is the complexity of the cocoa supply chain. From the farmer to the consumer, cocoa passes through multiple intermediaries, making it difficult to trace its origin. The lack of transparency in the supply chain of cocoa hinders the implementation and verification of its sustainable practices.

Changing the way food production systems impact people and the planet

In 2013, Krakakoa set out on its journey in an effort to reverse this situation by implementing sustainable manufacturing and processing of cocoa beans alongside its strong commitment to environmental sustainability. It is a bean-to-bar chocolate company based in Indonesia, known for their premium quality chocolates made from locally sourced cacao beans. It is their exceptional dedication to an ethical approach to production that lets them stand out from the competitors, earning the title of “Indonesia’s finest chocolate factory”.

Indonesian farmer using sisoors to harvest from tree

A smallholder farmer using scissors provided by Krakakoa.

Krakakoa ensures that the chocolates are crafted of the highest quality by practicing ethical sourcing – the process of procuring goods in a responsible way, such as by making sure that buying the ingredients did not disrupt working conditions, endanger employees, encourage fraud or other unlawful activity, or have a negative environmental impact. It is more than just acquiring eco-friendly ingredients for the production.

To uphold the core values of ethical sourcing, Krakakoa directly sources organic cocoa beans sustainably from small farmers — ensuring transparency and traceability within its supply chain system. They believe that enhancing the social and economic well-being of the communities with which a company collaborates is crucial for building a sustainable supply chain.

The lack of transparency in the supply chain of cocoa hinders the implementation and verification of its sustainable practices.

“At Krakakoa, creating meaningful changes means being on the ground, working directly with farmers. It means building long-term, genuine relationships with our partner farmers, to help them not only grow more and better cocoa, but also help them understand that they are stewards and guardians of their landscapes,” stated Sabrina Mustopo, the founder and CEO of Krakakoa. She underscores the significance of these relationships in shaping a sustainable supply chain for food production.

Fair pricing, capacity building, and resource sharing

Fair pricing acts as a motivator, encouraging farmers to embrace greater accountability in their production processes. Organic farming often demands higher costs and time, making it challenging for smallholder farmers. However, when presented with fair prices, they are more inclined to invest in sustainable farming methods and improved working environments. This not only boosts product quality but also reduces the environmental impact.

Krakakoa asserts that it has consistently compensated farmers above market rates. Prioritizing direct and close relationships with local farmers, the company removes intermediaries. This direct sourcing approach ensures that farmers receive a just price, guaranteeing a sustainable income for their cocoa beans and dedicated efforts.

Indonesian cocoa farmer at work

Krakakoa encourages smallholder farmers for cocoa’s sustainable production.

The social enterprise further emphasizes enhancing the knowledge and skills of these farmers to improve the quality of cocoa beans without sacrificing environmental sustainability. The agronomists of Krakakoa work closely with the farmers, providing training on best farming practices, sustainable cultivation techniques, and post-harvest processing. By doing this, Krakakoa ensures that the environmental damage caused by cocoa production is kept to a minimum.

“We provide farmers with training to understand sustainable farming methods; for example, detecting and understanding the nature of diseases and how to effectively treat them, and what kind of fertilizers need to be used to preserve the lands,” states Sabrina Mustupo. She emphasizes that this training aids smallholder farmers in enhancing the productivity of their farms.

To further empower local cocoa farmers, Krakakoa equips them with necessary tools and resources. “Sometimes they need cleaning scissors, fermentation boxes, dry houses – these are some equipment we supply them for free,” Sabrina Mustupo illustrates.

Chocolate bars on table

Krakakoa’s finest chcolate bars.

Collaborating closely with farmers and providing robust financial and capacity-building support ultimately contributes to the broader economic development of local communities.

The triple bottom line is not a pipedream

The triple bottom line philosophy — prioritizing the planet, its people, and profit — is an admirable ideal, though challenging to actualize. Krakakoa stands as a testament to sustainable businesses that thrive by embracing this approach. The company is proud of its role in the transformative journey of reshaping the local cocoa industry, merging ethical considerations with innovative strategies.

By cultivating deep ties between farmers, cacao, and global chocolate enthusiasts, Krakakoa employs sustainable practices in its supply chain. This approach ensures both high-quality products and sustainability. Krakakoa firmly believes in the rise of a more conscious consumer base — those who make mindful choices.

The company emphasizes that when individuals opt for Krakakoa chocolates, it’s more than just a treat; it’s a stand for empowering local farmers and fostering a fairer, more sustainable Indonesian cocoa industry.

Ananya Mallick is a freelance journalist about the impact industry. She holds a Bachelor’s degree from Swinburne University of Technology in Marketing and Media and Communications. She also works in project management in the creative and tech investment industry.
NEIII Impact Investing Fellowship Fall 2024

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