Proven Functional Indigenous Artisan Chocolate Group Looking to Fund Solar Panel System and Basic Chocolate Making Equipment
Executive Summary:
ACODAAC is an indigenous Ngabe chocolate making artisan group consisting of 25 members located in the community of Rio Oeste Arriba in the region of Bocas del Toro, Panama. Standing for the Association of Conservation and Development of Agriculture, Culture, and Artisan Goods, ACODAAC was formed in the community 25 years ago and has maintained a focus on economic development, and reforestation for the community through artisan sales, tree planting, and most recently, chocolate production.
With the help from non-profit organizations including but not limited to the US Peace Corps, USAID, and Global Brigades over the last 8 years, ACODAAC has become very organized and successful as a business. To give you an insight at the recent progress we have made, in 2010 the group made a gross profit of $800 for the year with a high focus on artisan and chocolate liquor sales. Since the start of the current phase of our project in February 2011 we have steadily grossed an average of $800 in chocolate product sales a month all while obtaining a profit margin 300% higher than before by creating a brand, expanding the product line, and executing simple marketing initiatives.
The largest obstacle for ACODAAC no longer exists within the restraints of untrained workers and business development, but rather in the actual physical capabilities and time it takes to produce the chocolate liquor that we produce. As it stands right now, the artisan group is producing chocolate liquor at a pace that keeps cultural and ethical standards in tact. A significant increase in production would prove to be a problem especially within the grinding process due to the fact that it is done by hand and is done by one person in the artisan group. There are 5 men in the ACODAAC artisan group and 2 of them are in good enough physical shape to grind the cacao to liquor which takes a great deal of time. To encourage economic growth, sustainability of the business, and to move into a clear direction of secondary production where a larger market share exists, the group has decided to look for outside donations or grants to obtain one electric industrial grinder and a solar power unit that would provide sufficient electricity to run it.
Why this project will have the most impact as far as the eradication of poverty:
The members of ACODAAC have proven that they can manage a business and do it well. After 8 years of business trainings, seminars, capacity building, and technical trainings, the group has shown that they are able to apply these skills and attitudes for the increased success of the business at an increasing rate. What is more encouraging, the group has developed the sometimes hard to teach skill of research and outreach when a problem arises or outside help is needed. ACODAAC actively talks to its customers and vendors to obtain a better understanding of its market while consistently learning better businesses practices along the way.
ACODAAC continually focuses on the success of the group instead of the individual by creating systems of profit sharing and re-investment into the business and community. 15% of all profits go directly back to the person who made the chocolate product, 10% shared between all members of ACODAAC, 5% going towards waste management, 5% going towards community needs such as school supplies and medical emergencies, 10% going directly back into the business for maintenance and future ventures, 10% to packaging, 20% for marketing, and 20% going directly into the ACODAAC bank account. This system has been in place for over 8 months and is working extremely well. The democraticly elected board of directors of ACODAAC meet once a month to go over the profits and expenditures and then divides all money in appropriation to its corresponding percentage.
Community Production:
Cacao, which is the fruit used to ultimately make chocolate, has been organicly and shade grown in the community of Rio Oeste Arriba for around 80 years and has been a main source of income in that time period for about 95% of the population. The cacao beans, which are sold to a local co-op, are harvested, fermented, and then dried yielding prices anywhere from .75 Cents a pound to as much as $1.70 depending on the quality of the beans. Most of these beans are eventually sold to companies in the USA and Switzerland to make specialized chocolate. The farmers generally see 7%-10% of the final selling price of their cacao while putting in more than 80% of the time necessary to create it and over 60% of the labor. By developing ways to add secondary value to the cacao by making chocolate products, ACODAAC has begun to bring more of the final value of the goods sold back to the farmers that produced it. Since starting the selling the of packaged and minimally processed chocolate products the artisan group has successfully raised the percentage amount received from the final selling price up to an average of 80% and they have done it in a sustainable way that will guarantee repeat businesses.
History of volunteers working with ACODAAC:
Many indigenous communities ask for outside help to fill their training and capacity building needs. As it is in many developing and 3rd world countries it can sometimes be a long strenuous progression for many communities to become accustom to so many new concepts and business practices. Panama is no different and the amount of time spent in these communities by outside help combined with the readiness of the community to except change can be directly contributed to the success of the project. The people of Rio Oeste Arriba have had a long history of outside help from international and domestic government agencies and non-profit organizations and this help combined with the motivation of the artisan group has resulted in a great amount of success. Below is a time-line of some of the international help the community of Rio Oeste Arriba and more specificly ACODAAC has received:
- 2004: A Peace Corps volunteer named Beth lived and worked in the community for 6 months with the specific goal of creating more opportunities artisan goods sales. She gave ACODAAC the idea to do more with turning cacao into something that could be sold by showing how to bake chocolate bread that was then sold locally. Beth also gave seminars about sanitation and worked with the group to determine a rough outline for a businesses plan.
- 2005-2007: A Peace Corps volunteer named Adam worked with the group and came up with the idea to sell hardened chocolate liquor to people in the community. At this time there were still no roads in the community. Adam's main focus in the community was to help with environmental health and conservation issues but some time was also spent on business planning.
- 2006: USAID helped ACODAAC develop a business plan for tourism and sent some members of the artisan group to Guatemala to see how agro-tourism functioned. Additionally, USAID dedicated much time to capacity building and business development.
- 2008-2010: A Peace Corps volunteer named Brian helped the group start selling hardened chocolate liquor in aluminum packages to other volunteers and one small local business. Brian spent most of his time working with ACODAAC in creating a businesses plan for chocolate sales and also worked on capacity building.
- 2010: An international organization working with universities in the United States named Global Brigades brought volunteers and money and lead seminars, workshops about business record keeping, business responsibility, publicity, marketing, and better business practices. They also brought in investment capital for a solar panel unit and kitchen equipment such as stoves, pots, pans, and baking trays.
- 2010-Present: US Peace Corps volunteer Adam Armstrong has taken the group into the next level which includes actual market outreach, price structures, packaging, and product development. Since the implementation of this next level, ACODAAC has started to sell an increasing amount of artisan chocolate products and expectations are high to keep increasing the amount sold.
My work with ACODAAC and the growth of chocolate production (As told by Adam Armstrong)
During the first 3 months of my Peace Corps service I did what is called a community analysis which is a tool we use to identify what resources and capabilities the community has and what can be improved or added upon. In this time I found that the artisan group was extremely organized compared to others around Panama and that they had motivation which can be a large limiting factor when doing economic development. I was soon working with motivated artisan group members until very late at night planning and working on the future of the group. We took the business plan that they had developed with the previous volunteer and updated and modified it to make it relevant to a different and more profitable market. In short, we created a complete line of chocolate and cacao based products that we could sell to our new target market of tourists and expatriates. We spent months designing our logos, coming up with price points, taste testing, developing marketing tactics that were simple and understandable, and then finally presenting our products to potential retailers and clients.
Without a hitch the plan worked and soon we were taking orders from around the country. With the addition of an organic certification called “Food Friendly Organic” from a local certifier we started selling even more than we imagined. Soon we came to a point where local working traditions and business structure stood in the way. Because of the heat of the day most of the chocolate production needs to be done at night and because our artisan group only has a couple capable people that are able to turn the hand grinders, we have started to have to limit production. As it stands right now the group does not want to look for other markets because of the fact that if a large order comes in they might not be able to fill it. There is also the reality that too much time working in the artisan group making the chocolate will have an impact on how much time the individuals have to grow, maintain, and harvest the cacao all while spending enough time growing food and in some cases acquiring water for the family.
After executing a diagnostic tool with the artisan business group we came up with the solution of finding some type of machine that can help the grinding part of the process and after extensive research we found that this type of machinery it is not only possible to acquire, it is also feasible for the artisan group to maintain and use.
A Word From the ACODAAC Chocolate Liquor Manager:
The following is a statement from Belisario Jemenez Sourgen (Chonchi in Ngabere), the person in charge of hand grinding the cacao and in charge of chocolate liquor; It is important to be able to make more chocolate for the growth of the group and also to create a better tasting chocolate by using the machine we would like to purchase to grind it down finer. We would also like to offer a better product to the public so we are able to sell more. Also, with so much work going into the grinding process it is hard to grind what is needed if we have a large order. I am the only one grinding the cacao for all of the chocolate liquor (this includes making chocolate liquor for the department that makes chocolate to eat) and the machine is very hard to use (it is a hand corn grinder that has been cranked down all the way to produce the most friction possible to produce the chocolate liquor). Also, I'm the only person in my department that is capable of running the machine due to the amount of strength needed to turn it (the rest of the people in the department are older women and it is very hard for them to use the machine ). When there is an order that needs to be filled right away then I will have to work all day cranking the machine to make enough liquor and this chocolate liquor is not as fine as it could be. If we were able to get it much finer, we could sell a better product to our customers for more money. To grind enough chocolate to make 100 pieces of chocolate I need to use the hand grinder on its tightest setting for 4 hours. This is after the women have toasted the beans and I've broken and winnowed all the beans by hand. To make a final product to sell we do much more than that but the hardest and most important part of the process in terms of volume and quality is with the grinding process. Right now we are at our maximum output at 400-500 bars of chocolate liquor per month and we have barely touched the market to sell our chocolate and if we are able to grind more chocolate at a better quality with the machine we would like to get we could triple the production we are now doing and start looking into other markets for our products.
Why getting this equipment will work:
ACODAAC has proven that it has the mentality and capacity to run, maintain, and profit from the desired machinery. The group has effectively used past grants to purchase a solar panel system and within a year of having the system has effectively managed it using the information recommended by the company. Furthermore, the group currently uses the solar panel system not only to work at night using light, they also effectively run a recharging business for cell phones and other electronic devices that in turn pays for new parts for the system and new batteries when needed.
The Equipment ACODAAC Would Like to Purchase
After talking to many international manufactures of different machines we have found that the most viable option is to buy the machine from a person making them in Almirante which is only 15 minutes away from the community. We have tested the machine and the experienced welder and machinist that builds them has not only guaranteed us warranties on parts and labor of the machine, he has also offered to give us an extra motor included in price. The best thing about this locally made machine is that it uses the same corn grinder that ACODAAC is accustomed to working with insuring more simplicity and better chance of sustainability. After verifying the quality and craftsmanship of the machines they sell, ACODAAC has decided that this would be the best option for grinding the cacao into cacao liquor.
As mentioned before, ACODAAC will need a solar panel system that will be sufficient enough to run the machine uninterrupted for 5 hours at a time. The Solar biz, which has been working in the area for a long time and has a great reputation will be the the local business that ACODAAC has chosen to work with and is located on the island of Bocas del Toro which is close enough to the community to provide technical help and fulfill warranties which are 20 years for the solar panels, and 2 years for everything else.
The rough cost breakdown for the complete system including installation, taxes, and delivery is as follows. A further breakdown of the systems are available:
The solar panel system will cost $3,500 after taxes and shipping and will provide enough power to operate the machine 5 hours a day twice a week. This system will also let the artisan group members use fans when working in hot conditions during the day.
The Grinder will cost $300 installed and comes with extra parts and a warranty itself.
Installation will be donated by a local contractor named Jim Weaver whom has installed many systems in the Bocas del Toro region.
ACODAAC has agreed to use its own money for the project by buying the necessary materials to build a place for the machine to be housed and by buying the machine. The building materials for this structure and the labor involved will be valued at $700 and the machine is valued at $300 which will constitute a 20% contribution of the total project by the artisan group.
This will leave a total of $4,500 needed to fund the project.
A grant of 2,000 is close to be obtained which will leave 2,500 that needs to be raised by outside funds
You can contact Adam Armstrong at californiaadam@yahoo.com or at 694-292-71 for further information.
Additional links:
http://youtu.be/MSBxQtLbL_s link for youtube video of them hand grinding the cacao
http://www.facebook.com/orebachocolate is the facebook page.
