Value chain analysis : Cacao-Tech

The Cacao-Tech project intends to provide a contribution to the transformation of the Cacao Value Chain in Latin America by enhancing transparency and quality with NIRS (Near Infrared Spectroscopy) technology and whole pod automated processing. The objective of this value chain analysis is to identify, describe, and engage the primary actors in the cacao pulp value chain. Cacao pulp is a side stream of cacao bean production and an upcoming area for new product development such as sugars, drinks and syrups. The cacao value chain is a disaggregated complex global value chain with many different players. It is predominantly populated by smallholders, depending on the country. These cultivate 70-90% of the total cacao production. It is characterised by largely informal relationships between producers and buyers with on-the-spot single purchases and a lack of trust and collaboration between actors. Multiple actors interact in small direct sales, such as producers, cooperatives, associations, off-takers, traders, other intermediaries, transportation companies, warehousing and chocolate makers. The value chain is mainly focused on trading cacao beans for chocolate making, but knows many side streams such as cacao butter, cacao powder, nibs and liquor and can also include parts of the cosmetic industry. Cacao-Tech offers 3 solutions for an enhanced cacao value chain. It offers a traceability solution, a cacao quality control solution and a solution for whole pod processing of circular cacao. These can be applied in combination with each other or separately. Regarding the traceability components that enable the circular and fair use of cacao, different value chain partners do not always value the same attributes in the value chain and trust is not necessarily defined by digital tools and responsibility goals. However, all partners in the value chain would benefit from more trust and traceability through digital enablers. Developing Cacao-Tech solutions could bring value to the Ecuadorian industry and enhance the position of European traceability-based business models enhancing ethical and sustainable cacao production. There are many tracks in which digital data sharing could enhance the value chain. For digitally enhanced quality control, the detection and visualization of key quality aspects of cacao by-products can enhance collaboration in the value chain and make the value chain more cost efficient and transparent for other users of cacao products, too. The direct cost benefits of addressing quality control at key points in the value chain alone might save millions in costs in the industry. The digital enablers also enhance trust and traceability through less cumbersome data collection and higher data quality, resulting from scanned information compared to manual data entry in other solutions. Introducing new products from the cacao fruit enhances the industry’s sustainability and provides additional income sources for farmers, in particular smallholder farmers, while also reducing waste. Therefore, in this project we are working towards whole-pod processing of cacao, introducing new by-products from the pulp. The pilot has shown that whole-pod processing is feasible and can substantially contribute to farmer income (Desczka, 2022), if cost implications of the new logistics are managed well. In the case of pulp the logistics are not largely changed, but harvesting whole pods will require further research on how to develop the logistics well in the case of smallholders. Cacao-Tech can be a solution for systemic problems that the industry has to overcome, such as lack of trust and transparency, lack of circularity and income from cacao. Cacao-Tech solutions therefore have the potential to transform the cacao industry into a modern, growth-oriented, and data-driven industry, bringing new innovation to an old trade and offering exciting opportunities for young people.