How Puratos-Grand Place Indochina seeks to reshape the cocoa industry

The first thing you notice upon entering the Puratos-Grand Place Indochina fermentation plant in Ben Tre is the smell of vinegar. It hangs heavy in the thick Mekong air as farmers buzz in with hundreds of kilos of raw cacao beans slung over their motorbikes in oversized burlap sacks. Each load, a pulpy heap of slimy beans that look more like garlic cloves, is emptied onto a large scale to be weighed and methodically inspected for any signs of rot. Those that pass inspection are then transferred into a wooden box to ferment for up to a week, producing the acrid smell, and ultimately bound for chocolate treats served in upscale hotels, bakeries and restaurants, such as the Park Hyatt Saigon and Sofitel Legend Metropole Hanoi.

It’s a seemingly inconsequential part of the process for Vietnam’s largest chocolate producer, responsible for 1,000 of the country’s 2,500 tons annually, and yet it is the convergence of two innovative components that define Puratos-Grand Place Indochina’s (PGPI) unique approach to change the industry, not just here, but around the world.

For Gricha Safarian, Managing Director of the Belgian-based joint venture that was formed in Vietnam in 2012, fermentation has long been a point of emphasis. A tall, gray-haired Belgian sporting a sticker with the logo of the rock band The Who on his laptop and an autographed Rolling Stones poster in the office, Gricha began experimenting with cocoa fermentation in a small house in Ben Tre in the 1990s, well before Vietnam’s cocoa industry was on the map. It conjures up the image of a mad chocolate scientist rocking to the beat of his own drum deep in the Mekong and, as it turns out, he was on to something profound.

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“We experimented with how many days to ferment, what temperature, and so on, and step by step we were able to get a very decent taste from the Vietnamese beans,” he explains. Cocoa beans grown here have been noted for having a particularly acidic taste, but as Gricha found out, the flavor could be significantly manipulated. “We were able to get rid of the vinegar taste and then we started to learn that we could take the quality even higher.”

“That’s when the realization came that our industry was ignoring an important part of the process, which is the part that is differentiating the taste from the origin,” he continues. “So all of this happened in Vietnam at first and, as we are part of an international group with 64 offices in the world, they adopted our approach. Not many Vietnamese people know this, but there are big things happening here. The business model was adopted by our entire group and is now being practiced in the Ivory Coast, Philippines and other countries.”

During the fermentation process, temperature quickly rises, making the outside of the wooden boxes warm to the touch as heat emanates. Inside, naturally forming yeast converts the sugar from the beans into ethanol, and eventually it becomes acetic acid. This reaction, combined with the heat, kills the beans, spurring complex chemical changes that impact flavor development and quality of the chocolate. Currently, the interaction between the yeast and other flavors is a main focus of PGPI’s research.

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“Ironically, while Vietnam has been the innovator of this approach, today our problem here is that we don’t have enough beans,” Gricha admits. “Vietnamese farmers see more profit in other crops, like pomelo, and they are reluctant to invest their future into a commodity that takes a long time and the prices are fluctuating.”

Indeed, it is easy to understand a farmer’s hesitancy to enter the volatile cocoa market. A cacao tree typically takes three years to begin producing pods, which the beans grow inside of, and during this time period market prices can change drastically. In March 2016, for example, cocoa prices were on an upward trajectory with speculation of an impending global shortage driving prices to USD3,076 per metric ton, according to the International Cocoa Organization. Fast forward 12 months and favorable growing conditions in the Ivory Coast and Ghana, the world’s top two producers, have resulted in an abundant supply, causing prices to plummet to USD1,980, a four-year low.

In an effort to provide some insurance to their cocoa farmers, PGPI has introduced what they refer to as the “chocolate bonus”: for every one ton of dried cocoa beans, a farmer will receive an additional USD170. Essentially setup as a VAT system where the consumer pays about an extra ¢1 for every 100 grams of chocolate purchased, it’s an amount they believe the sustainability conscious cocoa lover is willing to contribute to help tip the scale toward the farmers.

“Right now, a farmer’s profit is decided by speculators in the London market. We want to change this,” says Gricha. “What we are trying to do is basically decommoditize the cocoa bean. The USD170 that we supply right now is intended to grow gradually. So if the bonus goes up and the market price goes down, that’s decommoditization. We are also applying a minimum price now in Vietnam. If the market goes under a certain level, we still pay a certain price plus the chocolate bonus, so we are really getting away from the control of the financial market and that’s a must anyway, because otherwise all Vietnamese farmers will turn to another crop.”

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Bigger and Shinier

A few kilometers from the fermentation plant in Ben Tre, Ho Thanh Van is one of roughly 2,500 cocoa farmers who are feeling the benefits. After moving to Ben Tre in 1975, the 55-year-old farmer tried his hand with a variety of crops, including coconut, orange, and longan, before being introduced to cocoa. Walking his lush, one-hectare farm, Van exudes a proud yet reserved aura as he readily explains how PGPI’s emphasis on the farmer has helped him.

“In 2011, before working with them, my yield was only about 5 tons. After they sent someone to give me training on my farm, I increased my yield to 17 tons in 2015. Last year, I grew 25 tons,” he tells through a translator. Quality, too, has noticeably improved for Van, as he adds, “the cocoa pods are bigger now and the skin is shinier.”

While farmers in Vietnam are generally in a comfortable financial position, unlike parts of West Africa where many cocoa farmers still face extreme poverty, the idea behind balancing the profit discrepancy is intended to secure the supply chain for Vietnam’s cocoa industry as it continues to garner recognition in the premium end of the global market.

Having recently received the “fine flavor” cocoa bean designation from the International Cocoa Organization, Vietnam is only the second country in Asia to earn this distinction, which commands a higher price in the world market than the alternative, referred to as “bulk” or “ordinary” beans. Indonesia was the first Asian country to receive this merit, though it’s worth noting that it only applies to 1 percent of the country’s cocoa exports, whereas 40 percent of Vietnam’s cocoa exports were deemed worthy of the fine flavor status.

With an abundance of land more than suitable for cultivation, it’s clear that Vietnam has untapped potential in the cocoa sector, but only time will tell if PGPI has put together the right combination to take it to new heights in the fickle global market.

IMAGES BY NGOC TRAN