Theo Chocolate: The Challenge of Going Green

Organic chocolate is just about a household phenomena these days. Grocery stores stock the rich confection, and natural food markets love it for its increasing sales. Today, organic chocolate sales make up less than 5 percent of the global chocolate market, but it commands a mighty voice when it comes to North America’s insatiable sweet tooth. According to CandyIndustry.com, organic chocolate sales rose 20 percent in 2011, and most of those sales were in niche health food stores where organic products are often a going concern.

There was a time not long ago, however, when organic chocolate bars were as rare in stores as the pure bean from which they were made, when sourcing organic cocoa for U.S. distribution was an entrepreneurial dream. Creating an organic cocoa market meant kickstarting a string of organic, sustainably-trained farms in geographically-specific areas of the globe that could handle an environmentally sensitive crop. It meant ensuring that farmers not only produced a good quality product, but also cocoa that lived up to the ethical expectations of consumers half way across the globe.

Theo Chocolate co-founder Joe Whinney has been largely credited with launching that endeavor. In 1994 Whinney helped to develop the first supply chain for organically-grown cocoa, an essential ingredient for his Seattle-based chocolate line. As the company has grown and thrived, so has the recognition that chocolate, with its booming global sales, can be sourced in a way that not only satisfies a discerning customer base, but the livelihood of its farmers – and the well being of the environment. At the same time, it can be produced in a way that reinforces the ethos of sustainability: responsible stewardship at home as well as in the supply chain.

Ask Whinney what he feels is the key ingredient that defines a sustainable business these days, however, and he seems almost hesitant in his answer.

“I think the term ‘sustainable’ is somewhat amorphous,” Whinney said. “I mean, the basic definition that people use is that we’re meeting our needs today without jeopardizing future generations’ needs to meet their needs. But how you get that into business practices is challenging.”

In terms of Theo Chocolate’s business model, it is a holistic endeavor that extends to every corner of production, “all the way from the farm to the factory” -- from the well-being of the farmers and their community and the benefits they realize from the product sales to Theo, to how employees are treated and the impact that his business has on the environment.

And he is unsparing in his judgment of whether Theo meets those goals.

“I may get in trouble for saying this – but [I think] Theo is attempting to be a sustainable business. I think there are some areas where we are doing really well. I think there are other areas where we are still challenged, in part because we may not have the volume or the leverage to really drive change, and a lot of that energy.”

Leadership and vision, said Whinney, “that is unwavering, that is consistent and that is focused on having a positive impact in every aspect of our business” is at the heart of Theo’s success as a sustainable company. Maintaining that vision and accountability, said Whinney, is harder for a small business than a company that has the resources and leverage to meet its needs. “They have the resources that they can find and really impact change faster than we might be able to,” Whinney explained.

But it is Theo’s interaction with the small family farms that it relies on for cocoa in places like the Congo that is perhaps the most emblematic of the company’s view toward sustainability. The company trains the farmers on how to farm sustainably – an assumed step in today’s growing, hand-crafted organic chocolate trade, Whinney told us. “[And] then we provide dramatic incentives on the price to improve quality. So as you improve quality, you can substantially increase your income. The higher quality cocoa we get, the more we can sell a chocolate bar for and the more efficiency we have in our own operation.”

The approach works, but not just because it provides economic incentives for better product. It works because it also instills faith and the belief in the product, and in Theo’s business model.

Whinney said that Congolese farmers who were driven away from their land by rebels a few years ago and were forced to seek refuge in neighboring countries later returned to take up farming again after the rebels were driven out by United Nations peacekeeping forces.

“[All] these farmers came back home because they believed they had an opportunity,” Whinney said. “Their cocoa trees are still there. And they had the experience of receiving training for the product that had a positive impact on their lives.” He said their desire to return to a war-torn region and to continue investing in their community was evidence that Theo’s sustainable efforts were working.

Whinney freely admits that, for small chocolatiers like Theo, supply costs can present formidable challenges to sustainable goals.

“When you look at where we are shipping our products from, transportation -- and energy in transportation -- is a big, big challenge for us. And we are not large enough that we can command an ocean freight line on what kind of energy source should be used,” said Whinney, who sees the issue more as a “human behavior problem” that is best addressed by setting an example and encouraging or challenging those who may have more economic leverage to do their part. An example is the fair trade market, a concept that is near and dear to Whinney’s heart and, in his view, often suffers when larger companies attempt to change fair trade strategies by engaging in what is called “mass balance” methods of sourcing and producing their products.

For those who may have an eye on starting a resilient sustainable business, Whinney has simple advice: “clarity of vision and purpose.” Determining what you want to attain and why it matters is the first step, he says, to realizing your true goals. Self reflection and unwavering honesty in your aspirations are essential.

“Whatever your purpose, be honest about it, because that is what you’re going to end up achieving, and you need to be able to communicate that vision with a wide variety of stakeholders … Being clear about that is what allows you to build trust in the people you depend on and faith and loyalty and all those investments necessary in order to be successful.”

People, Whinney said, are at the core of what will make your business a success, whether they are the employers who keep the day-to-day operations going, the organizations your company may partner with, or the contractors who grow the ingredients or make the products you sell.

“I really think the key factor is people: how you treat people, how you engage people. In every organization there’s always opportunity to improve how we engage our employees, our customers [and] our suppliers. I think if we can take time to educate and engage and ensure that there is a sense of purpose for everybody involved,” said Whinney, “the more [we] can be successful.”

Image credit: Dept. of Foreign Affairs and Trade