By Madelaine Miralfor
On World Chocolate Day, it’s amusing to think many Filipinos will abandon meat and rice to lose weight, but they will never stop eating chocolates.
This is why many more Filipino investors are now into making their own chocolate brands. It is a lucrative business, they said, but the problem is that the country’s supply of cacao — the primary ingredient in making chocolates — still can’t meet the growing demand.
Raul Matias, founder of Manila Chocolatier, said it would be nice to make chocolates that are “100 percent Pinoy,” but he still can’t avoid sourcing cacao from other countries to sustain his business.
Manila Chocolatier is the company behind the local gourmet chocolate brand Machiavelli Chocolate, which features flavors that couldn’t be more Pinoy — Pili Nut, Mango, Ube, Barako Coffee, Palawan Honey, Lambanog, BukoPandan, Salabat, among others.
Every month, the company manufactures 500 kilos of processed cacao, 95 percent of which comes from the Philippines. The rest normally comes from Malaysia and Indonesia.
Kelly Go, managing director and co-founder of Auro Chocolate, also has some concerns. Although her company currently has a steady supply of cacao right now, she said the growing local and global demand for the commodity could start a problem in the future.
“The problem is everyone is focused on Davao,” Go said.
Right now, the Philippines exports about $6 million worth of cacao to the international market. This means that even if there’s already a huge demand coming locally, a number of companies abroad have also set their eyes to cacao being produced here.
With Filipino firms and foreign firms fighting over a limited supply, some companies here actually gave up already and decided to look elsewhere. Every year, the country imports more than $100 million worth of cacao from other cacao-producing countries, a data from Department of Trade and Industry showed.
To keep up with this, Go believes the Philippine government should already start promoting cacao farming in other areas than Davao, but that’s a plan that the country gave itself until 2022 to achieve.
The Philippines is among the countries in Asia seen to have a competitive advantage on cacao production given its strategic location and climatic condition.
But the country’s cacao supply only largely comes from Davao region, producing 80 percent of the total production each year. This is out of the 10,000 to 12,000 metric tons (MT) of cacao the country produces every year.
The rest of Mindanao contributes 10 percent of the total cacao production, while the remaining 10 percent is being shared by Luzon and Visayas.
Based on the 2017 to 2022 Cacao Industry Roadmaps crafted by the Department of Agriculture (DA) and the Department of Trade and Industry (DTI), the target is for the country to produce 100,000 MT of dried fermented cacao beans by 2022, which is eight times higher what is being produced now.
Massive rehab needed
With the challenge of low production and increasing demand in both national and international market, DA has launched a massive rehabilitation effort to revive the cacao industry.
Reynaldo Visanta, a farmer in Davao region, said the rehabilitation has started to give them competitive advantage.
“With our rehabilitation activities in the farm, our trees have sort of renewed their abilities to produce. From 100 kilos of wet beans we know harvest 300 kilos per tree,” he said.
Similarly, the World Bank-funded Philippine Rural Development Project (PRDP), also a project of DA, is pouring in millions to further boosts cacao industry in Davao del Norte alone.
To be specific, PRDP awarded a total of P14.34 million for the province’s Cacao Production and Beans Marketing, covering the towns of San Isidro, Kapalong, Talaingod and Asuncion. The project is being managed by Kapalong Cooperative.
Local chocolates versus imported chocolates
Matias said there is another challenge to manufacturing local chocolate brands. They are normally more expensive than imported brands, he said.
“We have to make up for scarcity of cacao,” Matias said. “And prices still dictate Pinoys.”
He was talking about the country’s working class population who are still at what he calls “Cadbury stage,” wherein people prefer popular chocolate brands that are produced globally in a massive scale.
“Locally produced chocolate is more expensive than well-known brands because in the economies of scale, the latter has a huge demand,” Matias said.
To address this, he suggested the government to start educating cacao farmers how to improve both the quality and quantity of their production and most importantly, give them financial support.
Nevertheless, Matias is optimistic about his business and the local chocolate industry. He also plans to export soon.
Go has same sentiment. In a phone interview, she even called the local manufacturing of chocolate a “thriving industry.”
Auro Chocolate, her company, is a Philippine Economic Zone Authority (PEZA)-certified bean-to-bar manufacturing company in the Philippines that produces delicately crafted chocolate products.
The company sells its own line of Auro Chocolate brand here and abroad as well as caters to some industrial users. Its well known partners here in the Philippines include Coffee Bean and Tea Leaf and the newly opened Shake Shack.
Go said that while “Filipinos think imported is always better,” the perception towards local chocolate brands is now “slowly changing.”
“Our own products are competitive even in other countries,” Go said. “So you can now see Filipinos also changing their minds and they are becoming more and more interested in locally made products.”
But like Matias, she said cacao production and the local chocolate industry in general definitely need more support from the government.
“I hope the government can help the farmers improve the quality of their production through innovation and technology. On the commercial side, there is a need for the Philippines to really promote the product,” Go said.
“A lot of farmers now started planting cacao but there’s no linkage. They also need support in being able to reach the market.”