The Business of Cocoa and Coffee in Trinidad & Tobago 0 250

By Mr. Robert Nunes

The business of cocoa and coffee occupies pride of place in the economic history of Trinidad and Tobago. With reference to cocoa, it is significant to note that its history in Trinidad and Tobago goes way back to 1525, with the cultivation of the Criollo variety by the Spaniards.

With the introduction of the Trinitario variety, which was derived through hybridisation between Criollo and the introduced Forastero cocoa, production took off in Trinidad and Tobago; such that by 1830, the country was the world’s third highest producer of cocoa after Venezuela and Ecuador, producing 20% of the world’s cocoa.

The cocoa industry eventually dominated the local economy between 1866 and 1920 during which time the world demand for cocoa products increased, and cocoa prices remained stable at an appreciable level. At that time, cocoa was at the height of its heyday and was rightly referred to as “King”. Subsequent to 1921, when local cocoa production peaked at 75 million lbs (34,000 tons), a combination of events led to the gradual decline in production. These included:

  • Decline in world cocoa prices due to a glut on the market resulting from over-production, particularly in West Africa.
  • The onset of the Great Depression of the 1920s.
  • The appearance of Witches Broom disease (WB) in Trinidad and Tobago in 1928.
  • The increase in world sugar prices.
  • The development of the local oil industry, which competed for agricultural labour.
  • The change of the agrarian system from plantation to largely smallholder.

Successive governments have struggled in the intervening years to return the sector to its glory days. Despite the Government’s efforts, production declined significantly over the period 1969 – 1986, from 48,600 hectares under cultivation to 20,000 hectares, a major contributing factor being the shortage of labour for agriculture. Since then, the steady decline has continued unabated, covering production, exports, acreage under cultivation and farmer participation. Annual production has plummeted to around 400/500 tonnes in recent times.

Further, the sector has traditionally been characterized by very minimal value added, with the prevailing business model being the export of high quality beans to metropolitan countries for the value added to take place, in the form of production of a variety of chocolates and cocoa-based products which are imported to satisfy local demand; the mainstay of the economic rewards therefore being reaped by the overseas manufacturers.

Over the past decade, however, a renaissance of sorts has started in the cocoa industry  with a resurgence in production and the emergence of new generation of entrepreneurs, viz. artisanal chocolatiers, who have been breathing fresh life into the sector and providing a platform for local value added exploitation. At present, an estimated thirty (30) to forty (40) artisan/small-scale producers offer a wide variety of chocolates (in the main, dark chocolate) and other value-added products (such as cocoa powder and cocoa nibs), with varying flavour profiles. The mainstay of the producers, however, is focused on carving out a niche in the local market. The cocoa renaissance is based on, and driven by, the following:

  • Emerging entrepreneurial drive to exploit value added opportunities in light of a greater appreciation of the potential of the industry for employment and income generation, particularly in rural communities.

The potential is based on the fact that the Trinitario bean, which constitutes the mainstay of local cultivation, is the gold standard of cocoa bean, being prized all over the world for the production of fine quality chocolates. In this regard, the country is one of ten (10) countries in the world recognized by the International Cocoa Organization (ICO) for having 100% high quality cocoa (fine or flavour cocoa). The stock is in high demand everywhere for flavour. World cocoa production is estimated to be between 4.5 – 5 million metric tonnes and just 5% of the market is high quality, fine or flavour cocoa which fetches a premium price on the international market (in the region of US$ 5,000 per metric tonne, as compared to around US$ 2,200 per tonne for ordinary bulk cocoa).

  • Technical support provided by the Trinidad and Tobago Cocoa Research Centre (CRC), the Cocoa Development Company of Trinidad and Tobago Ltd. (CDCTTL) and the Ministry of Agriculture’s Cocoa Research Section (CRS), Centeno.

Of particular importance are the CRC and the CDCTTL. The CRC, which is housed at the UWI, St. Augustine Campus, undertakes research in cocoa pathology (diseases) and molecular diagnostics, and also supports cocoa entrepreneurs through training, estate rehabilitation, flavour profiling, agro-technology and other help. It also manages the International Cocoa Genebank (ICG) which is the world’s largest and most genetically diverse collection of cocoa germplasm, with more than 2,000 varieties of cocoa.

The Cocoa Development Company of Trinidad and Tobago (CDCTTL), which replaced the Cocoa Industry Board, has as its mission is to empower stakeholders by leading and facilitating the development of the fine or flavour cocoa sector in an efficient, innovative and transparent manner to increase production whilst ensuring adherence to international standards of quality, leading to improved value and a globally competitive industry.

  • Government’s recognition of the importance of the sector from an economic diversification perspective and its consequent willingness to lend support

This recognition is rooted in Government’s appreciation of the significant income generation potential of the industry; its current worth being estimated at US$100 billion internationally. Further, it is projected to grow by 20% in the next ten (10) years.

Indicative of Government’s support are the following:

  • Funding of the research and developmental work of the Ministry of Agriculture’s Cocoa Research Section (CRS) at Centeno, which led to the development of the Trinidad Selected Hybrids (TSH) material, as well as their ongoing work with farmers. The breeding programme that created the TSHs is internationally known as one of the most successful cocoa breeding programmes ever.
  • Provision of financial assistance to the Montserrat Cocoa Farmers’ Co-operative in 2018 in support of their efforts to gain international recognition for their intellectual property through Geographical Indication (GI) registration for “Trinidad Montserrat Hills Cocoa.”

GI is ascribed to a product based on unique qualities attributable to the product’s origin. It affords an invaluable opportunity at product differentiation and increases competitiveness of such products in international markets.

  • Its role in the establishment, in 2015, of the Trinidad and Tobago Fine Cocoa Company (TTFCC), a signal achievement as it is the country’s first cocoa bean processing factory which was set up as a public-private partnership with involvement of the Ministry of Agriculture. TTFCC is now the standard bearer in terms of accessing export markets for high quality chocolates made from the Trinitario bean.

The partnership agreement facilitated access to the Ministry’s land and sharing of the private enterprise’s processing facilities with local growers.

In considering the next frontier to be traversed in the evolution of the sector in Trinidad and Tobago, cognizance must be taken of the global industry trends, key amongst which are:

  • Increasing concern about the impact of food intake on health and wellness; health benefits being highest for dark chocolate owing to its higher percentage of cocoa which contains flavonoids (flavanols in particular) which have antioxidant, anti-inflammatory and anti-clotting properties. These are associated with health benefits such as lower blood pressure, improved blood vessel health, improvement in cholesterol levels and improved cognitive functioning in older people.
  • Sustainability; which is increasingly important on the European chocolate market and speaks to considerations about the ethical and environmental cost of cocoa production, and points to the need for certification.

The foregoing emphasizes the need for Innovation as a pre-requisite for the growth and development of the cocoa industry locally, viz. innovation commencing at the farm level (reduction of cadmium levels and a certified bean to bar production approach) and extending to new product and process development (innovative products, such as functional foods/nutraceuticals, with export market potential, including use of alternate sweeteners to sugar), new business models and marketing modalities (cluster type approaches which would allow for exploitation of economies of scale).

Cadmium, it should be pointed out, represents somewhat of a challenge for the industry to surmount. It is a heavy metal that is naturally found in soil – a result, for example, of volcanic activity, forest fires, and weathering of rocks—and is taken up by many plants, including cocoa plants. Cadmium accumulates in the body over time and can have detrimental health effects beyond certain limits. The limit suggested by the World Health Organization (WTO) is 0.3 micrograms per gram in dried plants, whilst California requires a warning label on products that have more than 4.1 micrograms of cadmium per daily serving of a single product. The CRC, which has been at the forefront of cadmium mitigation efforts for around 12 years, has indicated that the major cocoa producing areas are not affected by the cadmium problem, although cocoa grown in certain parts of Trinidad and Tobago exceed the maximum allowable limits. The Centre is now working on a variety of soil amelioration methods and genetic strategies, both of which appear to be promising.

Turning our attention to coffee, the late historian Angelo Bissessarsingh informs us that coffee may have been first cultivated by the early Spanish settlers who planted cocoa in the valleys of the northern range; both commodities being ideally suited to the growing conditions of the cool and fertile environment.

Though, at the time, production quantities were small and mainly consumed locally, Trinidad coffee was considered, as reported by the historian, “to be highly aromatic and delectable”, though not as highly regarded as the Jamaican Blue Mountain variety. It is worth noting that Jamaica produces the arabica bean which is highly prized for its flavour profile (not unlike the trinitario cocoa bean); whilst the local bean is of the robusta variety. The beans differ in terms of planting material, taste and price, with the arabica fetching a premium price on the international market. Robusta beans have a higher caffeine content, which means that they produce a more bitter brew, though many locals have grown accustomed to the taste through long term patronage of well known brands such as Hong Wing and Chief.

In the Trinidad and Tobago context, it was not until approaching the middle to latter part of the 19th century that coffee began to show glimpses of its economic potential. Data provided by the historian shows that a quantity not exceeding 20,000 lbs. was exported to the UK in 1838, primarily to meet the demand of the coffeehouses which were growing in popularity at the time. Exports increased to over 40,000 lbs by 1883, a major contributory factor being the opening up of lands in the central range to peasant proprietors, arising from extensive land reforms carried out by then Governor Gordon.

In the aftermath of 1883, coffee production declined precipitously, reaching a new low of 4,438 lbs in 1888. This stemmed from lands being rapidly converted to cocoa which led to coffee being sidelined. As a result of the land reforms, cocoa production skyrocketed fueled by high world market prices. Although coffee production picked up steam a bit, rising to 20,000 lbs in 1892, it has struggled to reach acceptable market levels, fluctuating up and down on the lower end of the production scale. Nevertheless, the potential of this agricultural commodity continued to be recognized and efforts continued to be made to increase production.

Interestingly, the historian recounted that “during the early 20th century, in the poorer districts of east Port of Spain, where the barrack yards abounded, tiny one-door coffee shops began to spring up in numbers, being operated mainly by Venezuelan refugees fleeing political persecution. These sold strong black coffee and sandwiches made from hops bread and fillings such as ham, cheese and buljol. The powerful black coffee was an appetite suppressant in a time and place where empty bellies were not easily filled”. Fast track to the latter part of the 20th century, specifically 1985, and coffee production in Trinidad and Tobago, though somewhat improved over the early part of the century, was still far below optimal levels, registering 2,361 tons and declining to lower than one thousand tons in 1999. This notwithstanding the establishment in 1961 of the Cocoa and Coffee Industry Board of Trinidad and Tobago, with a mandate to ensure that the best arrangements were made regarding the handling and grading, as well as the purchases, sales, exportation and marketing of Trinidad and Tobago coffee and cocoa, with the goal of contributing to entrepreneurial endeavour in both industries and growth of the national economy.

No improvement of note has been recorded as we approach the close of the second decade of the 21st century, with production of green coffee beans still in decline and the industry considered by many as “dead”, with production over the period 2013 – 2016 averaging under one ton (CSO data). Identified contributory factors to declining production are high labour costs, pests and diseases, farm inefficiency, ageing farmers and the inability of the sector to attract young persons. Further, prices paid to farmers over the years by the now defunct Cocoa and Coffee Industry Board have also been fingered as a disincentive; such prices being unable to compensate the farmers for the investments made to upkeep their business ventures.

However, all is not lost as efforts are in train to breathe new life into the industry, a key driver being the Cocoa and Coffee Marketing Co-operative Society Ltd. (CCMCSL), an organization that seeks the interest of cocoa and coffee producers. CCMCSL was reported to have initiated collaboration with the Ministry of Labour to establish small Co-operatives in coffee-growing areas and to be assisting the farmers in finding markets for their coffee. Further, an identified aim of the organization is to assist the producers to develop value-added products and to eventually provide all the hotels and guest houses with ground coffee.

As in the case of the cocoa industry, notwithstanding the availability of agricultural incentives provided by the Government, Innovation is critical to the revitalization of the coffee industry, as has been demonstrated by the online artisan coffee retailer, Roastel; which has innovated around the roasting and brewing of the robusta bean to create a premium product, Roastel Coffee, that has been well received in a number of restaurants and small coffee shops. The company, owned and operated by Hanson Harribans, Coffee Roaster, and his wife,  has embarked on a quest to provide fresh, premium coffee and to create a new wave coffee culture in Trinidad and Tobago, notwithstanding competition from the established local chain, Rituals, and the international powerhouse, Starbucks.

In the context of Innovation, however, cognizance must be taken of industry trends. In this regard, it is noteworthy that the National Coffee Association (NCA), at its 2019 Annual Convention (March 7th – 9th), highlighted the following: a) Today, people are using their purchasing decisions to support companies that reflect their values and introduce new innovations; b) Consumers want healthy and functional foods (foods that are augmented with healing or nutritional benefits, like protein or antioxidants) and coffee is uniquely positioned as a potential functional food, being consumed by 64% of US adults, according to the NCA National Coffee Data Trends (NCDT) Report, and with scientific research continuing to link coffee to an expanding list of potential health benefits; c) The rise of ready-to-drink (RTD) coffee — especially with younger consumers — creates new opportunities for developing and marketing new products; d) Sustainability is a critical issue for the coffee industry; encompassing not only environmental considerations, but also issues such as packaging, waste management and supporting coffee communities at origin; e) Whilst the period of sustained astronomical growth of single-serve coffee systems has leveled off, this segment remains well entrenched as the second most popular brewing method after drip.

Examples of potentially market-changing opportunities include product innovation with brewers or pods, pricing innovation that increases the value proposition, communication innovation that changes how consumers perceive single-cup, or channel innovation that puts single-cup in more locations.

Although a monumental task where coffee is involved, there is no doubt that with the support of all of the stakeholders, provision of appropriate funding and innovative approaches, both cocoa and coffee can contribute substantively to advancing the economic diversification agenda. As a key stakeholder, CARIRI, with its established Food Technology Capability and Facilities (new product and process development; food safety management systems; testing; plant lay-out; labeling and packaging, and pilot plant) as well as Innovation Facilitation Programmes, viz. Idea Advisory Service (IAS) and Innovation Gap Analysis Programme (IGAP) is well poised to play its part in this important undertaking.

 

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