Note: Each of the participants in the Spring 2012 SVC Smith Experience was asked to blog about a session that piqued their interest at this year’s Social Enterprise Symposium. We will be highlighting eight of those articles over the next four months. To kick us off, Megan Burkhart (MBA ’13) talks about Sustainable Chocolate Sourcing and other panels relevant to her background as a Peace Corps Alum.
Inefficient ports, tricky trade regulations, rats, bugs, Sub-Saharan heat, corruption, natural disasters, variable quality of raw materials, unreliable electricity, inappropriate child labor…these are among the many logistical challenges that come to mind when one thinks about producing and exporting finished products from Africa. Yet Madecasse Chocolate has figured out how to overcome these obstacles with such competence that they were named one of Fast Company’s “50 Most Innovative Companies” of 2011.
Tim McCollum, co-founder of Madecasse Chocolate, brought the story of his company to the 2012 Social Enterprise Symposium in a session titled Sustainable Chocolate Sourcing. His discussion focused on the bean-to-bar process, which starts with yellow football-sized cocoa pods carried in baskets on women’s heads to a small processing shop, and ends with beautifully hand-wrapped chocolate products with distinct cherry notes and a subtle sweetness. The chocolate is shipped to the United States and sold in upscale retail outlets such as Whole Foods and Wegmen’s, as well as online.
Widely acknowledged by connoisseurs as a superior chocolate source, Madagascar had only been exporting raw cocoa, to be produced by external sources, before McCollum and his partner started the company after serving as Peace Corps Volunteers in Madagascar. According to the company website, “70% of the world’s cocoa comes from Africa. Less than 1% of chocolate is made there.” At first glance, that is a startling statistic, highlighting yet another valuable natural resource that is regularly exported from the African continent to generate profit elsewhere. However, recalling the challenges facing exporters in the region, it becomes obvious that the African continent is stuck in generations-old catch-22: economic stability can not happen without better infrastructure, and infrastructure developments can not be supported without better economic stability.
Madecasse’s operating principle is primarily, “why not?” Why not import an industrial cocoa roaster to a remote island off the coast of East Africa? Why not partner with local paper companies to make sustainable packaging for finished products? Why not figure out a way to help cocoa farmers in Madagascar generate four times more income than fair trade cocoa alone? McCollum laughed and shrugged as he described the company’s growth, explaining that he and his partner just loved the country, and were willing to face the challenges and rolling eyes of potential investors to prove that single-source, bean-to-bar chocolate production was possible in Madagascar.
As a former Peace Corps Volunteer myself, I immediately related to the inspiration and love for the country one feels during (and after) service. It seemed that every season brought new raw materials and opportunities for revenue-generating activities – bees, mangoes, dairy cows, tea, peanuts…yet the logistical hurdles standing between the idea and implementation seemed insurmountable. Eventually, most of us concede to the idea that “this is Africa” – for too long the continent has been the victim of its own value proposition (a plethora of raw materials), and one mzungu in central Tanzania isn’t going to change anything.
At many points during the discussion, McCollum emphasized that Madecasse was founded on inspiration and love for Madagascar, and faith that the essential elements of a successful enterprise were present on the island. The company’s success represents the real potential for economic development in Africa through the use of natural resources, human talent, and a lot of patience. The chocolate is delicious, the revenue model goes “beyond fair trade,” and I left the session with a renewed passion for leveraging business principles to thwart developmental catch-22s and create sustainable change in the world.
From the Sustainable Chocolate Sourcing session, I learned that seemingly insurmountable obstacles to enterprise development can be overcome with local knowledge and a dedication to the cause. This is particularly relevant within the scope of the WRI-New Ventures project, as our team works to find an appropriate technology and business plan to bring water treatment technologies to India.
Another session I attended that caught my attention was Social Entrepreneurship and Global Health. Since working in Tanzania with USAID, I’ve been intrigued by the marketing techniques and business models employed by Population Services International (PSI). PSI does a remarkable job of merging business training with health services outreach, and I left the session inspired to head towards that objective with my next career move.
Finally, during the process of planning the Launching a Social Enterprise session, I realized that the steps we outlined to launch an enterprise can also be useful to implement at a time of organizational change. Amani ya Juu, the revenue-generating nonprofit that I work with in DC, is currently restructuring its US-based landscape, and we recently met as a team to discuss the implications of this change – I found that the framework employed in the session was very useful in working through the new SWOT analysis and identifying action items involved in this expansion.
Megan Burkhart is a 2013 MBA Candidate at the Robert H. Smith School of Business at the University of Maryland-College Park.