Countless companies are turning to carbon offsetting as a way to reduce their overall carbon footprint. But this chocolate company is going in the other direction: carbon insetting.
Bay Area-based Alter Eco’s supply chain consists primarily of cacao farmers in Central and South America who are living with the consequences of climate change, deforestation, and mono-cropping. So the company has decided to invest funds in these cacao-growing regions, as they transition to regenerative farming, to reduce carbon emissions. It’s helpful for the farmers and builds resilience in the supply chain, one that Mike Forbes, CEO of Alter Eco, says could see the same challenges as coffee: the areas that grow the best coffee (often in shade and along the Equator) will no longer be suitable. “The same can be said for cacao in the coming decades.”
Last fall, this B Corp created a foundation, which has allocated $1.5 million to help farmers pursue agroforestry where cacao is grown amongst a diversity of crops, and ideally, under the canopy of a forest. About 400 of their 1800 cacao farmers in Ecuador have already made the transition; another 1400 remain, which Alter Eco will support in the coming five years with funding, educational tools, and training.
“You cannot reduce greenhouse gasses and mitigate climate change without addressing soil health through better farming practices. These are the foundations for long-term solutions that have real impact,” says Forbes.
Some early data suggests that this could be powerful if more cacao growers, and respective chocolate companies, joined in. Forbes says that regenerative-farmed cacao would increase carbon sequestration by 85 metric tons of CO2 per acre over the next two decades. If that were magnified across the global cacao industry, he argues, that would mean transitioning 30 million acres to agroforestry, resulting in 2.5 gigatons of CO2 being sequestered. “That’s equivalent to removing 30 million cars off the road each year.”
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Cacao is a product that thrives in humid, but warm climates. That’s why it’s often found near or within the Equatorial belt. But Forbes notes in his last visit to Ecuador, he saw farmers putting in irrigation systems because rains had dried up as the temperatures continued to inch higher and higher. Alter Eco gets just under half, of 41 percent of its cacao beans, from a cooperative in Ecuador called UNOCACE. It’s here that they’ll be working with all 1800 farmers to go regenerative.
This has a few benefits, says Forbes, aside from the larger impact on climate. Agroforestry encourages farmers to grow a wider variety of crops. That means not only do they have a better opportunity to sell different goods at varying price points (which Alter Eco estimates has increased their incomes by 25 percent), but their own diets become more nutritious too. Secondly, the yields on regenerative organic cacao increase (after year 4 of transitioning), and that also translates to the potential for better income for growers — especially since their use of fertilizers, external inputs, and irrigated water decreases. Plus, the plant is, arguably, in better health, producing a more desired crop, he adds, which has greater value. There are now studies beginning to make the connection between shade grown cacao and increased yields (with the additional bonus of storing more carbon.)
“All of this adds up to farmer happiness, which is an under appreciated piece of the story,” says Forbes. “I truly believe that inequality and climate change are the two defining challenges of our time. And regenerative agriculture addresses both.”
It’s a work in progress, he says. As Alter Eco Foundation collects data, it’ll look at both the environmental and social impact: water retention, yield of crop, carbon level in soils, but also the social dynamics of farmers. “Are they exchanging knowledge with each other, because that’s just as powerful,” Forbes says. “And definitely more powerful than us sharing stats.”
Alter Eco also works with the Pur Project, which has an agroforestry approach in the Peruvian Amazon. Started by Alter Eco France’s founder Tristan Lecomte, the Pur Project has similar principles of carbon insetting and goals of making cacao production a part of the forest ecosystem, rather than replacing it entirely.
Although Alter Eco is a small player in the chocolate industry, Forbes hopes that these “pioneering practices” will encourage others to follow. Though Mars, Nestle, Hershey, among others, dominate the industry, Forbes sees opportunity for small, alternative brands like theirs to be the trendsetters when it comes to environmental and social practices.
The word regenerative, though, he acknowledges is being used far and wide these days. And it’s something, he notes, that will require monitoring: “those of us in the industry will have to hold one another accountable to it.”
“I think it’s important to build consumer awareness and demand for products that are farmed differently and better for the planet, but we will have to watch and see how these words are treated,” he says. “Some words like ‘natural’ have been co-opted. I don’t know what that means any more on packaging. Let’s make sure that doesn’t happen here with regenerative.”
Packaging is another area where Alter Eco wants to cut its carbon footprint by investing in compostable. “This is not easy because the compostable bag has to work with a printer and make sure the design lasts. It has to work in fulfillment machines. It has to last and endure transport. And it will typically be more expensive.”
Despite the hurdles, Alter Eco has found a non-GMO compostable material for their wrappers: birch and eucalyptus trees with a bit of foil. “It’s a great storytelling piece also when I explain to customers that the truffles are wrapped in birch and eucalyptus.”
Much of this experimentation and investment in environmentally-friendly practices, Forbes says is possible due to the business’ unique investors: Next World, a private equity firm, where exit strategies are not the focus. “So you’ve got a runway to grow in a way that works for the company and its principles. And that runway is a 100 years. It’s not like alot of private equity funds that when they buy it, they want to sell it quickly. You have to have that long-term vision with these kind of challenges.”