Kyoto entrepreneur finds business sweet spot with cocoa from Indonesia

by

Kyodo

Keiichi Yoshino, a 34-year-old operator of chocolate shops in Kyoto, never dreamed he would become a chocolatier.

His epiphany came in a coffeehouse in South Korea in 2010. Looking at a map of global cocoa production areas, the former financial analyst wondered why Japan largely depends on Ghana for cocoa for its chocolate even though Indonesia, a fellow producer, is far closer.

He looked into it, and discovered from Japanese government data that Indonesia accounted for only 0.3 percent of Japan’s cocoa bean imports in 2013, while 80.6 percent was shipped from Ghana.

He was a “complete amateur” in farming back then, but he flew immediately to Sulawesi Island, where more than 70 percent of Indonesia’s cocoa is farmed.

The answer was simple: Cocoa beans from Indonesia, one of the world’s top three producers along with the Cote d’Ivoire and Ghana, were not fit for high-quality chocolate production as they were shipped before being fermented.

“Fermentation would add value to cocoa beans, but Sulawesi farmers did not bother to carry out the process as they wanted to earn cash without delay,” said Yoshino.

He stayed with farmers on the island and experimented in fermenting beans by covering them with banana leaves.

“They said they won’t ferment cocoa beans because no buyers would pay a higher price for them,” he said. “I decided to become a buyer myself.”

In fact, many Indonesian cocoa farmers had never tasted chocolate because their products were mainly shipped to extract butter and oil for industrial use such as the manufacturing of cosmetics, Yoshino said.

Also, they did not benefit from sharp rises in cocoa prices in international commodity markets over the last decade, as prices were set by speculative investors such as hedge funds. Producers had no power.

Determined to pitch Indonesian cocoa in Japan, Yoshino imported about 600 kg of fermented cocoa, a shipment that occupied most of his room space. He pitched samples around, but to his dismay, major chocolate makers showed no interest.

“I knew the Indonesian cocoa was of good quality, so I decided to become a chocolate maker myself. I gradually became enthusiastic as things got started,” he recalled.

The Kyoto University graduate school alumnus procured equipment for chocolate production such as a roaster and a mill. He set up his own company and opened a shop in the city in April 2011.

His company and shops are named Dari K, with dari in Indonesian meaning “from” and K representing the shape of Sulawesi Island. It is also the initial of Kyoto.

He sells pieces for ¥400 each, so Yoshino is targeting high-end consumers willing to pay for quality. He persuaded a Takashimaya department store official to accept a plan for Dari K to run a booth in November 2011, saying the store can “diversify” its lineup with chocolates made from Indonesian cocoa.

“Business slowly got on track as the fact that our items are sold at a department store enhanced the Dari K brand,” Yoshino said.

Transactions with the Kyoto company also helped raise productivity and profits for Sulawesi cocoa farmers, as the firm bought fermented cocoa for higher prices than conventional buyers would pay. Moreover, Yoshino suggested they conduct “grafting” — a technique used to insert branches with a lot of fruit into the stock of a tree.

“As a result, cocoa farmers’ earnings increased up to 1.6-fold,” the entrepreneur said.

With his efforts recognized by locals, the number of Sulawesi farmers supplying cocoa to Dari K jumped from 40 to 6,000 by October 2015. The company will sell whatever it does not use to other chocolate makers.

From late October to early November this year, Dari K ran a booth at the Salon du Chocolat in Paris, a major trade fair for the international chocolate industry, where its products were well received, Yoshino said.

“We thought only shops with star patissiers would be invited to the fair, but our chocolates featuring the quality of Indonesian cocoa were accepted,” he said.

He added, artisanal shops that use specific cocoa beans in their chocolate production are gaining a higher profile in the industry.

Dari K also conducts annual study tours to Sulawesi Island to connect cocoa producers with consumers in Japan. Yoshino was surprised to find that the farmers became much more motivated after meeting with customers directly.

“They treated chocolate consumers as family members and asked whether they can produce cocoa without chemical fertilizers” out of consideration for the health of consumers, he said.

Yoshino’s enthusiasm is not limited to chocolate production. Dari K sells a variety of items made from Sulawesi cocoa, such as lipsticks, liquor and tea. He has even started a project to produce electricity on the Indonesian island from biogas generated with cocoa shell waste through methane fermentation.

Indonesian cocoa farmers have also begun manufacturing chocolates themselves to achieve a stable income whenever cocoa prices fall in commodity markets.

The entrepreneur says he aims to “change the world through cocoa” and is considering expanding into the Philippines and Africa in the future.

“When I was working in the financial industry, my achievement was linked to investment returns. But now it is satisfying that I can directly make consumers and cocoa producers happy through my business,” Yoshino said.