A bitter sweet chance – chocolate industry uses ethical business models (Introduction)

“Anything is good if it’s made of chocolate.” Jo Brand

Chocolate

After focusing and taking a critical view on social problems in Latin America I want to come back to the “other America” and talk about its economic potential and business possibilities that come along with this. Passing by the store “Rausch-Plantagenschokolade” I decided to write about the great world of chocolate. I also worked in a cafe which sells expensive chocolate from all over the world. First I did not understand why I should pay five euros for a chocolate bar when I can also have it for 50ct. But after my boss explained me that cheap chocolate has so much chemicals in it – e.g. Milka would use chemicals which make the chocolate melt in your mouth – and that it is produced without caring about quality standards and actually exploiting farmers I finally realized that it is worth it paying a bit more.

Talking about Rausch

Rausch-Plantagen-Schokolade-Puerto-Cabello-43---Kakao_z1Rausch imports chocolate with 43% cocoa from the plantation Puerto Cabello in Venezuela. On their webpage it is said that they cooperate with the ministry of agriculture and local farmers in order to support them and help them to sell their products for a fair price. Other chocolate products from Latin America are Amacado, dark chocolate from Peru with 60% cocoa content and El Cuador, dark chocolate from Ecuador with 70% cocoa content.

“Rausch has not only propelled his company on one of the fastest growth tracks in Europe, he’s re-introduced the concept of truly premium chocolate bars to consumers in Europe and abroad.” Bernie Pacyniak from Nationaldriller

Pacyniak continues that Rausch could more than double its revenues over the last years from 45 million Euros to 100 million Euros and currently has around 550 employees and producing chocolate in other developing countries in Latin America, Asia and Africa.

Why does that happen? Why are people willing to buy chocolate from Rausch?

Since international competition and the effort to lower prices has led to a low-quality production of chocolate, Rausch actually noticed that this was a great opportunity to produce premium chocolate bar with good quality and a “distinct experience to consumers”.

“We would use only fine-flavored cacaos, but opt for regular sugar and lecithin as opposed to cane sugar and no lecithin for our Plantagenschokolade line,” Jürgen Rausch, founder and CEO of Rausch

How does the business model of Rausch support local farmers?

Rausch works together with local governments, brokers, cooperatives and individual farmers in order to find ways how to develop growing regions further and how to support local farmers as well. The philosophy of Rausch is that farmers should be rewarded with a good salary if they work hard. Therefore they try to eliminate the “middleman” which means that there aren’t too many people involved to trade chocolate. In this way the income of local farmers can be higher than it would be in other chocolate companies.

“We also want to help the farmer have a better life by earning enough money so that he can enjoy and provide a future for himself and his family.” Rausch

Rising problems

“High quality raw materials, such as fine-flavored cocoa, are becoming very scarce,” Rausch said. “That’s why we have to do something for the future.” Rausch

Rausch is currently developing more processes of how to produce high quality chocolate more efficiently in the world and they are building new logistic centres to answer to rising demand of good chocolate. The future will be interesting …

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4 thoughts on “A bitter sweet chance – chocolate industry uses ethical business models (Introduction)

  1. Heey Sara! Really Enjoyed your blogpost! As I am a really big fan of chocolate I can only support this. My mother just sent me Kakao from El Cuador, its amazing! Its really worth the money and you can taste the difference to “normal” chocolate!! I am very curious about the rising problems Rausch and Co have to deal with. What do they plan for the future?? Maybe you can dig in deeper into this topic!

  2. Hey Julia, thanks for your comment. Yesterday I went again to this store and it is just amazing what you can see there. I hope to find out more interesting facts about this business 😉

  3. Hey sasommi,

    I must admit, I usually prefer the cheap supermarket chocolate over the special fair trade one. It hit me by quite surprise that in includes many dangerous chemicals, unlike Rausch.

    I thing that I missed in your post was to hear more experts in the chocolate industry. You wrote a lot about what Rausch says about their product, but what do other say about this? Moreover, what are the different business strategies in this field?

    You could read a short review on a business strategy blog, that wrote a post about chocolate:

    http://www.strategicsourceror.com/2012/11/chocolate-industry-taking-on.html

    I liked that your post is divided into sub-topics, gives a very clear structure, especially the many quotes that gives the post several of pauses. Because my writing topic coffee has a lot of connection, and similar strategies to the chocolate industry, i will be waiting to read your next post!

    well done. 🙂

  4. Thanks Itai for your advices 🙂
    I wasn’t sure whether to only focus on the company Rausch or already on other strategies. I think this post was more like an introduction to the business strategy of Rausch. Therefore I used more quotes about this company. I will take your advice for my next post in which I will try to focus more on business strategies in this field.

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