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Building a better chocolate bar

Beyond Good’s innovation has created a new business model in the chocolate industry

Building a better chocolate bar

Tim McCollum didn’t set out to reinvent the craft-chocolate value chain. He simply wanted to create a value-added product in Madagascar, an island country off the coast of East Africa, plagued by one of the world’s highest poverty rates. McCollum had spent two years there in the Peace Corps, he realized it wasn’t the export of raw materials (as is typical in Africa) that could bring money to the impoverished nation, but rather, implementing value-enhancing processes to an existing local commodity: chocolate. “We had no idea what we were getting into,” McCollum says of Beyond Good, the vertically integrated chocolate company he founded in 2008. “We had no consumer packaged-goods experience, no food experience—just commitment to the country and the mission.”

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That lack of experience proved to be an advantage: The Beyond Good team simply forged ahead without realizing the immense challenges of building a state-of-the-art chocolate factory in Madagascar. “A lot of entrepreneurs will say they had an ‘aha’ moment,” McCollum says. “But we’ve had about 10 of them. First, it was cracking the code on farmer poverty. Then, it was understanding that our product quality is superior to other chocolate on the market. And later, we realized we are also helping to preserve endangered wildlife habitats. And this was all through the same business model of manufacturing in Africa.”

This steady stream of innovation, as well as its success in the U.S. retail market, has earned Beyond Good a place among Fast Company’s list of the world’s Most Innovative Companies.

STREAMLINING THE SUPPLY CHAIN

To understand the uniqueness of Beyond Good’s business model, it’s worth considering how the chocolate supply chain typically works: A cocoa farmer, who makes 50 to 70 cents a day, sells his harvest to a collector. The raw material changes hands two to three more times before reaching an overseas chocolate maker, roughly 120 days later.

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At Beyond Good, by contrast, the cocoa farmer sells directly to the chocolate maker, earning nearly $4 a day and completing the farm-to-factory process in a single day. This ensures complete traceability throughout the supply chain—something close to impossible in the traditional multistage model.

BEYOND GOOD FOR THE ENVIRONMENT

As a result of the increased compensation, the 243 farmers who currently have direct relationships with Beyond Good have begun planting more cocoa trees, as well as shade trees that protect their precious crops from heat and water stresses. The outcome: By virtue of the 3,000-plus shade trees Beyond Good farmers have planted to date, the company is helping to reverse deforestation and protecting habitats for lemurs and other endangered species that are native to Madagascar. “Our lemur conservation was purely accidental,” McCollum says, “but it happened because we had the right farmer incentives in place.”

And then, of course, there’s the chocolate itself. Beyond Good’s products fall into the craft chocolate category, where bars typically retail for $10 or more. But thanks to a super-efficient supply chain and its close relationships with farmers, Beyond Good bars—which can be found on shelves at Whole Foods and specialty retailers across the U.S.—sell for just $4. “The cocoa in Madagascar is the earth’s original genetic variety—it doesn’t exist anywhere else,” McCollum says. “So the real breakthrough is that we’ve made this quality chocolate at an accessible price point.”

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