Devoting nearly 30 years "hand in hand" to Vietnam cocoa industry, GRICHA SAFARIAN has developed a model of the complete supply chain for the country's cocoa.

 

 

On a beautiful sunny day of May in Ben Tre, in a green garden of cocoa trees whose canopies exceeding people's heads, the farmers are meticulously using scissors to cut the stem of the ripe palm-sized cocoa pods whose color is turning orange or red, and getting them carefully placed in the jute bags next to them. After that, they use the cocoa cutter to extract the white beans coated with their natural sticky pulp.


Normally, harvested wet cocoa beans will be on their way to be fermented and dried by the farmers in around 21 days before reaching the buyers. As for farmers who are Puratos Grand-Place Indochina 's purchasing partners, their role ends as soon as the wet beans bags are delivered to the company's Post Harvest Center located in Giao Long industrial park (Ben Tre). Here, cocoa beans will be fermented, dried, cut-test, roasted, ground and then transferred to its factory in Binh Duong which is 120km away, for the final steps to produce the finished products of chocolate.
The entire industrial-scale "from cocoa beans to chocolate" process only takes 60 days instead of the previous duration of six months to two years. That the traditional process takes so long is due to the cocoa-growing countries' shortcomings of technology forcing the companies to transport the raw beans to overseas factories for processing. The first achievement Puratos Grand-Place Indochina gained from a Vietnam-located complete supply chain is a button chocolate product named Chocolante 60DAYS Vietnam Dark 74% who made its debut in Japan in April 2021.

“The production from cocoa beans to chocolate in less than 60 days has brought about such a fresh and unique flavor which is not yet to be found in any other types of chocolate “I've tried.” chef Nagase Mayumi from Japan commented. Accordingly, the product not only has a strong cocoa flavor, but also gets a significant gain in its fruity notes, which uniquely characterize the Vietnamese chocolate. Ben Tre's cocoa beans were awarded the Fine Flavor certification by the International Cocoa Organization (ICCO) in 2016. Thanks to that, Vietnam became the second Asian country to achieve this title following Indonesia, with 40% cocoa production being recognized, while the ratio Indonesia achieved is only 1%.
“If I were to walk out of the gate and tell some stranger on the street that Vietnamese chocolate is one of the best in the world and the cocoa supply chain in your country was presented as a sustainable supply chain model at the World Bank, they would never believe me” amusingly said Mr. Gricha Safarian, Managing Director of Puratos Grand-Place Indochina cum Honorary Consul of Belgium in Vietnam.
The Belgian entrepreneur who knows "a little bit of" Vietnamese found it impossible to sit still for the first 30 minutes of the conversation with Forbes Vietnam discussing sustainable development. He constantly moved back and forth with a marker pen in his hand to write down important keywords on the see-through glass wall separating the meeting room with his desk area, where he handles the daily consular work.
At the age of 60, Gricha has committed more than half of his life to the cocoa industry. In 1985, he founded the Grand-Place chocolate brand in Belgium. By 1993, his random visit to Vietnam got him immediately to "fall in love" with the creative and hardworking people here. Six months later, he moved to Vietnam with his family. “There were only 10 Belgian people registering to live in Vietnam in the Embassy then, but half of them is my family” Gricha recalled.
In 2011, the founder of Grand-Place realized that if he wanted to take things to another level, the company needs a more abundant financial resource. That's when he met Puratos Group - a Belgian family bakery, patisserie and chocolate company whose history began in 1919, owning production bases in 50 countries globally. Puratos Grand-Place Indochina joint venture was established in 2012 with business shares of Grand-Place and Puratos is 30% and 70% respectively.

Now, the company has about 230 employees, operating 4 production facilities in Binh Duong, Ben Tre and Dak Lak with its capacity of approximately 14,120 tons per year. According to its own published data, Puratos Grand-Place Indochina holds around 65% of the chocolate market share in Viet Nam. “We have been providing ingredients for all bakeries in Vietnam,” said Ms. Phan Thi Phuong Thanh, the chocolate & cocoa product manager of Puratos Grand - Place Vietnam.
The cocoa supply chain originally offers the customers products with the flavor of sweetness. However, to Gricha Safarian, it's like "the worst place" which offers terribly low income drowning the farmers in deep poverty and aggravate the deforestation. According to Cocoa Barometer, the farmers only benefit 6.6% of the finished chocolate bar's value while at least 60% of their income depends on the cocoa plantation.
“If value is created by everyone, the benefits it brought must be the fair share to all” said the Belgian entrepreneur. In 2013, Gricha created the Cacao-Trace- a sustainable cocoa sourcing programme, a "from farmer to chocolate" cocoa development program. Accordingly, customers can trace the origin and quality of cocoa beans from finished chocolate batches via the QR code printed on the product packaging. Remarkably, for every kilogram of chocolate with Cacao-Trace certification sold, the farmers will receive a bonus of 10 cents. During the first year of pilot run, Puratos Grand-Place Indochina granted over US$136 thousand for 2,218 farmers and buyers in Vietnam. Beside Vietnam,this initiative is also applied by Puratos Group to both Ivory Coast and the Philippines.
In 2020, Gricha co-founded the Center for Disruptive Innovation to spread the idea of wet cocoa beans' procurement from farmers and build the post-harvest centers system around the world, and Vietnam is the first testing site. This idea was presented by him at the World Bank, with the view to fund-calling a $4.5billion-worth Green Bond package as well as getting the response from 50% of the cocoa supply chains globally. According to the Center for Disruptive Innovation's estimation, if got successfully capital-funded and implemented, the new production model can create 75,000 additional jobs for residents and raise the cocoa industry supply chain's value by an additional $17billion in the next ten years.
“Let's assume I keep everything unchanged and ask you - a link in the supply chain, to extract 20% of your income to help the farmers, you might find it disagreeable. But what if I increase the value of the supply chain to 50% and make a similar request?” Gricha asked. With him, value creation is the key point of the new model.
The new supply chain will turn the industry value distribution around. The farmer will “receive what is equally worth their effort” when the minimum purchase price of fresh cocoa beans will be set up based on the cost of living of the production country, instead of unlimitedly varied in accordance with the price in London's and New York's cocoa trade market, according to Ms. Phan Ai Cam Lai, the head of the strategy department of KAS Group Asia cum Co-Founder of the Center for Disruptive Innovation. The new model will also motivate the farmers to resort to agro-forestry practice, in which the land will be used multi-purposedly: such as intercropping perennials with short-term crops or cattle-breeding, thereby creating stability and higher income for the farmers. “Sustainability of the cocoa industry will depend on generating the carbon-neutral product. The manufacturing process must respect the interests of all involved parties including farmers, workers, consumers and the environment,” said Mr. Gricha.
Like many other non-essential goods manufacturing and trading companies, Puratos Grand-Place Indochina is experiencing a period of uncertainty due to the COVID-19. The pandemic that Gricha views as "the worst crisis ever in his career", has had a negative impact on the restaurants and hotels consuming channels of the company. Nevertheless, packaged products recorded an optimistic result when there is a rising customers' demand for food safety and hygiene. Catching up with the trend of online shopping, Puratos Grand-Place has promptly launched a selling website since mid-February 2020 and recorded around 57% sales growth from this channel only after one month. According to Mr. Gricha, the net revenue of business dropped 8% in 2020 while its average revenue of the last five years increased by 18%.

Sharing about future strategy, the CEO of Puratos Grand-Place Indochina has a plan to make Chocolante 60DAYS Vietnam Dark 74% a brand-representing product globally. However, with the current status of cocoa cultivation area's reduction in Vietnam, he expressed his concern that the production output would be affected. According to "The Overview of Cocoa Industry in Vietnam" by Dr. Nguyen Ngoc Thuy from Nong Lam University - HCMC, Vietnam is still a newly developed country in the global cocoa industry with a modest production output of 5,500 tons, compared to the world's production output of 4.8 million tons in 2019. Vietnam cocoa cultivation area has decreased from 25,700 ha in 2012 to 5,028 ha in year 2019, caused by volatile cocoa prices and the mostly small and sporadic nature of cultivation area, which makes it difficult to improve productivity and makes the cocoa's economic efficiency not attractive enough to the farmers. “We plan to develop our own cocoa cultivation area as well as cooperate with the government and international organizations to promote the cocoa supply chain in a sustainable direction,” said Mr. Gricha.

To Gricha Safarian, business is art, and vice versa. He believes, like the artist world, a successful business must own the creative thinking to stand out. "We are still a small business but managed to conquer the market by unique products and ideas.” he said. At the company, he created a Design Thinking department whose mission is to spread the Design Thinking working spirit with two core slogans, “Please don’t think” and “Please fail”. The employees are encouraged to think from the customers pain point instead of their own and forge the Dare to fail, Learn from failure before Success" way of thinking. Explaining his viewpoint that art is business, Gricha wittily pointed at the two Vietnamese maidens’ paintings of Nguyen Trung hung in his office, sharing that he bought them with approximately five thousand dollars, but they are worth over twenty thousand each now.

 

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