In recognition of National Chocolate Day, celebrated in the U.S. on October 28, we are sharing the story of Cooperativa Agraria Sonomoro Del Vraem Ltda (COAS), a Peruvian cacao cooperative that produces and exports a wide variety of chocolate products, including cocoa powder and chocolate bars, from the cacao pods harvested by its farmer members. Root Capital's work with Peruvian cacao producers, like COAS, is possible thanks to the generous support of the Trafigura Foundation.
A Root Capital client since 2021, the COAS cooperative is in the city of Pangoa, on the eastern side of the tropical Andes, within the region of Junín. Originally inhabited by the indigenous Asháninka people more than 3,500 years ago, the region is one of the main production zones for cacao in Peru. Cacao cultivation can be temperamental, but the unique climate and geography of Junín—which boasts uniform temperatures, high humidity, intense rainy seasons, and nitrogen-rich soil—make it ideal for growing cacao.
Formally known as the Asociación de Productores Agrarios de Naylamp de Sonomoro (APANS), the organic agricultural enterprise was founded in 2002 and originally cultivated citrus fruits. Now a cooperative, COAS focuses almost exclusively on cacao cultivation, including collecting, processing, and marketing dry cocoa beans. The cooperative has 501 active members (28% of whom are women), a total of 1,389 hectares in production, and three warehouses across the Junín region.
A Challenging Year for Cacao in Peru
The Peruvian cocoa market has suffered considerable market volatility this year due to the “Coastal El Niño” weather pattern, which caused torrential rains, landslides, mudslides, and the widespread flooding of thousands of hectares of farmland. These weather events destroyed homes and roads, and displaced tens of thousands of residents. In Junín, the “Coastal El Niño” phenomenon also contributed to the spread of debilitating diseases, such as dengue.
Cacao production in Peru continues to suffer due to the prevalence of pests such as the cocoa pod borer, which creates external damage to the cocoa pod and leads to premature or uneven ripening. Additionally, cacao farmers have had to adopt cost-increasing measures and adjust their agricultural practices during the harvest season to respond to increasing global concern about cadmium levels in chocolate.
Partnering with Root Capital
COAS began its partnership with Root Capital as an advisory services client, receiving tailored training that helped the cooperative strengthen its business management capacity, financial management processes, and overall strategic governance. Cacao production in Junin is particularly vulnerable to rising temperatures and the effects of climate change; therefore, our agronomic advisory services have centered on bolstering COAS’s climate resilience preparedness at a technical level. This agronomic support has included workshops analyzing the cooperative’s vulnerability to climate change, as well as advising the cooperative on the transition to using biofertilizers to improve cacao growth and yield.
Our advisory services prepared COAS operationally to begin receiving financing in 2022, so that the cooperative could expand the purchase and sale of cocoa from its cacao farmer members.
Since 2022, Root Capital has loaned a total of $350,000 in general working capital to the cooperative. This financing has allowed COAS to go from selling 800 metric tons of cocoa in 2021 to 1,200 metric tons in 2023. The increase in sales has improved farmer livelihoods in the region as the smallholder farmers who cultivate cacao for COAS have begun receiving higher prices for their crop.
A Gender-Forward Approach
During a Gender Equity Workshop held in late 2022, women cooperative members noted a lack of economic resources and access to land as barriers to women farmers’ success in Peru. Members also mentioned the inequitable distribution of responsibilities at home, which disproportionately fall on women, taking time away from production.
Earlier this year, the cooperative expanded its gender equity diagnostic work –with nearly half of their advisory workshops focused on gender issues. COAS is making great strides in improving women employees’ leadership opportunities within the cooperative by establishing more inclusive policies. In fact, a 2022 Gender Gap Analysis found that women actually held more responsibility in COAS’s production processes than previously thought; Root Capital’s advisors noted that the majority of employees in the accounting and quality control departments were women. The increased inclusion of women in the cooperative’s processes allows for a greater understanding of gender issues among cooperative members. This critical self-reflection allows the cooperative to take a hard look at cross-cutting issues like climate resilience and business management through a gender equity lens.
COAS’s success would not be possible without steadfast support from partners like the Trafigura Foundation and Root Capital. Despite being a relatively new client, COAS has demonstrated remarkable sustained growth over a short period of time. This growth has ultimately benefited the smallholder cacao farmers and cooperative members in Junín, as well as the local Asháninka community.
About the Author
Tess Fisher is the Content Development Associate at Root Capital.