We at Xoco are committed to maintaining the highest ethical standard for all of our business practices. We take pride in the fact that we are benefiting many more than just our shareholders. Our model is directly oriented towards poverty reduction, rural community empowerment, and environmental restoration across Nicaragua, Guatemala and Honduras.

Poverty reduction In the cocoa industry, social responsibility starts with creating a sustainable business that creates enough value to benefit everyone up and down the value chain. That is exactly what we are doing. In fine cocoa, quality is everything. Consumers pay a premium price for the right quality. Reaching the very best quality is not easy, and requires vision and discipline on the part of Xoco and our outgrowers. Xoco guarantees a premium price to its outgrowers, well above what they earn for other crops, provided they complete strict but readily achievable quality standards. In the end, Xoco’s business model provides farmers an opportunity to create a niche product, whose price premium offers a ticket to break the poverty cycle, which is deeply entrenched across the Central American countryside. A Xoco farmer typically has 1-10 hectares of land. On some of it, the family grows rice, beans, corn and other basic crops, mostly for self-subsistence. On another part of the farm, some crops are grown for income. In the communities where Xoco trees are concentrated, the most common crops are low-altitude coffee, corn, beans, and plantains. Today, two hectares of low-altitude coffee provides between $500 and $750 a year for a farmer-family. The low prices of bulk coffee are not likely to change with the low-cost high volume competition from Vietnam and Brazil. In comparison, two hectares of fine cocoa, at peak production, is likely to generate $7,000 per year for the family, roughly 10 times as much. With bulk coffee and basic commodity crops, many Central American farmers survive on less than $1 per day, in extreme poverty. Under these conditions infant mortality is high, malnutrition is endemic and children have little access to education. Cultivating fine cocoa, the rural farmers can obtain incomes of over $3 per day per family member – the critical inflection point where the poverty cycle is broken.

Community Change Agent leadership training participants, Valle de Pantasma, Nicaragua

Community Empowerment Program Xoco works with the farmers and our employees on issues like workers’ rights, health, motivation and basic economics as part of our Corporate Social Responsibility program. A key element of our program has been our “Community Change Agent” (CCA) initiative. In this initiative, we work with selected youth from the local community. We provide them with a number of tools that can be used to have positive impact on their community. Inspired by the program created by US venture capitalist Tim Draper, Xoco adapted the Bizworld training module to rural communities in Central America. BizWorld teaches the basics of business, entrepreneurship, and money management and promotes teamwork and leadership in the classroom. In Xoco’s cocoa growing communities, the BizWorld program has proven enormously rewarding. The local students are talented and motivated, but often lack the basic training and self-confidence to step out of traditional patterns established in small communities, to create new projects. In addition to running the BizWorld curriculum, Xoco has adapted an additional leadership training module. The training module was originally developed by Danish youth-leadership guru, Nicolai Moltke-Leth. A former special forces soldier, come mountain climber, Paris-Dakar rally participant and much more, Nicolai’s mantra is that everyone can achieve their full potential by applying his or her will power. Xoco has adopted Nicolai’s courses, True North and SeedsTraining to its youth programming in rural Central America. The training module provides a framework for youth empowerment, encouraging young leaders to bring their own visions into realities for their communities.

BizWorld participants learned the basics of entrepreneurship with the Xoco team, Valle de Pantasma, Nicaragua

Xoco trees are often planted on deforested pasture formerly used for corn, beans and cattle grazing.

Environmental Restoration Cultivating fine cocoa is an excellent reforestation measure. Xoco works with cocoa farmers to establish plantations on formerly denigrated land used for cattle pasture and other field production. In addition to offsetting carbon emissions, the establishment of cocoa plantations rapidly improves the quality of the soil. The cocoa tree forest, combined with precious wood for permanent shade, creates its own balanced ecosystem, maintaining – and frequently restoring – wildlife corridors. Xoco processes are being certified with Rainforest Alliance. In the future, Xoco’s intends to collaborate with Rainforest Alliance to certify all of its outgrowers, once the plantations reach the eligible age.

Cocoa plantations, mixed with precious wood for permanent shade, form balanced ecosystems.