Business Model Innovation in Action: Beyond Good

Business Model Innovation in Action: Beyond Good

In the next part of our “Business Model” innovation series, we’re going to be spotlighting a prime example of an enterprise – Beyond Good – that embodies several of the key tenets of reimagined business models, including vertically integrated, supply chain conscious, and restorative.

Halloween snack, late-night treat, stress reliever, headache alleviator, kids’ delight, adults’ weakness, trail mix accoutrement, s’mores anchor, olive branch, last-minute gift, sparker of joy. 

Chocolate: that versatile, comforting confection we all know and love so well.  

It lines every supermarket in America and probably occupies space in nearly all of our cupboards. And yet behind this pervasive commodity is a murky supply chain and a quietly destructive industry. 

The state of the chocolate industry

​​The global chocolate market is roughly a $115 billion industry. And out of the 6 million tons of cocoa beans produced every year, nearly ⅔ comes from West Africa. Cocoa is often raised by hand on small, family-owned farms, and the average size of a cocoa farm in West Africa is 7 to 10 acres.

Approximately 400 cocoa beans are required to produce one pound of chocolate. On average, cocoa trees produce between 20 to 30 pods annually, with each pod containing 20 to 40 cocoa beans. This results in each cocoa tree generating between 400 and 1,200 cocoa beans per year, meaning that a cocoa tree can produce the equivalent of up to three pounds of chocolate each year.

While the lion’s share of cocoa hails from West Africa, chocolate bars are largely produced in Europe and beyond. For example, ofi, Cargill, and Barry Callebaut – all companies based in the Global North – control nearly 60% of the world's cocoa beans and supply cocoa to the biggest manufacturers (this concentration is one reason why so much of our chocolate tastes the same).

Separating West Africa from where chocolate is produced is roughly 5,000 miles and a crowded, inequitable supply chain bogged down by middlemen who walk away with an outsized share of the profits. Cocoa goes from farmers to collectors to exporters to importers to manufacturers and finally to retail brands, with the farmers often getting only measly sums, far from providing enough to support themselves and their families. 

In the West African nations of Ivory Coast and Ghana, many cocoa farmers earn less than $1/day. Because so many cocoa farmers live under the poverty line, they’re often forced to sell some of their land in order to make ends meet, including selling viable farmland to illegal gold miners. Meanwhile, children are subjected to forced labor, handling machetes and applying toxic agrichemicals rather than going to school. 

In addition to farmer poverty, chocolate production inflicts immense environmental harm. Traditionally, the industry clears rainforests to make room for cocoa, damages biodiversity in doing so, and contributes to climate change by emitting CO2. Rampant deforestation, soil deprivation, and pesticides have destroyed farmland. Not to mention, the above mentioned illegal mining leads to land degradation.

Further complicating the state of the industry is that extreme rain and crop diseases have seriously hindered cocoa production in West Africa recently, as The International Cocoa Organization estimates that global production could drop by around half a million tons this year, on the heels of an already tough two prior years. This trend is only likely to get worse with climate change, and it’s a prime reason why chocolate prices have been steadily increasing. Though it’s worth noting those high chocolate prices are not going back to benefit the farmers – they’re still getting small shares of those returns. 

Beyond Good – and beyond the chocolate status quo

Take everything we just outlined above -- and throw it out the window. That's what Beyond Good is doing. They’re not only a highly innovative company disrupting an entrenched industry, but an example of the “reimagined business model” we discussed in our earlier blog.

Beyond Good, formerly known as Madécasse, is a Brooklyn and Madagascar-based chocolate and vanilla company founded in 2008 by Tim McCollum on a simple premise to manufacture chocolate at the origin. Beyond Good is a portfolio company of Desert Bloom Food Ventures, a Third Nature Partners investment and strategic fund partner.

The company is on a mission to change the way consumers experience chocolate (and vanilla, but that’s another blog), deliver at least 5x the average income to cacao farmers, and protect habitat to endangered wildlife. They are committed to fighting climate change, preventing deforestation, and enhancing biodiversity, all while building a robust cocoa industry that emphasizes ethical and sustainable methods.

The linchpin behind all of this is that they’re doing something that no other mainstream chocolate brand has done: set up a factory in Madagascar near the farms themselves and train the farming communities on how to produce high-quality chocolate bars. By cutting most of the middlemen out of the equation and creating a vertically integrated business model, Beyond Good has radically simplified the chocolate supply chain, giving itself the autonomy to implement innovative business practices that prioritize financial, social, and environmental returns.

The benefits of this approach are numerous. By manufacturing its products directly at the source, this enables Beyond Good to retain more of the economic value within the Madagascar community. This approach contrasts with the typical practice of exporting raw materials to developed countries for the value-added stages of production. Local farmers now make more money. It also allows for greater farmer “traceability,” meaning consumers can actually know where their cocoa is coming from. And the company has greater control over product quality and can offer a truly unique flavor compared to most commodity chocolate. 

Additionally, by eliminating intermediaries, Beyond Good is able to implement progressive and restorative agroforestry practices. Because cacao trees need shade, Beyond Good works directly with farmers to plant fruit and other trees to create shade and improve soil health, which not only helps cocoa yield, it halts deforestation, boosts biodiversity, and protects endangered species, including the declining lemur population.

A new dawn for chocolate 

The future of chocolate doesn't have to be mired in exploitation and environmental degradation. Beyond Good is proving that with vision and business model innovation, an industry can be transformed. By manufacturing chocolate at the source and investing in local communities, they are not just making better chocolate—they are setting a new standard for ethical and sustainable business. As consumers, we hold the power to support this revolution with our choices. So, the next time you reach for a chocolate bar, consider the journey it took to get to your hands. After all, the sweetest treats are those that leave a better world in their wake.

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