From beans to bars: Keeping cocoa’s value in West Africa
With the right investment, West Africa’s cocoa industry can turn raw exports into shared prosperity.
- Blog
- Sustainable agriculture
- West Africa
If you could choose between selling one pound of cocoa beans for $1 or selling a chocolate bar made from less than a quarter-pound of cocoa beans for $5, it makes sense to choose the latter. But answering what it takes to turn those cocoa beans into a chocolate bar is far more complex. Many cocoa-producing countries want to capture more value created along the chocolate supply chain. In West Africa in particular, several national governments have set goals to expand in-country cocoa processing to strengthen their economies, create jobs, and improve the lives of cocoa farmers. They view the private sector as a key driver of this opportunity, bringing capital, innovation, and expertise to the table.
To expand in-country processing, companies in West Africa need the infrastructure, equipment, technical knowledge, and a steady supply of raw material. But to scale, they need much more of the right blend of grants, equity, and working capital.
That’s why Acumen has invested in two cocoa companies operating in West Africa: Lizard Earth in Sierra Leone and Loom Craft Chocolate (Loom) in Nigeria.
- Lizard Earth trains farmers on improved agronomy and purchases cocoa from farmers at harvest. The company is now building the capacity and infrastructure to move downstream — processing beans into cocoa nibs, and eventually into chocolate bars.
- Loom produces and sells milk and dark chocolate products in Nigerian markets, with plans to expand operations upstream by training and sourcing from cocoa farmers across the country in states such as Osun and Akwa Ibom.
Beyond Acumen’s portfolio, other companies such as fairafric in Ghana and Verse Chocolate in Côte d’Ivoire are also adding significant value to local economies, creating jobs, and helping diversify the agricultural sector.
The untapped potential of West Africa’s cocoa
West Africa is home to the world’s major cocoa-producing countries, four of which grow 70% of global supply: Côte d’Ivoire, Ghana, Nigeria, and Cameroon. These countries primarily export raw cocoa beans rather than processed products, for several reasons:
- Historical context: During the colonial era, European powers established export-based economies in West Africa, extracting raw materials such as cocoa and shipping them to Europe for processing. This legacy persists, as the economic systems in these countries remain geared toward raw commodity exports.
- Business environment: The global cocoa trade is dominated by multinational companies that capture most of the margin from value-added products like chocolate, creating a hyper-competitive environment for early-stage companies. Meanwhile, manufacturers of chocolate-processing equipment are concentrated in Switzerland, Italy, Germany, and India, making installation and maintenance costly. Efforts to increase domestic processing have also lagged due to limited support for local industries and unreliable electricity supply.
- Relatively low local demand, high global demand: Chocolate is still seen as a luxury product in West Africa, where demand remains relatively small. By contrast, Europe imports and consumes the majority of cocoa, with 70% of global supply flowing through the continent.
Despite the challenges, governments across West Africa recognize cocoa’s importance and the untapped potential of the value chain. The governments of Ghana, Côte d’Ivoire, Sierra Leone, and Nigeria have all committed to increasing local processing capacity — and each has emphasized the critical role of the private sector.
- Ghana increased the amount of cocoa processed in the country from 30% to 34% in 2023, with a goal of reaching 50% by 2024.
- Nigeria aims to raise in-country cocoa processing by 40% over the next two years.
- Côte d’Ivoire has pledged to attract private investment to reach 50% local processing by 2025.
“If 50% of our cocoa were processed locally, it could create thousands of jobs, increase farmers’ incomes, and reduce poverty.”
Jean Paul Aka, Team Leader for Environment, Sustainable and Inclusive Development at UNDP, in Ivory Coast
There is a clear appetite and market opportunity to keep more of the cocoa supply chain value within producing countries. But to do so, companies need better infrastructure, reliable equipment, stronger technical knowledge, and a steady supply of raw material to capture that value.
Building and running a chocolate factory in West Africa
Accessing equipment and building technical expertise
Running a cocoa processing factory is technically demanding. The process involves several stages – sorting, roasting, cracking, winnowing, and refining. Beans are then transformed into cocoa butter or powder, or combined with milk and sugar to produce chocolate. For example, during refining, which can take up to 48 hours, cocoa nibs are ground into a liquid state in a machine called a melanger. Once milk and sugar are added, the chocolate must reach the right consistency and texture – smooth and fully blended – before being cooled and gently reheated to the ideal temperature.
Loom’s founder and CEO, Uzoamaka Igweike, first explored chocolate-making through a home baking business. It then took Loom another three years to adapt that knowledge into a commercial production facility. Building and running a functioning chocolate factory requires the right equipment, technical support, and significant capital.
As Loom’s first institutional investor, Acumen’s investment is helping the company access the specialized equipment needed for production. Loom also plans to hire additional chocolate makers and provide specialized training programs in chocolate production, food safety, and quality control. By building its factory and training cocoa farmers, Loom can help farmers produce higher-quality cocoa while guaranteeing them market access — resulting in more stable and resilient livelihoods for smallholder communities.
Keeping chocolate cool and moving
Once chocolate is made, it needs to move. But no one wants to buy a melted bar. Efficient transportation, storage, and distribution networks are essential to ensure the raw cocoa beans reach factories on time and finished products are exported in good condition. Improved logistics not only keep chocolate intact but also provide farmers with a consistent and reliable source of income.
Fairafric, a Ghana-based chocolate company, exports its bars in refrigerated containers at 16℃ and 60% humidity. But as CEO Hendrik Reimers notes, one key to success is making sure the company can regularly fill containers at the docks. “Without enough goods and half-full containers, it costs more in shipping fees than the monetary value of the goods inside the container.”
Ensuring a steady supply
On-shoring cocoa processing is costly, so sufficient supply is critical to justify the investment. Yet over the past few years, global supply has plummeted. To strengthen supply, Lizard Earth distributes seedlings to farmers and trains them in improved agronomy. Back in 2020, the company began helping farmers replace aging cocoa trees, an investment that paid off when climate change drove global shortages in 2023. According to a recent study by impact measurement firm 60 Decibels, 79% of farmers reported improvements in their farms, with most citing increased fruit production and healthier leaf growth.
While companies must also ensure that markets can absorb their output, the benefits of value-add processing start at the farm level. When smallholder farmers capture more value, they not only increase incomes but also gain greater resilience against market shocks and climate pressures. This foundation enables more secure and sustainable livelihoods.
Financing the future of cocoa
One of the biggest barriers preventing companies in West Africa from retaining value in the cocoa supply chain is access to financing. While progress has been made over the past decade, long-term, affordable financing at the scale needed to build industry infrastructure is still lacking.
1. Unlock the right kind of capital
Cocoa processing requires a range of capital, including grants, equity, and working capital. Grants can fund critical Technical Assistance. Equity is best used for capital expenditures, like building or upgrading a processing facility and recruiting the right talent. Working capital enables companies to pay farmers on time, fulfill purchase orders from buyers, and generally navigate the ups and downs of highly seasonal cash flows.
But for a cocoa processing factory, working capital needs are high and local capital facilities are often too expensive. Based on Acumen’s experience in Nigeria, interest rates can reach 30%. For early-stage companies, that makes exporting raw beans to international processors cheaper than processing locally. Working capital providers like Rabo Foundation, Oikocredit, and Root Capital are trying to close this gap, highlighting the need for philanthropy and impact investment.
And the problem doesn’t stop as the company grows. Scott Walker, founder of Verse Chocolate, estimates that a processing factory with a 50-70K ton capacity would need $400 to $500 million in annual working capital alone. Large commercial banks often charge interest rates of 15-17%, which can eat into already slim margins and squeeze companies to pay farmers less.
2. Right-size the capital to the stage of growth
In order for companies to progress through different stages of growth, they need access to the right funders who can provide both the right size and type of capital. Philanthropic funders and impact investors play a critical role by offering grants and Patient Capital that de-risk additional investment. This type of funding allows companies to iterate on their product and operations.
Acumen’s early-stage agricultural initiative, Trellis, for example, provides the first institutional investment into companies. But Trellis and other pre-seed equity investors are unlikely to also provide the $4 million equity facility the company will likely need later down the line as it scales. Our later stage blended finance facility, the Acumen Resilient Agriculture Fund (ARAF), seeks to provide larger tickets for supercharged growth.
While Acumen is yet to progress a chocolate company from our early-stage investing to our later stage facilities, we have begun operating on a capital continuum theory that is designed to more intentionally move companies effectively across stages of growth. Acumen can’t and won’t do it all. Partnerships across key stages of the capital continuum, that create more seamless handoffs between early, middle, and late stage investors, are critical.
Over the past 10 years, Acumen has invested in six cocoa enterprises across East Africa, West Africa, and Latin America, backing companies like Loom and Lizard Earth that are pioneering in-country value-add processing. We know that with the right blend of capital, equipment, and expertise, West African companies can move up the value chain and smallholder farmers can share more equitability in the benefits. Governments, philanthropic funders, and investors can build the financial and technical infrastructure needed to transform cocoa from a commodity crop into a driver of inclusive growth across the region.
Conclusion
Retaining more value from cocoa in West Africa will require more than ambition. It demands the right blend of capital, technical expertise, and collaboration across governments, investors, and entrepreneurs. With patient, well-structured investment and strong local partnerships, the region’s cocoa sector can move beyond raw exports to build inclusive industries that benefit farmers, workers, and communities. When cocoa’s value stays closer to where it’s grown, farmers earn more, communities thrive, and economies grow stronger.
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