Fair Trade gambit: in realizing his dream, Joseph Whinney's chocolate factory in Seattle...

It's not every day that one sees the president of a company put on overalls and fire up a refurbished Barth roaster to start the day's cocoa bean processing. And although the quantities can't compare with those of larger cocoa bean processors in the United States and throughout the globe, Whinney remains unfazed about the company's output. He's living a dream.

Ever since Whinney became involved in sourcing organic cocoa beans from Central and South America in the 1990s--establishing

Being a pioneer back then--Whinney was the first to introduce organic cocoa beans to North America--it's not surprising that he's trailblazing once again: sourcing, roasting, processing and producing single-origin, Fair Trade-certified chocolate products.

In reflecting on his most recent effort, Theo Chocolates Co. in Seattle's Fremont neighborhood, Whinney simply sees a continuation of what captured his soul in the first place: cacao and the notion of a fair price for a fair day's work.

"Back in my early 20s, when I was 25 lbs. lighter, I had volunteered to work with a small conservation foundation in southern Belize," he explains. "We were looking at how communities, such as the Mayans, were cultivating indigenous crops, interacting with the environment. Well, I fell in love with cacao, with the crop, the plant."

But as many have found out, the allure of cacao often translates into a demanding relationship. In Whinney's case, his passion for cacao clashed with the social and economic degradation found amongst cacao bean farmers.

"It was obvious that farmers were facing increasingly oppressive conditions," he says. "From my perspective, this stemmed primarily from economic issues. I looked at establishing a market solution, essentially building a business to help farmers while improving environmental conditions."

In Whinney's thinking, by tapping into a market that valued environmental stewardship, one that appreciated the special value of cacao, the farmers would benefit economically.

As the annals of history continuously relate, being ahead of one's time usually requires an ample amount of perseverance. Whinney recalls the reaction when he set out to establish the business, querying 10 of the existing cocoa bean processors in the United States about sourcing organic cocoa beans.

"Only one responded," he says with a smile. And that came with a qualifier. "Essentially, if I could supply them with all the organic ingredients and then provide them with customers, they were interested."

Whinney was able to do so and gradually began to grow his business, financing it through growth equity.

"We were buying directly from the farmers," he says. As a result, OCP found itself sourcing and managing a supply chain.

"Our biggest challenge was finding a good quality supply of cocoa beans," Whinney continues "We spent a lot of money in developing new sources of supply."

Those investments didn't correlate to timely paybacks as beans secured before the harvest would take several months to process, sell and collect the revenues.

"There were definitely slow cash turns," he says. In 2001 equity financing was beginning to dry up just as the dot.com boom was coming to a close. As the company's equity line dried up, the company's operations also wound down, closing down in 2002.

Whinney's passion for cacao and the farmers, however, refused to wither away. It came to fruition when Whinney and interested Seattle investors decided to build a chocolate factory in 2004.

Thus, Theo Chocolate, named after the Theobroma tree, was born.

Conceived and financed in 2005, the company began producing its first Fair Trade-certified, single-origin and blended dark chocolate bars in March of this year. It also offers flavored bars and an exotic selection of truffles made with Fair-Trade chocolate.

But, as Whinney points out, Fair Trade certification (see Opening Shots on page 6 and visit www.fairtrade.org and www.transfairusa.org for more information) represents only one step.

"It [Fair Trade certification] is not a panacea," he explains. "It's not the complete answer, but it's a very good first step. We're raising consumer awareness. We feel that the consumer who buys a pair of shoes, milk or chocolate wants to know that the products are coming from suppliers that have social and environmental integrity. As we go forward, we expect to participate in other programs, collaborate with other industry players in developing ways to help cacao farmers stabilize."

He also points out that while he pays a fee for Fair Trade certification, as well as kosher and organic, it's more about finding the right kind of cacao bean.

"We're paying a premium for the bean, which is much more than any Fair Trade certification cost," Whinney says. "It doesn't matter what kind of certification you have. If the quality is not there, we won't buy it."

That said, the company's commitment to Fair Trade remains strong.

"Farmers who belong to Fair Trade co-ops have access to credit, social and educational benefits," he says. "It's not the end-all. Nevertheless, it does provide us with a point of differentiation. We want to educate consumers about what it means to be a socially responsible chocolate company.

"Consumers today are highly educated," Whinney continues. There's a real interest in exercising their own personal values in what they choose to buy. It gives them the opportunity to exercise those values by buying our products, which is good for us and for the producers."

And while it's really early in the game--the company recently finalized distribution agreements in the Northeast, Midwest, Northwest and Southwest--optimism abounds as does consumer interest.

"We exhibited at the Fancy Food show this past July in New York City and the response to our product and branding was overwhelming," says Debra Music, director of sales and marketing. "It was incredibly validating."

That validation comes from a grass-roots approach to brand building, one that began in the company's own back yard.

"The Northwest has an unbelievably progressive 'foodie' community," she points out. [Seattle] was absolutely the right place to do something like this."

As with all startups, the process of selling both a brand and a vision usually starts with knocking on doors, a host of retail, foodservice and wholesale doors.

"The Puget Consumer Co-op [PCC] was one of our first partners, and they were incredibly supportive," she says. "Whole Foods was also incredibly supportive."

With such notables in the fold, the acceptance rate grew rapidly, Music says. She also attributes such eagerness from retailers to Theo offering them the opportunity to actually come and visit the factory, thereby allowing buyers to see first-hand the roasting, milling, mixing, refining and conching process.

"As Joe [Whinney] says, it's all about the beans," Music points out. "People visiting our factory realized that we have a deep and profound respect for the processing of the beans."

And thanks to Whinney, who, while he's not busy roasting, fixing, selling, exhorting, inspecting, tasting and negotiating, taps into his former OCP contacts and sources the highest quality organic and Fair Trade beans.

For example, to produce the company's Ivory Coast 74% 3-oz. bar, the company uses single-origin cacao beans from the Coopaga Cooperative, which is know for growing beans that have a rich and intense flavor. Theo's Ghana 84% features beans from the fertile growing region known as Kumasi, whose beans are known for delivering slightly floral notes over golden and round chocolate flavors.

This fall, Theo will launch three new varieties in its Origin line: Venezuela 91%, a blend of Venezuelan cacao from the Berinas, Merida and Tachira areas; Ghana, Panama, Ecuador 75%, a blend of Fair Trade and organic beans that come from Ghana, the remote rainforest of Bocas del Toro, Panama, and Ecuadorian Arriba; and Madagascar 65%, a single-origin, organic dark chocolate that carries dynamic wine flavors.

Complementing the company's lineup of focused single-origin and blended dark chocolate bars are a line of 2-oz. flavored bars marketed under the 3400 Phinney brand. Available in Vanilla Milk Chocolate, Bread and Dark Chocolate, Nib Brittle Dark Chocolate, Coffee Dark Chocolate, Coconut Curry Milk Chocolate and Chai Milk Chocolate, the 3400 Phinney line is targeted toward a "younger demographic," says Music.

"It's whimsical and playful, and aims at children, as well as college students," she says. That whimsy certainly comes through in the packaging, which was designed by local artist Marta Windeisen. The 3400 Phinney illustrations reflect a quirky, cartoon-like style that connotes the line's adventurous side while Theo's packages have an almost mystical quality to them with expressive colors.

And that's exactly the way Music likes it.

"The packaging helps differentiate ourselves in branding," she says. "As you look at the premium chocolate category, most branding is very conservative, done in blacks, brown, gold and silver. We want to express the idea that we are innovators."

Additional evidence of that innovation can be seen in the company's line of truffles. Autumn Martin, Theo's head chocolatier and the person responsible for creating all of the 3400 Phinney brand varieties, has used her talents to come up with a wonderful lineup of intensely flavorful chocolates. The confectionery line, which comprises about 15% of the company's business, includes such offerings as mint, cardamom caramel and single-malt Scotch.

"I seek to develop inclusions that pair well with chocolate," she says. Take for instance the company's Bread & Chocolate variety in the 3400 Phinney line.

"I love to eat French bread with chocolate," Martin says. To parallel that experience, Martin combined organic toasted artisan bread crumbs tossed with butter and salt into chocolate. Transferring that combination into a moulding line can sometimes be challenging she admits, but after "lots of thinking, planning and experimenting," the bars deliver the same taste as they did in the kitchen, she says.

But it's not only flavor delivery that Martin seeks to provide consumers. Rather, it's a connection.

"A special focus of ours is to source produce and nuts locally," she explains. "I try to make a personal connection with suppliers."

This past summer Martin worked on a local organic farm every Saturday "hoeing, weeding and harvesting."

"I wanted to appreciate the agricultural side of chocolate, where the ingredients come from. I've gained so much respect for the organic food industry. I feel it's important to establish a strong relationship where food is coming from."

To that end, she looks to travel to Mexico this winter, Oaxaca specifically, the birthplace of mole.

"We're making a conscious effort to inform consumers about where chocolate and other ingredients come from. Too often there's a disconnect about eating and where food comes from.

"I look at chocolate as a carrier of a message," she continues. "I want to teach people about chocolate, its potential, its benefits."

Theo, of course, is in a perfect position to do so because it offers twice daily tours of the plant, where locals and tourists can see first hand the roasting process.

"We charge $5 per person and give them an overview of cacao, its history, where it grows, and the processing involved," says Pamela Hinckley, marketing and retail director. "And yes, we give out plenty of samples."

The tour begins at the Buhler destoner, which is housed in a separate room separated by glass doors and windows from the other processing areas. Here, sacks of cacao beans are placed on a lift truck and then fed to the destoner to clean them before pre-roasting.

Once cleaned, the beans are placed in yellow tubs and moved to the roasting room. Interestingly, all of the processing equipment in the plant, excluding the roaster, is painted in bright yellow and green colors.

"Most chocolate processing equipment that I've seen is painted in a cream color," explains Whinney. We thought about painting the equipment using cocoa colors of brown and red, "he says. "With our red brick walls, we felt the equipment would get lost. So we painted them yellow and green, with yellow denoting movement and green indicating that's something is happening. It provides people touting the plant great visual cues."

As for the roaster, Whinney says they just couldn't find a high-temperature green paint that matched.

Unlike many smaller operators, Theo does a pre-roast of the beans and roasts the nibs. Once a 60-kilo batch of beans are pre-roasted--time and temperature varies, depending upon the bean, but an average pre-roast lasts 10 minutes-they are fed to the adjacent winnower.

After winnowing, the nibs are roasted for about 6-15 minutes, temperature again ranging upon the bean.

"Unlike coffee, there's no light, medium or dark roast," Whinney explains. "You roast to develop flavor. As a result, we roast to our own taste, coaxing the flavor out of the bean. Getting that expectation to match up with the roaster was quite a bit of a dance. But I wasn't shy to experiment with temperatures. You can taste the flavor changing as you roast. But once you pass the peak flavor point, the quality begins to drop. As a result, I taste every roast."

Luckily, Whinney admits he has a good palette for discerning subtle flavor differences. He and Martin are the company's primary tasters, although everyone who works at Theo has input.

After roasting, the nibs are fed into a Koruma stone mill and then Ladco ball mill. The milling process reduces the size of the cocoa solids to 12-14 microns. Again, Whinney choose the stone and ball mill route as opposed to using a melanger and conche refiners because of the ability to get such a finite particle size. The finer particle size contributes to flavor development and textural smoothness.

After milling, the cocoa liquor is pumped into a Bauermeister mixer. There, organic cane sugar, and if producing milk chocolate, local organic milk powder, are added. Theo uses organic cane sugar for the 3400 Phinney products and organic Swedish beet sugar for the Theo line.

The chocolate is then pumped to a Bauermeister five-roll refiner, which reduces the particle size of the sugar. From there, the batch flows to the one of two Petzboldt conches.

Conching time varies, says Whinney, depending upon the bean's origins.

From there, the chocolate is pumped into one of three holding tanks.

When producing bars, the chocolate will flow to a Sollich tempering unit and subsequently into a moulding line. The bars travel through a three-zone cooling tunnel for about six minutes before being hand packed onto trays for overnight ambient cooling. The bars are then feed into a wrapper, which usually runs at 60 bars a minute.

The company's line of truffles, 16 flavors total, are enrobed on the same moulding line, with the truffles also unloaded by hand and then packed into six- or 15-piece boxes. The company also does a two-piece box as a wedding favor and many other custom pieces.

The tour then ends with further sampling in the company's retail showroom. Whinney believes strongly in using the plant tours as a way of fostering a relationship between the company and consumer.

"One of the trends we see is that consumers appreciate local food," he says. There's interest in local products, consumers feel closer to where the food is coming from."

It did take some time and money, however, to renovate the building and install the equipment so that the tours could take place. Housed in a former Red Hook brewery, the Theo plant encompasses 25,000 square feet, with 18,000 devoted to production and office needs.

To date, the company has spent under $3 million in equipment, building and staffing needs. Whinney sees that investment total growing as sales ratchet up and production demands increase. He's already committed to a new moulding line to be installed this fall.

"Dollar-wise, we're pretty much on target where we wanted be," Whinney says. "Our same store sales are higher than expected, but getting distribution took longer than I thought, about two to three months longer."

The recently signed distribution agreements should push production demands up significantly, challenging Whinney and his crew to match the pace.

Acknowledging that Theo isn't the only premium chocolate brand out on the market, Whinney doesn't feel threatened by the competition or the number of choices consumers face.

"The best analogy I can give is that of a wine shop," he says. "There are many different vintners in a wine shop, far more than there chocolate manufacturers in the candy aisle. A robust category is more attractive to consumers.

"Cacao needs to be treated as a specialty agricultural crop, not a commodity," he adds. "Consumers need to understand what makes it special. The demand for premium chocolate products is definitely on the increase; consumers are trying new brands, new flavors, different cocoa contents. As a result, I'd rather have our products compete in a larger category that's growing than to be the only candy product on the self."

But it's not just about competing. For Whinney and the Theo team, there's also a strong desire to connect to the consumer.

Part of the reason for having a tour of the plant, which Whinney would like to expand in the near future, is consumer education.

"One of our key goals is providing a dynamic interface with consumers and customers. We want to tell the story of the beans, and the farmers who grow them."

Count on Theo telling a good story.