The Chocolate Life

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I rarely take a public position when it comes to chocolate companies, but a recent statement in a video brought me up short. Before I go on, I do have to say that what Rick and Mike - and everyone involved - have done is phenomenal. They were in the right place at the right time with the right product with the right ethos, capturing the cultural zeitgeist perfectly - guiding and riding it expertly.

But I have never been a huge fan of the chocolate they make, or more properly, their skills as chocolate makers. I don't mind vintaging in wine where the differences in a particular bottle occur from year to year. My issue with the Mast Brothers stems from the fact that I never know what I am going to get from batch to batch of what is ostensibly the same chocolate. If I find a decent bar and go back several weeks later to get another of the same, it will be different. Sometimes very different. And sometimes difficult to recognize as being the same chocolate. Yeah, I know, small batch variability and all that. When the Mast Brothers are on, they turn out good chocolate - but too often I am left wondering what all the fuss is about. I've even had bars with rancid nuts, purchased fresh from the factory store.

Going back to the video: At just after 3:00 minutes in, Rick claims that they've paid up to 10x the average price for commodity beans (and 3x-5x market price more generally).

Last Friday's spot closing price was $2352.94 per MT (metric ton, 1000kg), down from over $2800/MT in November, 2011. If what Rick is saying is true, then at some point in the last six months they paid between $23,000 and $28,000/MT for beans. 18 months ago, 10x market would have been nearly $40,000/MT.

Really? I'd like to see the paperwork supporting those claims.

If it's true, and the farmer actually received 10x market for their beans, then that's good news and I will be the first out the gate to let people know about it.

But - if it's not true - what are the implications and potential ramifications for the craft chocolate industry? Not just for the Mast Brothers, but for every craft chocolate maker who is trying hard to improve the lives and livelihoods of the cacao farmers they source from.

Your Thoughts?


Do some math. Is it possible to pay $25,000/MT for beans and make a 2.5 oz (71gr) bar of chocolate that can be sold (profitably) for $7?

At $25,000/MT raw, whole beans in multi–ton quantities cost about $11.35 per pound. By implication in the video, that money is paid to the farmer and therefore would not include customs, insurance, freight, and other costs, so the calculation understates the actual landed price of the beans and therefore the following cost basis is low.

Assume an 80% yield on those beans (i.e., every 100 lbs of beans yields 80 lbs of usable nib after roasting and winnowing - this is generous) raises the price per pound of nib to about $14.15. Assuming a 70% cocoa content chocolate, that means that the cost of just the cocoa nib component of a pound of chocolate is north of $9.90 - also assuming zero loss in the process of making the finished product.

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Mast Brothers do not use cocoa butter in their bars from their label and what they told me.

Thanks Thomas


After Lowe took a look at my back of the envelope math, I decided to do some more concrete modeling of the costs involved and created a spreadsheet on Google Docs for everyone to look at

The spreadsheet takes a slightly more sophisticated look at more of the costs associated with producing a chocolate bar, not just the price of the cocoa.

The goal was not to "prove" that I was "right" (okay, I did want to make sure I was not completely off) but to provide a basic template for a pricing tool that anyone who is making chocolate (or wants to make chocolate) can use to help figure out how various different costs affect the final (retail) sale price of a bar. I have also included a three-tier distribution scheme in the pricing (broker, distributor, retailer). Obviously not everyone is going to have these three tiers (especially in the beginning), but having the costs built into the model is extremely important, IMO.

Everyone who is interested should be able to download this spreadsheet and play with it and modify it as they need to.

It's not perfect, and I know it — so I am not asking people to critique it. It's still naive in the sense that it does not properly account for all costs, but at least it should give people an idea of relative contributions of various factors. Members are free to download, modify, and tinker to meet their needs.

Brad anyone might think my reply was a slight to your company and chocolate- and it wasn't. I have never tried your product, and I wasn't even comparing you Mast Brothers at all. I actually think most of their chocolates are grainy and inconsistent. That brings me back to the point of this whole conversation. Clay brought this up to make a point of the possible unrealistic claims they make as bean to bar producers, regarding their purchasing bean price. What I am saying is that this is a valuable conversation that must be had- not just because there needs to be more transparency in modern companies but also that if you are staking a big claim about potentially 'doing good for society' then your peers must not openly disagree. Secondly, and more personally, I truly want to look into bean to bar, and I want to know what other people think of what is a legitimate price to pay for good beans (and what is too high). In summary that is two reasons this conversation must be had. I'm glad It has been had


At first I took it as a jab, and started to write one of my tyrades, but then went back, read the thread in context to what you wrote and retyped my response.


Good thing.  I would have thoroughly embarrased myself.


I agree with you whole heartedly about transparency.  That's what my business is all about.


From a business perspective it's also a good thing to observe a company's practices surmise why they are doing something, and then read feedback from those who have tried their product and see a correlation between what they are doing and the reasons.  In this case, the locals don't like their chocolate, so they have to find other markets in order to move product.


Cheers and best wishes in your venture.




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