Cacao Products ~Chocolate, Beauty and Wellness~ 5 th December, 2017 Dari K Co., Ltd. Dari K Co., Ltd. 1
Contents 1. Introduction of Dari K 2. Japan s trend of chocolate market 3. Qualifications of cacao which the market requires Dari K Co., Ltd. 2
Self-introduction Keiichi Yoshino Born in 1981 Studied at -Keio University (BA in Economics) -National University of Singapore (Exchange program) -Kyoto University (MA in Southeast Asian studies) -Oxford University (MSc in Social Policy) Previously worked at -Morgan Stanly Japan (M&A analyst) -Speedwell (Hedge-fund analyst) Dari K Co., Ltd. 3
Our journey started with just one map Dari K Co., Ltd. 4
Production volume in 2014 カカオ生産量 (2014 年度 ) 単位 : トン 出典 : 国際ココア機関 (ICCO) カカオ統計 2015/16 第 2 刊 Dari K Co., Ltd. 5
Origin of cocoa beans imported to Japan Dari K Co., Ltd. 6
Why Japan does not import cocoa beans from Indonesia? Standard production process Harvest cacao fruits Take the pulp out Fermentation Dry Fermented cacao beans Case in Indonesia Harvest cacao fruits Take the pulp out Dry Non-fermented cacao beans No fermentation Dari K Co., Ltd. 7
Opportunities in Business and Social aspect 1 Procurement of high quality cacao beans Business Opportunity 2 Improve the livelihood of cacao farmers Social Contribution Dari K Co., Ltd. 8
ls of thought on PM SP stakeholders Our Scheme Free planting material distribution model (lightly regulated) Farmer Dari K Customers Farmer organizations Farmer Yes Yes Private nurseries Options Broadly speaking there are two schools of thought on PM propagation and distribution among CSP stakeholders According to some stakeholders the most effective way to circulate high (er) quality PM is to stimulate (commercial) exchange of PM among farmers and organizations/nurseries, without enforcing the current licensing system. One could argue that this exchange happens a lot already. Farmers generally do not take into account the long term performance of genetic material. Training High Productivity No chemical residue Yes Fermentation Yes High& Stable quality Yes Perfect Traceability l rights reserved ls of thought on PM Planting material 69 distribution strongly SP stakeholders regulated by the government Hands-on training Free planting material distribution model (lightly regulated) Harvest Take out wet beans Centralized fermentation Free planting material distribution model Sun-dry (lightly on regulated) Sort special shelves dried beans Pack Store Trade Government regulates Farmer Collector Warehouse Trading company Customers Indonesian general Dari K Farmer organizations l rights reserved Farmer No No Private nurseries Private nurseries Low Productivity According to some stakeholders the most effective way to circulate high (er) quality PM is to stimulate (commercial) exchange of PM among farmers and organizations/nurseries, without enforcing Farmer the current licensing organizations system. One could argue that this exchange happens a lot already. Farmers generally do not take into account the long term performance of genetic material. Risk of chemical residue Farmer No Farmer This is the current (formal) system in Indonesia, whereby the government regulates quality across the system. A network of private nurseries is licensed to commercially distribute PM. 69 Take out Cultivation Informally farmers (and Harvest organizations) still exchange PM (with and without cash compensation). wet beans According to a majority of stakeholders central control in terms of quality needs to be preserved and more effectively enforced, Nonfermentation No Farmer organizations Low& Unstable quality Farmer Private nurseries According to some stakeholders the most effective way to circulate high (er) quality PM is to stimulate (commercial) exchange of PM among farmers and organizations/nurseries, Dry without on enforcing the ground the current licensing system. One could argue that this exchange happens a lot already. Farmers generally do not take into account the long term performance of genetic material. Dari K Co., Ltd. 9 No Traceability
International Cocoa Price since 2015 Nov 8 2016 2015 2016 2017 Dari K Co., Ltd. 10
Dari K s standard Environment Implementing agroforestry Organic farming *Including transition stage from chemical fertilizer to organic farming Humanity 3. No child labor and forced labor 4. No use of dangerous tool *No use of Hatchet Quality 5. Check on fermentation and technical assistance 6. Full traceability 7. Technical assistance by Dari K and our partners Dari K Co., Ltd. 11
Pricing policy Ordinary customs Base: International market price + Premium/Discount depending on beans quality Dari K s policy Base: 7 standards + Premium depending on beans quality Dari K Co., Ltd. 12
Quality l) Ordinary customs Dari K Application Non-application of 7 standards Application of Dari K 7 standards Undesired beans/ contents Up to 30% Less than 1% Fermentation Mostly unfermented Slaty, Purple color Acidic and astringent taste Poorly fermented Black, Partly purple Smoky/fforeign odors Fully fermented Brown Easy removable shell Nice aroma A light bitter taste Contamination Dry beans on grounds Use solar dryer (drying table) Dari K Co., Ltd. 13
Quality Ordinary Dari K USD3,000/ton USD3,750/ton +25% premium 20% are not usable 100% usable & high quality USD3,000/800kg USD3,750/ton USD3,750/ton Dari K Co., Ltd. 14
Difference between standard fair trade and Dari K Standard fair trade from consumers to producers : One way Producer Product Consumer Dari K s scheme Producers are creatively adding value to their own product to get high margin Producer Product Consumer Dari K Own standard Dari K s standard Dari K Co., Ltd. 15
Contribution to better livelihood to cocoa farmers Cacao bean price Productivity 140 120 +20% 1200 1000 800 +50% 100 600 80 400 200 60 0 Non-contracted farmes Dari K contracted farmers Non-contracted farmes Dari K contracted farmers Income No. of contracted farmers 2 +80% 1200 1.5 1000 800 1 600 0.5 400 0 Non-contracted farmes Dari K contracted farmers 200 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Dari K Co., Ltd. 16
Our Shops in Japan Dari K Co., Ltd. 17
Signature item: Handmade Fresh Chocolate Bronze Awards for C.C.C. at Salon du Chocolat Paris Dari K Co., Ltd. 18
Other cacao products Dari K Co., Ltd. 19
Award -Won Bronze Award for 3 consecutive years (2015, 2016 and 2017) at Salon du Chocolat by using ONLY Indonesian CACAO, the world s most prestigious chocolate fair held in Paris, France. -Roasted and exhibited the Philippines s cacao beans (Val Turtur& Toto Muyco) at the Salon du Chocolat in Oct-Nov 2017 Dari K Co., Ltd. 20
Media Exposure TV(more than 20 times since 2011) 2015 年 5 月 29 日ワールドビジネスサテライト ( テレビ東京 ) 2015 年 9 月 2 日 VOICE(MBS) 2016 年 2 月 11 日おはよう日本 (NHK) 2016 年 3 月 22 日ガイアの夜明け ( テレビ東京 ) 2016 年 11 月 14 日よーいドン ( 関西テレビ ) 2016 年 11 月 16 日ニュース 7(NHK) 2017 年 2 月 8 日あさイチ (NHK) Newspaper 日経 日経産業 朝日 読売 東京 毎日 産経 京都 The Japan Times Seputar Indonesia( インドネシア全国紙 ) Fajar( インドネシア地元紙 ) など Dari K Co., Ltd. 21
Contents 1. Introduction of Dari K 2. Japan s trend of chocolate market 3. Qualifications of cacao which the market requires Dari K Co., Ltd. 22
Market size of confectionery in Japan カテゴリ別菓子市場規模推移 ( 小売金額ベース ) 出典 : 全日本菓子協会 6,000 Chocolate 5,260 チョコレート Chocolate 5,000 和生菓子 Japanese 小売金額 億円 ) ( 4,000 3,000 2,000 洋生菓子 Cake スナック菓子 Snack ビスケット Busicuit 米菓 Rice confectionery 飴菓子 Candy 1,000 0 2011 年 2012 年 2013 年 2014 年 2015 年 2016 年 Chewing gum チューインガム Rice cracker せんべい Fried confectionery 油菓子 Retail market size of chocolate reached USD5bn! Dari K Co., Ltd. 23
Trends Worldwide Trend in the Chocolate Market Health & Wellness Bean To Bar Dari K Co., Ltd. 24
Health- &Wellness- conscious products High cacao % Less/ No sugar -use of maltitol Addition of healthy materials such as GABA, lactic acid bacteria Dari K Co., Ltd. 25
Emerging Bean to Bar brands in Japan Dari K Co., Ltd. 26
Advantage of Bean to Bar chocolate maker Chocolate Cacao products Dari K Co., Ltd. 27
Cacao Nib Chocolate Polyphenol-rich Cacao nibbles Dari K Co., Ltd. 28
Chocolate Lip bakm Excellent moisture retention effect from natural ingredients of Cacao Dari K Co., Ltd. 29
Cacao Tea Harmony of Japanese black tea from Wazuka, Kyoto and Cacao nibs Dari K Co., Ltd. 30
Honey Cacao New experience of changing into Chocolate in your mouth Dari K Co., Ltd. 31
Cacao Sake The very first sake with cacao flavor made in Kyoto Dari K Co., Ltd. 32
Contents 1. Introduction of Dari K 2. Japan s trend of chocolate market 3. Qualifications of cacao which the market requires Dari K Co., Ltd. 33
What markets want Qualifications of cacao which the market requires; Aroma & Taste Selection of clone, good seedlings Post harvest process Safety & Traceability Non-usage of chemical pesticide/fertilizer Usage of sleeve is highly recommended Dari K Co., Ltd. 34
Traceability System KIC contracted farmers 1Fermentation by KIC 2Centralized fermentation 3Fermentation by individual farmers Dari K Co., Ltd. 35
1. Dewo Nyoman Tir Commence Year Size (ha) # of cacao trees Other crops 2003 1 1,000 Corn Good Practice 1. Cultivating young trees 2. Having cows to use their dung as fertilizer Man on the picture is the son of Deqo Nyoman Tir Challenge No other crops at all layers Improvement Plan Advising them to crop bananas as shade trees and lemongrass and hot pepper as a cash crop To increase the amount of crops Teaching them how to graft trees Dari K Co., Ltd. 36
2. Indra Dulaso Commence Year Size (ha) # of cacao trees Other crops 2009 1 800 N/A Good Practice 1. Good pruning 2. Planting Gamal as teaching last time 3. Starting to make insect repellent and herbicide Challenge Improvement Plan Small number of shade trees as last time Advising them to continue increasing shade trees As the farm is on slope, top soil is swept away by rain Advising them to build terrace under cacao trees to avoid sweeping away Dari K Co., Ltd. 37
Contact Info Dari K Co., Ltd President & CEO Keiichi Yoshino +81-(0)70-6509-6456 Keiichi.Yoshino@dari-k.com Director, Shop Management Dept. Rei Ushikubo +81-(0)-70-1442-4680 rei.ushikubo@dari-k.com Address: 72-2, Shichiku Nishitakanawa-cho, Kita-ku, Kyoto 603-8205 Dari K Co., Ltd. 38