Agribusiness giant Cargill is partnering with AeroFarms, an indoor vertical farming company, with the goal of improving cocoa bean yields and developing more climate-resilient farming practices.
The multiyear collaboration will allow each company to tap into its areas of expertise, with AeroFarms providing its insight in controlled environment agriculture and Cargill sharing its knowledge of cocoa agronomy and production practices, the companies said.
Together, Cargill and AeroFarms will experiment with indoor growing technologies such as aeroponics and hydroponics, as well as light, carbon dioxide, irrigation, nutrition, plant space and pruning to identify the optimal conditions for cocoa tree growth. The goal is to gain insight that could lead to faster tree growth and greater yields, accelerate the development of varieties with better pest and disease resistance, and improve the cocoa bean’s flavor and color.
"We as a company don't have all that knowledge," said Niels Boetje, managing director of Cargill Cocoa Europe. "Cocoa demand is continuing to grow, and therefore for us to find new ways of increasing the productivity is important."
The cocoa and chocolate market is projected to surpass $67 billion by 2025, according to a 2020 report from Fortune Business Insights. In addition, consumers are placing more importance on sustainability efforts and traceability when it comes to determining what products to buy. In many cases, they are willing to pay a premium for those offerings.
Chocolate makers such as Hershey, Mars, Nestlé and Mondelēz have tried to make internal changes to respond to environmental and economic issues involved in cocoa production.
In 2018, Hershey announced a $500 million investment in cocoa sustainability strategies in Ghana and Ivory Coast. And Mars, which has committed to a 100% sustainable supply chain, has partnered with agricultural analytics company Nature Source Improved Plants to expedite the development of new cacao varieties with greater yields, better disease resistance and higher quality.
Chocolate ingredient supplier Barry Callebaut has vowed to eradicate child labor from its supply chain; lift half a million cocoa farmers out of poverty; become carbon and forest positive; and provide 100% sustainable ingredients by 2025. And Olam announced it achieved 100% traceability last year for the cocoa it sources thanks to new technology.
David Rosenberg, co-founder and CEO of AeroFarms, said while this will be his company's first foray into trees, it has worked with more than 550 different crops that it can use for insight in working with cocoa. He said the advantage of using vertical farming is that it removes uncontrolled variables that can appear when a crop is grown outdoors or in a greenhouse, allowing researchers to have more control over the conditions under which the plant is grown and the eventual outcome on its genetics.
Rosenberg and Boetje declined to comment on the finances of the new agreement or if Cargill is making any investment in AeroFarms. The two companies are no strangers to each other, having previously worked together on another plant that hasn't been publicly announced.
The companies have begun work with the cocoa tree at AeroFarms' global headquarters in New Jersey, with plans to expand it to the company's new indoor vertical farm in Abu Dhabi scheduled to open in 2022. The executives said it will take about 18 months to collect information needed to conduct more detailed experiments. Boetje said the companies could decide to further expand their partnership.
"We're continually looking at like, new opportunities to work together," he said.
AeroFarms was founded in 2004, and for much of its existence it has been largely known for greens like arugula, kale and broccoli sold in stores. But it sees its impact on agriculture as extending beyond just the store shelf to contributions it can make to crops like cocoa to help them grow more efficiently while benefiting the producers who raise them.
"I didn't start out, found the company to just be a leafy green company," said Rosenberg. "I founded it to really be a company ... to really help transform or evolve agriculture. And what I've come to realize is our biggest contribution is just probably understanding what makes plants grow."
Cocoa production, the majority of which comes from Ivory Coast and Ghana in West Africa, has long been dogged by environmental concerns and allegations that companies depend on child labor but have not done enough to eradicate it from their supply chains. Nestlé and Cargill were sued by six former child slaves who claimed the companies were complicit in contributing to slavery at cocoa farms in Ivory Coast. The U.S. Supreme Court threw out the lawsuit in June.
Boetje said Cargill, which bills itself as one of the largest cocoa and chocolate suppliers, has vowed to do more to create a more resilient and sustainable supply chain for these ingredients. "With this project, we really hope to bring that new insight, new knowledge in order to fulfill that promise that we have," he said.