Cacao Oro

Abstract

In November 2018, John Warrington, CEO of Cacao Oro de Nicaragua, was about to share a recommendation that would surely change the company’s future. Over the last few weeks, John had engaged in analyzing the evolution of the company and the implications for its future. As a result, he felt the need to formulate a competitive strategy to guide the expansion in the next few years. He identified four market options: first, to focus on bulk cocoa, with commodity prices and high-volume transactions; second, to specialize in fine or flavor cocoa, with high price premiums and low-volume transactions; third, to focus on certified bulk cocoa, with small price premiums and high-volume transactions; and, finally, to develop a “mixed” strategy with a combination of the three previous options. A few years earlier, plans were underway to develop 10 000 ha of cocoa in Nicaragua to become the world’s largest cocoa producer. To start the venture, the first effort was to restore a 3000-ha farm in Rosita, a region on the Atlantic coast of Nicaragua, damaged by Hurricane Félix in 2008. In 2014, Cacao was born with restoration works to enable 2000 ha for cocoa cultivation. The first harvest in 2017 confirmed that the project was on the right track. And John thought that the time was ripe to reflect on the company’s future strategy. The Teaching Note to this article can be accessed at 10.6084/m9.figshare.23500566 .