By Bernie Pacyniak
A leader in organic and certified chocolates, the Agostoni family commits to the future by investing in a state-of-the-art €50-million facility in Orsenigo, Italy.
Call him a “numbers” man. Adello Crippa doesn’t shy away from the label. Rather, he embraces it. In fact, there’s not much the general manager and chief financial officer of ICAM shies away from.
And that’s probably the reason that the Agostoni family brought Crippa in to oversee their growing organic chocolate operations in 1999. Recognizing that the family’s expertise in sourcing and producing premium chocolates wasn’t a guarantee for success during the coming century of extreme competition and ongoing industry consolidation, co-founder Carolina (Vanini) Agostoni, along with her brothers Urbano and CianCarlo Vanini as well as her children, Angelo, Plinio, Marisa and Antonio, looked beyond the family to direct the business.
Upon joining ICAM, Crippa, together with the Agostonis, have overseen dramatic changes within the company. At the end of the year 2000, the company posted €40 million in sales. Of that, €5 million (12.5%) represented exports, the remaining €35 million domestic sales.
Today, thanks to strong double-digit sales growth abroad, primarily in the organic sector, export sales account for more than half (60%) of the company’s projected 2010 sales of €100 million euros ($135 million).
In 2009, the company processed nearly 11,000 metric tons of cocoa beans and produced 11,700 metric tons of chocolate. Organic represented 45% and 53%, respectively of those totals. And although ICAM - like most companies during the Great Recession - suffered a dip in sales in 2009, all forecasts point to a robust 2010 and an even better 2011. One of the reasons for that projection stems from a decision made five years ago by the Agostonis.
As Crippa recalls, he didn’t mince words in presenting the options available to the family stakeholders. In reviewing the numbers and the realities facing the company, Crippa asked the Agostonis what they wanted to do with the company, “Do you want to grow it or do you simply want ‘La dolce morte?’” In other words, “a sweet death.” As he explained, it would have been very easy for everyone to simply let things continue as they were, guaranteeing a comfortable existence for all family members. Growth, however, required an aggressive plan, one that would put into place people, systems and infrastructures to meet the challenges from multinational corporations and more demanding consumers and customers.
Having nurtured a fledgling family business since 1946, one that’s evolved into the largest supplier of organic cocoa and chocolate products in the world, the Agostoni family’s passion for chocolate makes it their life’s work.
It’s likely Crippa suspected that the family stakeholders would pass on the “sweet death” option, preferring instead to develop a long-term strategic plan, one designed to address a multitude of issues facing a midsized family operation.
In creating such a plan, the Agostonis zeroed in on four critical concerns: operations, succession, systems and market growth.
First, they agreed to build a world-class, state-of-the-art greenfield processing facility that would, as Angelo Agostoni, president of ICAM and the eldest second-generation family member describes, “be prepared for the future for next 20, 30 years.”
Two years ago, the company began designing the plant, breaking ground in 2009. In April 2010, the company began producing dark chocolate at the Orsenigo facility, a €50 million ($67 million) investment that touts the largest cocoa bean processing system under one roof.
Several innovations, such as a segregated cocoa bean warehouse that pumps beans to a sterilization unit prior to processing, a trigeneration energy system, a highly sophisticated computerized monitoring system, have established Orsenigo as a technological marvel.
And while Orsenigo represents an operational component of the strategy, the other three elements - while less tangible - comprise key tactical efforts to meet the family’s goal of becoming a €200-million ($270 million) company within five years.
Take succession, for example, often one of the hardest issues for family-run companies to tackle. As Angelo points out, since the family controls all the company shares, it’s vital that the next generation be prepared to carry on the Agostoni philosophy of sourcing and producing only the best premium chocolate.
Tagging a self-imposed 10-year deadline on completing the transition, the Agostonis have already established two third-generation family members in critical management positions: Sara Agostoni (Angelo’s daughter) heads up all purchasing, excluding cocoa beans while Giovanni Agostoni (Plinio’s son) oversees commercial operations in Italy. But as Angelo emphasizes, both of them started their professional careers elsewhere before joining ICAM. In this manner, best practices from other industries and companies can be integrated into ICAM.
At the same time, once a member of the third generation decides to join the family business, it’s a learning process focused on understanding the underlying philosophy that drives the company. “We want to ensure that the third generation shares the same ideas, the same kind of thinking about the business that we do,” Angelo says. “Simultaneously, we understand that the marketplace demands new skills, that in our company we will need to fill new roles.”
That understanding leads directly to the third point on the Agostinos’ action list, one which involves the incorporation of new management systems, systems that represent best practices and world-class protocols. Here already, the company has invested millions of dollars into SAP and other programs designed to maintain the highest traceability, quality and safety standards possible.
The fourth and final directive targets market growth, a move that’s led to establishing ICAM subsidiaries in key areas such as the United Kingdom, Russia and the United States. The company has already opened offices in the UK and the United States and is in the process of doing so in Russia.
All four of these strategies, of course, revolve around one guiding principal behind the Agostonis’ raison d’etre: equal partnering with cocoa bean farmers to achieve the highest level of farm-to-bar quality processing.
Long before Fair Trade certification became a popular buzz word for ethical marketing, Angelo was establishing direct contacts with farmers in Central and South America. Frustrated in his efforts to introduce direct buying of cocoa beans with West African farmers in the 1970s, Angelo shifted his focus to Central and South America.
There, he initiated technical and financial support programs, programs that introduced tree care and propagation techniques, proper fermentation and drying processes and even in-origin lab testing in Panama, Honduras and Guatemala during the 1980s.
In 1990, ICAM became the first commercial partner for the National Confederation of Dominican Cacao Producers (CONACADA), which led to the conversion of some farms to organic certified cocoa beans in 1995.
As Angelo points out, when CONACADA was first formed in 1985, farmers in the Dominican Republic were not even fermenting their cocoa beans. Their slow conversion led to improved quality and flavors.
In 2004/2005, the company was instrumental in helping recover the lost heritage of cocoa growing in the Apurimac Valley of Peru, an area typically known as VRAE (Valle de los Ríos Apurímac y Ene), by teaming up with Mendis Paredes, a renowned botanist interested in preserving Peru’s cocoa resources.
Previous to 2004, a non-governmental organization opened a project to farmers in the area rehab cocoa plantations, but there was no long-term NGO plan for continuing development. Picking up where the NGO left off, Angelo and Paredes formed the VRAE Farming Group. Shortly thereafter, ICAM established a joint effort with the VRAE Farming Group to construct new fermenting and drying centers.
The joint partnership quickly delivered a payback: In 2006, Angelo received nearly 80 metric tons of cocoa; a year later VRAE delivered 900 metric tons.
“We can make a difference for a farmer who owns between two to three hectares and yields only a ton per year,” Angelo explains. “Today, there are areas where we see 30 to 40 tons per year from one hectare.”
But it’s not just about yield. Quality, as in the case of aroma and organoleptic characteristics, stem from a variety of factors, beginning with soil, bean variety, tree cultivation and crop management to fermentation, drying and proper storage and distribution. Truly, the food of the gods is in the detail.
It’s an education process that Angelo continues to this day, one that extends to in-origin raw bean testing, tests which are replicated again at the company’s lab in Orsenigo.
Part of the reason for the Agostonis’ commitment to a new facility involves sustaining the quality carefully nurtured in the field through final processing in the plant.
“We saw that more and more chocolate manufacturers were looking for distinctive products, products that deliver more quality and have complete traceability,” Angelo says.
“To us, it was clear we needed to have more control of the supply chain, from farm to bar,” he continues. “In addition, these manufacturers are also looking to develop new products within a short time frame. Today, the market is very demanding; everyone’s looking for niche products. And that’s something we’re good at. Be it a special recipe or one featuring a special inclusion, we can develop those in a short time.”
To maintain that competitive capability, however, it was clear that a new facility was absolutely necessary. ICAM’s growth had taxed the company’s Via Pescatori factory built in 1953 to capacity.
Planning for the plant of the future began with a search for real estate and the subsequent purchase of several hectares in Orsengio, about 50 kilometers from Lecco. In short order planning for a bean-to-bar complex, one which envisioned a 50,000-sq- meter (538, 195 sq. ft.) plant, a separate bean warehouse and a totally automated final products warehouse, began.
Although operations began this April, installation of all processing equipment (see side bar) will not be realized until 2012, when outputs should reach 50,000 tons of cocoa beans and 40,000 tons of chocolate annually. Nevertheless, the plant is already turning out double the volume than the existing Lecco facility.
“We’re currently producing 12,000 tons of cocoa beans and 15,000-16,000 tons of chocolate in Lecco,” Angelo says. “And while it’s still a ‘work in progress,’ the Orsenigo facility is projected to turn out 24,000 tons of cocoa beans and 30,000 to 25,000 tons of chocolate this year.”
But Orsenigo is more than just output. It’s about exacting control of the process. Antonio Agostino, head of quality and technology at the company, extols the facility’s tremendous flexibility and traceability, which, not surprisingly, begins at the cocoa bean stage.
For example, once beans arrive in Genoa, Italy, via container (360 bags fill one container and create one lot), they are then trucked to Orsenigo for inspection and storage. As Antonio explains, organic beans are immediately segregated into separate holding stacks apart from conventional beans to eliminate any chance of cross-contamination. There, beans are removed from every bag and then taken to the testing lab in the facility. Bar codes are assigned to each bag to aid in the tracking of beans. A 9-kilogram mixed sample of beans from that particular lot goes to the lab for a review of 12 specific qualities and a 100-count bean cut test.
Once approved, the beans are then cleared for cleaning. After cleaning, the beans are gently transported pneumatically via pipes from the warehouse, which is separate from the main facility, and directed to a sterilization unit that’s part of the plant. Here they undergo steaming, infra red treatment and then steam again, to ensure bacteria removal in the first stage of cocoa bean processing.
A sophisticated winnowing process separates the shells from nibs greatly minimizing waste, producing the first of many cost savings for the company. Beans are roasted on a batch basis before heading toward a three-stage milling process and cocoa liquor production.
Once again, quality assurance steps in, completing a two-stage testing process. Beans that were originally sent to the lab for initial testing are roasted, ground and processed into cocoa liquor, which is evaluated using a 17-point flavor profile. At the factory, once liquor is produced, a second sample is drawn from the holding tank. Here, again, a five-member sensory panel conducts the same 17-point flavor profile.
Upon approval, the liquor is then released and directed toward further processing, be it chocolate and/or cocoa powder/ butter production.
It’s important to note that within the plant, there are “kilometers and kilometers” of piping, all of which allow for easy cleaning as well as dedicated use, be it for organic and conventional chocolates, milk, dark or white.
At the moment, the company has a new 1.5-meter wide dark chocolate drop moulding line in operation, which features a Winkler & Dunnebier depositor and a Sollich cooling line. Plans call for three additional moulding lines, currently in operation in Lecco, to be moved to Orsenigo where they’ll be upgraded with new depositors as well as have their cooling tunnels extended.
At present, the plant features a single Duyvis cocoa butter press, but two more will be installed shortly. Two six-ton Buhler conches complement the plant’s pre-refining and refining units, also from Buhler. Micron size can vary from 10 mm to 28 mm, depending up requirements, Antonio says.
One of the plant’s most impressive technological achievements, however, is the completely automated cocoa bean processing system installed by Barth, a division of Buhler.
It is, as ICAM’s technology and quality director points out, the largest in the world that’s he’s aware of. Nevertheless, none of this technology matters if the love and passion for making good chocolate isn’t there, asserts Antonio.
“Anyone can buy state-of-the-art technology or premium ingredients, but that doesn’t make great chocolate,” he says. “In cocoa processing, you have to know how to master the nearly infinite number of scientific variables to guarantee an artisanal result.” Moreover, as many experienced chocolatiers know, replicating a recipe in a different location isn’t as straightforward as most people would think, despite having all the ingredients and equipment the same.
“But here, with this equipment, we have the possibility of understanding all the nuances,” Antonio says. “Thus, it’s easier to roast the beans and obtain the exact flavor and taste that you’re looking for. When I dream at night about a particular chocolate whose beans come from a special farm in Peru, I know I can make it into the finest chocolate the next morning.”
That capability is what’s spurring ICAM’s push toward key markets on the global landscape. For example, the company recently secured the private label business for COOP UK and Scandanavia.
It’s also set up shop in the United States with a new subsidiary dubbed Agostoni Chocolate NA. The company has teamed up with Global Organics Ltd. to distribute semi-finished products to manufacturers and chocolatiers and has a direct sales team based in Los Angeles to worked with private-label accounts. That same team also manages the specialty food distributor network, which caters to smaller operators, such as chefs and chocolatiers. Down the road, the company will consider introducing its own retail brand in the United States.
Right now, however, Crippa notes that there are less and less companies willing to guarantee organic and certified products from farm to bar. That’s where ICAM, because of its direct relationship with farmers, can excel.
As he points out, “Our success is based on the human factor.” Excessive size precludes such a relationship.
It’s that human touch, from interacting with the farmer and his cocoa crop to dreaming about the processing techniques to preserve that origin flavors and charactesitics, which keeps ICAM’s artisan roots integrated in the present and now the future as well.
At a glance
Headquarters: Lecco, Italy
Plants: Lecco 27,000 sq. meters (290,626 sq. ft.); Orsenigo - 50,000 sq. meters (538,195 sq. ft.) 2010 Sales: €100 million
Products: Semi-finished chocolate products, couvertures, cocoa butter, cocoa powder, bars, pralines Sales Breakout: Private label – 54%; professional – 28%; branded – 16%
Brands: ICAM, Agostoni Chocolate Management
Team: Angelo Agostoni, chairman and president; Adelio Crippa, managing director and cfo; Marco Beltrami, assistant managing director; Alessandro DeMarchi, director of industrial clients and strategic purchases; Marisa Agostoni, marketing director; Sergio Cerutti, director of domestic sales; Carla Baroni; director of exports; Plinio Agostoni, director of production and logistics; Alberto Agostoni, director of engineering & maintenance; Antonio Agostoni, director of quality and technology.