Chances are, your favorite common chocolate bar started in a plastic bag. Many cocoa producers in countries such as Ghana or the Ivory Coast, where 59% of the world’s cocoa is produced, start cocoa trees by tossing seeds into plastic bags, hoping some sprout, and planting those that do. The rest are pitched.
One company, Tree Global, wants to change that. By providing better seedlings, Tree Global is aiming at large corporations and farmer co-operatives that require millions of trees to provide a consistent, healthy, and over-performing supply of crop seedlings. Founded by Canadian brothers Gregory and Jonathan Hess, Tree Global aims to raise better trees starting as seedlings, right next to the farms demanding them.
“Really, there are two ways people get trees now,” said Gregory, CEO of Tree Global. “They grow them on their own, or they’re sourced from fragmented, local sources. It’s unreliable in supply and quality.”
When you’re talking about projects in excess of one million trees, unreliable supply and quality could mean millions of dollars. Cocoa demand exemplifies just one market sector Tree Global is looking at that faces this problem. The cocoa market alone experienced a 283 percent increase between 2000 and 2009, and is expected to be worth $98.3 billion by 2016. The Hess brothers are looking to tap into this and other tree markets such as rubber and nuts, by introducing their services and growing methods.
They’re not advertising what actually goes into their unique growing system, though they have said they’re not making any genetic modifications, but focus on the results. Using their methods, they’re able to generate faster seedling growth, higher yield and shorter time to yield, all which drive significant value to customers. The other benefit, Gregory says, this their “turn-key” solution.
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“We establish nurseries on our near our customers growing sites and install a full-time ‘master-grower’ to oversee the operations,” Gregory said. “We also employ 40-50 local workers at each site which provides the added benefit of creating local rural labor.”
Tree Global is looking to partner with big cocoa, rubber and nut producers in Southeast Asia and West Africa. That means customers who require one-million-trees or more. The Hess brothers are relying on the fact that even the smallest efficiency boost pays off ten-fold, thanks to the volume.
“Our business model isn’t around,” Gregory said. “It’s establishing partnerships with big organizations. These organizations also work with small-hold farmers so we have a direct impact on increasing the income levels of rural workers.”
Despite their knowledge now, the brothers haven’t always seen the green in the trees. “I needed a finance professional to complement my skills,” said Gregory Hess, who has implemented large scale projects across the world in developing countries. “And Jonathan was keen for a change and challenge, and we started looking for opportunities. We came into the world of trees.”
Gregory admits in this world, there’s higher risk in places such as West Africa and Southeast Asia, but that there are also higher rewards. The company charges on a per-seedling basis, an upfront fixed fee to build the nursery, and added fees once trees have hit performance-checkpoints, like survival rates and higher yields. But the brothers say the payoffs are sure to come.
“In Ghana, to produce rubber they plant tree stumps that have a 30-40 percent survival rate,” Gregory said. “We’ll have close to 100 percent. They pay for seedlings three-times over and they lose that time that the fields are not active. We decrease the time to first yield, and are tapping rubber 2 years earlier. We’re producing much more consistent trees, optimal potential, and increasing average yield.”
Already with two projects in Thailand and Ghana, Tree Global, is looking to expand, and according to Jonathan the company is “in conversations with major cocoa industry players.”
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FEATURED PHOTO: Charles Knowles/Flickr