Does The Market For Cocoa By-Products Work?

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Cocoa could well be the most wasted fruit in the world, as only the seeds in the pods are used for chocolate, about 20-30% of the fruit. That adds up to about 20 million tonnes of side streams every year globally!*

Pulp, the white fleshy fruit around beans, is tricky to work with. It’s volatile and ferments right away. The husks are scattered on farms and left to rot. Both pulp and husk could be put to far better use, and both could add real value in the chain.

I believe it’s one of the biggest opportunities for change, that could lead to stability of farmer income and reduce waste. But the code for a successful business model has not yet been cracked.

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In early 2026, after more than six years of building, scaling and learning, I closed my startup Pacha de Cacao. The reason was simple; we could not reach the scale we needed to make the numbers work.

I understand why.

Do I still believe in cocoa by-products? Yes. But now that I have been working on this topic for so long, I have a different perspective from when I started.

Like Pacha, several small to mid-sized companies are taking the traditional approach of a start up producing and selling a product, but we’re all fighting huge uphill battles on two fronts at the same time and it’s exhausting.

So, what’s happening? Please hear me out for a sec.

Pacha de Cacao — a juice drink made from cacao fruit pulp.

Supply: closer than we think

The supply side is the easy part. Don’t get me wrong, there is still plenty to wrestle with: local and international logistics, quality, collection, regulation, and production costs. It is easier to make this work in South America than in West Africa. There are larger farms in the mix, infrastructure is generally easier, and varieties like CCN-51 produce so much pulp that pre-drying is already standard practice on the farms anyway. This means there is already a lot of separated pulp on these farms.

We have seen with Pacha that the majority of farmers are willing and able to adapt their practices when value flows back to them. Plenty of cooperatives are ready to partner on pulp as well, because it brings extra cash to farmers right away and it helps to build more loyalty to the coop.

Larger farms in particular collect massive volumes of pulp and this is a growing model in South America. Large companies, sometimes backed by international investment funds or retailers, buy large farmland to secure traceability, consistency and price stability of cocoa.

So the pulp is there. A lot of it.

Left to right: 1) Negotiating with a farmer in Ecuador, 2020. The ask was new for him: pulp, not beans. 2) Testing pulp quality by hand in Ecuador. I was there for every collection. 3) Pacha in cocktails at one of our biggest US customers, a high-end Mexican restaurant chain.

Market**: still a long way off**

The market side is much further behind. Cocoa as a fruit is a completely new concept for consumers in Europe and the US. How do you sell a product the consumer does not yet understand, let alone need? It’s really hard.

For startups, the reality is that there is no clear business case beyond break-even, and investor money and grants fill the gaps. There is a growing market, which consists of specialty chocolate shops, the premium chocolate segment and some retailers. But the mass market is not yet there. It takes time to reach the masses with something so new.

I think this is where large cocoa and chocolate companies have more of a role to play, to drive volume and to fund the education this new category requires. But for this, a clear commercial case is needed, which is not yet proven.

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I was excited when Hershey joined the 20 million dollar Series B of Blue Stripes, a US startup turning the cocoa fruit into snacks and drinks, in 2024. Unfortunately Hershey does not include cocoa fruit ingredients in their own products, which would have helped consumer awareness, and it is not part of their sustainability programme either, Cocoa For Good.

Hershey, until this day, never made serious efforts to include by-products as part of their own plan. That would have been a game changer for by-products, and would have positioned them as a frontrunner in the industry. A real missed opportunity. Still, Blue Stripes seems to be doing well, I think because they balance multiple revenue streams across products and channels.

The old logic of innovation goes a bit like this: startups test new ideas, and large companies step in once the concept proves itself in the market. But that logic does not work for by-products. A startup cannot prove the market alone, because the market does not exist yet at the scale a multinational needs to take it seriously. And multinationals are not building it themselves either, so the proof never makes it to the pudding. Classic chicken-and-egg.

That doesn’t mean there is no potential. It just means the market has to be built together, with several partners pulling in the same direction. A startup alone cannot do that.

Building it together

I think the transformation can and WILL happen. It just needs different dynamics than what we’ve seen so far.

• Several partners in a whole chain need to move together. A large farm (scale) can work with smallholders (impact) in the area on collection, logistics and quality. A startup does early market introduction, technology and marketing. A multinational acts as offtaker, supports the startup with education, know-how, infrastructure and operational backing. They also bring in the retail distribution they already have in place. All stakeholders play to their strengths.
• By-products have to be carried as a real part of the operations and integrated into an authentic sustainability programme of the multinational, not as a side project. What I keep seeing in the field is large farms treating the by-product revenue as theirs to keep. That doesn’t fit the sustainability story. The extra value has to land with the smallholder farmer, measurable and verifiable, and at least 10% on top of their bean income.
• Pushing single-ingredient finished products (like a cacao pulp drink, as Pacha did) is the hardest way to enter a market. What I see as a realistic format going forward is by-products as ingredients and materials inside existing products, in food, but also in cosmetics and construction materials. Pulp can be a sugar alternative (though preferably not highly processed), or replace wood pulp in paper and fibre production. Husks can become materials and biocomposites. There are so many possibilities!
• Local markets in producing countries are such an obvious opportunity for more value creation. I know this is also not easy, but operational costs and risks are much lower, and people in origin regions already understand cocoa as a fruit. I was so excited to see a few cooperatives in Peru working on this during my last trip in 2025.

So, Pacha de Cacao did not make it, and it’s clear why. It was fighting an upward battle, in a niche. Still, it has been the most challenging and most rewarding time of my life and I wouldn’t have wanted to miss it.

We have to build it - together.

That is how by-products can move from niche to norm, and how the sector transformation will be a success.

PS — I'm writing a handbook with the honest lessons from my years in cocoa by-products: the book I would have wanted to read when I started! Follow me on LinkedIn to know when it's out.

*Back-calculation: ICCO world cocoa bean production for 2023/24 ≈ 4.5 million tonnes of dry beans. Standard pod composition: beans 20%, pulp 30%, husks 50% of fresh pod weight. This gives ~22.5 million tonnes of fresh pod; side streams (pulp + husks) ≈ 18 million tonnes per year, rising toward 20 million as production grows. Sources: ICCO Quarterly Bulletin of Cocoa Statistics, Vol L No 3 (2023/24); own field-data calculation.

Marika van Santvoort has been working in cocoa & chocolate since 2014, with a focus on responsible sourcing, innovation and farmer impact. In this monthly column she shares her own perspective on what is really moving in the sector; what is being said, what is not, why it matters and what it means for the industry. LinkedIn · movingcocoa.com

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