How this entrepreneur quit family business to build India’s first USDA-certified organic chocolate brand

Success stories of MSMEs: Over the past few years, multiple young Indian brands have come up to cater to this niche segment through their bean-to-bar chocolates that represent evolving tastes around the world when it comes to quality chocolates.

dark chocolate
Bean-to-bar or craft chocolate makers make chocolate from raw cocoa beans by sourcing, roasting, and grinding them into chocolate which is then made into chocolate bars (Image: pixabay)

Success stories of MSMEs: The gradual shift underway towards eating healthy or organic has also allowed room for a healthier alternative to arguably the most popular snack around the world – chocolates. Dark chocolates, which are considered rich in minerals and a powerful source of antioxidants, continue to find acceptance among Indian consumers looking for organic ways to satisfy their sweet tooth. Over the past few years, multiple young Indian brands have come up to cater to this niche segment through their bean-to-bar chocolates that represent evolving tastes around the world when it comes to quality chocolates.

Among the earliest brands in the segment has been Mumbai-based Pascati Foods, derived from the Sanskrit word Pascat Parivesya which translates to a sweet meal. Launched in 2015 by Devansh Ashar, Pascati was India’s first US Department of Agriculture (USDA) and Fairtrade certified organic dark chocolate brand. USDA’s organic label involves federal guidelines around factors such as soil quality, animal raising practices, pest and weed control, and the use of additives.

On the other hand, Fairtrade is a global body that recognises fairer terms of trade between farmers and buyers. Among common principles to be ensured are farmers receiving prices that cover their average costs of sustainable production and minimising safe use of agrochemicals, safe management of waste, maintenance of soil fertility and water resources, and no use of genetically modified organisms (GMOs), according to the Fairtrade portal.

For better quality recognition and to stand out among competitors, Ashar had secured USDA certification in 2017. “During a US trip in 2016, my father noticed the transition to organic or vegan eating among people. In India also people had started moving toward healthier eating. So, we applied to various agencies accredited by the government’s export trade promotion body Agricultural and Processed Food Products Export Development Authority (APEDA) to provide USDA certification. However, we were denied as our chocolates were multi-ingredient such as organic almonds, organic rose flavour, organic cocoa butter, etc., and they had never certified a multi-ingredient product in India before as nobody had approached them,” said Ashar.

Eventually, a Bengaluru-based agency Aditi Organic Certifications agreed to the audit of the product along with the audit of Pascati’s manufacturing unit in Palghar, around 100km north of Mumbai, to check storage equipment, machines, their cleaning process, etc., to ensure there is no cross-contamination with conventional products. “Particularly after Covid, people eating organic food have been reading labels and other information on the packet to know what they are consuming. So, a USDA logo with relevant details helps them pick our product,” added Ashar.

Pascati also does private labelling for grocery delivery chain Nature’s Basket and works with hotels such as W Goa by Marriott and Ananda in the Himalayas in Uttarakhand. “Entry barriers are fairly less in approaching these brands when you say you are USDA certified,” he said.

National Programme on Organic Production (NPOP) and National Organic Programme (NOP) are two standards for organic certifications in India by APEDA. NPOP is the Indian standard while NOP is the USDA standard given by APEDA agencies under an agreement with the USDA. A company in India can be NPOP certified or NPOP-cum-NOP certified. It cannot solely be NOP certified. Essentially, NPOP certification is the prerequisite for NOP certification. However, USDA had ended the 15-year agreement with APEDA last year. “There is also the Jaivik Bharat logo by FSSAI but it also calls for a certification process,” said Ashar.

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Ashar had worked in the Indian hospitality industry for around four years after completing his graduation in hospitality management from the US in 2009. His last sting was at the Taj Falaknuma Palace in Hyderabad which he left in 2013 to launch something of his own. Meanwhile, he joined his over 30-year-old family business Venus Electronics of insulating copper strips into coils for clients like Indian Railways. It took around a year and a half before Ashar stumbled upon the idea of an organic bean-to-bar chocolate brand.

“There was no value-addition to the family business from my end and hence I was exploring another business idea. Towards the end of 2014, one day my nephew was having a chocolate bar. I took a bite and but it didn’t melt on my pallet. I noticed it was compound chocolate made of cocoa powder and oil while the ones that melt effortlessly are lindt chocolates made of cocoa butter. This led me to understand how chocolates are made right from selecting beans to making bars. I realised there weren’t many companies making organic bean-to-bar chocolates in India which otherwise was becoming popular in the US,” said Ashar. He began with making chocolate confections at home using an idli grinder and cocoa nibs (crumbled beans) after a three-month online course in chocolate making.

“We started participating at local markets and exhibitions to get customer feedback. Based on positive feedback, we set up a small unit at Daman but outgrew it in around two years and later expanded to the current unit in Palghar,” added Ashar. 

Bean-to-bar or craft chocolate makers make chocolate from raw cacao beans by sourcing, roasting, and grinding them into chocolate which is then made into chocolate bars, giving better control over quality and supply chain, and more authentic product made with ethical practices. On the other hand, chocolatiers or chocolate melters procure chocolate as an ingredient, melt it and mix it with other ingredients to make chocolate bars or candies etc., instead of first making the ingredient itself. 

However, organic ingredients are expensive by at least 25-30 per cent of conventional ingredients. For example, organic sugar would cost Rs 60-65 per kg in comparison to Rs 40-45 per kg of regular sugar, said Ashar. The company’s product range includes chocolate bars and chocolate spreads, apart from cocoa powder and cocoa butter for restaurants, cafes, and home bakers. The minimum quantity of dark chocolate in Pascati’s bars ranges from 60 to 90 per cent. The company sources raw beans from three cocoa farmer cooperatives having around 1,200 farmers in Kerala’s Malabar Hills, Idukki, and Kottayam regions.

Pascati currently produces and sells around 4,000 chocolate bars per month which generally goes up to 9,000 during the Diwali season. The company retails across e-commerce, company website, and offline modern retail stores but around 95 per cent of revenue comes from the offline channel. “Post Covid, we are growing at 20-25 per cent annually along with an increase in the volume of cocoa processed from 4.5 metric tonnes in 2020 to nearly 7 metric tonnes last year. This year we would be near 8 metric tonnes,” said Ashar without disclosing revenue and other details.

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First published on: 19-04-2022 at 09:00 IST