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16 © 2016 Winston & Strawn LLP
New York Team Helps Promising Cacao Grower Organize as Delaware
Benefit Corporation
New York attorneys
Jee Chung
,
Rachel Ingwer
,
and
Erica Coleman
, supervised by partner
Bryan Goldstein
, are providing corporate and
transactional legal support to Uncommon Cacao,
a promising social enterprise working to build
a sustainable, prosperous cacao supply chain
in which farmers, chocolate makers, and the
environment thrive together.
The vast majority of the world’s five million cacao
farming families live in destitute poverty. Uncommon
Cacao’s mission is to build a more fair and
sustainable specialty cacao supply chain that will
ensure farmers receive a living wage for their work.
The company focuses on fair pay for great quality,
and aims to put more money into farmers’ pockets
by helping them access the high-value market for
specialty cacao. Launched in 2010, Uncommon
Cacao has helped to double the average household
income for hundreds of farming families, and has
grown to become one of the most well-respected
specialty cacao brands in the market. Through its
commitment to radical transparency, Uncommon
Cacao hopes to catalyze industry-shifting change
for cacao farmers around the world. And by creating
economic incentives for conservation through
cacao agroforestry, Uncommon Cacao encourages
re-forestation and protects thousands of acres of
rainforest in the process.
Since Uncommon Cacao’s primary focus is creating
positive impact in the countries where it operates,
the ramp-up to profitability is slow and has not yet
been reached. To facilitate an injection of $1. 5
million in new capital from social impact investors
such as Pi Investments and Acumen Fund, the
Winston team helped Uncommon Cacao effect a
series of transactions, including the conversion of
founder loans to equity and the conversion of the
parent entity into a Delaware benefit corporation.
Among other initiatives, Uncommon Cacao will
use the proceeds to acquire an existing cacao
brokerage from a customer, enabling it to expand
its origin sources from two to 12 countries over
the next four years. With Winston’s help, the
company will formalize its internal governance,
operations, and structure, including with respect to
intercompany transfers, so that it may use the new
investment as working capital to carry its operations
in Belize and Guatemala until they are profitable.
Uncommon Cacao anticipates the capital infusion
will enable it to break even by 2017 and purchase
millions of dollars of cacao from farmers over the
next few years.
The Winston team will also help Uncommon
Cacao establish The Cacao Farmer Fund, a
non-profit that will facilitate technical support
to improve the lives of cacao farmers globally
through projects emphasizing quality, yields, and
productivity. Uncommon Cacao will contribute a
significant percentage of its profits to this non-profit
organization each year.
Uncommon Cacao growers at work