Mission, Purpose, & Values
Workplace & Responsible
Key Performance Indicators
& Action Plan Summary
To Our Stakeholders,
The first Theo Impact Report is an important milestone for Theo Chocolate. Since our founding we have been
deeply committed to positive impact and transparency. Taking this step to compile and report our holistic
impact is an evolution of our on-going commitment.
At our factory, in the heart of Seattle, we open our doors daily for people to see how we make chocolate from
bean to bar, firsthand. We hope this Impact Report does the same thing for our business practices. This is our
invitation to get to know Theo a little better. Please come take a closer look.
Ethics and sustainability are critical to decision making at Theo. In 2019, we put people first by investing heavily
in workplace safety and benefits. The people who work at Theo are the company’s heart and soul, making
responsible urban manufacturing possible.
We strive to continually find ways to deepen our impact. Throughout this report you will find areas we identified
for improvement over the coming year.
This is just the beginning of the conversation we’d like to start with you. If you have feedback on the Impact
Report, we’d like to hear. Please email Info@TheoChocolate.com so we can take it into account for next year.
CEO, Theo Chocolate
mission, purpose & values
Theo Chocolate was founded in 2005 to create a positive impact through chocolate. We are committed to
making high quality chocolate, ensuring everyone who touches the business thrives.
In this report, we dive deep into partnerships with our most important stakeholders: cocoa farmers and
At Theo, our Mission, Purpose and Values help guide our decision making. Our Values were created by
Theo employees in 2017.
As a company rooted in cocoa, our
mission is to create a more beautiful,
compassionate, and enduring world by
responsibly making delicious and
inspiring products for everyone.
We invite people to discover a better
world through chocolate.
We cultivate relationships that create a
safe, supportive, and engaging workplace.
We are honest about our products,
practices, and challenges.
We are passionate about doing our best
as individuals and as a team.
We make choices that nurture the health
and well-being of our employees,
partners, and planet.
Hear directly from Theo employees about
our Values at
Ethical sourcing is core to who Theo is as a company. We source
organic and fair trade ingredients whenever available and
possible, and prioritize purchasing from small holder farmers.
We partner fairly with cocoa and ingredient sourcing partners
to pay them living incomes, with the goal of supporting thriving
and resilient communities.
Theo sources fair trade cocoa from outside the conventional
cocoa growing industry to retain full visibility into our sourcing.
The conventional cocoa growing industry still faces ethical
challenges including poverty wages for cocoa farmers and the
use of forced child labor. At Theo, we strive to show cocoa can
be purchased in a different way that allows everyone to benefit.
We do this because we believe fairness and well-being should be
for all, not only for some.
Since Theo’s founding, we have sourced 10,000 metric tons of
organic and fair trade cocoa from 10 different countries across
Central America, South America and Africa. That volume could
fill 5 miles of semi-trucks, end-to-end, with cocoa beans.
history of eastern
Theo began purchasing cocoa beans from the Democratic Republic of
Congo (DRC) in 2012 by partnering with Eastern Congo Initiative (a NGO),
our trading partner ESCO Kivu, and smallholder farmers in Eastern
Democratic Republic of Congo. People in Eastern Congo have lived through
years of conflict and violence, compounded by low access to health care
and government infrastructure. Investing to develop a militia-proof crop has
supported stable economic development, as farmers now return to their land after times of heightened insecurity.
Theo partnered with ESCO Kivu and cocoa farmers to invest over $800,000 in infrastructure, cocoa capacity
projects, and direct payments to farmers which supported increasing quality and yield. This specifically funded the
distribution of cocoa fermentation boxes, farmer training along with post-fermentation infrastructure. The
partnership has developed Watalinga, Eastern Congo into a successful organic cocoa growing region, bringing
benefits to the farmers and community.
2019 ORGANIC COCOA PURCHASES
All cocoa beans Theo purchased in 2019 came from Watalinga, Eastern Congo. These purchases directly support the
livelihood of over 6,200 cocoa farmers and their 34,000 family members. Having close relationships with farmers mean
we know how much they are paid for their cocoa, something many conventional chocolate makers cannot identify.
In 2019, Theo purchased
OF COCOA BEANS
from Eastern Congo
While we have purchased cocoa beans from Peru in the past, we did not purchase cocoa from the
Norandino Cooperative in Peru in 2019, as we had an adequate supply of the beans.
WHAT INFLUENCED THEO’S 2019 COCOA PRICE?
$2.04 PER KG
PER METRIC TON
PRICE TO FARMERS
The base price fluctuates slightly based on market
prices. ESCO Kivu ensures organic cocoa purchased
on behalf of Theo is purchased at approximately
20-25% higher prices than surrounding prices in
DRC for conventional beans to reflect the higher
quality and ensure living income prices.
If cocoa meets fermentation requirements,
this additional price incentive is added at
the time of purchase from farmers. The
fermentation price incentive has increased
the percentage of cocoa meeting target
fermentation levels from 70% to 90%.
2019 PRICE PER METRIC TON OF COCOA BEANS*
Our 2019 cocoa
above Fairtrade International
organic minimum prices
*Theo average price paid for organic cocoa includes the fair trade development fund premium. It is the FOB price we pay when the organic cocoa is picked up.
Fairtrade International price based on fairtrade.net listed minimum price FOB, plus organic and Fairtrade International premiums (as of Oct. 1, 2019).
Conventional Market Price based on International Cocoa Organization average monthly prices Jan-Oct 2019 .
PER METRIC TON
Fair trade premiums are paid to the community
as a development fund, which the Watalinga
Cocoa Farmers Association determines how
to spend. Theo does not provide input on how
this money is spent as we respect farmers’
right to self-determination.
PER METRIC TON
FREIGHT ON BOARD
This is a blended cost of what we pay for cocoa beans
imported into the US and what we pay for cocoa beans
that are processed into cocoa butter and liquor, before
being imported into the US.
FOB cost is the price when our transporter takes
possession of the cocoa beans. This includes costs for
final processing, infrastructure, transportation, farmer
training and agronomists.
FAIR TRADE DEVELOPMENT FUND IMPACTS
Because of the
Watalinga Cocoa Farmers
on using the fair trade
development funds for
children now have
access to schooling in
The Watalinga Cocoa Farmers Association development fund spending:
per Contract Year
BUILDING A LOCAL
2018-2019 CROP (PLANNED)
CASH FOR FARMERS
Community projects consisted of: building 16 classrooms, equipping 7
previously existing classrooms, 2 new primary schools, 4 health clinics,
1 pharmacy, 1 store, funding a rabbit breeding/sewing/literacy program
OTHER INGREDIENT FAIR TRADE DEVELOPMENT FUNDS
Theo’s purchases of other ingredients have also contributed over $147,000 to fair trade development funds.
The two highest volume ingredients we buy, after cocoa, are sugar and coconut.
began sourcing fair trade in March 2014
began sourcing fair trade in January 2016
Every ingredient used in our treats has a purpose. It has been thoughtfully chosen to provide the best flavor experience
while using minimal ingredients. We leave out lower-quality, lower-cost fillers, for example, choosing to use 100% cocoa
butter instead of soy or sunflower lecithin emulsifiers.
Whenever available and possible, we are committed to choosing ingredients that are:
Fair trade certified • Organic • 100% soy and palm oil free • Kosher certified • Local
We’ve chosen to certify our products with rigorous third-party organizations, so you can
trust that the statements we make about our ethical and sustainable practices are true.
In 2019, we transitioned to a new icon on the front of our treats to demonstrate
our products are Non-GMO, the “Organic is Always Non-GMO” icon. We made
this change to educate our customers that when they see the USDA Organic
certification, they can rest assured that it is also Non-GMO.
We are proud of our Fair for Life and For Life fair trade certifications because we believe
they have some of the highest standards, covering both the ingredients we buy and our
business practices across the entire supply chain. We are currently the only chocolate
maker in the United States with these certifications.
of our 2019
organic and fair
Fair for Life certification covers our products
so you can trust they are made in an ethical
manner with a responsible supply chain.
We encourage you to review our most recent certification audit results:
Fair For Life results. For Life results.
Learn more about all our certifications.
For Life certification covers our company.
It validates that our company and business
practices are socially responsible.
WHAT’S NEXT IN 2020:
• Living income prices for cocoa were recently identified for Ghana and Ivory Coast. In the absence of research that
identifies a living wage cocoa price for DRC, Theo or our trading partner ESCO Kivu, will be talking with farmers to validate
that the prices they are paid contribute to earning a living wage.
• Our trading partner, ESCO Kivu, has always paid farmers in Watalinga above conventional market prices for organic cocoa
beans on Theo’s behalf. In 2020, we will partner with ESCO Kivu to determine a cocoa floor price in case the price of cocoa
drops in the future.
workplace & responsible
At Theo, there are two elements we focus on to foster a great work environment: our culture and responsible
manufacturing. At the end of 2019, Theo employed 97 people, 7 of which were seasonal. All employees are central
to achieving our mission.
FAIR TRADE WORKPLACE
We are proud to be the only chocolate company in the United States that is Fair for Life fair trade certified. This
certification is unique in that it not only checks how the producers of the ingredients we buy are treated, but it also
annually audits our own office and production facility to ensure people who work for Theo are paid and treated fairly.
Our current workplace score from the October 2019 audit is 194 out of 240 points for base standards. We received 27
bonus points for areas above the base standards.
Please learn more about our Fair for Life certification audit results at fairforlife.org
Theo’s workplace culture is honest and inclusive. To involve all employees in how the company is run, we have a group
that meets every other month called TheoLink. This provides a way for employees to collaborate, communicate and
enact new ideas to improve the company and community. In past years, TheoLink has been responsible for identifying
and implementing the following workplace improvements:
• Enhanced alternative transportation benefits
• Waste reduction opportunities, including new compost bin locations
• Ways to encourage volunteerism
• Improvements for annual company employee events
Additionally, the company shuts down once every three months for an All Team Meeting to ensure critical communications
reach everyone. At the end, the Leadership Team sets aside time to answer any questions or take new ideas.
As a manufacturing facility, safety for Theo employees is a top priority. In 2019,
we invested heavily in improving safety in our factory. A new cocoa bean roaster
not only increased our production capacity, but also provided significant safety
enhancements versus the previous roaster. New engineering improvements,
manufacturing processes, and safety training were also put into place.
When a safety incident does occur, our Safety Committee identifies new ways
to fix concerns. This resulted in workplace adjustments in 2019, like changing
out knife styles after accidental lacerations and reducing compost barrel sizes
to lessen weight being lifted.
Over the past year, significant changes in our employee safety programs and culture were instituted. We believe the enhanced
focus on Safety is increasing people’s comfort to report less severe incidents or report earlier after an incident occurs. While the
total number of reportable safety incidents increased in 2019 vs 2018, the severity of incidents decreased.
Source: OSHA 300A Form
Safety Incidents by Quarter
% OF INCIDENTS
WITH MISSED WORK
AVERAGE # DAYS ON MODIFIED
Q1 (JAN-MAR) Q2 (APR-JUN) Q3 (JUL-SEP)
Throughout 2019, our focus on safety brought down the number of reportable incidents across the quarters despite an
increase in production hours in the back-half of the year. So far in Q1 of 2020, only one reportable incident has occurred vs
the eight that occurred in 2019.
In 2020, our goal continues to be an on-going reduction in both incidents and missed work. We continue to identify ways
to enhance safety and will conduct manager safety training in the factory, warehouse, and confection kitchen.
In 2019, we finished collecting employee feedback on what would make Theo an even better place to work. In response,
we rolled out key benefits enhancements.
Including free, on-site health screenings and
series of health education sessions
Voluntary Life Insurance offered
Medical Premium for Dependents:
Increased from 25 to 35%
Added glasses/contacts benefit
Increased transit subsidy and began carpooling and
Increased to 3% match
Financial planning, credit counseling and first-time
home buyer education and down payment assistance
Eight weeks of full pay
Parental Leave, enhanced dependent coverage, and the 401k match increase were planned for 2020-2022, but we were
able to launch them earlier than anticipated. In 2020, we will continue assessing the best course to support Theo
employees’ health and interests.
At Theo, we take steps to reduce the negative environmental impact our business practices may have.
In our Seattle Factory, we actively compost and recycle any materials possible. This past year we installed a new
cocoa bean roaster and partnered with our county regulatory agency to pioneer the first cocoa roasting regulations
in Washington State. These efforts involved establishing limits for VOC’s, smoke opacity and particulate emissions to
ensure there are no negative environmental impacts from the cocoa cleaning and roasting process. We are proud to
roast cocoa without any daily limitations. This is a result of the time and investment made to ensure our new roaster
operated well below the state’s emission limits.
2019 UTILITIES USAGE
As a growing company, the overall utilities used are increasing as we run our factory for more hours. Due to this, in
2019 we began tracking the efficiency of our utilities used per pound of chocolate manufactured. Our goal moving
forward is to decrease the amount of utilities used per pound of chocolate made.
Efficiency of utilities used per lb chocolate made:
ELECTRICITY: KWH GAS: THERMS WATER: GALLONS
2019 0.63 0.011 0.57
In 2020, we will start looking at feasibility of several efficiency projects to reduce our use of critical resources.
• Electricity reduction through lighting replacement with high-efficiency technology
• Water recycling and reuse in manufacturing
• Natural gas reduction through improved use of insulation and replacement of inefficient equipment
2019 WASTE CONTRACTS
Our waste contracts with City of Seattle waste management
are heavily weighted to Compost and Recycling services.
However, we do not track the actual pounds picked up. We will
be working to identify a method to quantify and reduce our
garbage waste stream.
Cardboard: In addition to city recycling, we work with a recycler
who picked up 26 tons of cardboard this past year.
In 2019, we initiated a project to understand the benefits of moving from petroleum-based plastic packaging to
plant-based flexible packaging. Pending results of production and shelf study tests, we plan to transition all products
in flexible packaging to plant-based packaging in 2021.
Results found the transition will reduce
in toxic freshwater
Fossil fuel use by
annual savings that could power
3 average US homes per year
Greenhouse gas emissions by
Each year this is the same amount of carbon that is
sequestered by 23 tree seedlings grown for 10 years
Alternative transportation subsidies are available for employees who commit to take public transportation,
bike, carpool or walk. In 2019, we enhanced these subsidies to reduce single occupancy car commuting.
of Theo employees elect
to receive alternative
Smallholder cocoa farmers tend to live on their farmland, so organic
practices have a direct impact on the health and safety of their families
and communities, along with the earth.
In Eastern Congo, our trading partner ESCO
Kivu employs 17 agronomists. These
agronomists support farmers with
sustainable cocoa growing training, including
regenerative agriculture practices.
cocoa that are
When transporting cocoa from Eastern Africa and sugar from Brazil in 2019, we used lower environmental impact
options such as rail and boat instead of driving and flying product. This reduces emissions, and the costs, of bringing
ingredients to Seattle.
Theo supports the creation of thriving and resilient communities. There are three ways we have traditionally been
involved in supporting the communities where we do business.
Since 2005, Theo and our customers have donated $92,000 to at least 29 organizations through the
proceeds of selling various partnership bars.
Over the years, Theo has donated products to non-profits and Food Lifeline for redistribution to food banks and meal
programs throughout Western Washington.
of chocolate donated to Food Lifeline
Theo encourages employees to actively contribute to the community by
providing paid time off for volunteering, what we call Theo Match.
For every two hours an employee volunteers, outside of work, for a
charitable organization, Theo pays a bonus equivalent to one hour of the
employee’s regular pay, up to twelve bonus hours each calendar year.
of finished goods donated to non-profits
In 2020, our goal is to develop a community involvement strategy to
ensure we are strong partners in the communities where we do
business, both Seattle and Cocoa Origins. 2018
Thank you to the many people who make Theo the unique, mission-driven company it is:
• Theo employees (past and present) whose day-to-day passion and hard work brought these results to life.
• ESCO Kivu and the cocoa farmers in Watalinga, Eastern Congo who partner to produce ethically and sustainably
grown, delicious cocoa in an environment of on-going instability.
• Theo customers who join us hand-in-hand to create positive change through chocolate.
The focus of this report is on the most material areas of impact, so not all of Theo’s business practices are covered.
We welcome any feedback you have - please send your questions or comments to Info@TheoChocolate.com
We look forward to continuing the conversation with you.
key performance indicator
& action plan summary
Organic cocoa purchased
• 1,225 mt in 2019
• 10,000 mt historically
Average price for cocoa (usd/mt)
• Theo paid $3,338 in 2019
• +40% vs c-market $2,312
Fair Trade development funds
• $245,000 for 2019 contract
• $1.9 million historically
2019 cocoa bean purchases restated April 2020
• DRC farmer conversations to
validate current pricing is
contributing to earning a living wage
• Setting farmer cocoa floor prices
with ESCO Kivu
2019 Safety incidents: 16
Fair for Life workplace score: 194,
+27 bonus points
• Continue reporting Safety incident
numbers and conduct safety training
• Assess the best course to support
Theo employees’ health and interests
Utilities used per lb of chocolate
• Electricity: 0.63 KWH
• Gas: 0.011 Therms
• Water: 0.57 Gallons
Employees receiving alternative
transportation subsidy: 21%
Organic hectares of cocoa: 11,000
• Progress on assessment and
implementation of utility efficiency
• Plastic packaging: Progress on
transitioning flexible packaging to plant-based film
by the end of 2021
Donations & Contributions
• $92,000 in cash contributions since founding
• 2019 product donations: 38,000 lbs
chocolate plus $8,500 in finished goods
Employee volunteer hours through
• 2019: 112
Develop a community involvement
strategy to ensure we are strong partners in
the communities where we do business - both
Seattle and Cocoa Origins