The Whole-Fruit Circular Economy

Creating Additional Income Streams in the Cacao Value Chain

Cacao farming generates massive amounts of organic by-products. Each ripe cacao pod weighs about 400 grams, yet only 9–10% (around 35–40 grams) becomes the exportable cocoa bean. You get your chocolate, but the other 90% — the cacao pod husk, pulp, and cocoa bean shell — is usually discarded. This overlooked material represents an untapped upcycling opportunity to create additional income streams in the cacao value chain.

Cacao pod husk (CPH), the thick, woody outer rind of the cacao fruit, alone accounts for an estimated 70-75% of the fresh fruit and is the main by-product. Pulp and cocoa bean shells are also treated as organic waste. All three of these by-products can be upcycled to diversify income streams for smallholder cacao farmers while delivering environmental benefits.

Cocoa’s roughly 90% waste-to-product ratio is among the highest in agriculture when you compare dried bean weight to total pod weight, with each ton of dry cocoa beans generating eight to ten tons of wet CPH. This makes by-product valorization particularly critical for sustainability.

The whole-fruit circular economy is a model that upcycles and monetizes CPH, pulp, and cocoa bean shell, rather than beans alone.

The Whole-Fruit Circular Economy Opportunity

Climate change, crop disease, and persistent poverty create a perfect storm for smallholder cacao farmers. Globally, fewer than 15% of cacao-farming households earn a living income, and in Thailand, a 2017 Bank of Thailand survey found 40% of farming households fall below the national poverty line. These farmers have little buffer when prices fall, trees age, or weather patterns shift.

Meanwhile, unreliable buyers are pushing down farm-gate prices for dried beans. The “bean-only” system discards most of the fruit as waste, adding environmental costs without generating extra value.

But these same inefficiencies can become profitable, sustainable resources when viewed through a circular economy lens. Transitioning smallholder cacao farms from a linear "bean-only" model to a high-margin "whole-fruit" powerhouse represents a fundamental reimagining of cacao's value proposition, treating CPH, pulp, and cocoa bean as raw materials for new products.

Each component of the pod carries its own commercial potential, from premium cocoa and specialty teas to juices, biochar, and fertilizers.

The whole-fruit circular economy model breaks down into four interconnected income streams.

4 Pillars of the Whole-Fruit Circular Economy

1.     Premium Cocoa Beans

Premium, traceable cocoa beans are the cornerstone of farmers' incomes. Farmers who meet Grade A quality standards and maintain consistent flavour profiles command higher prices, averaging 8% to 20% above standard farmgate prices.

Traceability to the geolocated farm plot level, in compliance with emerging regulations such as the EU Deforestation Regulation (EUDR), opens new markets. Chocolatiers can offer single-estate, limited-edition products that highlight the region, terroir, and individual farmers, attracting discerning buyers.

For smallholders, this premium is the foundation: it stabilizes income, maintains access to high-value markets, and provides the financial breathing room needed to invest in upcycling pulp, cacao pod husk, and cocoa bean shell.

2.     Pulp: The New Superfood

The mucilaginous pulp surrounding the beans—once discarded during fermentation—can be upcycled into premium fruit juices, craft alcohols, and natural sweeteners that command significant market premiums.

Companies like Koa, Luker Chocolate’s Upia, and Blue Stripes are among a growing list of companies creating new, diversified revenue streams for cacao farmers. Dutch brand Kumasi reports a 30% increase in income per kg of cacao for partner farmers.

3.     Husks: The Sustainable Bio-Engine

The cacao pod husk may hold the most transformative potential, and biochar and organic fertilizer are leading applications:

Biochar

A highly effective soil amendment that addresses one of cacao farming's most significant challenges—soil degradation. CPH biochar sequesters carbon, improves soil water retention, enhances nutrient availability, and can reduce the need for synthetic fertilizers while boosting crop yields. This creates a closed-loop system where cacao waste regenerates the very soils that produce it.

At the smallholder level, a recent Koltiva feasibility study in Indonesia’s Aceh Province found that biochar offers a sustainable upcycling opportunity for smallholder cocoa farmers.

Industrial-level operations, like Sanbra Foods Biochar project in Ghana’s cocoa-growing region and  Soladaridad-supported Asaase Pa convert cocoa waste into biochar and sell the carbon credits.

Organic Fertilizer from Compost

Composting CPH to produce solid or liquid organic fertilizer improves nutrient availability, leading to healthier crops and higher yields. This can be achieved at the smallholder level, also demonstrated by Koltiva, with participants turning 50 kg of wet CPH into 5 L of liquid compost, producing organic fertilizer.

Other potential uses for the pod husk include biodegradable packaging, animal feed, soap, cosmeceuticals, and functional food ingredients.

4.     Cocoa Bean Shell: The Specialty Ingredient

The cocoa bean shell, typically removed during roasting, contains valuable antioxidants and fibre, and can be processed into tea, cocoa flour, or natural mulch.

Cocoa bean shell tea, often marketed as "cocoa husk tea", shows strong potential to become an important market segment. Currently a niche product sold primarily by specialty tea retailers, it represents an overlooked opportunity within the rapidly expanding functional and herbal tea markets.

The global functional tea market was estimated at around USD 8.1 billion in 2024 and is projected to grow to roughly USD 14.6 billion by 2035, at a CAGR of about 5.5%. Increased health consciousness, consumer demand for sustainable, ethically sourced products, and the inclusion of superfoods like cocoa husk are driving market growth.

ECOSHIFT, active in the Thai cacao sector, employs this upcycling technique, partnering with Monsoon Tea to create KOH KOA Cocoa Husk Tea. The product is currently available in France with anticipated market growth in 2026.

By valorizing these four components, cacao farmers could potentially double or triple their income per harvest while reducing environmental impact—transforming what was once considered waste into a diversified portfolio of revenue streams that strengthen the entire value chain from farm to final product.

Making this transformation requires a verifiable traceability infrastructure to meet regulatory requirements, promote and validate sustainability initiatives, and enhance transparency.

Strategic Compliance: EUDR and Beyond

Implementing digital supply chain traceability for dried cocoa beans creates the core infrastructure needed to track cocoa-derived by-products from geolocated farms to final upcycled products. This traceability, when combined with documented due diligence on legality and deforestation risk, supports compliance with the EU Deforestation Regulation (EUDR) for cocoa and derivatives.

Beyond legal compliance, the same data can be leveraged to meet broader ESG and transparency expectations by buyers and consumers, such as substantiating sustainability claims, reporting under corporate disclosure frameworks, and differentiating upcycled cocoa products in the market.

As grindings decrease and long-term contracts continue to fluctuate, creating additional income streams for smallholder cacao farmers is paramount. A whole-fruit economy approach could shift the sector from a single commodity to a regenerative bioeconomy.

This compliance infrastructure checks regulatory boxes and unlocks tangible economic and environmental gains.

The Benefits of the Whole-Fruit Circular Economy

A circular economy offers waste reduction, sustainability benefits, and a higher return on investment (ROI). A whole-fruit model, which includes CPH biochar, organic fertilizer, juice extraction from pulp, and cocoa husk tea, creates new income streams within the existing cacao farm structure.

The growing market for upcycled products and increased global demand for specific derivatives, such as biochar carbon credits, are driving economic incentives. Reducing emissions or increasing soil carbon sequestration can turn traditional farming into a sustainable source of income. Each ton of CPH biochar can sequester 2–3 tons of CO₂ equivalent.

Farmers can improve sustainability and significantly reduce purchased fertilizer costs by converting cacao pod waste into liquid organic fertilizer. Potential savings are estimated between one‑third and one‑half of what they would otherwise spend on synthetic inputs over time. It is estimated that “substituting just 20% of chemical fertilizers with organic fertilizers can increase yields and soil fertility, while reducing harmful nitrate residues in the soil.”

The growing cocoa pulp juice and cocoa husk tea markets demonstrate that creating additional income streams in the cocoa value chain can be profitable.

Attracting the Next Generation of Cacao Farmers

The global average age of cacao farmers is 50-55. In SE Asia, more than a quarter of farmers are over 55. Without deliberate efforts to make farming attractive and viable, many governments fear there may be “no professional farmers” left within a few decades.

In Thailand, for example, people aged 15–40 account for roughly one‑third of the agricultural workforce, significantly less than their 50% share of the general population.

The Thai government launched the Young Smart Farmer (YSF) programme in 2014 to reverse the aging of its farm sector. Managed by the Department of Agricultural Extension, the programme trains farmers under 45 in modern production, processing, marketing, and leadership, helping them become agro-entrepreneurs through comprehensive business management training and overseas exchange opportunities.

At the regional level, ASEAN and FAO also promote youth‑focused training, finance, and entrepreneurship programmes that encourage young people to build careers in sustainable agriculture and value-added agrifood enterprises. Framing the whole-fruit model as an environmental solution and a modern, entrepreneurial career path can make farming “agricool.”

Higher-Tech, Higher Status Farming

Young people often associate agriculture with low-tech, low-status work. But digital traceability systems, mobile agronomy tools, remote sensing for farm health, and on-farm IoT for fermentation or drying make cocoa farming feel like a tech-enabled profession rather than a fallback option.

The processing infrastructure can be improved by introducing a cooperative of cluster-based processing models to collect enough pulp, husk, or shell to process efficiently. Diversified on-farm processing can create non-harvest jobs for women and young farmers, for greater gender and youth inclusion.

From the perspectives of policy and finance, including development banks, cooperatives, and impact investors, funding on-farm upcycling initiatives has downstream implications. Smallholder farmers and chocolate brands benefit through improved compliance and storytelling for conscious consumers.

The “Agrinfluencer”

Well over 80% of people under 40 in SE Asia are already mobile‑first, making digital tools a powerful lever to draw them into a whole‑fruit cacao economy. And social media has the potential to become a powerful tool promoting agriculture to younger generations.

Enter the “Agrinfluencer,” a digitally savvy next-gen cocoa farmer with the technology and skills to make viral posts promoting their smallholder cocoa farm and its products. According to Antom, “With over 20 million content creators and a rapidly growing digital economy, generative AI tools are reshaping how Southeast Asians create, consume, and pay for digital content.”

Embedding technology and data in the whole-fruit economy has downstream implications. Smallholder farmers and chocolate brands can become influencers by leveraging social media posts that highlight improved compliance and stronger storytelling for conscious consumers.

Creating Additional Income Streams in the Cacao Value Chain

Upcycling cacao by-products creates a win for smallholder farmers, the environment, and future generations.

With government, finance, and next-gen farmers aligned, the whole-fruit economy can turn cacao waste into wealth—and aging farms into innovation hubs. Small-scale on-farm projects, such as organic fertilizer or biochar, can open the door for the next generation of “Agrinfluencers” to showcase sustainability initiatives and create additional revenue streams.

The whole-fruit economy requires coordinated investment in processing infrastructure, technical training, market development, and supportive policy frameworks to transform a “bean-only” economy and catalyze lasting change. Training programs, impact investors, and development banks all play a critical role.

Most importantly, farmers themselves, particularly young, digitally savvy “Agrinfluencers,” can lead this transformation by proving that sustainable, diversified cacao farming is both profitable and aspirational, before the next generation leaves the farm behind.