I was having dinner last August 1, 2022 with a company colleague from Barcelona who was about to fly back home the following day. In the course of our dinner conversations, he mentioned that he bought several bars of...

I was having dinner last August 1, 2022 with a company colleague from Barcelona who was about to fly back home the following day. In the course of our dinner conversations, he mentioned that he bought several bars of 85% Dark Malagos Chocolate® to bring home to his wife back in Spain. He says that it is one of the best chocolates they’ve tried anywhere in the world. They became familiar with the brand during their assignment here in the Philippines for our company and ever since their return to Spain, they’ve been craving to have a fine chocolate treat once again with this brand.

I’m familiar with Malagos Chocolates® from Davao and have actually tried some of the brand’s chocolates when our family visited Davao for a short vacation back in 2013. But my colleague’s sharing got me intrigued about this brand once again.

Therefore, during a recent trip to Davao City, my wife and I decided to re-acquaint ourselves with this brand. Coincidentally, when we landed in Davao last August 15, it turned out to be the first day of the weeklong Kadawayan Festival for 2022. It’s an annual festival held in Davao City which is a celebration of life, a thanksgiving for nature’s gifts, the riches of culture, the bounty of the harvest, and the serenity of living. It is a gathering for seven days of music, dance, and feast in Davao’s streets, with multiple events taking place throughout the week which highlights the eleven tribes of Davao City. That also meant that the locally-produced chocolate brands, including Malagos Chocolate®, would be showcased around the city. True enough, right at the check-in counter of the hotel where we stayed in, Malagos Chocolate® bars were front and center! And when we tasted again its 85% chocolate bar variant, we immediately realized why my colleague was raving about it. It was indeed true fine chocolate which is now counted as one of the best in the world.

So when we were brainstorming for my next Filipino brand to write about here in Branding Nerd, I was convinced that Malagos Chocolate® should be this blog’s next feature.

A History of Quality Farming

Founded not too long ago in 2003 by farmers Roberto and Charita Puentespina, Malagos cacao growing and chocolate manufacturing was not the first agricultural venture of the couple. Among other things, they were already established as one of the largest cut-flower producers in the country. In the late eighties and through the nineties, Charita’s orchid laboratory took up the cause of saving the waling-waling, and she trail-blazed in growing temperate cut flowers in the Philippines. Her initial efforts in the early ‘90’s has catapulted Puentespina Orchids & Tropical Plants, Inc. to where it is today, one of the pillars in the cutflower and cutfoliage industry in the Philippines with over 300,000 dozens of various cutflowers and cutfoliage harvested annually.

As stated in their website: “Charita’s love affair with cacao began in 2003 when we leased a farm in Malagos, Baguio District, Davao City. The farm had existing cacao trees.

Her dream for this new venture was to revitalize the cacao sector which had crashed in the 1980’s. She also wanted to make her very own premium Philippine chocolate instead of just exporting the cacao beans to institutional accounts.

She’d always say, “We need to step up. We must put more value to our raw material. This way we could employ and empower more people, especially the farmers.” This was the beginning of our incredible journey in making chocolate.”

It was this early vision of premium Philippine chocolate that galvanized the founder to create the kind of world-class brand that Malagos Chocolate® is today.

What Makes the Malagos Chocolate® Brand Unique

In the first module of the course “The Brand Architecture | What it Takes to Build and Sustain a Brand that Lasts”, I usually spend a good amount of time teaching my students about the concept of finding the “Open Hole” in the market which is a critical stage in developing a brand. It is that space in a market segment which represents the important considerations or attributes of the consumers, but there are no existing brands that occupy that space. Once a business owner finds that open hole and positions its brand there, it is automatically assured of being unique as a brand.

Uniqueness is a prerequisite for any brand, that is why in the brand architecture framework, the USP or unique selling proposition of a brand plays a significant role in the strategy stage (the most critical stage) of any brand.

In the case of Malagos Chocolate®, the brand’s battlecry, which is “Tree to Bar“, already gives us a hint of what makes this brand unique.

I wish to highlight two such reasons-to-believe (or RTBs) which makes this brand unique.

First, they grow and harvest their own unique and premium cocoa trees;

And second, the production of their chocolate bars, which follows a rigorous 14-step fully integrated process, is actually done in the exact same farm where their cocoa trees are grown and harvested. Hence, their battlecry, Tree to Bar.

A majority of the world’s leading and well-known chocolate brands actually do not possess these two unique features of Malagos Chocolate®.

Premium Cocoa Trees

The first point of uniqueness of the brand is its use of cocoa beans from premium cocoa trees.

In the course of writing this blog, I’ve discovered, that in the entire world, there are four main varieties of the cocoa plant, namely forastero, criollo, trinitario, and nacional.

The Four Varieties of Cocoa in the World

Forastero variety still dominates in world chocolate production. It is the most widely used, comprising 80–90% of the world production of cocoa.  The high yielding plants of forastero made it an easy choice for growers, who replaced the criollo crop with the low quality forastero for this reason. Forastero is primarily cultivated in West Africa and is known as “bulk cocoa”.

Criollo variety are rarer and considered a delicacy. Criollo also tends to be less resistant to several diseases that attack the cocoa plant, hence very few countries still produce it, estimated at less than 1 to 5% of the total crop production in the world. Partly due to the rarity, and definitely due to its unique, complex flavor, criollo beans are regarded as super fine cocoa and many heirloom varieties are sought after by craft chocolate makers. One of the largest producers of Criollo beans is Venezuela

Trinitario beans while not as rare as criollo still only make up less than 10% of the total cacao production. Trinitario (from Trinidad) is a hybrid between Criollo and Forastero varieties. It is considered to be of much higher quality than Forastero, has higher yields, and is more resistant to disease than Criollo. The Trinitario being the least pure has a wide range of tastes and profiles of any other variety. The various ratios of criollo to forastero, and terroir greatly influence the complex flavors found in this bean.

Nacional, the fourth variety, is the least known cacao. This bean variety (thought to be extinct) was only recently rediscovered in Peru in 2011. In its purest form, it is regarded as the world’s rarest cacao. Chocolates made with nacional beans are rich, creamy, and with little bitterness.

Most cocoa beans in the world are already hybrids due to the natural cross-pollination of various types of cocoa trees as they evolve through the years. Therefore, pure, thoroughbred cocoa trees are quite very rare these days.

Malagos Chocolate® is made from Trinatorio cocoa beans which are grown and harvested in their own Puentespina Farm in Davao.

The actual genetic make-up of Malagos cocoa beans shows some traces of the rare Criollo and Nacional varieties making its quality much higher than the common chocolates made from mainly Forastero cocoa. Although, the dominant type found in Malagos cocoa is Amelonado which is an evolutionary type of bean from the Forastero variety.

Heirloom Cacao Designation

In 2019, the brand achieved a very important milestone when Puentespina Farm was designated as Heirloom producers of quality & flavor cacao beans at origin by the California-based Heirloom Cacao Preservation Fund which was founded in 2012 in partnership with the Fine Chocolate Industry Association (FCIA) & US Dept of Agriculture (USDA). Puentespina Farm is only the 16th in the world to be awarded such a designation, and the only one in the Philippines. It’s a very prestigious and highly-coveted designation in the world of cocoa.

According to Heirloom Cacao Preservation Fund: “Heirloom cacao beans are the diamonds of the cacao tree, producing the finest flavor. They are endowed with a combination of historic, cultural, botanical, geographical and flavor value that is the foundation of the best tasting chocolate.”

Heirloom Cacao Preservation (HCP) designation of Puentespina Farm, only the 16th in the whole world, and the only one in the Philippines

“We are elated to be part of this very small group of farmers who have been given this designation as Heirloom Cacao. We are only the 16th to be given this honor, and the first in the Philippines.”

Charita Puentespina, Farmer and Founder of Puentespina Farms & Malagos Chocolate

This international designation and recognition uniquely positions Malagos Chocolate® amongst fine and premium chocolates in the market since it is a single-origin brand which sources its cocoa beans straight from this heirloom cacao farm.

Tree-to-Farm Process

The second reason-to-believe (or RTB) that supports the brand’s unique position as a premium chocolate brand is its remarkable 14-step tree-to-farm process which is implemented in its entirety within the Puentespina Farm where their Trinitario beans are also grown and harvested.

As I mentioned earlier, many mass-produced and well-known global chocolate brands do not have these same two unique features as Malagos Chocolate®.

Malagos Chocolate® is only one of about one hundred Tree to Farm producers of chocolate in the world which significantly accounts for the unique and fine flavor of the brand.

The use of premium cocoa beans in chocolate-making is actually not a guarantee of producing high-quality premium chocolate. The rigorous process has a material effect on the final quality of the chocolate. The best cocoa beans in the world could still yield a low-quality bar of dark chocolate if the beans are poorly fermented, over-roasted, or adversely effected by any number of other production variables.

For example, in step number five which is fermenting, if the workers are not diligent in turning the raw beans during the 5-6 days of fermentation, the resultant quality of the beans could be either over or under fermented which leads to low quality chocolate. In the case of Malagos Chocolate®, since this step is part of the their in-house process, they are able to control the ultimate quality of the cocoa beans through a well-monitored and implemented fermenting process.

During harvest from cocoa trees, which is step number four, some farmers around the world are known to harvest even before the cocoa fruit has properly ripened because of their limited opportunity to do the harvest. This common practice also leads to undermined quality of the cocoa beans eventually. In the case of Malagos Chocolate®, since the farm is fully-integrated into the process, harvesting is only done at the optimal time when the fruits are ripe of the picking.

As Rex Puentespina (son of founder Charita) said: “Great chocolates are made are made through the efforts of many people.” Given the labor-intensive process that premium quality cocoa beans go through, having all steps of the process housed in one place provides a distinct competitive advantage for Malagos Chocolate® in ensuring the consistency high-quality of the cocoa beans that are finally used in the chocolates.

As of this writing, the brand has already amassed a total of fifty six international awards including having the Puentespina Cocoa Farm now being recognized as one of the producers of the Best 50 Beans in the World.  A total of 166 cacao beans samples were received from 40 countries at the 2017 Edition of the Cocoa Excellence Programme in France. The ongoing success of this brand has truly placed Davao and the Philippines in the world map of fine cocoa and premium chocolate.

This brilliant brand leaves us with these two valuable lessons in brand strategy:

First, the brand positioning of Malagos Chocolate® (which is properly expressed by its battlecry of Tree to Bar) enables the brand to remain laser-focused on all aspects of the brand’s operations, from sowing, growing, harvesting, processing, and manufacturing. It is evident in all the initiatives of the brand through the years that they have clearly been very focused in building this positioning which has inevitably been recognized by the international community.

And second, process strategy is always a compelling source of competitive advantage for brands. This is often something that is not provided enough attention and care by brand owners, but if properly focused on, process strategy can truly be an enduring and powerful way of building the equity of a brand. In the case of Malagos Chocolate®, its slogan of Tree to Bar has actually placed process at the heart of its brand positioning.

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