Theo Chocolate Aligns Mission and Financing with Capital Infusion from RSF Social Finance

Seattle, WATheo Chocolate has earned a following by pairing a seductive product—“It’s rich, it’s velvety, it’s almost sinful,” said CBS News—with a built-in social mission.

As the first organic, fair trade–certified bean-to-bar chocolate maker in North America, Theo has been way ahead of the curve when it comes to positive impact. Now Theo is extending its focus on social responsibility to an area many companies don’t consider: its source of capital. Linking up with another leader in the impact sector, Theo has inked a $3.8 million financing deal with RSF Social Finance in San Francisco.

New funding from a kindred spirit

The new financing replaces existing funding and includes a $3.8 million capital infusion to address Theo’s seasonal working capital needs. It is familiar territory for RSF, a leader in funding fair trade and organic enterprises with strong social missions. RSF has provided essential capital to sustainable consumer product leaders Guayakí, Equal Exchange, Madécasse and others.

Kate Danaher, RSF’s senior manager of social enterprise lending and integrated capital, notes: “RSF has made millions of dollars in loans to enterprises that are modeling alternatives to food as usual. We understand the struggles that pioneers face, and it’s exciting to see enterprises like Theo become a force in the marketplace.”

Ensuring positive impact throughout the supply chain

Theo founder Joe Whinney was the inspiration behind the company’s bean-to-bar approach. Since 1994, he has been central to the development of an organic cocoa bean supply chain for the United States. Today, Theo supports farmer training in the Democratic Republic of Congo and Peru (its current sources of cacao), negotiates directly with farmer associations, and insists on transparency throughout its supply chain to ensure the system is working for everyone.

These efforts are paying off. Farmers are learning regenerative agricultural practices that improve their cocoa quality and create more-diversified farms, benefiting farm families and the environment. At the same time, Theo’s unique pricing structure provides price stability in an often volatile market. It also gives farmers an incentive to raise quality, because when they do they earn even more for their cocoa beans than they would from the fair trade premium alone.

“Theo’s overarching vision is to drive impact in the world by creating beautiful products in a responsible manner,” says Debra Music, Theo’s chief marketing officer. “We are always seeking to improve what we do, and we recognized that the source of our capital also needs to have a positive impact. Working with RSF addresses this concern.”

Bringing transformative ideas to life

RSF has a long history of seeding, developing and modeling transformative ideas. One of its newest initiatives is the Fair Trade Capital Collaborative, which provides financing for fair trade suppliers serving RSF borrowers. The goal is to enable fair trade consumer products companies and their suppliers to grow in tandem, expanding the ability of all parties to raise incomes and steward the environment in supplying countries. Initial partners include Guayakí, a yerba mate beverage company that restores forests in South America; Indigenous, a clothing company that pioneered fair trade certification for apparel and linens; and Equal Exchange, a worker-owner cooperative that sells fair trade coffee, tea and other foods.

“It’s encouraging for us to know that our partnership with RSF helps other enterprises that share our values grow as well, and that we are participating in a system that provides seed capital to other high-impact ventures that might not otherwise receive funding,” says Chuck Horne, Theo’s chief financial officer.

RSF’s new funding for Theo comes at a pivotal moment in the company’s growth trajectory. Theo recently launched a new line of nutrient-dense chocolate-based snacks featuring its proprietary high-flavanol cocoa powder. This product, Theo Chocolate Clusters, will broaden the chocolate category and begin to realize chocolate’s potential as a healthy food.

Clusters are made with whole-food ingredients such as quinoa, coconut, turmeric and hemp seeds, plus 50 mg of cocoa flavanols per serving. They are an excellent source of both fiber and iron and it is also said to be an organic anti-inflammatory. Clusters are available nationwide at Whole Foods Markets as well as many local and regional grocers.


Press Contacts

Theo Chocolate

RSF Social Finance
Sarah Grolnic-McClurg, Thinkshift Communications

Fair trade, organic chocolate maker aligns its financing with its values.

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