THE FIRST THING you notice when you enter Theo Chocolate’s roasting plant is the smell. It’s a rare aroma; Theo is the first Northwest chocolatier to roast its own cocoa beans and the only one in America roasting organic, fair-trade-certified beans. It evokes a whole suite of olfactory associations: fruit, coffee, newly turned loam, and, underlying them all, that essential perfume of the tropical Americas, fresh-ground red chili.

Makes sense. Chili and chocolate started out in the same part of the world, and the native peoples there sipped them together—a Mesoamerican speedball. Theo mixes them in two concoctions, a coconut curry bar and lavender-jalapeño caramel. And it was in the Central American jungle 18 years ago that Joe Whinney started down the path that led him to found Theo and, maybe, revolutionize the chocolate industry.

Whinney, who’s 41 now but still exudes a 20-ish enthusiasm, was working with farmers in Belize as a volunteer for the Tropical Conservation Foundation. He grew fascinated with cacao, the fruit that produces cocoa, and went on to work with organic growers in Ghana. There he became appalled: “I was overwhelmed at the disconnect—a luxury product produced by people in desperate economic and environmental conditions.”

The cacao market is notoriously exploitative. “It’s much more consolidated than coffee,” says Rodney North of the fair-trade importer Equal Exchange. Three brokers—two of them U.S. agribusiness giants, Cargill and ADM—dominate trading. Small farmers, who may earn $1 a day, grow the fruit. Some in Africa use child slave labor; a 2000 BBC exposé ignited an international furor. Whinney had a ringside seat as the “token tree hugger” on the World Cocoa Foundation’s board. “Industry people in the group just tried to spin the issue,” he says. “It was a total greenwash. I realized I could make much more difference by controlling the brand and production—by making chocolate myself.”

"All of a sudden it hit me—what if we can’t make any good chocolate?"

Whinney considered building a factory in Boston but opted for Seattle. “In Boston,” he explains, “there was this attitude: ‘If it’s a good idea, someone would have done it already.’ Seattle has a more entrepreneurial spirit.”

Seattle investors funded most of Theo’s $2 million start-up. Whinney secured the historic Fremont trolley barn, formerly Redhook’s brewery. He imported reconditioned European machines to perform the 13 processes (from destoning and roasting to tempering and molding) that turn beans into bars. He built a laboratory to test temperature, bacterial contamination, even chocolate varieties’ DNA. And then he shuddered, as the first batch neared completion in February 2006. “Nobody else here had any experience with chocolate,” he recounts. “I knew the equipment, and I’d selected the beans well. But all of a sudden it hit me—what if we can’t make any good chocolate?”

That was then. In 2007, its first full year, Theo won several national honors, notably a gold medal at the New York Fancy Food Show. This February, O magazine named it Best Chocolate Fix. Factory tours—two to four each day—fill up quickly and turn people away despite a $5 charge.

Showmanship helps: Whinney dressed Willy Wonka–style for a Valentine’s bash, and Theo’s 3400 Phinney bars (Chai Milk Chocolate, Bread and Chocolate Dark) show a Ben and Jerryish whimsicality, though they’re seriously flavorful. But connoisseurship and conscience are key. “We pay for quality—$3,600 to $6,000 a ton for beans,” boasts Whinney, versus $2,000 for bulk cacao. That yields single-origin bars—Madagascar Dark, Venezuela Limited Edition—as rarefied as wines or coffees. “When you bring quality and social responsibility together, it means fuller enjoyment.” And, maybe, more sales. “Last year we sold over a million chocolate bars. This year we’ll double that—and we’re only at a tenth of capacity.” That’s a lot of dark—er, green—chocolate.