Market Potential for Organic Cocoa - Study on the global market for cocoa beans and semi-finished cocoa products

Summary

The international demand for organic cocoa is growing. However, reliable published data on supply and demand volumes and trend studies about this sector are lacking. With the increasing demand, processors are looking for new, reliable sources of organic cocoa. Furthermore, producers in the main cocoa cultivation areas want to know more about market prospects and trends in the long term before deciding whether to convert to certified organic production.
FiBL, therefore, compiled this study based on a comprehensive analysis of literature and market data from various sources. Key questions on the expected development of supply and demand and their influencing factors were addressed in consultation with relevant European and American traders, mills, and chocolate manufacturers. The study is aimed at market players in the cocoa sourcing and processing industries and the retail sector, as well as scientists, consultants and NGOs active in the cocoa sector.
The worldwide production of cocoa is based on 5 to 6 million small farmers. Apart from this large number of smallholder producers in the primary sector, the cocoa value chain is highly concentrated at the level of traders, processors of semi-finished products, and chocolate manufacturers, with the exception of small artisanal processors.
In 2018, 4.8 million tons of cocoa were produced worldwide, of which approximately 131’860 tonnes were organic. This corresponded to a 3.4 % share of the total cocoa production.
Despite certain risks associated with production and cultivation conditions (see Chapter 4), experts have predicted an annual increase in trade volume for organic cocoa of 5-9% by 2025 (see Chapter 5).
In 2019, the six most important organic cocoa-producing countries were the Dominican Republic, the Democratic Republic of the Congo, Peru, Sierra Leone, Ghana and Ecuador. The five most important organic cocoa markets were the USA, Germany, France, Italy, and the UK.
At the time of our surveys among experts, in January 2020, the supply of organic cocoa slightly exceeded demand. Nevertheless, the amount of residue-free organic goods, or the amount of organic cocoa from certain growing countries, can fluctuate and become scarce at certain times. All interviewed experts expected a sufficient supply of the demanded quantities of organic cocoa in the medium term because further producer groups would react to increasing demand by converting to organic production. In addition, yields are expected to increase through consulting projects and the rejuvenation of tree stands. However, experts evaluate the long-term supply of cocoa at a global level as vulnerable. Labour-intensive and little-mechanised cocoa production on small farms combined with low cocoa prices makes it challenging to persuade younger producers to continue cocoa cultivation. Unless the framework conditions for cocoa cultivation are fundamentally changed by politics and the market develops to favour cocoa producers, many cocoa production sites could be abandoned or converted to other, more attractive crops. Suitable instruments could be national support programs for cocoa producers, significantly higher producer prices, and more investment in mechanisation, advisory services, and plantation renewal.
From a buyer's perspective, the organic cocoa market, with its small share of 2.5% of total production in 2018, is a niche market with low strategic weight for many large companies in the sector. It is, therefore, usually not a prioritised sector with the major international cocoa processors. Smaller and specialised organic cocoa processors have thus filled the niche with attractive price and service offers to the organic cocoa producers.
Experts predict a general growth of the organic cocoa market and a development out of the niche market. Indicators for this include the uptake of organic chocolate in most supermarkets and discounters.