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Exporting cocoa beans to Italy

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Italy is a large importer of cocoa beans, sourcing a high share of its imports directly from cocoa-producing countries. Western African countries combined account for more than 70% of Italy’s cocoa bean imports, but exports from suppliers in East Africa and Latin America have recently grown at a high rate. Italy is home to large-scale chocolate companies such as Ferrero, but also has several small-scale and high-quality chocolate makers. The market for certified chocolate is also increasing steadily in Italy, following a consumer and industry trend towards sustainability.


1 . Product description

The cocoa tree (Theobroma Cocoa) grows in tropical areas between 15 and 20 degrees latitude north and south of the equator in Africa, Asia and Latin America. After extraction from the pod, cocoa seeds are fermented and sundried. A cocoa producing tree can deliver on average 0.5 to 2 kg of dried seeds per year.

The international cocoa market, including Italy, accepts three types of cocoa beans:

  1. Common grade: Forastero cocoa
    Forastero was originally grown in the high Amazon region and is now the predominant cocoa variety cultivated mainly in Africa, accounting for around 80% of global cocoa production. The beans have a flatter flavour than the fruitier and more citric Criollo and Trinitario beans.
  2. High grade: Criollo cocoa (original cocoa tree)
    Criollo was originally grown in Venezuela, Central America and Mexico, but is now also grown in Ecuador, Colombia, Peru, Bolivia, Nicaragua, Honduras, Guatemala and Sri Lanka. Criollo makes up 5 to 10% of global cocoa production. The beans have a bitter, aromatic flavour and are easily processed.
  3. High grade, Trinitario cocoa
    Trinitario was originally grown in Trinidad, but is now also grown in Venezuela, Ecuador, Honduras, Nicaragua, El Salvador, Costa Rica, Cameroon, Samoa, Sri Lanka, Indonesia and Papua New Guinea. The beans are a hybrid of the Criollo and Forastero trees. This variety represents between 10 and 15% of the global cocoa production.

Harmonised System (HS) codes are used to classify products and to calculate international trade statistics, such as imports and exports. The focus of this study is on cocoa beans under Harmonised System code 1801.

Other cocoa products are covered in our study on exporting semi-finished cocoa products to Europe.

2 . What makes Italy an interesting market for cocoa?

Italy is among the largest cocoa bean importers in Europe

At more than 100,000 tonnes in 2017 (€ 264 million), Italy alone makes up approximately 4% of all European imports of cocoa beans. The vast majority of these imports (93%) is sourced directly from producing countries. Since 2013, Italian cocoa bean imports increased at an average annual rate of 3.1% in volume, and even more significantly in value, at an annual rate of 9.1%.

Lower than average chocolate consumption, but more high-quality chocolate

Italy has a lower chocolate consumption than the European average, but Italian consumers have a marked preference for chocolates made from high-quality cocoa beans. These cocoa beans are often traded at price differentials, thus offering potential for producers to attain more value to their product.

Italian consumers purchase an average of 4 kg of chocolate per year, less than half of the average 9 kg those in Switzerland consume per year, for example. However, consumption of chocolate in Italy is marked by a strong preference for dark chocolate, which makes up 40% of all chocolate consumed in Italy.

The Italian chocolate industry has a long tradition in high-quality products. Italy is home to some of the most traditional chocolate companies in the world, which are mainly concentrated in the region of Piemonte. The country’s artisanal chocolate makers are organised under the Associazione Cioccolatieri Artigiani Italiani (ACAI), while the larger industry is represented by the Associazione delle Industrie del Dolce e della Pasta Italiane (AIDEPI). Both of these bodies promote high-quality and pure ingredients in the production of chocolate. Members of the AIDEPI have made specific commitments to use 100% cocoa butter in ‘pure’ chocolates, i.e. not to add substitutes such as vegetable oils.

Italy is the largest supplier of chocolate to China

China is one of the fastest-growing markets for chocolates in the world. Industry estimates indicate that China will be the second largest chocolate market in the world by 2020. Italian producers have tapped into this opportunity recently, becoming the largest supplier of chocolate to the Chinese market, followed by Belgian producers. The growing demand for chocolate worldwide fuels the demand for cocoa beans, making Italy an increasingly interesting destination for supplies from cocoa-producing countries. In 2015, Ferrero, one of the largest Italian chocolate producers, opened its first manufacturing plant in China, indicating a trend for overseas manufacturing.

A growing market for ethical chocolate in Italy

Although the market for certified chocolates is typically smaller in Southern Europe as compared to Northern Europe, Italian consumers have been showing more interest in sustainably-sourced products. Italian company ICAM is a pioneer in the organic market and one of the largest manufacturers of organic chocolate in the world. The growing market for organic chocolate in Italy includes other companies that have organice lines such as Vanini.

Chocolates produced from fair-trade certified cocoa beans are commonly available through specialised fair-trade shops and supermarkets in Italy. Fair-trade certified cocoa beans used in chocolates sold on the Italian market are often sourced from cooperatives in Ecuador, Ghana, Dominican Republic, Peru and Bolivia. Double certification, i.e. chocolate products certified as fair trade and organic, is very common in Italy.

3 . What are the requirements for cocoa to be allowed on the market in Italy?

Exporting cocoa to Italy requires compliance with strict European Union requirements. In our study on buyer requirements for cocoa, you can find a detailed analysis of these requirements. See some of the highlights below, specified for the Italian market where relevant.

Legal requirements

You must follow the European Union legal requirements for cocoa, mainly dealing with food safety. Traceability and hygiene are the most important themes.

Specific sources of contamination require special attention, the most common of which for cocoa beans include: pesticides, mycotoxins (ochratoxin A is especially relevant for cocoa), polycyclic-aromatic hydrocarbons (PAHs) and microbiological contamination such as salmonella, although cocoa is considered low risk for the latter.

It is also important to consider the contamination from heavy metals during production and handling, particularly cadmium. The presence of cadmium may be a particular problem for cocoa from some Latin American countries due to issues such as volcanic activity and forest fires.

Quality criteria

You must meet international quality standards to gain access to the Italian market for cocoa beans. These standards are particularly high within the fine-flavour cocoa beans speciality segment .

Cocoa of Excellence lists the following factors to define high-quality cocoa:

  • Genetically good trees;
  • Well-cared cocoa, grown in a suitable environment;
  • Properly harvested pods;
  • Good practices to keep trees healthy, free of pests and diseases;
  • Optimum fermentation and drying protocols specific to each bean type;
  • Know-how of cocoa beans processing and chocolate making.

High-grade, fine flavour cocoa beans are generally of higher quality than common-grade cocoa beans, as their distinctive flavour is popular among manufacturers of high-quality chocolate. Fine flavour beans are usually produced from trees genetically linked to Criollo and Trinitario cocoa-tree varieties. Common-grade or bulk cocoa beans for mass production are genetically derived from Forastero trees.

Harvesting and processing techniques are also important in harnessing the qualities of fine flavour cocoa beans. While harvesting, make sure to pick only ripe fruits. During processing, make sure all cocoa beans are fermented and dried homogenously. Cocoa beans should be shipped shortly after harvest because extended storage, longer that six months, may result in losses due to the relatively high humidity in tropical environments.

The grading of cocoa depends on the fermentation process, which is done to moderate the beans’ initially bitter flavour and yield a typical cocoa flavour. Cocoa grading differs across producing and consuming countries. Standard practices have been set by the international cocoa trade associations which classify grades as follows:

  • Well fermented cocoa beans: less than 5% mould, less than 5% slate and less than 1.5% foreign matter.
  • Fairly fermented cocoa beans: less than 10% mould, less than 10% slate and less than 1.5% foreign matter.

Tips:

Labelling requirements

The label on cocoa exported to Italy should be written in English. The label should include the following:

  • product name;
  • grade;
  • lot or batch code;
  • country of origin;
  • net weight in kg.

In case your cocoa is organic or fair-trade certified, the labels should contain the name or code of the inspection body and certification number.

Figure 2: Labelling example

figuur_2_14.jpg

Source: Caribbean Agricultural Network

Packaging requirements

Cocoa beans are traditionally shipped in jute bags weighing between 60 and 65 kg.

Shipping cocoa beans in bulk has become more popular in the mainstream market in recent years. When shipped bulk, cocoa beans are loaded directly into the ship’s cargo hold or in shipping containers that have a flexi bag (see figure 3). This mega bulk method is often adopted by larger cocoa processors, which handle cocoa beans of standard qualities.

Jute bags are still commonly used in the fine flavour and speciality cocoa segment. Vacuum-sealed GrainPro packaging can be used for very high-quality micro lots (see figure 3).

Figure 3: Examples of packaging for cocoa beans: jute bag, container-sized flexi bag and GrainPro

figuur_3-1.jpg  figuur_3-2.jpg  figuur_3-3.jpg

Sources: Osu.edu, Bls.bulk.com and GrainPro

Tip:

Additional requirements

Expect buyers in Italy to request extra food safety guarantees, such as the implementation of good agricultural practices and Quality Management Systems (QMS) regarding production and handling processes.

The main standards of good agricultural practices are set by GLOBALG.A.P. They are voluntary standards for the certification of agricultural production processes that provide safe and traceable products.

A system based on Hazard Analysis and Critical Control Point (HACCP) is often a minimum standard required for the storage and handling of cocoa beans. Some buyers will also expect you to have certificates from the International Featured Standards (IFS) or the British Retail Consortium (BRC).

Corporate responsibility and sustainability are also growing in importance in the cocoa sector. Adopting codes of conduct and sustainability policies related to your company’s environmental and social impacts can provide you with a competitive advantage. Leading companies in the Italian chocolate market such as Ferrero and Domori have sustainability policies emphasizing contact with producers, operations transparency, as well their social and environmental impact.

Certification standards such as UTZ and Rainforest Alliance are common in Italy, although not as widely required as in Northern European markets. Large companies operating in the mainstream chocolate and food market, such as ICAM, include these certification schemes as part of their sustainability policies. See the UTZ list of certified cocoa supply chain actors to find companies in the Italian market and other regions.

Requirements for niche markets

As mentioned above, there is a growing market in Italy for sustainably-sourced products which are certified organic and fair trade. Companies such as ICAM and Vanini, which have organic chocolate lines, have a strong influence on the Italian market. Fair trade certification also has a share of the Italian chocolate market through specialized companies such as Altromercato, Quetzal, Eco Garantito and Libero Mondo. Most fair-trade cocoa beans traded in Italy have double fair trade and organic certification.

Tips:

  • Check the EUR-Lex website for more detailed information about the regulations concerning cocoa products.
  • Find out which standards or certifications potential buyers in your target segment favour. Buyers may have preferences for a certain food safety management system or sustainability label depending on their end clients and distribution channels.
  • See our study on exporting certified cocoa to Europe for more information about demand, trends and specific trade channels.

4 . What is the competition like in the Italian cocoa market?

West Africa accounts for more than 70% of Italy’s cocoa bean imports

Ivory Coast supplies more than half of Italy’s direct cocoa bean imports, which have grown at an annual rate of 3.8% in volume between 2013 and 2017. Ghana was the second largest supplier of cocoa beans to Italy in 2017, having an 18% share of Italy’s total imports that year, after growing at an average annual rate of 1% since 2013. Another significant Western African supplier to Italy is Nigeria, accounting for 4% of total imports. Producing countries in West Africa dominate the Italian import market for bulk cocoa and large-scale chocolate manufacturing.

Fast-growing suppliers include East Africa and Latin America

Developments in Italian cocoa bean imports show an interesting dynamic for smaller suppliers in producing countries. Registering an annual growth of around 16% in volume, Uganda now figures among the largest exporters of cocoa beans to the Italian market, having accounted for 3% of all Italian imports in 2017. Tanzania’s exports of cocoa beans to Italy also grew significantly between 2013 and 2017, at an average annual rate of 16% in volume. In 2017, Tanzania supplied around 560 tonnes of cocoa beans to Italy.

In Latin America, Colombia’s exports are among the fastest-growing suppliers of cocoa beans to Italy. Between 2013 and 2017, Colombia’s exports of cocoa beans to Italy increased at an average annual rate of 27% in volume. Although this is partly due to Ferrero’s increasing sourcing activities in Colombia, smaller-scale speciality chocolate makers such as Domori also buy Colombian cocoa beans and contribute to this growth. Supplies from Peru also increased substantially at an annual rate of 13% in volume between 2013 and 2017, consolidating the country’s position as one of the top three suppliers to Italy, with 7% of total Italian imports.

Other Latin American countries supplying larger volumes to Italy, have also increased their supplies over the 2013–2017, namely Ecuador and Dominican Republic, at respective annual rates of 6.1% and 1.9%. Together, these countries account for around 11% of Italian imports.

5 . Through what channels can you get cocoa on the Italian market? Which market segments to target?

The Italian market does not differ much from the general European market in terms of segmentation and channels. See for instance our study on trade channels and segments for cocoa. The below analysis looks into current developments in the three segments of the Italian cocoa market.

Chocolate confectionery

The chocolate confectionery sector in Italy is worth around € 2 billion, led by chocolate bars (€ 429 million or 38,500 tonnes), followed by pralines and truffles (€ 330 million or 19,000 tonnes) and chocolate-based snacks (€ 104 million or 7,400 tonnes).

Retailers like Coop and CONAD are important for mass products of big brands, but are increasingly offering premium and certified chocolate products as well.

At the same time, the market for high-quality and artisanal chocolates is very diverse and developed in Italy. Examples of specialised chocolate shops in Italy include:

Food industry

Cocoa products are also important ingredients for the Italian food industry, including for ice cream, biscuits and other confectionery. The Italian food-processing industry is valued at approximately € 132 billion.

Cosmetics industry

Cosmetics sales in Italy reached more than € 10 billion in 2017, which indicates possible opportunities for cocoa butter exports to the Italian market. The cosmetics industry processes cocoa butter in products such as creams and soaps. If you want to know more about opportunities in this industry, refer to our study on exporting natural ingredients for cosmetics to Europe.

Figure 5: Main channels for export of cocoa beans to the Italian market

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The main cocoa-processing multinationals have facilities in Italy and play a strong role in the Italian chocolate market, including Ferrero, Barry Callebaut and Nestlé. However, the local industry is diverse, with many different players active in different cocoa market segments.

Italy has a few cocoa-processing companies and manufacturers of cocoa products which import cocoa beans directly from origin countries, such as Zaini and Agostoni. Cocoa bean importers also play an important role, such as Cacao Dominicano and Spiga Trading. At the same time, Italy also has specialised importers and chocolate brands dealing with organic and fair trade certified products, such as Que Tzal, Altro Mercato, Eco Garantito and Libero Mondo.

Besides these companies, Italy has a high number of chocolate brands importing cocoa beans directly, such as Majani and Caffarel. For producers and exporters dealing with fine flavour, high-quality cocoa beans, Italy also has an array of bean-to-bar and artisanal chocolate makers, such as Amedei, Domori, Aruntam, Bodrato Cioccolato, Slitti, Guido Castagna, among several others.

Tips:

6 . What are the end market prices for cocoa in Italy?

Prices for chocolate can be segmented in lower end, middle range and upper end. In general, the lower-end chocolate products are often of standard quality and the cheapest on the market. The upper-end products are chocolate products of high quality, made with fine flavour beans, possibly of single origin. For more details about segmentation in the cocoa and chocolate markets, refer to our study on channels and segments.

Table 1: Indication of consumer prices of chocolate per market segment in Italy

Market segment

Brand

Product Details

Price per 100 grams

Upper end

Domori

Cacao Criollo 70% Porcelana

(25 grams)

€ 30.00

Amedei

Toscano black chocolate bar 63%

(150 grams)

€ 14.67

Aruntam

Aruntam Chocolate Piura 72½ Peru

(60 grams)

€ 11.67

Venchi

Dark chocolate bar Cuor di Cacao 75%

(100 grams)

€ 5.60

Middle range

Altromercato

Mascao

Dark chocolate 60% with pomegranate

(80 grams), organic certified

€ 4.00

Caffarel

Dark Tavoletta Extra-Fondente 86%

(100 grams)

€ 3.60

Vanini

Dark chocolate 86% (100 grams)

€ 1.99

Lower end

 

Novi Nero

Nero 88% Cacao (75 grams)

€ 1.60

Solidal

Cioccolato Fondente Extra (100 grams)

€ 0.90

CONAD

Tavoletta Cioccolato CONAD

(200 grams)

€ 0.80

Source: Chocolate Shop, Domori Shop, Native Joy Food

The price breakdown for chocolate is illustrated in figure 6.

Be aware that export prices of cocoa beans and the share kept by cocoa producers will depend on the cocoa bean quality, the size of the lot and the supplier’s relationship with the buyer. However, chocolate companies and retailers keep the largest shares.

Figure 6: Price breakdown for chocolate

figuur_6_4.jpg

Source: Cocoa Barometer, 2015

Tips:

  • Monitor end consumer prices of chocolate to evaluate price ranges. The websites of supermarket chains, chocolate speciality stores and chocolate web shops are good sources for price information. Some of these sites include: Chocolate Shop, Choco Store and Alla Corte di Bacco.
  • Monitor price developments for cocoa beans on the international markets. Use, for example, the Monthly Review of the Cocoa Market Situation reports published by the International Cocoa Organization (ICCO).

Please review our market information disclaimer.

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