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Exporting cocoa beans to Spain

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Spain plays an important role in the cocoa market, having the fifth-largest import volume of cocoa beans in Europe. Spanish buyers source most of their cocoa beans from West Africa, primarily as bulk. A number of cocoa-processing companies installed in Spain are helping the country grow fast also as an exporter of chocolate. Local demand for high- quality and dark chocolates is increasing, which might offer opportunities for direct relationships between Spanish speciality bean-to-bar makers and suppliers in producing countries.


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 Spain, 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 Spain an interesting market for cocoa?

Spain imports 5% of all European cocoa bean imports, placing it fifth in import volume in Europe, behind only the Netherlands, Germany, Belgium and France. Spanish imports of cocoa beans amounted to almost 124,000 tonnes in 2017, valued at € 265 million.

Spanish imports grew at an annual average rate of 5% in volume and 7% in value in the 2013–2017 period. These increases are in line with the growing demand in Spain for high-quality chocolate products that have high content of high-quality cocoa.

Spain’s chocolate industry reaching maturity

Approximately a third of Spain’s cocoa imports in 2017 were re-exports from other countries in the EU, mainly the United Kingdom, the Netherlands, Belgium and France. The Spanish grinding industry produces industrial chocolate that is used as a basis for the manufacturing of final chocolate products.

The growth of Spain’s chocolate industry fuelled an increase of the country’s entire confectionery industry starting in 2015. Domestic production of cocoa and chocolate remained relatively stable that year, growing just 1.2% in relation to 2014. However, still in 2015, Spain’s chocolate export volume grew by 11.8% in relation to the previous year, increasing the demand for cocoa beans. Exports of other confectionery products such as candy and biscuits may be larger in volume, but have not grown as fast as chocolate exports, which are led by innovative players such as Chocolates Valor.

Consumers in Spain increasingly chose dark chocolates

The average chocolate consumption per capita in Spain is 3.4 kg per year. In comparison, France’s per capita chocolate consumption amounts to 4.2 kg, putting it in eighth place in chocolate consumption in Europe.

Chocolate consumers in Spain increasingly prefer high-quality dark chocolates, in contrast with chocolates that have more added sugar and milk. According to industry source, consumption of dark chocolates is driven by consumer preferences for healthy products. Chocolates with a high content of cocoa are considered healthier than those with higher sugar and milk content. As a result, sales of dark chocolate products are rising, chocolates without added sugar such as the ones in the 0% line of Chocolates Valore are becoming more popular and, at the same time, new and healthy ingredients such as dried fruits and oats are being added to chocolate.

Consumption of products with a high percentage of cocoa is also increasingly gaining space at breakfast time in Spain. Cocoa powders used in breakfasts make up 25% of Spain’s total consumption, the second presentation after chocolate tablets, which hold 34% of total consumption. Potential health benefits help explain breakfast consumption of cocoa powder such as Cacau Puro de Mercadona, which is marketed as 100% cocoa powder, gluten free and having zero added sugar.

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

Exporting cocoa to Spain 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 Spanish 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.

Tip:

  • Read more about the quality requirements of the European market for cocoa beans on the Cocoa Quality website.

Learn more about maintaining the quality of your cocoa during transportation on the website of the Transportation Information Service.

Labelling requirements

The label on cocoa exported to Spain should be written in English or Spanish. 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 Spain 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 multinational companies in the Spanish chocolate market such as Nestlé and Mondelez have sustainability policies emphasizing contact with producers, operations transparency, as well their social and environmental impact. Market leading Spanish companies such as Ibercacao also have sustainability policies relating to social and environmental initiatives. These initiatives include the use of standards such as UTZ, Sedex and the Roundtable on Sustainable Palm Oil (RSPO).

Certification standards such as the ones mentioned above have become important in the mainstream chocolate market. Several cocoa traders and processors operating in Spain, such as Indcresa and Nederland S.A., food manufacturers and chocolate companies, such as PasDulce, feature on the UTZ list of certified cocoa supply chain actors. Products certified by Rainforest Alliance are also present in the Spanish market, mainly sold through German retailer Lidl under brands like Magnum and Cornetto. In 2017, UTZ and Rainforest Alliance announced a merger into a single organisation and certification named Rainforest Alliance. The new single standard will be launched in 2019.

Requirements for niche markets

Spain represents a small but steadily growing market for organic-certified cocoa products in Europe, compared to countries such as Germany and the United Kingdom, which are regarded as Europe’s largest markets for organic-certified cocoa products. Both small-scale chocolatiers such as Chocolates Solé and large chocolate makers such as Mondelez — Suchard Bio — offer organic-certified chocolates. Organic certification remains a small market and relevant as a niche opportunity in Spain. Fairtrade is also an increasingly important certification standard for a range of cocoa traders and chocolate makers in Spain, such as the cocoa manufacturing company Cacao Sampaka and the trading company Indcresa.

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 Spanish market?

An overwhelming 78% of Spain’s total cocoa bean imports originated in West Africa in 2017. Ivory Coast was the largest cocoa supplier, accounting for 38% of the total share of direct imports at 35,507 tonnes in 2017. Ivorian cocoa bean exports to Spain grew at an average annual growth rate of 7% between 2013 and 2017. Ghana and Cameroon both accounted for 15% each of Spain’s total direct imports of cocoa beans in 2017. Ghana actually registered an average annual decrease of -5% between 2013 and 2017, whereas Cameroon saw an average annual growth of 4% in the same period. Producing countries in West Africa dominate the market for bulk cocoa and large-scale chocolate manufacturing.

Emerging suppliers in East Africa and Latin America show mixed developments

East African countries supply around 6% of the total amount of directly sourced cocoa beans from producing countries to Spain. Registering an annual growth of around 77% in volume between 2013 and 2017, Kenya’s exports of cocoa beans to Spain are by far the fastest-growing. The Democratic Republic of Congo also grew its export volumes of cocoa beans to Spain at an annual growth rate of 25% in the 2013–2017 period. In 2017, DR Congo supplied around 1,363 tonnes of cocoa beans to Spain. Bean-to-bar maker Blanxart is one of the main companies in Spain sourcing from DR Congo. Uganda, however, saw a relatively large annual decline of -25% in volume between 2013 and 2017, exporting 1,097 tonnes of cocoa beans to Spain in 2017.

All Latin American countries combined supply around 12% of Spain’s cocoa bean imports, a significantly high share than the 7% they contribute to the total European cocoa bean imports. Supplies from Ecuador and Peru increased substantially at an average annual rate of 9% and 20% respectively. Colombia, however, saw an average annual decline of 4% between 2013 and 2017.

Tips:

  • Identify your potential competitors to learn from their practices, including:
    - marketing: website, social media, trade fair participation;
    - product characteristics: origin, quality, oil content;
    - value addition: certifications and processing techniques.
  • Check well-structured websites, such as Ingemann (Nicaragua) and Xoco (Honduras).

5 . Through what channels can you get cocoa on the Spanish 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 Spanish cocoa market.

Chocolate confectionery

The chocolate confectionery sector in Spain is very concentrated by a few large companies, including Mars, Mondelez, Nestlé, Hershey and Ferrero. Nestlé took the leading position within the chocolate confectionary in Spain in 2015. Consolidating its position in the Spanish market, Nestlé has invested heavily in innovation and improvements to its manufacturing facilities in Spain in the last several years.

Supermarkets make up the most important channel for the sale of chocolate products to consumers in Spain, accounting for approximately 51% of total sales. Discounters made another 22% of the sales in the market for chocolate products, followed by hypermarkets with 18%.

Retailers such as Mercadona and Carrefour are an important channel for mass products of big brands, but increasingly offer premium chocolate products as well. Specialised shops in Spain naturally offer premium chocolate products, such as Chocolates Brescó, Mon Chocolate, Fantasía de Chocolate and Cacao Sampaka.

Food industry

Cocoa products also important ingredients for the Spanish food industry. The Spanish food industry is valued at about € 98 billion, employing approximately 500,000 people. The sugar, chocolate and cocoa sector reached net sales of nearly € 4.8 billion in 2014. Companies producing biscuits, ice cream, pastries and other bakery products are some of the main users of cocoa products. Leading chocolate processing companies in Spain include Delaviuda, Natra and Chocolates Valor.

Cosmetics industry

After years of retraction, sales of cosmetics in Spain eventually stabilised and started to bounce back since 2016. A growing number of Spanish consumers have been showing more interest in cosmetics with natural ingredients. 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: The main channels for export of cocoa beans to the Spanish market

Market segment

Brand

Product Details

Price per 100 grams

Upper end

Pangea Chocolate

Alto Beni, Bolivia 76%

€ 10.70

Kaitxo

Dark from Tanzania 75%

€ 10.00

Utopick

Chocolate negro NUGU 70%

€ 9.27

Middle range

Cacao Sampako

Dark chocolate 70%

€ 4.20

Alternativa 3

Organic 75% from Peru

€ 3.35

Blanxart

Dark chocolate from

Brazil 76%

€ 2.59

Lower end

Valor

Dark chocolate 70%

€ 1.15

Carrefour

Dark chocolate 72%

€ 0.90

Milka

Choco Swing Cookie

€ 0.82

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:

Please review our market information disclaimer.

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