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The Belgian market potential for cocoa

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Belgium is famous around the world for its chocolates. ‘Made in Belgium’ chocolates reflect tradition and quality, and make Belgium the world’s second largest exporter of chocolate products. Belgium is Europe’s second-largest direct cocoa bean importer, and is also an important distributor of cocoa derivatives, mainly to the cocoa-processing industries in neighbouring countries. Sustainability is key in the country; the Belgian cocoa sector launched an initiative in late 2018 aiming to make the sector 100% sustainable by 2025.


1 . Product description

The cocoa tree (Theobroma cacao) grows in tropical areas, between 15 and 20 degrees latitude north and south of the equator, in Africa, Asia and Latin America. Cocoa pods grow directly from the trunk and thicker branches of the tree. After extraction from the pod, cocoa seeds (beans) are fermented and (sun) dried. A cocoa producing tree can deliver on average 7-9 kg of dry beans per year.

The three main varieties of the cocoa tree as distinguished by the international cocoa market are:

  1. Forastero is the predominant cocoa variety. It is mainly cultivated in Africa, but also in Central and South America. It accounts for around 80% of global cocoa production. Forastero grows faster and gives a higher yield than other cocoa varieties. The beans have a strong, earthy flavour. Generally, bulk cocoa beans come from Forastero trees. Well-known Forastero subspecies are Amelonado and Nacional. Nacional trees in Ecuador produce fine flavour cocoa.
  2. Criollo (original cocoa tree) is mainly grown in Central America, northern South America, the Caribbean and Sri Lanka. Criollo makes up around 5% of global cocoa production. The beans have a delicate and sweet flavour. Criollo is often mixed with other varieties when making chocolate, given that it is scarce and expensive. Fine flavour cocoa beans are produced from Criollo cocoa trees. Well-known varieties are Chuao, Porcelana and Ocumare.
  3. Trinitario is mainly cultivated in Central and South America, the Caribbean and Asia. The beans are a hybrid of the Criollo and Forastero trees. This variety represents around 10­-15% of global cocoa production. The beans have a floral, fruity flavour. The cocoa beans from Trinitario trees are classified as fine flavour cocoa. There are exceptions, however, as Cameroonian cocoa beans produced from Trinitario trees are classified as bulk cocoa beans. Well-known varieties are Carenero, Rio Caribe and Sur del Lago.

The focus of this document is on cocoa beans (whole or broken, raw or roasted), corresponding to HS code 1801. Harmonised System (HS) codes are used to classify products and to calculate international trade statistics, such as imports and exports.

Cocoa bean derivatives (cocoa paste, cocoa butter and cocoa powder) are covered in our study on semi-finished cocoa products in Europe.

2 . What makes Belgium an interesting market for cocoa?

Belgium is the second-largest direct cocoa bean importer in Europe

With a market share of 12% in 2018, Belgium is the second-largest European importer of cocoa beans sourced directly from producing countries. The Netherlands is the largest direct cocoa importer. Belgian direct cocoa bean imports amounted to 232 thousand tonnes in 2018, at a value of €498 million. Between 2014 and 2018, import volumes decreased at an average annual rate of 2.4%, and by 5.9% in value.

Belgium sourced 99.3% of its cocoa beans directly from producing countries in 2018, mainly from Ivory Coast (55%), Nigeria (10%) and Ghana (10%). The other 0.7% came from intra-European trade. Cocoa beans enter Belgium via the second-largest cocoa port in Europe, the port of Antwerp, from which a significant share is re-exported to other European countries.

Belgium is a key trade hub for cocoa beans in Europe

Belgium is Europe’s second largest exporter of cocoa beans, with a market share of 43%. In 2018, Belgian export volumes of cocoa beans reached 189 thousand tonnes, at a value of €420 million. Main export destinations were Germany (44%), France (25%) and the Netherlands (24%).

Belgium has consolidated this distribution role of cocoa beans within Europe over the last years. While Belgium re-exported 51% of its imported cocoa beans in 2014, in 2018 this share rose to 81%. Between 2014 and 2018, Belgian exports increased by 8.7% in volume and 6.4% in value.

Belgium houses a large chocolate manufacturing industry

Belgium is a large manufacturer and exporter of chocolate products. In 2018, Belgium accounted for 11% of global chocolate exports, with 649 thousand tonnes of chocolate products, at a value of €2.6 billion. This made Belgium the second largest chocolate exporter in the world, after Germany. Between 2014 and 2018, Belgian exports of chocolate products increased at an average annual rate of 6.3% in volume and 4.2% in value.

‘Belgian chocolate’ refers to chocolate produced by the rules of the Belgian Chocolate Code, meaning that the complete process of mixing, refining and conching is done in Belgium. This code is developed to protect the reputation of Belgian chocolate manufacturers and their products, and to inform buyers. Belgian chocolate is popular worldwide, and demand for it is rapidly rising.

About 540 chocolate manufacturers and makers are active on the Belgian chocolate market. Large multinational chocolate manufacturers, however, dominate the market. Mondelez is Belgium’s largest chocolate manufacturer, thanks to its popular brands such as Côte d’Or and Milka. Well-known Belgian chocolate companies are Godiva, Leonidas and Neuhaus.

Belgium is a key producer of industrial chocolate for European chocolate industry

Most chocolate companies outsource the production of industrial chocolate. The production of industrial chocolate has become a core activity for Belgian companies. The world’s leading producer of industrial chocolate is Barry Callebaut, which has its largest production site in Wieze, Belgium. Other important companies producing industrial chocolate in Belgium are Cargill and Puratos.

As the demand for Belgian chocolate is rising, most industrial chocolate producers have invested in their production facilities in Belgium. For instance, Barry Callebaut invested considerably in its Belgian factories in 2017 to increase its production capacity by 20%. By mid-2019 the company started building a new global distribution centre in Belgium (to be ready in 2021), to increase the efficiency of product distribution. In late 2018, Cargill invested €12 million in its Belgian factory to increase production capacity. This investment comes on top of the €35 million investment made in 2014.

These industrial chocolate producers need high volumes of cocoa butter and cocoa liquor. Barry Callebaut, Mondelez and Cargill have grinding facilities in Belgium to produce these derivatives. However, the cocoa grinding industry in Belgium is not the largest in Europe. To compare: Belgium’s grinding industry processed an estimated 90 thousand tonnes of cocoa beans in 2016, whereas the cocoa industry in the Netherlands processed 565 thousand tonnes that same year.

As such, industrial chocolate producers import a large share of cocoa derivatives from neighbouring countries, especially the Netherlands. In 2018, Belgium’s net import volume of semi-finished cocoa products reached an estimated 169 thousand tonnes. Between 2013 and 2018, imports increased at an average annual rate of 5.0%.

Tips:

  • If you use Chrome as a web browser, read here how you can translate this study, or any of the articles referred to in this study, into another language.
  • Have a look at the website of the Port of Antwerp to learn more about the port itself and cocoaspecific opportunities.
  • See the website of the Belgian Confectionery Industry Organisation for more information about the chocolate industry in Belgium.
  • Access the EU Trade Helpdesk to analyse European and Belgian trade dynamics yourself and to build your export strategy. By selecting Belgium as your reporting country, you will be able to follow developments such as the emergence of new suppliers and the decline of established ones.
  • See our study of trade statistics for cocoa for more detailed information about the European trade in cocoa beans.

3 . Which trends offer opportunities on the Belgian market?

Sustainability is key in the Belgian chocolate market

In late 2018, the cocoa sector in Belgium launched Beyond Chocolate, a sector-wide partnership that aims to make the sector 100% sustainable by 2025. This implies that all chocolate produced or traded in Belgium should meet a relevant certification standard or should be produced with cocoa beans from (company-specific) sustainability programmes.

For instance, the cocoa beans used for Belgium’s leading chocolate brand Côte d’Or are sourced under the principles of Mondelez’ sustainability programme Cocoa Life. Retailers also take part in the initiative. For instance, since 2018 Lidl has only been using Fairtrade-certified cocoa for their own private label chocolate bars. Retailer Colruyt ensures that its private label brands Everyday and Boni Selection are either organic, Fairtrade or Rainforest Alliance/UTZ-certified.

Chocolate consumers also increasingly demand and buy sustainably produced chocolates. The sales of Fairtrade chocolate products, for instance, rose by more than 50% in 2018, as compared to the previous year. Although chocolate is the fastest growing Fairtrade product in Belgium, the total market share of Fairtrade chocolate is still below 5%.

Although organic certification is also still a niche market for the chocolate industry, the organic food products are regarded as one of the most important growth markets in the Belgian food retail sector. Examples of Belgian organic chocolate producers are Belvas (the first organic chocolate maker of Europe), Nao and Magic Chocolates.

The increasing endorsement of certification to promote sustainability in Belgium provides an interesting entry point to exporters that have significant volumes and a wide assortment of certified cocoa. Examples of successful cocoa exporting companies that provide information on their sustainable production practices and certifications include CABRUCA (Brazil) and Grupo CONACADO (Dominican Republic).

Belgian consumers demand healthier chocolates

Belgium registered a yearly per capita chocolate consumption of 7.2 kg in 2017. Compared to other European countries, this is relatively high. However, countries such as Switzerland (10.5 kg), Germany (9.2 kg) and Austria (8.7 kg) have a higher per capita consumption. Although Belgian consumers are increasingly looking for healthier food products, chocolate consumption has remained stable over the years.

Both chocolate manufacturers and makers are responding to this trend by using more natural sweeteners (such as stevia and agave). The chocolate brand Sweet Switch is an example of a sugar-free Belgian chocolate brand. Chocolate companies also add more ingredients that are perceived to be healthy, like fruits and nuts. An example is the Côte d’Or Fruit product line, produced by Mondelez. Vegan chocolate is also becoming more popular, as exemplified by the chocolate brand Takana.

The consumption of dark chocolate in Belgium is also increasing, as chocolate with a higher cocoa content is perceived as healthier. Large Belgian supermarkets like Delhaize nowadays offer a wide variety of dark chocolate bars. Offering smaller sizes of chocolate products has also become more common. For instance, Mars now offers Twix bars in bite-size, which are for sale in Belgian supermarkets.

Innovation diversifies Belgium’s chocolate market

In recent years the range of chocolate products available in Belgium has expanded enormously. Shops offer a large variety of chocolate products, ranging from classic flavours (pure, milk and white) to products containing exotic fruits and herbs.

The use of more interesting ingredients also involves using cocoa from more diverse origins. For instance, the Belgian chocolate company Leonidas offers small dark chocolates from São Tomé, and Valentino Belgium offers a praline gift box with chocolates made with cocoa beans from five specific sources (Ghana, Ecuador, Papua New Guinea, Ivory Coast and Brazil) so customers can taste the flavour differences between the countries.

Belgium is also home to companies focusing on creating innovative chocolate products and processes to stimulate the export potential of Belgian chocolate producers, such as the Cacaolab.

Tips:

This study has been carried out on behalf of CBI by ProFound – Advisers in Development.

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