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Entering the European market for certified cocoa

Takes about 17 minutes to read

Rainforest Alliance/UTZ is the most commonly used mainstream certification scheme for cocoa. Fairtrade and organic are growing on the specialty market, and offer interesting opportunities for exporters, especially if your cocoa is certified by both standards. As an exporter, you should certify according to market demand and buyer requirements, making sure that certification is economically viable to you and that it safeguards long-term commitments.


1 . What requirements must certified cocoa comply with to be allowed on the European market?

You can only export cocoa to Europe if you comply with strict European Union requirements. For a complete overview of these standards refer to our study on buyer requirements for cocoa or consult the specific requirements for cocoa in the EU Trade Helpdesk. This section highlights the main requirements related specifically to certified cocoa.

On the mainstream cocoa market, the most relevant certification scheme is Rainforest Alliance. You can consult the guidelines and requirements for the use of their label here. The most common corporate sustainability programmes include Nestlé Cocoa Plan, Barry Callebaut’s Forever Chocolate and Mondelez’s Cocoa Life.

Organic certification

Demand for organic cocoa is rapidly growing in Europe, making this an interesting niche market. In order to market your cocoa as organic in the European market, it must comply with the regulations of the European Union for organic production and labelling.

Before you can market your cocoa beans as organic, an accredited certifier must audit your growing and processing facilities. Examples of accredited certifiers are Control Union, Ecocert, ProCert and SGS. After being audited, you may use the EU organic logo on your products, along with the logo of the standard holder, such as Bio-Siegel (Germany), Agriculture Biologique (France) or the Soil Association (United Kingdom). There are slight differences between these standards, but they all comply with EU legislation on organic production and labelling.

Another private standard used in Europe is Demeter, which is a standard for biodynamic farming.  

Fair trade certification

Fairtrade International (FLO) is the leading standard-setting organisation for Fairtrade. After accreditation by an independent third party, you are allowed to put the Fairtrade logo on your product. Accredited certifiers for fair trade standards include Ecocert IMO and FLOCERT. Refer to the full guidance to learn more on how to become a Fairtrade producer.

Other fair-trade standards used on the European market are Fair for Life and Small Producers' Symbol (SPP). There is also a label by the World Fair Trade Organization (WFTO) which recognises entire organisations that fully practice fair trade.

Tips:

  • For the full buyer requirements, read our study on buyer requirements for cocoa in Europe.
  • Refer to the International Trade Centre Standards Map to learn about different certification schemes.
  • Find out which standards or certifications are preferred by potential buyers in your target segment. Buyers may have preferences for a certain sustainability label depending on their end clients and/or distribution channels.
  • Try to combine audits, if you have more than one certification, to save time and money. Also investigate the possibilities for group certification with other producers and exporters in your region.
  • Learn more about organic farming and organic guidelines on the European Union website and the Organic Export Info website.
  • Visit trade fairs for organic products, like Biofach in Germany. Check out their website for a list of exhibitors, seminars and other events at this trade fair.
  • Observe the labelling requirements for certified cocoa. The bulk packaging label should contain the name/code of the inspection body and certification number. This will ensure that the bags containing certified cocoa have their identity preserved throughout the supply chain.

2 . Through what channels can you put certified cocoa on the European market?

1. How is the end market segmented?

Certified cocoa is used on both the mainstream and the specialty cocoa market. Mainstream cocoa beans are used for processing in four different industries: confectionery, food, cosmetics and pharmaceutical. Certified cocoa beans used on the specialty market are mainly used for the production of high-end chocolate products. The below figure shows the general segmentation of the chocolate end market.

Figure 1: Segmentation of the chocolate market based on quality
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Low end: The low-end segment offers cheap cholate products, with lower cocoa content. The products are often produced by large chocolate manufacturers, for which they predominantly use bulk cocoa from West Africa (Forastero variety). Bulk cocoa is characterised by high volumes, low value and standard quality. Rainforest Alliance/UTZ-certified cocoa has become a very common certification requirement in this segment.

Low-end chocolate products are usually the mass products of big brands and retailer’s own low-end private label products. Examples of big brand products include Milka and Toblerone (manufactured by Mondelez), M&Ms and Twix (manufactured by Mars) and Kit-Kat (Nestlé). These products are predominantly sold in supermarkets.

An indication of consumer chocolate prices (based on Dutch retail prices in 2019) in European supermarkets for low-end certified chocolate products is as follows:

 

Product

Price (€/kg)

Low end

Delicata Milk, private label product (Rainforest Alliance/UTZ certified)

7.95

Verkade, milk chocolate (UTZ certified)

13.42

Middle range: The middle-range segment includes chocolate products of good quality, which are commonly sustainably certified. Certification, storytelling and the origin of the cocoa beans are important in this segment, mainly for marketing purposes.

Examples of middle-range products available in Europe include the popular Swiss brand Lindt. Lindt is mainly known for their wide range of premium chocolate bars from either Trinitario and/or Forastero cocoa, which is sourced through Lindt’s own sustainable sourcing programme. Another commonly available middle-range chocolate product in several European countries is Côte d’Or, which is certified by Mondelez’s own Coco Life sustainability programme (which works in partnership with Fairtrade).

These middle-range products are also mainly sold through supermarkets, and are usually the high-quality category of retailers. Supermarkets also increasingly offer private label premium chocolate products with Fairtrade and/or organic certification. The table below gives an indication of consumer chocolate prices for middle-range products:

 

Product

Price (€/kg)

Middle range

Tony’s Chocolonely, dark chocolate (Fairtrade, Slave free commitment)

15.50

Vivani, dark chocolate (organic certified)

18.50

High end: The high-end segment is dominated by specialised chocolate makers, producing bean-to-bar or premium chocolate products. They predominantly use specialty cocoa for these products, which is usually a mix of Criollo, Trinitario and/or to a lesser extent Forastero. Organic certification is especially relevant in this niche segment. End products tend to be characterized by a high cocoa content and are often of single origin (which is important both for the taste and traceability of the cocoa).

Examples of bean-to-bar brands working with organic cocoa in Europe are Original Beans (the Netherlands), Michel Cluizel (France), Fjåk Chocolate (Norway) and Friis Holm (Denmark).

These products are mainly sold through (online) specialty shops. Examples of specialty web shops in Europe are Chocolats de Luxe (Germany), Chocoladeverkopers (the Netherlands), Sourced Market and Cocoa Runners (the United Kingdom). High-end chocolate products are also sold at trade fairs, such as Salon du Chocolat (with events in France, Belgium, Italy and the United Kingdom), Chocoa (the Netherlands) and the organic fair Biofach (Germany).

Chocolate consumer prices for high-end chocolate products are given in the table below (based on Dutch prices in 2019):

 

Product

Price (€/kg)

High end

Original Beans (organic dark chocolate, Mexico, 88%)

78.57

Friis Holm (organic dark chocolate, Nicaragua, 68%)

95.00

Georgia Ramon (organic dark chocolate, Guatemala, 72%)

99.00

Premium prices for certified cocoa: For exporters of cocoa, it is important to realise that trade prices and retail prices behave independently, thus are not directly linked. In addition, although sustainability certification does not always affect the retail prices of chocolate, most of them offer a premium to producers and exporters. Premiums may differ per country, producer and buyer due to various aspects, such as quality, proportion of in-kind premium and negotiation powers.

Tips:

  • Learn more about the promotion of standard quality and certified chocolate by mainstream European supermarkets such as Tesco (United Kingdom), and compare their product assortment and price levels with specialised online stores such as Cocoa Runners.
  • Refer to our study on trends in the cocoa sector to learn more about developments within different market segments.
  • Price premiums for certified cocoa beans may range widely, depending on quality and certification scheme. If you move towards certified cocoa, make a thorough cost calculation of fees, learning costs, workload and possibly lower yields, make sure you provide the required quality and comply with the standards correctly.

2. Through what channels does certified cocoa end up on the end market?

As an exporter, you can use different channels to bring your certified cocoa to the European market. Entering the market will vary according to the quality of your cocoa beans and your supply capacities. It is important to realise that the European market is moving towards shorter supply chains. This means retailers and cocoa-processing companies are increasingly sourcing their cocoa beans directly.

The market channels for certified cocoa beans are characterised by chain of custody protocols. Chain of custody certification is applicable to all companies in the supply chain that own and handle the product and make sustainable certified claims about the product. These protocols provide evidence that the product originates from well-managed, certified sources, and verifies that it has not been mixed with products from uncertified sources at any point in the supply chain, except under strict management controls. The figure below shows you the most important channels for cocoa beans in Europe:

Figure 2: The main channels for export of cocoa to Europe
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Cocoa bean processors/grinders

Large processors/grinders source their cocoa beans directly from producing countries, mostly under the principles of their own sustainability programmes. However, they will also source from otherwise certified cooperatives. Examples of cocoa bean processors/grinders in Europe, including their corporate sustainability programmes are Cargill (Cargill Cocoa Promise), Olam (Cocoa Sustainability) and Barry Callebaut (Forever Chocolate).

These multinationals process raw material into cocoa mass, cocoa butter and/or cocoa powder, which they distribute to the confectionery, food, cosmetic and pharmaceutical industries throughout Europe. Some grinders also manufacture end products to supply directly to the retail or food service sector.

For whom is this an interesting channel? If you are an exporter of high volumes of (certified) bulk beans, your direct trading partner usually will be a cocoa grinder/processor. These companies tend to buy high volumes of standard qualities, and often require UTZ/Rainforest Alliance or their own sustainability certification as a minimum standard. They usually have cocoa-buying stations in producing countries to which you can sell your beans directly.

Importers

Most importers work with cocoa beans complying with a wide range of certified standards. Examples of large cocoa trading companies importing certified cocoa are Albrecht & Dill Trading (Germany), Sucden (France) and Theobroma (the Netherlands). They distribute cocoa in their own country or elsewhere in Europe. These importers handle large quantities and have contacts with exporters in producing countries. In most cases, importers have long-standing relationships with their suppliers.

Importers active in the specialty segment usually deal with smaller quantities, and often work directly with producers and producer cooperatives. Examples of specialty trading companies in Europe are Cocoanect (the Netherlands) and Naturkost Übelhör (Germany). Naturkost Übelhör is focused on organic produce, and holds a wide range of organic certification standards, including BioSuisse Organic, Bioland, EU Organic, Fairtrade, Naturland, Sedex.

For whom is this an interesting channel? For exporters working with high volumes of certified bulk beans from producers/cooperatives, large importing companies can serve as a gateway into the European market. Bear in mind that many specialised importers prefer to work directly with producers and/or cooperatives and not through exporters. Importers are likely to purchase cocoa beans complying with various certification standards, which will cater for their different customers in different industry segments.

A producer association selling specialty or organic/fair trade certified cocoa can best sell its cocoa beans directly to specialised cocoa importers. If you produce or have very high-quality cocoa beans and you are working through an importer, it is best to also discuss the possibilities to directly link up with high-end chocolate makers.

Chocolate manufacturers and makers

Examples of large and middle-sized (private label) chocolate manufacturers in Europe include Valrhona (France), Pronatec and Chocolat Bernrain (Switzerland). These companies have their own importing departments and source their cocoa beans directly from producing countries. These chocolate companies with sustainability commitments aim to have a direct link to the farmer, based on trust between the chocolate maker, the certifier and the importer. They also operate across different certification standards, including Rainforest Alliance/UTZ, as well as organic and fair trade.

In the specialty cocoa segment, you will find smaller chocolate makers who increasingly trade directly with farmers (associations). Examples of bean-to-bar makers in Europe that source part of their organic or Fairtrade cocoa directly from producing countries are Åkesson’s (United Kingdom), Blanxart (Spain) and Ritual Chocolate (United Kingdom).

For whom is this an interesting channel? If you produce or have very high-quality cocoa beans and you are working through an importer, it is a good idea to discuss the possibilities to directly link up with high-end chocolate makers. Direct trade is always the preferred option. Targeting specialty chocolate makers directly, however, means you must have the financial means and technical know-how to organise export activities. Specialty chocolate makers may not have specific certification requirements, or could even reject certification altogether. This is because their operations already address sustainability elements, and often go beyond what any certification scheme can offer. However, organic certification is especially growing among this group of buyers.

If you have cocoa of a standard quality in high volumes, it is interesting to sell to large chocolate manufacturers. This may also be an interesting channel for local grinders with cocoa mass and cocoa butter which meet high quality standards (which means they do not need to be processed again). This would allow you to trade directly with European confectionery and food companies. If you have lower quality semi-processed cocoa products, your direct trading partner is usually a European importer or grinder. Large-scale chocolate makers tend to operate across the entire range of certification, from Rainforest Alliance/UTZ to organic and fair trade.

Tips:

  • Find buyers who match your business philosophy and export capacities (in terms of quality, volume, certifications). See our study on finding buyers on the European cocoa market for concrete tips.
  • Attend trade fairs in Europe to meet potential buyers. Interesting trade events include Biofach (organic products only) and COTECA (Germany), Chocoa (Netherlands) and Salon du Chocolat (France). Attending such events can provide you with additional insight into the preferences of European buyers, with regard to origin, flavour and sustainability certification. By understanding the market better, you can ensure that your specific product corresponds to the demand and requirements.
  • Connect to platforms such as Direct Cacao, as they help establish links between farmers and chocolate makers. Read more about direct trade and shorter cocoa chains in our study on trends in the cocoa sector.
  • Check the website of Organicbio for a list of European companies buying organic cocoa beans or the FLOCERT database for companies buying Fairtradecertified cocoa.
  • Invest in longterm relationships. Whether you are working through an importer or directly with a chocolate maker, it is important that you establish a strategic and sustainable relationship with them. This will help you manage market risks, improve the quality of your product and reach a fair quality/price balance. For more tips, read our study on doing business with European cocoa buyers.

3 . What competition do you face on the European certified cocoa market?

The degree of competition on the market is generally high for certified bulk cocoa with low added value. This segment is mainly dominated by major suppliers and cooperatives able to deliver large quantities so they can compete on price. It is difficult for small and medium-sized companies to compete with this segment. The degree of competition is lower in the specialty cocoa market. In this segment there is more focus on quality and taste, in combination with traceability and sustainability.

Largest suppliers of certified bulk cocoa beans are Ivory Coast and Ghana

The largest suppliers of certified cocoa beans to Europe are Ivory Coast and Ghana. These two countries produce mainly bulk cocoa, and are the largest producers of Rainforest Alliance/UTZ and Fairtrade-certified cocoa.

UTZ-certified cocoa is produced in 18 countries, but largely dominated by Ivory Coast and Ghana. Combined, both countries accounted for nearly 77% of global UTZ-certified cocoa bean sales in 2018. Sales of UTZ-certified cocoa beans from Ivory Coast increased at an average annual rate of 21% between 2015 and 2018. Ghana’s sales increased at an average annual rate of 16% during the same period. Nigeria and Cameroon are the third and fourth largest sellers of UTZ-certified cocoa beans to Europe.

Regarding Rainforest Alliance-certified cocoa sales, Ivory Coast and Ghana accounted for approximately 81% of global sales in 2018. These countries dominate supplies of bulk cocoa to the European mainstream chocolate industry. They were followed by Indonesia (6.5%), Ecuador (4.8%) and the Dominican Republic (3.7%).

Ivory Coast and Ghana also account for the largest areas of Fairtrade-certified cocoa in the world, at an estimated share of 77% of total Fairtrade-certified production. They are followed by Latin American suppliers Dominican Republic, Peru and Ecuador. These five countries combined account for 93% of the total Fairtrade International cocoa area in 2016. They are also among the largest suppliers of cocoa beans to the European market.

Latin America dominates organic cocoa supplies to Europe

When it comes to organic cocoa production, Ivory Coast and Ghana play a much less important role. About 70% of organic cocoa is produced in Latin America. This makes Latin America the most competitive source within the organic chocolate industry, but also the strongest competitor among specialty chocolates that are increasingly endorsing organic certification.

The largest organic cocoa production area can be found in the Dominican Republic, where nearly half of the total organic area in the world is located. A major share of the organically produced cocoa from the Dominican Republic is also Fairtrade-certified. Other relatively large producers of organic cocoa are the Democratic Republic of Congo, Peru, Sierra Leone, Tanzania and Ecuador.

Identifying your potential competitors

To be successful as an exporter, it is important to learn from your potential competitors. Focus on their marketing strategies, the product characteristics they highlight and their value addition approaches. Successful companies with high shares of certified cocoa that export to the European market from which you can learn include the El Ceibo cooperative (Bolivia), Grupo Conacado (Dominican Republic), Cooperativa Agroindustrial Cacao Alto Huallaga (Peru), Fedecovera (Guatemala) and Ingemann (Nicaragua).

Learn from these companies how to promote your portfolio of certifications and sustainability practices. Give detailed information about your cocoa growing region (origin), the varieties, qualities, processing techniques and certification of the cocoa you offer. You can also tell about the history of your organisation, your cocoa growing farm(s), and about the passion and dedication of the people working there. These are all elements that make your company unique.

Tips:

  • Work together with other cocoa producers and exporters in your region when you lack company size or certified product volume. Together you can promote goodquality certified cocoa from your region and be a more attractive and more competitive supplier for the European market.
  • Develop longterm partnerships with your buyer. This implies always complying with buyer requirements and keeping your promises. This will provide you with a competitive advantage, more knowledge and stability on the European market.
  • Actively promote your company on your website and at trade fairs. Flavour quality competitions also provide good opportunities to share your cocoa with a wider audience (example: International Chocolate Awards of the Cocoa of Excellence Programme).

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

Please review our market information disclaimer.

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