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The German market potential for cocoa

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Germany is a massive cocoa and chocolate market with many opportunities for producing countries, both in the bulk and specialty segment. However, as the bulk market is reaching saturation point, there are new opportunities for exporters and producers, especially on the specialty market. This is mainly fuelled by the growing demand for darker chocolate, and the large organic and sustainable cocoa market. Germany is a major chocolate consuming country as well, registering the second-largest per capita chocolate consumption in Europe.

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 the following.

  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), which corresponds with 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 Germany an interesting market for cocoa?

Germany is the second-largest European importer of cocoa beans

With a market share of 19%, Germany is the second-largest importer of cocoa beans in Europe, preceded only by the Netherlands (48%). Total cocoa bean imports amounted to over 469 thousand tonnes in 2018, at a value of €997 million. Between 2014 and 2018, the total volume of cocoa beans imported by Germany increased at an average annual rate of 8.6%, and by 5.6% in value.

Germany imported a large share of its cocoa beans through its neighbouring countries, mainly the Netherlands (share of 41%) and Belgium (15%). Only 44% of total German imports was sourced directly from producing countries. Ivory Coast (24%), (8.4%) and Ghana (7.2%) were the main direct suppliers. Germany’s imports sourced directly from producing countries had a steady increase during 2014 and 2018, at an average annual rate of 8.0% in volume and 3.9% in value. Most direct cocoa bean imports enter Germany via the port of Hamburg.

Germany houses the second-largest cocoa grinding industry of Europe

Most cocoa beans imported into Germany are used domestically for further processing. Germany is the second largest grinder in Europe, after the Netherlands, and the world’s fourth largest with 9.7% of global grinding.

In 2018/19, the German cocoa grinding industry consumed 450 thousand tonnes of cocoa beans. Grinding activities in Germany increased by 4.7% between 2015 and 2018. The presence of large processing facilities owned by major multinational grinders (such as Cargill and Barry Callebaut) fuel the cocoa processing industry in Germany. However, grinding is not expected to increase significantly in the future, as multinational companies are increasing their bean grinding activities in the countries of origin. As this allow these companies to have more direct control of the chain, lower production costs as well as to target regional markets.

Germany is Europe’s leading chocolate producer

Germany houses Europe’s largest chocolate manufacturing industry, predominantly using bulk beans. The production value of chocolate products was estimated at around €5.4 billion in 2017. Large multinational chocolate manufacturers such as Ferrero, Mars and Mondelez all have their manufacturing facilities in Germany and dominate the market. In total, there are over 230 German chocolate producers; examples of larger German chocolate manufacturers are Hachez, Ludwig Schokolade and Ritter Sport. There is a positive outlook towards the chocolate industry in Germany because of general higher consumption rates of chocolate in the region.

A large share of the chocolate production is exported, which makes Germany the world’s largest exporter of chocolate products. In 2018, the estimated export value of Germany’s chocolate products was €4.2 billion (17% of global chocolate exports). Between 2014 and 2018, export volume increased at an average annual rate of 1.7%, while its value increased by 4.0%.

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 Hamburg to learn more about the port itself and cocoaspecific opportunities.
  • See the website of the Association of the German Confectionery Industry for more information about the chocolate industry in Germany.
  • Access the EU Trade Helpdesk to analyse European and German trade dynamics yourself and to build your export strategy. By selecting Germany 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.

Germany is a massive cocoa market, and also a major chocolate consuming country, registering the second-largest per capita chocolate consumption in Europe. There is a growing demand for darker chocolate, while the large organic and sustainable cocoa and chocolate market provides interesting opportunities for cocoa exporters.

Germany is Europe’s largest organic market

Germany is an interesting market for organic cocoa, as it is the largest market for organic foods in Europe, with a market share of 28%. In 2018, the share of organic food in the total German food market was 5.3%. The German organic market is expected to grow at an average annual rate of 1.9% between 2017 and 2022. Confectionery products, like sweets and chocolate, are expected to be the fastest-growing categories in organic food sales.

Organic products are widely available in Germany and competition is strong. Organic chocolate is available across all price ranges, from low-end and private label to premium. For instance, retailer Aldi Süd offers organic chocolate under its private label One World. Examples of German premium organic chocolate brands are Vivani and Belyzium.

Producers and exporters of organic cocoa beans are likely to find the widest opportunities in Germany, where the market is large and diverse.

Growing demand for sustainably produced cocoa and chocolate in Germany

Up to 62% of all chocolate confectionery sold in 2018 in Germany was made using sustainably produced cocoa. This marks an increase of 35% since 2014. This is partly explained by the German Initiative on Sustainable Cocoa (GISCO), which since 2012 aims to promote sustainable cocoa production and sourcing. About 70 parties have joined this initiative, ranging from government agencies to retailers and key players in the German cocoa grinding and chocolate manufacturing industry.

The most popular sustainability certifications on the German chocolate market are Rainforest Alliance (which merged with UTZ in 2018) and Fairtrade. Large German retailers such as Lidl, Aldi and REWE have committed themselves to only sell 100% sustainable cocoa. Consequently, most German mainstream brands are now certified by one of these certification bodies.

Sales of Fairtrade cocoa and chocolate products in Germany have risen sharply since 2014. In 2018, Germany imported an estimated 55 thousand tonnes of Fairtrade certified cocoa beans (a share of 12% of total German cocoa bean imports). Most Fairtrade cocoa is sourced from Ghana, Ivory Coast and the Dominican Republic.

Given the widespread availability of certified chocolate in Germany, certification can be a key entry requirement for cocoa exporters in most market segments.

German consumers choose healthier chocolates

Germany registered a yearly chocolate consumption of 9.2 kg per capita in 2017. In comparison, in Europe only Switzerland’s per capita consumption is higher, at 10.5 kg. Bars and tablets are the most commonly consumed chocolate products in Germany. Although most Germans (55%) still prefer milk chocolate, chocolate consumers in Germany are increasingly demanding high-quality dark chocolate.

Consumption of dark chocolate is driven by consumer preferences for healthy products. Chocolate with a high cocoa content is considered healthier than chocolate with a higher sugar and milk content. Similarly, there is also a growing demand for sugar-free, sugar-reduced and vegan chocolate. Chocolate products with perceived healthy ingredients such as hemp seeds, matcha or acai fruit are also becoming more popular in Germany.

Although such higher quality and healthier chocolate remains a niche, the market is already quite competitive with a wide range of brands already available in German shops. However, new products launches continue to happen, with the example of the animal-free chocolate product (Chocjes) of Katjes, which entered the market early 2019.

Growing demand for certifications on dietary laws

The dietary laws followed by consumers based on their religious background is increasingly taken into account by chocolate manufacturers in Germany. Halal and kosher chocolate products are becoming more popular among the younger chocolate consumers in Germany. An example is the German brand Iftarlade from manufacturer Honeyletter, which offers halal and kosher chocolate bars.

Cultural diversity has also changed seasonal products. In addition to the traditional Advent chocolate calendar in Germany, there is now also a special Ramadan chocolate calendar.

Premiumisation of seasonal chocolate products

Germany is a traditional market, where seasonal chocolate products (for instance during Easter and Christmas) remain very popular. In 2018, nearly 30 million kilograms of Easter chocolate products were bought in Germany, at a value of €394 million.

These products are usually made of bulk cocoa, and mainly sold by discounters and supermarkets. However, there is a trend towards premiumisation as more niche products are being offered. This offer ranges from organic to vegan, fair-trade and gluten-free seasonal chocolate varieties.

Tips:

  • See our study on trends for cocoa to learn more about current trends on the European market.
  • Promote sustainable and ethical aspects of your production process. Support these claims with certification. See our study on doing business with European buyers of cocoa for more tips on marketing and promotional aspects of your cocoa.
  • Before engaging in a certification programme, make sure to check (in consultation with your potential buyer) that this label has sufficient demand in your target market and whether it will be costbeneficial for your product.
  • Find potential business partners in Germany by checking the lists of Fairtradecertified operators, German Rainforest Alliancecertified brands, UTZ certified cocoa supply chain actors and organic chocolate producers.
  • Focus on the premium, specialty, and fine flavour cocoa market in Germany. You can only access the premium cocoa market if you offer highquality cocoa. See the section about quality requirements below to learn more.Want to put premium cocoa on the German market? Try to establish direct trade relationships with smaller traders and chocolate makers. See the section on market segments and trade channels below for more information.

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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