The Dutch market potential for cocoa

The Netherlands is the largest importer of cocoa beans and home to one of the largest cocoa grinding industries in the world. The Netherlands imported almost 91% of its cocoa beans from West Africa in 2020, primarily as bulk cocoa. The demand for high-quality cocoa, however, is growing and attracting further interest in cocoa beans from Latin American countries.

1. Product description

This document focuses on cocoa beans (whole or broken, raw or roasted), which corresponds to HS code 1801. Harmonised System (HS) codes are used to classify products and to calculate international trade statistics, such as imports and exports.

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.

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 the Netherlands an interesting market for cocoa?

The Netherlands is an important cocoa trade hub within Europe. It is the world’s largest cocoa bean importer, and the world’s second-largest cocoa-processor. The Netherlands is an important re-exporter of cocoa beans and semi-finished cocoa products to other European destinations.

The Netherlands is the largest importer of cocoa beans worldwide

The Netherlands is the largest importer of cocoa beans in the world. In 2020, Dutch imports amounted to 895 thousand tonnes. This is 24% of global cocoa bean imports. The Netherlands sourced 99% of their cocoa bean imports directly from producing countries.

The total import volume of cocoa beans by the Netherlands saw an average annual growth rate of 2.3% between 2016 and 2020. Because of the COVID-19 pandemic and global supply chain disruptions, cocoa bean imports by the Netherlands in 2020 registered lower volumes than in previous years, though still slightly higher than in 2016.

Cocoa beans enter the Netherlands via the port of Amsterdam, the largest cocoa port in the world. The port has extensive and well-equipped import, storing and cocoa processing facilities, and the area houses many actors active in the cocoa value chain. The Netherlands is expected to continue to play an important role in the cocoa trade, due the port and region’s expertise, concentration of facilities and actors, its focus on sustainability and its flexibility to innovate. Companies specialised in storage of cocoa beans in the Netherlands are, for instance, Commodity Centre Netherlands, CJ Hendriks group and C. Steinweg Group.

The Netherlands houses the world’s second-largest cocoa-grinding industry

The cocoa-grinding industry in the Netherlands is the world’s second-largest, after Ivory Coast. The Dutch cocoa-grinding industry will have consumed an estimated 600 thousand tonnes of cocoa beans in 2020 and 2021. Between 2018 and 2020, cocoa-grinding activities in the Netherlands remained stable.

However, the effects of the global COVID-19 pandemic on the cocoa-grinding industries are showing in 2021. The European Cocoa Organisation (ECA) reported that cocoa-grinding volumes all over Europe have fallen during the first quarter of 2021. Even so, according to research by Rabobank, the overall outlook of the recovery of the cocoa-grinding industry remains positive. The Dutch cocoa-grinding industry is expected to recover steadily to grinding volumes slightly below 2019, driven by strong retail sales all over Europe.

Cocoa-grinding activities at origin, mainly in Ivory Coast, are increasing and will continue to compete with grinding in the Netherlands. Grinding at origin is largely dominated by large multinationals (such as Barry Callebaut, Olam and Cargill) as part of a cost-reduction strategy.

The Dutch cocoa grinding industry is located near the port of Amsterdam. It houses multinationals such as Olam and Cargill, as well as Dutch companies like Dutch Cocoa, Daarnhouwer and Theobroma (ECOM Group). These companies play an important role in both the importing and manufacturing of cocoa derivatives.

The Netherlands is a key trade hub for cocoa and semi-finished cocoa products within Europe

The Netherlands is the second-largest exporter of cocoa beans in Europe, with export volumes reaching 76 thousand tonnes in 2020. Belgium was the largest cocoa bean exporter in Europe with 224 thousand tonnes. Dutch exports decreased in volume at an average annual rate of almost -14% between 2016 and 2020. With cocoa bean exports decreasing, the export volumes of (semi-finished) cocoa products by the Netherlands registered an increase. Especially the export of cocoa paste by the Netherlands increased a lot, with an average annual growth rate of 11% between 2016 and 2020.

Germany is the most important destination of Dutch cocoa bean re-exports, with a market share of 56% in 2020, at 42 thousand tonnes. France held second place, receiving over 11% of total Dutch exports, at 8.5 thousand tonnes. With overall Dutch re-exports having decreased a lot over the years, the exports to Germany also decreased with a year-to-year decline of -23% between 2016 and 2020. This decline is in part explained by the increased direct imports from cocoa producing countries by Germany.

The Netherlands is Europe’s largest exporter of semi-finished cocoa products. In 2020, export volumes of cocoa paste reached 190 thousand tonnes and export volumes of cocoa butter reached 256 thousand tonnes. To compare, Germany is Europe’s second-largest exporter of cocoa paste and cocoa butter, at volumes of 78 thousand tonnes and 76 thousand tonnes respectively in 2020. Given the size of the cocoa grinding industry in the Netherlands, it is likely that the country will maintain its position as a large manufacturer and exporter of semi-finished products. However, the increase of cocoa grinding activities at origin will pose increasing competition to this industry. When it comes to the export of chocolate products, the Netherlands is Europe’s third largest exporter, only behind Germany and Belgium. Dutch export volumes of chocolate products remained stable between 2016 and 2020, while Germany and Belgium showed modest growth with average annual increase rates of 2.3% and 2.6%.

3. Which trends offer opportunities on the Dutch market?

The Dutch are moderate chocolate consumers, while showing a growing interest in high-quality chocolate and interesting new flavour combinations. The Dutch market is characterised by an increasingly strong focus on sustainability.

Dutch consumers increasingly buy high-quality chocolate

There is an increasing demand for high-quality and dark chocolate on the Dutch consumer market, for which consumers are willing to pay a higher price. For instance, private label brand Delicata (by Albert Heijn) now offers a wide range of pure chocolate bars from specific origins, indicating the growing importance of this concept on the mainstream market.

The increasing popularity of high-quality chocolate has also led to a sharp increase of bean-to-bar makers in the Netherlands in recent years. Over the past ten years, the number of small chocolate makers in the Netherlands (with less than 10 employees) has more than doubled, amounting to 445 companies in 2019.

Besides a growing offer of high-quality chocolate products for consumers, there is also a more diverse offer of high-quality couverture chocolates for chocolate makers in the Netherlands. For instance, in 2019, Cargill launched its premium couverture chocolate Veliche Gourmet for pastry chefs and craft chocolate makers in the Netherlands.

While the Netherlands is not particularly famous for its gourmet chocolate shops, the number of chocolate shops has been growing significantly the past decade. Examples of high-end chocolate shops in the larger Dutch cities are: Cacao, De Bonte Koe, De Lelie, Chocolaterie Pierre and Chocolatl.

Widespread availability of certified cocoa and chocolate products on the Dutch market

In 2010, the Dutch government and cocoa and chocolate industry players in the Netherlands signed a declaration of intent to achieve 100% sustainable cocoa consumption in the Netherlands by 2025. In 2018, about 66% of cocoa sold by Dutch supermarkets had a sustainability label on the product, either from the Rainforest Alliance or Fairtrade and/or an organic label.

Although Dutch consumers are primarily guided by taste, more than half of all Dutch consumers indicate that sustainability is also a major decision when purchasing chocolate in supermarkets. The most popular certifications on the Dutch chocolate market are Rainforest Alliance/UTZ and Fairtrade. Many Dutch mainstream brands are certified by one of these organisations. Both UTZ and Fairtrade originated in the Netherlands. Especially the demand for Fairtrade chocolate is growing significantly. In 2019 alone, it grew by 22%, amounting to the use of almost 18 thousand tonnes of Fairtrade-certified cocoa in the Netherlands. An example of a cocoa cooperative that is both Rainforest Alliance/UTZ and Fairtrade certified is CAYAT from Ivory Coast.

While organic certification is still a niche market for the chocolate industry, it is becoming more important in the food industry in general. The Netherlands is Europe’s tenth-largest organic market, with organic retail sales amounting to €1.2 billion in 2019. In 2019, the organic retail market share did not grow, while the total turnover on organic products in Dutch supermarket grew by 4.9%. Predictions indicate that further growth of organic retail sales in the Netherlands is expected. Within the chocolate market, examples of Dutch organic chocolate brands include Chocolatemakers and Lovechock.

Sustainability increasingly drives and shapes the Dutch cocoa and chocolate sector

There are nation-wide initiatives to make the Dutch cocoa sector more sustainable. One result of such joint efforts was the launching of the Dutch Initiative on Sustainable Cocoa (DISCO) in September 2020. This public-private partnership of most major stakeholders active in the Dutch cocoa and chocolate sector aims to improve the lives of cocoa farmers and their families while preserving the environment around farms.

Another example of an industry initiative to increase sustainability on the Dutch cocoa market is that the largest Dutch retailer Albert Heijn signed a partnership with chocolate manufacturer Barry Callebaut in 2019. The aim of this partnership is to make the production of Albert Heijn’s private label chocolate Delicata fully traceable.

Also, Tony’s Chocolonely, the largest Dutch chocolate brand, has joined other large industry players such as Barry Callebaut, Mars and Mondelez to support the call on the EU for due diligence regulations. These regulations should be legally binding measures for the use of sustainable cocoa on a European level, for instance laws to protect and restore global forests. These regulations are expected to become operational in 2022.

These due diligence regulations require cocoa buyers to sharpen their supplier codes. Exporting SMEs will have to comply with these codes. SMEs that cannot comply may not be able to continue supplying cocoa beans to these international companies.

Dutch consumers are increasingly interested in innovative flavour combinations

The Netherlands had an estimated annual chocolate consumption of 5.1 kg per capita. Compared to other European countries, Dutch per capita consumption of chocolate is relatively low. Examples of larger European chocolate consumers are Switzerland (8.8 kg per capita) and Austria (8.1 kg per capita).

Chocolate bars are especially popular in the Netherlands, of which sales increased by 20% between 2013 and 2018. Within the chocolate bar category, there is an increasingly diverse offer of innovative ingredient combinations. The largest and most popular Dutch chocolate brand Tony’s Chocolonely offers such chocolate bars with a range of ingredient combinations, such as sea salt, popcorn and spices. The brand combines these ingredients to social impact concepts: slave-free chocolate and fair trade. Another Dutch brand offering similar products is Johnny Doodle. Mainstream Dutch chocolate brands also launch chocolate bars with new flavour combinations, such as Verkade and retailer Albert Heijn’s private label Delicata.

Demand for healthier chocolate bars is growing in the Netherlands

Dutch consumers are increasingly looking for healthier products. For example, the confectionery industry is responding to this trend by increasingly using natural sweeteners in chocolate (such as stevia and agave). There is also an increasing demand for vegan (raw) chocolate, dark chocolate and chocolate products with ingredients that are perceived as healthy. For instance, chocolate bars with avocado or matcha are growing in popularity. The Netherlands was one of the first markets in Europe were Nestlé introduced its KitKat Green Tea Matcha chocolate in 2019.   

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

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