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Exporting Cocoa to Germany

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Germany is the second-largest grinder and importer of cocoa in Europe, behind the Netherlands. Opportunities for exporters lie in conventional and premium products (speciality, fine flavour and certified chocolate, especially organic). In the premium segment, direct trade is preferred with smaller German traders, specialty chocolate stores, coffee houses, chocolatiers and bakeries. Although European Union regulations on cadmium in cocoa and products derived from cocoa do not take effect until January 2019, German buyers are already applying them.


1 . Product description

The cocoa tree (Theobroma cacao) grows in tropical environments within 15–20 degrees latitude north and south of the equator. The main cocoa-growing regions are Africa, Asia and Latin America. After extraction from the pod, cocoa seeds are fermented and then sun-dried. A producing cocoa tree can deliver on average 0.5–2 kg of dried seeds per year.

Statistical product classification

Harmonised System (HS) codes are used to classify products and calculate international trade statistics (imports and exports). This fact sheet focuses on cocoa beans with HS code 1801. Other cocoa products are discussed in our study of value-added cocoa products in Europe.

Product specifications

Varieties

The cocoa market distinguishes three main varieties of cocoa beans:

  1. High-grade, Criollo cocoa (the original cocoa tree)
    Originally grown in Venezuela, Central America and Mexico, but now also cultivated in Ecuador, Colombia, Peru, Bolivia, Nicaragua, Honduras, Guatemala and Sri Lanka, Criollo beans account for 5%–10% of all global cocoa production. The beans have a delicately bitter, aromatic flavour and are easily processed.
  2. Common-grade, Forastero cocoa
    Originally grown in the high Amazon region, these beans are now the predominant cocoa variety cultivated in Africa, representing around 80% of all global cocoa production. The beans have a flatter flavour than the more fruity and citric Criollo or Trinitario beans.
  3. High-grade, Trinitario cocoa
    Originally grown in Trinidad, but now also cultivated in Venezuela, Ecuador, Honduras, Nicaragua, El Salvador, Costa Rica, Cameroon, Samoa, Sri Lanka, Indonesia and Papua New Guinea, Trinitario beans account for 10% to 15% of all global cocoa production. The beans are a hybrid between the Criollo and Forastero trees.

Quality

High-grade (fine flavour) cocoa beans are generally of a higher quality than common-grade cocoa beans due to their more pronounced organoleptic characteristics. Their distinctive flavour is sought primarily by manufacturers of high-quality chocolate. Fine flavour beans are usually produced from trees that contain the genetics of Criollo and/or Trinitario cocoa tree varieties, while common-grade (bulk) cocoa beans for mass production are genetically derived from Forastero trees. Nevertheless, harvesting (ripe fruits) and processing techniques (homogeneous fermentation and especially drying) are also important to harness the “fine” qualities of fine flavour cocoa beans. Fine flavour cocoa beans fetch higher prices on the market than bulk cocoa beans due to their intrinsic quality but also due to marketing aspects (for example, elaborate stories or more transparency).

Grading/fermentation

To moderate the initially bitter flavour of cocoa and to develop the typical cocoa flavour, the beans must be subjected to a fermentation process. Cocoa grading differs across producing and consuming countries. Over the years, however, standard practices have been formulated by the leading international cocoa trade associations. The Federation of Cocoa Commerce Ltd (FCC) distinguishes two grades:

  1. well-fermented cocoa beans, with less than 5% mould, less than 5% slate and less than 1.5% foreign matter;
  2. fairly fermented cocoa beans, with less than 10% mould, less than 10% slate and less than 1.5% foreign matter.

Cocoa beans should be shipped shortly after harvest, as extended storage (>6 months) may result in losses due to the relatively high humidity in tropical environments.

Packaging

Cocoa beans are traditionally shipped in jute bags. A single bag generally weighs 60–65 kg. In recent years, however, shipment of cocoa beans in bulk has become more important due to the lower handling costs. Loose cocoa beans are loaded either in shipping containers or directly into the hold of the ship. The latter case is known as the “mega-bulk” method, which is often adopted by larger cocoa processors. Shipment in bags is still common, especially within the fine flavour cocoa segment.

2 . What is the demand for cocoa in the Germany?

Grinding

How much cocoa is ground in Germany?


*2015/2016 figures are estimates, 2016/2017 figures are forecasts

Third-largest grinder in the world

Germany is the world’s third-largest grinder behind Côte d’Ivoire and the Netherlands (Figure 1). The large grinding industry in Germany can be attributed to the presence of large processing facilities owned by major multinational grinders (for example, Cargill, ADM and Barry Callebaut), most of which are located near Hamburg (Germany’s largest port). Nevertheless, Germany’s grinding activities are currently decreasing slightly due to an increase in value addition within the countries of origin such as Côte d’Ivoire.

Large chocolate industry

In addition to its large grinding industry, Germany has a highly developed chocolate industry, which predominantly uses bulk beans. Germany is the leading chocolate-producing country in Europe, ahead of the United Kingdom. According to the German Trade & Investment Agency (GTAI), the production value of chocolate products amounted to around € 5.2 billion in 2015. There are about 233 chocolate producers in Germany, alongside hundreds of imported brands. Examples of German chocolate manufacturers can be found on the website of Chocozone, which is dedicated to sharing chocolate candy wrappers with collectors. The site provides a good overview of chocolate manufacturers by country.

Tips:

  • As grinding increasingly happens in countries of origin, check whether you have a competitive grinding industry in your country. Discuss with potential German buyers/traders the opportunities for local cocoa grinding and processing as well as the required product specifications.
  • One current trend involves a shift towards more exclusive chocolate confectionery. This trend is presenting opportunities for fine flavour cocoa and other high-quality cocoa (for example, from specific origins). A focus on offering premium/speciality/fine flavour cocoa is therefore another interesting option. Even with bulk beans, you may be able to achieve the desired quality for the premium market (for example, through customised fermentation). The website of Confectionary News presents one example.
  • For insight into the latest developments on the German chocolate confectionery market, see the website of the Association of the German Confectionary Industry (BDSI).

Consumption

How much cocoa is consumed in Germany?

High per capita consumption

According to research by Mintel, the average German consumed 8.32 kg in 2016 (per capita). Germans are the third-largest consumers in Europe, after the United Kingdom (8.61 kg per capita) and Switzerland (8.59 kg per capita).

Bars and tablets are the most commonly consumed chocolate products in Germany. German chocolate consumption has reached a level that can hardly be increased. This massive market already creates ample opportunities for developing countries, especially for bulk beans. New opportunities basically lie in the growing demand for higher-quality dark chocolate, for which mostly fine flavour cocoa beans are required. Another consumption trend that is presenting opportunities is an increasing interest in sustainable cocoa. Additional information on this subject is presented in the section on “Trends”.

Imports

How much cocoa is imported to Germany?

Second-largest importer in Europe

With a market share of 21%, Germany is the second-largest importer of cocoa beans in Europe, behind the Netherlands (41%). Cocoa bean imports amounted to more than 435,000 tonnes in 2016, with a value exceeding € 1.2 billion (Figure 2A). Between 2012 and 2016, the total volume of cocoa beans imported by Germany increased by an average annual rate of 4.2%. Germany is also a large importer of chocolate, in addition to being the world’s largest exporter of chocolate.

The Netherlands is the main supplier

More than 50% of cocoa beans imported by Germany are supplied from surrounding European countries, especially the Netherlands and Belgium (Figure 2B). Most imports are in the form of bulk beans from west African origin. Despite the fact that Germany harbours two important cocoa ports, Hamburg and to a lesser extent Bremen, direct trade from developing countries represents a smaller share (46%).

Tip:

  • Although most trade in cocoa beans goes through the Netherlands and Belgium, German buyers might also be interested in sourcing cocoa beans directly from your country.
  • See our study of Cocoa in the Netherlands for more information on its role as an important European trade hub.

Exports

How much cocoa is exported from Germany?

Small cocoa bean re-exporter

Germany is a small re-exporter of cocoa beans, with re-exports amounting to 16,000 tonnes in 2016 at a value of € 46 million (Figure 3A). All beans are exported to other European countries (Figure 3B). Austria was the main re-export destination in 2016, accounting for 34%. Other important destinations were Italy, the Netherlands and Poland.

World’s largest chocolate exporter

Germany exports a large amount of chocolate (Figure 4), being the largest chocolate exporter in the world. In 2016, chocolate exports amounted to 831,000 tonnes. These export volumes are largely due to the presence of large chocolate manufacturers such as Ferrero, Mars and Mondelēz.

Tip:

3 . Which trends offer opportunities on the German market for cocoa?

Growing sales of higher-quality dark chocolate

In Germany, the demand for premium, higher-quality dark chocolate is growing due to the attributed health benefits of chocolates with a higher cocoa content. As a result, the sales of premium products such as speciality and fine flavour chocolate are rising.

Tips:

  • Focus on the premium/speciality/fine flavour cocoa market. The premium cocoa market is accessible only to cocoa with high quality standards. You should therefore ensure that you are able to deliver high-quality cocoa beans.
  • In Europe, market preferences (for example, with regard to flavour and origin) can differ by country. You would therefore do well to consult with current and potential German trade partners about their flavour profiles. In addition, visit the website Chocolats-de-luxe.de, which provides examples of high-quality chocolates that are sold in Germany.
  • Try to establish direct trade relationships with smaller German traders or chocolate makers, as this trade channel is preferred for premium cocoa. Additional information is provided in the section on “What do the trade channels and interesting market segments look like on the German market for cocoa?”
  • See our study of Fine flavor cocoa on the European market for more information.

Increasing share of sustainable cocoa

According to the German Initiative on Sustainable Cocoa, the proportion of sustainably produced cocoa as used in the confectionery products that were sold in Germany increased from 18% in 2013 to 27% in 2015. By 2020, it is expected to rise to at least 50%. Unlike the Netherlands, which has pledged to achieve 100% certified sustainable cocoa by 2025, Germany has not adopted any deadline for achieving 100% sustainable cocoa. According to the German Confectionery Association (BDSI), German supermarkets are somewhat lagging behind in their efforts to promote sustainable chocolate brands within their stores.

Tips:

  • Consult the German Initiative on Sustainable Cocoa about possibilities for increasing the production of sustainable cocoa in your country. This initiative is aimed at improving the situation of cocoa farmers in their countries of origin and promoting the production of sustainable cocoa.
  • If you consider exporting certified beans, consult with current and potential German buyers on the preferred sustainability label. Organic is the most important certification scheme on the German market. Additional information about organic certification is presented in the section on “With which requirements should cocoa comply in order to be allowed on the German market?”
  • See our study of Certified cocoa on the European market for more information.

Increased demand for transparency

German consumers and chocolate makers are increasingly demanding transparency in the cocoa supply chain. They want to know where the chocolate comes from, what the stories behind the cocoa beans are and who earns what in the supply chain. Transparency comes with an improved traceability, which is more easily managed in certified supply chains and in direct trade relations.

Tip:

  • Know and share the story about your cocoa beans. For example, tell about how your farmers live and how they produce their beans. Enhance your story with visuals (for example, photos and videos).

For more information about trends on the European cocoa market in general, refer to our Trends for cocoa.

4 . With which requirements should cocoa comply in order to be allowed on the German market?

With which legal and non-legal requirements must my product comply?

When exporting cocoa to Germany, you must meet the legal requirements set by the European Union, particularly those regarding food safety, food contaminants and labelling. Of particular importance to the German market is an additional legal requirement applying to cadmium.

Cadmium

The European Union strengthened its regulation on cadmium in cocoa and products derived from cocoa. Although this regulation will not take effect until January 2019, Germany is already applying it. The maximum permitted levels of cadmium are listed in Table 1. Please note that these levels relate to final chocolate products, so they need to be extrapolated to beans.

Table 1: Maximum permitted levels of cadmium in cocoa and derived products
tabel_1_23.jpg
When translating the cadmium levels of chocolate into levels admitted in cocoa beans, European importers will in practice consider <0.5 ppm a good level to achieve. This figure is in accordance with the norm of <0.3 ppm in chocolate that Germany is already applying. Up to 0.8 ppm will still be accepted, but above 0.8 ppm will depend on the cocoa content in the chocolate. If the level rises above 1 ppm, chocolate makers will have to blend the cocoa with other cocoa of lower cadmium content. This process is quite uncommon for products from certain countries, such as cocoa from Latin America.

Tips:

What additional requirements do buyers often have?

Some buyers have requirements that go beyond existing European legislation. The main categories of additional requirements of European buyers have to do with food safety, and environmental and social requirements. In general, western and northern European buyers (including German buyers) have stricter additional requirements and are more active in the field of sustainability than buyers from southern and eastern Europe.

Tips:

  • Our publication on Buyer requirements for cocoa provides an overview of the most important additional requirements on the European cocoa market. The requirements described in this publication also apply to German buyers.
  • Different buyers may have different preferences for a certain food safety management system or sustainability label. Therefore enquire which ones are preferred by current or potential German buyers in your target segment. In general, HACCP-based food safety management systems (for example, the International Food Standard) are the systems most commonly required by German retailers. UTZ Certified and Fairtrade are the most popular sustainability labels. For more information on certified cocoa, refer to the fact sheet on Certified cocoa in Europe.

What are the requirements for niche markets?

Organic certification

Organic certification is highly dominant in Germany. German consumers increasingly demand organic and environmentally friendly products. Germany is in fact the second-largest organic market in the world, behind the Unites States. The sales of organic foods in Germany make up nearly a third of the total organic food sales in the European Union, according to research conducted by the Global Agricultural Information Network. If you comply with the organic production methods that are specified in European legislation for products from organic production (such compliance is voluntary), and if an accredited certifier has positively audited your growing and processing facilities, you will be allowed to display the European Organic Farming logo on your products as well as the logo of the standard holder. In Germany, well-known Organic certification schemes are BCS Öko-Garantie, Bio-Siegel, Bioland and Naturland.

Fairtrade certification

German retailers and cocoa manufacturers are increasingly making serious commitments to sell and process Fairtrade cocoa. It is estimated that these commitments alone led to a sixfold increase in Fairtrade cocoa sales within Germany in 2014. Fairtrade certification is even more important on niche cocoa markets.

Tips:

  • If you would like to focus on the German market, consider applying for Organic certification. Become familiar with the requirements for Organic certification; for example, the standard of the International Federation of Organic Agriculture Movements (IFOAM) or the standards of the various German organic labelling organisations mentioned above.
  • Consult the legislation on organic production (Regulation EC No 834/2007) to learn more about organic production.
  • Consider applying for Fairtrade certification, as this aspect is also becoming increasingly valued by German buyers.
  • If you offer fine flavour cocoa, consider applying for Organic and/or Fairtrade certification. The demand for fine flavour cocoa in combination with certification is a rapidly growing niche market.

5 . What do the trade channels and interesting market segments look like in the German market for cocoa?

Grinding/processing

Germany is the second-largest grinder in Europe, after the Netherlands. Hamburg is by far the most important port for cocoa beans in Germany and ranks third in Europe. Here, various grinders and processors including Cargill, ADM and Barry Callebaut are concentrated, sourcing their beans directly from exporting countries.

Confectionary industry

Ferrero, Mars Deutschland and Mondelēz are the leading chocolate manufacturers in Germany. Other important chocolate manufacturers in Germany are Nestlé, Lindt, Stollwerck and Ritter Sport. Vivani, Rapunzel and Schell are examples of smaller manufacturers in the market for organic and fine flavour chocolate.

Sales channels

Supermarkets
Supermarkets and convenience stores represent the most important sales channels for chocolate in Germany, representing 45% and 31% of all sales respectively, according to market research company Canadean. These outlets are especially important for mass products of major brands. Nevertheless, large supermarket chains (for example, Edeka and Rewe) are also increasingly offering premium chocolate products.

Speciality stores
Speciality stores, including gourmet chocolate stores, organic supermarkets (e.g. Denn's Biomarkt) and Fairtrade stores (for example, Weltladen and Contigo), account for around 12% of all chocolate sales in Germany. They are very important sales channels for premium/speciality/fine flavour cocoa.

Coffee houses
Other potential trade channels for premium/speciality/fine flavour cocoa include coffee houses. Germany has thousands of independent coffee houses that serve high-quality coffee, tea and pastries. Many also sell coffee, tea and chocolate for home consumption. These outlets attract wealthier consumers who are prepared to pay for quality products accompanied by stories about their origins.

Chocolatiers
Chocolatiers and patissiers can also be interesting sales channels, as they use cocoa mass, powder, butter or couverture for pastries, bonbons, chocolate bars and seasonal chocolates.

Speciality stores, coffee houses, chocolatiers and patissiers generally buy from importers/traders, including Übelhör and Care Natur (organic cocoa) or GEPA (Fairtrade and partly Organic certified cocoa).

Tips:

  • If you would like to focus on the market for premium/speciality/fine flavour cocoa, direct trade is the preferred trade channel. Try to establish direct trade relationships with smaller German importers, speciality stores, coffee houses, chocolatiers or bakeries. Examples of bean-to-bar companies that already source fine flavour cocoa directly from producing countries include Rausch (Trinidad, Madagascar, Grenada, Indonesia, Peru, Venezuela, Costa Rica and Ecuador), Original Beans (among others, Peru, Bolivia, Ecuador, the Dominican Republic, Indonesia and Congo), Hachez (Venezuela and Brazil) and Coppeneur (Ghana).
  • Attend relevant cocoa/chocolate industry events in Germany to meet potential direct and indirect buyers. Examples of interesting trade fairs include ISM, Anuga, Biofach (organic products) and Internorga (catering and food service). Attendance at such events can also provide you with additional insight into German buyer preferences (for example, with regard to origin, flavour and sustainability certification).
  • Use industry associations (for example, the Association of the German Confectionary Industry BDSI) to find potential buyers in Germany. Another interesting source of potential buyers is the Choco Guide, a database of chocolate manufacturers, traders, museums and chocolatiers in Germany.

For more information about market channels and segments on the European cocoa market in general, refer to our Market channels and segments for cocoa.

Our publication on Finding buyers offers suggestions for locating buyers within the European market.

6 . What are the end-market prices for cocoa?

Consumer prices are rising

Consumer market prices for cocoa are quite volatile, especially due to the highly volatile prices of cocoa beans. To provide an indication of the prevailing prices, several examples of consumer prices for chocolate in Germany for different segments are presented in Table 2. Note that these prices are intended only for illustration, as prices are likely to fluctuate throughout the year.

Table 2: Examples of consumer prices for chocolate in Germany for different segments, September 2017
tabel_2_9.jpg
Source: Websites of several retailers

Tips:

  • Monitor end-consumer prices for chocolate on the German market in order to develop an idea of prevailing price ranges. Good sources of price information include the websites of supermarket chains, chocolate specialty stores or chocolate web shops (for example, Chocolats de Luxe).
  • Monitor price movements for cocoa beans on the international markets in order to stay abreast of current prices and future price prognoses for cocoa beans. One useful resource is the Monthly Review of the Market published by the International Cocoa Organization.
  • Margins for actors in the cocoa value chain within Germany do not differ significantly from those generally applicable in the cocoa value chain throughout Europe. For an overview of value distribution in the cocoa sector, consult our publication on Market channels and segments for cocoa.

Useful resources

  • Association of the German Confectionary Industry (BDSI) - http://www.bdsi.de - provides insight into the German confectionary industry. The association also has a member list, which can be useful for finding potential partners.
  • Confectionary News - http://www.confectionerynews.com - online news portal for the confectionary industry; has a section dedicated to chocolate.
  • European Cocoa Association - http://www.eurococoa.com - trade association that groups the major companies involved in the cocoa bean trade and processing in warehousing and related logistical activities in Europe, including Germany.
  • German Initiative on Sustainable Cocoa - http://www.kakaoforum.de - provides insight into the German market for sustainable cocoa.
  • Homborg Finest Food - http://www.theobroma-cocoa.de - German magazine about chocolate.
  • International Cocoa Organization - http://www.icco.org - provides statistical and other insight into the global cocoa industry.

Please review our market information disclaimer.

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