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Exporting cocoa to the United Kingdom

Takes about 23 minutes to read

The United Kingdom is one of the main chocolate consumers in Europe. After years of decline due to a slowdown in the chocolate industry, British imports of cocoa beans increased again in 2017. The main supplier to the UK is the Ivory Coast, followed by Ghana. The British chocolate market is becoming more specialised; the increase in artisanal chocolate makers and high-end shops serve more demanding and educated consumers. It is also in the United Kingdom that fair trade finds its largest global market.


1 . Product description

The cocoa tree (Theobroma Cocoa) grows in tropical areas between 15 and 20 degrees latitude north and south of the equator: Africa, Asia, and Latin America. After extraction from the pod, cocoa seeds are fermented and sun-dried. A cocoa producing tree can deliver on average 0.5 to 2 kg of dried seeds per year.

The international cocoa market (including the United Kingdom) distinguishes three types of cocoa beans:

  1. Common grade: Forastero cocoa
    Forastero was originally grown in the high Amazon region and is now the predominant cocoa variety cultivated mainly in Africa, accounting for around 80% of global cocoa production. The beans have a flatter flavour than the more frutal and citric Criollo and Trinitario beans.
  2. High-grade: Criollo cocoa (original cocoa tree)
    Criollo was originally grown in Venezuela, Central America and Mexico, but is now also grown in Ecuador, Colombia, Peru, Bolivia, Nicaragua, Honduras, Guatemala and Sri Lanka. Criollo makes up 5 to 10% of global cocoa production. The beans have a bitter, aromatic flavour and are easily processed.
  3. High-grade, Trinitario cocoa
    Trinitario was originally grown in Trinidad, but is now also grown in Venezuela, Ecuador, Honduras, Nicaragua, El Salvador, Costa Rica, Cameroon, Samoa, Sri Lanka, Indonesia and Papua New Guinea. The beans are a hybrid of the Criollo and Forastero trees. This variety represents around 10 to 15% of global cocoa production.

Harmonised System (HS) codes are used to classify products and to calculate international trade statistics, such as imports and exports. The focus is on cocoa beans, of Harmonised System code 1801.

Other cocoa products are covered in our study on semi-finished cocoa products in Europe.

2 . What makes the United Kingdom an interesting market for cocoa?

The British are among the main consumers of chocolate in Europe

In 2014, the United Kingdom had an average consumption of 7.5 kg of chocolate per capita, after Switzerland (9.0 kg), Germany (7.9 kg) and Austria (7.8 kg). British consumers spend around € 131 per person per year on chocolate.

Most consumers purchase low-quality chocolate through mainstream retailers, but the speciality segment is becoming increasingly popular. Plain milk chocolate is the favourite among British consumers, eaten by 73% of consumers. Nonetheless, premium and dark chocolate have been showing strong growth.

Tips:

  • See the website of the European Cocoa Association for more information about the European and British cocoa market and consumer preferences.
  • See our study on trends for cocoa to learn more about consumer trends in Europe.
  • Access the website of the Speciality Chocolate Fair and The Chocolate Show to get a list of exhibiting companies, news items, innovations and other interesting aspects of the British and international speciality chocolate market.

British imports of cocoa beans are declining

The United Kingdom is the sixth-largest importer of cocoa beans in Europe. The country imported 105,000 tonnes of cocoa beans in 2017. As illustrated in Figure 1, imports increased between 2013 and 2017 at an annual average rate of 10% in volume and 7% in value. However, this increase is especially due to the high imported volume in 2017. Between 2013 and 2016, import volume actually showed a gradual decrease.

Tip:

  • Access the Eurostat Statistics Database to analyse European trade dynamics yourself and to build your export strategy. Identify interesting importing countries and developments such as the emergence of new suppliers and decline of established ones.

British exports of cocoa beans are small and declining

The United Kingdom is a relatively small re-exporter of cocoa beans. It is the seventh exporter of cocoa beans in Europe. The country re-exported 390 tonnes in 2017, with a value of € 1.5 million.

In general, exports of cocoa beans decreased at an average annual rate of -33% between 2013 and 2017. Only 1.0% of British imports of cocoa beans are re-exported, which illustrates the importance of the processing (including grinding) industry in the country. The United Kingdom has large cocoa processors and chocolate manufacturers such as Mondelez, Barry Callebaut and Cargill.  

The main destination for British re-exports of cocoa beans in 2017 was Belgium with 65% of total re-exports, totalling 255 tonnes of cocoa beans from the UK. Exports to Belgium decreased significantly at an annual average rate of -34% in volume between 2013 and 2017.

Tip:

  • Refer to the EU Trade Helpdesk more information on Europe’s trade dynamics for cocoa beans. Investigate the opportunities to supply cocoa beans to countries Europe or elsewhere through the United Kingdom.

Consumers seek quality and authenticity

The United Kingdom is an important player for specialty chocolate on the European market. A growing number of British consumers are willing to pay for a higher quality and more expensive, speciality chocolate. This is expected to continue in the future. In 2014, 49% of consumers claimed to eat chocolate products containing premium ingredients. In addition, 48% of British consumers stated that they eat dark chocolate.

This increase in consumption of high-quality and premium chocolate products is reflected by the rise of specialised chocolate shops, chocolatiers and chocolate events in the United Kingdom. Well-known British chocolatiers and chocolate shops are:

London-based chocolate events are Speciality Chocolate Fair and The Chocolate Show.

The focus on cocoa origin has also become more important on the high-end chocolate market in the United Kingdom. Most high-end brands offer a line of single-origin chocolates. Companies such as Red Star Chocolate (founding company of Duffy’s Chocolate) go further, and have developed direct trade relationships with their suppliers in producing countries (member of Direct Cacao, an organisation focusing on direct trade).

Larger chocolate brands in the United Kingdom (such as Cadbury and Oreo) are also developing more speciality chocolate. These are mainly focusing on speciality flavours, such as mint, oat crunch and peanut butter. The focus on single origin is less apparent among these brands.

Tips:

Certifications remain important in the United Kingdom

Certification schemes are important in the British food market. Both mainstream retailers as well as niche chocolate shops sell certified chocolate. Certifications are less common for chocolates sold by small artisanal chocolate makers.

The United Kingdom also sees an increase in sustainability labels on the chocolate market. According to an article by Confectionery News, the British sustainable cocoa market reached 20% in 2017. Rainforest Alliance and UTZwhich merged into one organisation in January 2018 named Rainforest Alliance — are important labels for multinational brands and large retailers operating on the British market (see the section about requirements below).

Fair trade and organic certifications are becoming increasingly important. In 2014, the United Kingdom was the largest consumer of Fairtrade cocoa products in the world. However, while several large British retailers such as Sainsbury’s and Morrisons sell Fairtrade-certified chocolate, their sales still mostly consist of non-certified chocolate.

Organic certified chocolate is increasingly important on the British market. Examples of British chocolate brands that combine an organic and Fairtrade certification are Green & Blacks and Seed and Bean. The British market for food products increased by 4.9% in 2015, amounting to € 2.6 billion.

An interesting example for sustainability on the British chocolate market is Nestlé’s achievement of producing its entire range of chocolate confectionery and biscuits sold in the UK and Ireland using certified sustainable cocoa since 2016. The Nestlé Cocoa Plan is the company’s own sustainable sourcing programme, but they use third party certification through UTZ Certified and Fairtrade.

Tips:

3 . What requirements must cocoa comply with to be allowed on the market in the United Kingdom?

You can only export cocoa to the United Kingdom if you comply with strict European Union requirements. In our study on buyer requirements for cocoa you can find a detailed analysis of these requirements. The highlights are given below, specified for the British market when relevant.

There are no specified import regulations in the United Kingdom that differ from European Union regulations for cocoa. However, you should note the United Kingdom will leave the European Union (BREXIT) in the near future. Import regulations might change on the longer term. At the moment, the pound is still low against the euro; the exchange rate of the British pound has dropped dramatically since the decision to leave the European Union

Legal requirements

You must follow the European Union legal requirements for cocoa, mainly dealing with food safety. Traceability and hygiene are the most important themes. Special attention should be given to specific sources of contamination.  Pesticides, mycotoxins (ochratoxin A is of special relevance for cocoa), polycyclic-aromatic hydrocarbons (PAHs) and microbiological contamination such as Salmonella (though cocoa is considered low-risk) are the most common for cocoa beans.

It is also important to consider the contamination from heavy metals during production and handling, particularly cadmium. The presence of cadmium is a particular problem for cacao from some Latin American countries due to factors like volcanic activity and forest fires.

Quality criteria

If you want to access the British market for cocoa beans, you will have to meet international quality standards. They are particularly high within the speciality segment for fine-flavour cocoa beans.

Cocoa of Excellence mentions the following factors defining the quality of cocoa:

  • Good trees (genetics)
  • Well cared for and grown in a suitable environment
  • Pods correctly harvested
  • Good practices to keep the trees healthy and free of pests and diseases
  • Optimum fermentation and drying protocols specific to the type of beans
  • Know-how for processing cocoa beans and for chocolate making.

High-grade (fine flavour) cocoa beans are generally of higher quality than common grade cocoa beans, as their distinctive flavour is popular among 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. Common grade (bulk) cocoa beans for mass production are genetically derived from Forastero trees.

Harvesting and processing techniques are also important in harnessing the ‘fine’ qualities of fine flavour cocoa beans. During harvesting you should make sure you only take the ripe fruits. During processing you should make sure all cocoa beans are fermented and dried homogenously. Cocoa beans should be shipped shortly after harvest because extended storage (> 6 months) may result in losses due to the relatively high humidity in tropical environments.

To moderate the initially bitter cocoa flavour and to develop the typical cocoa flavour, the beans are fermented. Cocoa grading differs across producing and consuming countries. Standard practices have been set by the international cocoa trade associations. The grading of cocoa depends on the fermentation process:

  • Well fermented cocoa beans: less than 5% mould, less than 5% slate and less than 1.5% foreign matter.
  • Fairly fermented cocoa beans: less than 10% mould, less than 10% slate and less than 1.5% foreign matter.

Tips:

Labelling requirements

The label on cocoa exported to the United Kingdom should be written in English. The label should include the following topics:

  • product name
  • grade
  • lot or batch code
  • country of origin
  • net weight in kg

In the case your cocoa is organic or fair trade certified, the labels should contain the name/code of the inspection body and certification number.

Figure 3: An example of labelling
cocoa_in_france_-_figure_3_-_an_example_of_labelling_-_caribbean_agricultural_network.jpg

Source: Caribbean Agricultural Network

Packaging requirements

Cocoa beans are traditionally shipped in jute bags, which can weigh between 60 and 65 kg.

On the mainstream market bulk shipment of cocoa beans has become more popular. This means cocoa beans are loaded directly into the ship’s cargo hold or in shipping containers containing a flexi-bag (see figure 2). This mega bulk method is often adopted by larger cocoa processors, which handle cocoa beans of standard qualities.

In the fine flavour / speciality cocoa segment, jute bags are still commonly used. For very high-quality microlots vacuum-sealed GrainPro packaging can be used (see figure 4).

Figure 4: Examples of packaging for cocoa beans – jute bag, container-sized flexi bag and GrainPro
figuur_4_0.jpg

Sources: Osu.edu, Bls.bulk.com and GrainPro

Tip:

Additional requirements

You can expect buyers in the United Kingdom to request extra food safety guarantees from you. Examples are the implementation of good agricultural practices and Quality Management Systems (QMS) regarding the production and handling processes.

The main standards in good agricultural practices are provided by GLOBALG.A.P. They are voluntary standards for the certification of agricultural production processes that provide safe and traceable products.

A system based on Hazard analysis and critical control points (HACCP) is often a minimum standard required at the level of storage and handling of cocoa beans.  Some buyers will also expect you to have certificates such as International Featured Standards: Food (IFS) or British Retail Consortium (BRC).  

Corporate responsibility and sustainability are growing in importance in the cocoa sector. Adopting codes of conduct or sustainability policies related to environmental and social impacts of your company can provide you with a competitive advantage. Leading companies on the British chocolate market such as Nestlé and Mondelez have sustainability policies emphasizing the contact with producers, transparency in their operations, as well their social and environmental impact.

Certification standards like UTZ and Rainforest Alliance have also become important on the mainstream chocolate market. Tesco and Sainsbury’s are the main British retailers feature on the UTZ list of certified cocoa supply chain actors, along with several traders and manufacturers operating in the United Kingdom. Rainforest Alliance is also present on the British market, through the large retailer Tesco as well as through international brands like Magnum, Cornetto and Galaxy, as well as the German retailer Lidl. In 2017, these two organisations announced a merger into a single organisation and certification named Rainforest Alliance. The new single standard will be launched in 2019.

Requirements for niche markets

Along with the Netherlands and Germany, the United Kingdom represents an important market for organic-certified cocoa products in Europe. Both small-scale chocolatiers and larger chocolate makers in the United Kingdom offer organic-certified chocolates. But it remains a very small market and only relevant as a niche opportunity.

The United Kingdom is the most important market for Fairtrade-certified cocoa in Europe. In 2014, British purchases of Fairtrade-certified cocoa beans reached 37,351 tonnes. A very small part of these Fairtrade cocoa beans were also organic certified. Fairtrade certification (possibly together with organic certification), could be a requirement of companies operating in niche markets.

Tips:

  • Check the website of EURO-Lex for more detailed information about the regulations concerning cocoa products.
  • Find out which standards or certifications are preferred by potential buyers in your target segment. Buyers may have preferences for a certain food safety management system or sustainability label depending on their end clients and/or distribution channels.
  • See our study on certified cocoa for more information about the demand on the European market, trends and specific trade channels.
  • Before engaging in a Fair Trade 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 cost beneficial for your product.
  • Consult the list of operators on the website of FLOCERT (select ‘Cocoa and ‘United Kingdom’) to explore the different companies in the British market.

4 . What competition do you face on the British cocoa market?

Ivory Coast remains the main supplier of cocoa beans to the United Kingdom

In 2017, the two main suppliers of cocoa beans to the United Kingdom were Ivory Coast and Ghana. In 2016, the second largest supplier of cocoa beans to the United Kingdom was Nigeria, but no supplies from the latter were exported to the UK in 2017.

Ivory Coast supplied 58,000 tonnes of cocoa beans the United Kingdom in 2017, by far the largest supplier. The country’s exports to the UK increased between 2013 and 2017 at an annual average rate of +8.4% in volume.

Ghanaian supplies of cocoa beans to the UK declined significantly between 2013 and 2017 at an annual average rate of -11% in volume. Ghana has had serious issues with its cocoa bean production in the last few years. A strong drought in 2015 contributed significantly to the decline in production

West Africa is the largest producing region in the world for Forastero cocoa beans, which are used in high volumes by mainstream chocolate manufacturers.

Peru (0.2% of market share) was the third producing supplier of cocoa beans to the United Kingdom in 2017. Peruvian supplies increased significantly between 2013 and 2017 at an average annual rate of +23% in volume. Together with Ecuador and the Dominican Republic, Peru is among the largest suppliers of fine flavour cocoa to Europe.

The remaining 30% of British imports originates from re-exports of other European countries, mainly France.

Tip:

  • Identify your potential competitors and learn from them in terms of: Marketing (website, social media, trade fair participation), product characteristics (origin, quality, oil content) and value addition (certifications and processing techniques). Well- structured websites where you can learn from your competitors are, for example: Ingemann (Nicaragua) and Xoco Gourmet (Honduras).

5 . Through what channels can you get cocoa on the British market? Which market segments to target?

In terms of segmentation and channels the British market does not deviate much from the European market, as described in our study on trade channels and segments for cocoa. This is how the three segments of the British cocoa market are developing:

Chocolate confectionery

The chocolate confectionery industry in the United Kingdom reached a value of € 4.7 billion in 2015. In 2017, sales in the chocolate confectionery industry decreased, due to ongoing pressures from health concerns and changing shopping traditions. Most chocolate is sold through supermarkets and other large retailers. A smaller portion is sold through specialised chocolate shops. Examples of specialised chocolate shops in the United Kingdom are: the Highland Chocolatier: Iain Brunett and Artisan du Chocolat.

Mondelez was the leading player in 2016 for chocolate confectionery in the United Kingdom, followed by Mars. Other large-scale companies and multinationals producing chocolate in the United Kingdom are Barry Callebaut (industrial chocolate) and Nestlé. While Ferrero is one of the largest players in Germany and France, it only has a 5% market share on the British market. The British chocolate industry employs more than 18,000 people.

In the United Kingdom, the consumption of chocolate is divided into several types. 73% of the British eat plain milk chocolate, while 37% eat dark chocolate. This is a higher proportion of dark chocolate consumption than the 27.5% European average.

Food industry

Cocoa products are also an important ingredient for the British food industry. The food and drink sector is the largest manufacturing sector in the country. Companies producing biscuits, ice cream, pastries and other bakery products are some of the main users of cocoa products.

Cosmetics industry

The consumption of cosmetic products in the United Kingdom is one of the largest in Western Europe. The cosmetics industry processes cocoa butter in products such as creams and soaps. If you want to know more about opportunities in this industry, refer to our study on natural ingredients for cosmetics.

Figure 6: Main channels for export of cocoa beans to the British market
figuur_6_0.jpg

The United Kingdom is an important importer and processor of cocoa beans. The country has a range of ports. Hull and Liverpool are especially used for the entry of cocoa beans. Hull has dedicated specific storage facilities for bagged and bulk cocoa; the port of Liverpool is also investing in new warehousing facilities to accommodate the growing demand for cocoa from surrounding factories in Yorkshire and North Wales. Three of the larger cocoa-processing players use these two ports for the imports of their cocoa beans (Mondelez, Cargill and Nestlé).

For example, cocoa beans imported at Hull are mainly supplied to Nestlé and Cadbury (part of Mondelez). Cargill mainly uses the port at Liverpool, where the company also has a chocolate production facility. A Barry Callebaut production facility used to be close to the port of Liverpool as well, but the facility has been relocated to the middle of the country in 2013.

Storage companies also play a significant role in the cocoa trade. They perform additional functions, such as grading. They are mostly located in the principal entry-point locations for cocoa. An example is B&P Commodities & Logistics, with offices in both London and Hull.

Multinational players such as Mondelez and Nestlé account for a large share of the mainstream market in the United Kingdom. However, the expansion of the speciality cocoa market has opened possibilities to more specialised players operating in niche markets. This creates space for suppliers handling smaller volumes at higher qualities, as well as for more personal supplier-buyer relationships.

As an exporter, entering the British market will depend on the quality of your cocoa beans, your supply capacities and business model.

Large importing companies can serve as a gateway into the British market for exporters dealing in higher volumes. One of the main cocoa traders in the United Kingdom is Ecom, a global trader with headquarters in Switzerland. Armajaro, one of the larger cocoa traders in the United Kingdom, has become part of Ecom. The Ecom group has a British cocoa trading department.

Companies mentioned above such as Mondelez, Barry Callebaut and Cargill have integrated activities such as importing, crushing and manufacturing. These companies can serve as a gateway to the market. However, they deal with larger volumes and standard qualities. Their activities include the production of industrial chocolate, thus catering for clients both in the chocolate industry as well as other food industries.

One of the two major future trading platforms (LIFFE) for cocoa is located in the United Kingdom. The United Kingdom is also an important global centre for brokers which deal with cocoa. This represents an important entry point into the British market for exporters dealing with higher volumes and standard qualities (commodity market). An example is Sucden Financial.

The United Kingdom also has importers which specialise in ethical products, including cocoa beans. These are normally focusing on specific organic and fair-trade markets. Examples of specialised British importers are: Twin Trading and HB Ingredients/Bean to Bar. An example of a British company that works with cocoa-producing cooperatives in origin countries is Divine, which is partly owned by Twin Trading.

If you want to enter the British market, you can also target chocolate makers directly. This is recommended for producers and exporters dealing with fine flavour cocoa beans of a high quality. The United Kingdom has several chocolatiers; some of the leading ones are:

Tips:

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

Prices for chocolate can be segmented in lower end, middle range and upper end. In general, the lower end chocolate products are often of standard quality and are the cheapest on the market. The upper end products are chocolate products of high quality, made with fine flavour beans and possibly with a single origin. For more details about segmentation on the cocoa and chocolate markets, refer to our study on channels and segments.

Table 1: Indication of consumer prices of chocolate per market segment in the United Kingdom

Market segment

Brand

Details

Price per 100 grams

Upper end

Marou

Organic certified

€ 11.20

Pacari

Dark chocolate, 85% cocoa, raw,

Organic certified

€ 11.14

Pralus

Dark chocolate, 100% cocoa,

Organic certified

€ 6.95

Chapon

Dark chocolate, 75% cocoa,

Single origin: Ecuador

€ 10.47

Willie’s cocoa

Dark chocolate, 100% pure cocoa,

single origin

€ 6.84

Market segment

Brand

Details

Price per 100 grams

Middle range

Thorntons

Dark chocolate, 72% cocoa, Fairtrade

certified

€ 4.38

Côte d’Or

Dark chocolate, 70% cocoa

€ 1.50

Lindt

Dark chocolate, 85% cocoa

€ 2.25

Green&Black’s

Dark chocolate, 70% cocoa,

Organic certified

€ 2.25

Market segment

Brand

Details

Price per 100 grams

Lower end

Sainsbury´s

Dark chocolate bar

€ 0.50

Kit Kat

Chocolate bar with biscuit

€ 1.01

Cadbury

Milk chocolate bar

€ 1.91

Source: Sainsbury´s, Selfridge´s, Thorntons and Cocoa Runners.

The price breakdown for chocolate is illustrated in figure 7.

Be aware that export prices of cocoa beans, and the share kept by cocoa producers, will depend on the cocoa bean quality, the size of the lot and the supplier’s relationship with the buyer. However, the largest shares are kept by chocolate companies and retailers.

Figure 7: Price breakdown for chocolate
figuur_7_1.jpg

Source: Cocoa Barometer, 2015

Tip:

  • Monitor end consumer prices of chocolate to get an idea on price ranges. Good sources for price information are the websites of supermarket chains, chocolate specialty stores and chocolate web shops. Examples are: Cocoa Runners or Pittenweem.

Please review our market information disclaimer

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