Cocoa - Procurement Best Practices & Sourcing Strategies

Procurement Market Intelligence Report

Cocoa – Procurement Best Practices & Sourcing Strategies

Cocoa Market – Executive Summary, Cocoa Market Overview, Market Monitoring Insights and Industry Analysis, Procurement Insights, Purchasing Process and Supplier Analysis, Regional Analysis

1. Executive Summary
1.1. Executive Summary
2. Cocoa Market Overview
2.1. Cocoa, Cocoa Butter and Powder: Material Process Flow
2.2. Cocoa and Derivatives: Supply, Demand, Trade Dynamics, Pricing Analysis, Cost Structure Analysis
3. Market Monitoring Insights and Industry Analysis
3.1. Cost and Price Analysis
3.2. End-use application
3.3. Porter’s Five Forces Analysis
3.4. Challenges in Cocoa Supply Chain
3.5. Drivers and Constraints in Cocoa Market
3.6. Trends/Innovations/Technology
3.7. PESTEL Analysis
4. Procurement Insights
4.1. Cocoa Supply Chain
4.2. Sustainability Measures Adopted by Top Cocoa buyers
4.3. Best Trading Regions for the US
4.4. Best Trading Regions for the Netherlands
4.5. Best Trading Regions for France
5. Purchasing Process and Supplier Analysis
5.1. RFP/RFI Questionnaire
5.2. Supplier Intelligence
6. Regional Analysis
6.1. Country Analysis: Ivory Coast
6.2. Country Analysis: Ghana
6.3. Sustainability Initiatives and Best Practices

What factors contribute to the optimistic scenario in the cocoa market?


Higher global demand for cocoa-based products, awareness of the health benefits of consuming cocoa, strategic moves by major players in the industry, improvements in production techniques, and adoption of sensitivity to environmentally friendly cacao cultivation methods are some factors that make for an optimistic future.


What are the regional dynamics of the cocoa market according to the latest research statistics?


According to the latest statistical research on the cocoa industry, it is ready for growth powered by positive figures; these show a harmonious balance across demand and supply conditions. Oceania is clearly the leader among sourcing regions for cocoa, with a market price of USD 4250 per metric ton for 2022.


What are the central questions addressed in the cocoa market Report?


The research report on the cocoa industry addresses critical points such as highly influencing factors, leading market participants, regional market scenarios, and noteworthy industry developments.


Global Cocoa Market Size


According to the research report of ELINT Market Research, the global supply of cocoa has witnessed a significant rise, experiencing a growth rate of 6.75% compared with the statistics from 2021/2022 and 2020/2021. A tremendous rise in the global supply is undoubtedly the leading factor positively driving the cocoa market. The high growth in cocoa supply results from favorable environmental conditions in major cocoa-producing regions, adopting sustainable farming practices, and innovations in agricultural methods. In addition, the grown supply fulfills the increasing global demand for cocoa and pushes the bright times for cocoa-producing countries.


In complement to the rising cocoa supply landscape, the derivatives supply for cocoa in the global industry has exhibited substantial growth. ELINT Market Research projects a rise of 4.5% in the overall supply of global derivatives compared with the previous cocoa seasons of 2021/2022 and 2020/2021. The exponential rise in the supply of derivatives indicates the increasing global demand for cocoa-based products across industries, especially food and beverages, confectionery, and cosmetics. Moreover, it also shows the cocoa market’s reliability, resilience, and transition per changing consumer preferences and overall industry trends.


Market Definition


The cocoa market is the global industry for cocoa beans and goods. Cocoa is also among the most important agricultural products and the raw material for chocolate. From production to processing and trade in cocoa beans to intermediate products such as processed goods consumption, it thus presents an agricultural supply chain. Ups and downs in the cocoa industry impact the chocolate world at large. The two are closely related industries from the same raw material.


Cocoa Market Drivers


  • Increasing Global Chocolate Consumption:


Increasing global demand for chocolate is the primary impetus behind the market. While the booming cocoa industry can find markets in every corner of the globe, chocolate products are seeing extreme consumption in growing economies.


  • Health Benefits of Cocoa:


The discovery that cocoa maintains health due to its antioxidant properties and ability to boost one’s sense of well-being has led to a trend toward developing products from it. The market has benefited from this shift in consumer sentiment towards healthy foods.


  • Sustainable and Ethical Sourcing Practices:


Consumers are now much more aware of ethical and sustainable solicitude. Consequently, the cocoa industry finds itself in a new era marked by increasing transparency and social responsibility from companies that stress fair trade and environmentalism.


Cocoa Market Challenges


  • Fluctuating Cocoa Prices:


The cocoa market is highly volatile and prone to shifts in weather conditions, political instability in major cocoa-growing areas, and global demand. Such variations create enormous worries for growers and manufacturers, who must manage risk decisively.


  • Cocoa Farming Challenges:


There are also challenges in cocoa cultivation, such as diseases, pests, and the aging of cocoa trees. Cultivating sustainable, stable cocoa production also requires investment in research and development and new farming methods.


  • Supply Chain Complexity:


The cocoa supply chain is complex, crossing between countries and various hands. Dealing with this vast network requires a mechanism for coordination and management; otherwise, inefficiencies could arise, as well as quality control problems.


Cocoa Market Opportunities


  • Emerging Markets and Untapped Regions:


Many places still need to be explored to be opened up for plantation, so the market has much room for expansion. The Asia Pacific and Africa represent the new battleground for emerging markets, with possibilities for increased cocoa production here.


  • Innovation in Product Development:


Product innovation is an opportunity for the market to capitalize on. Thus, companies seek to develop more diverse product lines and tap into niche markets, from premium chocolates to cocoa-flavored beverages.


  • Investment in Sustainable Practices:


Companies investing in sustainable, environmentally friendly cocoa production have the merchandise to cash in and gain from the ups and downs of market price tides. Such practices improve brand value and help to capture a higher share of the consumer market.

Cocoa Market Trends


  • Artisanal and Premium Chocolate Products:


There is a growing demand for gourmet and small-scale chocolate products. The premiumization trend stems from more consumers seeking higher quality and unique flavor products.


  • Blockchain Technology for Traceability:


There is an increasing trend towards applying blockchain to supply chain traceability. This trend adds transparency and enables consumers to know the entire life cycle of their cocoa products, which tackles issues surrounding fair trade and ethical sourcing.


  • Cocoa-Enhanced Functional Foods:


With active marketing campaigns, energy bars, drinks, and other complementary food products often promote cocoa’s natural health properties. It also aligns with the current rising trend of health consciousness.


Cocoa Market Segmentation


  • Type of Cocoa Bean: The research classifies the market into Criollo, Forastero, and Trinitario.


  • End-Use Application: Based on end-use applications, the research divides the market into chocolate, confectionery, bakery, and beverages.


  • Processing Method: The research classifies the market into Natural/Traditional and Dutch-processed.


  • Geographical Regions: According to regional outlook, the research segments the market into North America, Latin America, Asia-Pacific, Europe, the Middle East, and Africa.


Cocoa Market Regional Dynamics


In the highly competitive and vast global market, Ivory Coast has successfully established its crucial position with an outstanding 44% share in production and 40% in exports. Ghana follows it closely, contributing 20% share in production and 19% in exports. Indonesia also catches the competition with a 9% share in production. Due to favorable weather conditions, Ivory Coast, Nigeria, and Ghana will likely witness robust yields during 2022-2023, supporting the global cocoa supply chain.


The global distribution scenario for cocoa derivatives paints a complex landscape, with the Netherlands leading at 28%, indicating its vital role in cocoa butter and powder exports. In addition, Indonesia is growing at a high rate with 13%, and both Malaysia and Germany are holding 10% each, perfectly representing the complex connection of global trade in cocoa derivatives, with cocoa powder, cocoa butter, and cocoa liquor accounting for 30%, 32%, and 38%, respectively. It presents the high versatility of cocoa concerning its capacity to fulfill diverse global demands.


Contract Models


Several contract models are in practice to adapt to the constantly changing nature of the cocoa market to suit different stakeholders. Long-term contracts (over 1 or 2 years) are the most stable and continuous supply form, promoting long-term relations between producers and consumers. Furthermore, the convenience of spot contracts arranged through third parties gives dealers increased flexibility to meet market needs at short notice.


Recent Activities in the Cocoa Market


  • Global food giants Nestlé and Cargill have recently formed a strategic partnership to transform cocoa shells from chocolate production into an outstanding low-carbon fertilizer. The motive of the collaboration is to manufacture a low-carbon fertilizer from cocoa shells.


  • A global leader, Koa has recently opened Africa’s largest cocoa fruit factories in Ghana. The main feature of this facility is that it offers higher efficiency and a more significant scale to ensure a continuous supply chain, providing much-needed steadiness to the cocoa industry.


Cocoa Market Players


Several dynamic players are influencing the landscape of the cocoa market. Some prominent players are Cemoi, Cargill, Barry Callebaut, Mondelez, and Mars. These players can take a central position in the market as they continuously invest in improving their product offerings and attracting consumers with innovative campaigns. New market entrants need to understand these dynamics and devise strategies to stabilize their place in the competitive market.

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