The cocoa market - France (2024)

1.2 Global market

First, let's take a look at the world cocoa market.

According to the ICCO (***), and as shown in the graph below, world cocoa bean production for ****-**** is expected to fall short by almost **.*%.

According to the ICCO, exports from Côte d'Ivoire and Ghana, which account for nearly **% of world production, are down by **% and **% respectively on the previous season.

At the same time, international cocoa stocks have been falling in recent years, as shown in the graph below, creating an imbalance between supply and demand of almost ***,*** tonnes.

Cultivated and processed volumes and end-of-season cocoa stocks World, ****-****, in million tonnes Source: ****

Let's now analyze the most dynamic geographic zones on the cocoa market.

As mentioned above, Côte d'Ivoire and Ghana are by far the two biggest cocoa-producing countries, followed by Ecuador with *%. Thus, as the graph below shows, bean production is largely dominated by the African continent.

Cocoa bean production by continent World, ****, in Source: ****

The graph below shows a more detailed analysis of cocoa bean-producing countries. In Asia, for example, the leading producer is Indonesia.

Cocoa bean production by country World, ****, in Source: ****

Cocoa beans are raw materials that are processed worldwide into cocoa paste, cocoa ...

1.3 Domestic market

Let's analyze the French domestic cocoa market .

First, let's analyze France's trade balance.

To do this, we have used data from the UN Comtrade code [***] "Cocoa and cocoa productions". France is a major importer of cocoa, importing the equivalent of $*.*** billion in ****. Exports were estimated at $*.*** billion in ****.

Cocoa imports France, **** to ****, in billions of dollars Source: ****

This gives a coverage rate (***) of **.**% for the year ****, almost one percentage point lower than in ****, so the coverage rate was **.**%.

The coverage rate is therefore well below ***, and the trade balance is negative , showing that the country is rather dependent on its suppliers on the cocoa market.

Cocoa market coverage rate France, ****-****, in Source: ****

Below, we can see France's main cocoa-supplying countries. We can see that many countries are European, with Belgium in first place, accounting for over a fifth of French imports.

We can also see that a major producer does not necessarily mean a major importer: for example, Ghana, a major producer, imports only *.**% of the total dollar value of cocoa imported into France. Indeed, for example, Belgium, France's leading supplier, is a country that receives imports from producing countries such as Ghana or Côte d'Ivoire, then participates in ...

2.1 Domestic chocolate consumption

Chocolate is one of the main consumers of cocoa.

So we can look at chocolate consumption to try to determine cocoa consumption in France.

On average, France will consume almost * kg of chocolate per year in ****, placing it in the top ** of chocolate-consuming countries.

Top ** most chocolate-consuming countries World, ****, in kg Source: ****

Secondly, we can study the types of cocoa-based products consumed by the French and the changes in French consumption.

Change in sales of cocoa-based products between **** and **** in supermarkets France, ****-****, in Source: ****

2.2 French preferences

The French prefer chocolate bars first, cited by **.*% of the population, followed by fondants and moelleux au chocolat (***).

Source: ****

2.3 Cocoa consumption habits in France

Temporality

Cocoa is a commodity that is used at different times of the year, particularly for chocolate consumption during festive seasons such as Easter and Christmas.

Temporality of chocolate consumption France, ****, in millions of euros and thousands of tons Source: ****

Consumption habits

First, we can look at the breakdown of chocolate sales by category and market share.

Breakdown of chocolate sales by category and market share France, ****, in % of sales Source: ****

We can also observe the market shares of the various chocolate bar brands. The brands most appreciated by the French are the more accessible private-label brands and the big groups: Lindt & Sprüngli, Mondelez and Nestlé.

Market share in value of different chocolate bar brands France, ****, in Source: ****

We can also observe the weight of the different chocolate bar segments in the consumption habits of the French. The most popular are tasting/gourmet bars, gourmet blocks and baking chocolate.

Weight of main chocolate bar segments by value France, ****, € million Source: ****

Lastly, **% of chocolate consumed in France is dark chocolate, compared with *% in Europe, making dark chocolate something of a French speciality.

2.4 Cocoa in cosmetics

As mentioned above, cocoa is mainly used in the chocolate industry.

However, cocoa is also used in other industries, such as cosmetics.

Indeed, cocoa butter is also widely used in beauty products and cosmetics, such as make-up.

The price per tonne of cocoa butter is set to soar from €*,*** in **** to€**,*** in ****.

Price per tonne of cocoa butter France, ****-****, in € Source: ****

According to BBC Africa, soaring cocoa butter prices will have an impact on both business and supply issues.

3.1 Overview of the cocoa value chain

Below is an analysis of the value chain in the French cocoaindustry.

Source: ****

Below, we can also analyze the composition of a cocoa bean .

Composition of a cocoa bean World, ****, in Source: ****

Furthermore, it should be noted that the cocoa supply chain presents a characteristic form of "bottleneck", with over * million producers on one side, most of whom farm a few hectares of cocoa, millions of potential consumers on the other.downstream, millions of potential consumers and, in the middle of the chain, four companies holding nearly **% of grinding capacity and ten companies sharing **% of confectionery retail sales. [***]

These elements make up a chain in which the priority for the entire central segment, which concentrates raw materials and redistributes processed products, is quantity and quality.s, is product quantity and uniformity, to the detriment of taste variety, and effective segregation according to environmental and social production conditions. [***]

3.2 Chocolate manufacturers

The chart below shows the distribution of company sizes within the sector.

Large companies account for almost *% of the chocolate sector.

Company size in the chocolate sector France, ****, in Source: ****

What's more, we can also observe an evolution, an increase in the number of cocoa manufacturing companies. Between **** and ****, there will be an increase of almost *** companies in the cocoa, chocolate and confectionery products manufacturing sector.

number of companies manufacturing cocoa, chocolate and confectionery products France, ****-****, in numbers Source: ****

As the number of companies increases, so doesthe number of employees in cocoa, chocolate and confectionery manufacturing.

Number of employees in cocoa, chocolate and confectionery manufacturing France, ****-****, in numbers Source: ****

What's more, the chocolate sectoris rather concentrated, as the graph below shows.

Concentration of activity per company in chocolate manufacturing France, ****, in Source: ****

Below, we can identify a little more about the different types of company in thecocoa industry:

Integrators

In France, there are a small number of major chocolate manufacturers with international reach and a presence across the entire value chain. Among them, the only one. The other leaders are Swiss or American, such as Barry Callebaut(***).

Retail specialists

Among the leaders in the mass retail sector are Italy's ...

3.3 Distribution of the cocoa sector

Let's now analyze the distribution of the cocoa industry in France.

We can analyze the distribution of the different distributors.

Distribution players in the cocoa industry France, ****, % of total Source: ****

New distribution methods are also emerging.

In ****, chocolate brand Valrhona will open a new hybrid location in the heart of Paris. This address aims to create a bridge between the professional world and the general public. It is at once a point of sale, a place for tasting and initiation, and also flagships.

The aim is to create an experiential space in which to discover the brand's universe. [***]

4.1 Cocoa farms and bean processing

Cocoa farms:

Cocoa is traditionally grown by smallholders, who account for between ** and **% of the world's production. They generally cultivate small plots of land, typically between * and * hectares in size in Africa and some parts of Asia. The trees grow exclusively in tropical areas, where they can benefit from the shade of plants such as banana, plantain or oil palm. [***]

Cocoa varieties

There are generally three varieties of cocoa: Forastero, Trinitario and Criollo. The first is the most widespread, accounting for around **% of total cocoa production. The latter two generally have a finer flavor: The Rinitario, sometimes referred to as "the prince of cocoa", produces beans with a sweet aroma and balanced flavor.its beans generally have a fruity, slightly acidic aroma, with a spicy, piquant flavor.

Harvesting and production stages of cocoa beans

Once ripe, the pods - the fruit of the cocoa tree - are harvested by hand, then dehusked to obtain the beans. The harvest period varies from region to region, from September to March. There is also a second "mid-season" harvest, mainly between May and August.

The resulting beans are then fermented and dried on the plantation or in the grower's village. This stage usually takes between ...

4.2 The volatility of cocoa prices

West Africa, one of the main suppliers to the world market, saw its production plummet in **** due to intense rainfall followed by severe drought. As a result, the cost of cocoa beans soared . [***]

Cocoa prices have more than doubled in one year.

In fact, we can see that in****, cocoa-based products were among the top products most affected by inflation, as shown in the graph below.

Top price rises - Demand inflation France, variation from February to March ****, in % Source: ****

Below is the COICPindex for coffee, tea and cocoa in France.

COICP index for coffee, tea, cocoa France, ****-****, index *** **** Source: ****

Merchant cocoa" is the product traded on the international market. The price of this commodity is quite volatile, depending on several factors such as expectations of stock-outs, good or bad harvests, and political events in producing countries.

Cocoa prices over the months World, ****-****, in thousands of euros per tonne Source: ****

Below, we can go into a little more detail and try to break down the value of a bar.

Breakdown of the value of a tablet France, ****, in Source: ****

4.3 Innovation in the cocoa sector

Innovation is at the heart of the chocolate and cocoa sector.

Indeed, if we look at the ranking of the best launches ****. In this ranking, nearly four products are closely or distantly related to the cocoa sector.

Ranking of best launches **** France, ****, in K€ Source: ****

We are also witnessing the premiumization of the cocoa and chocolate sector. In ****, the Réauté chocolate supermarket will be created. [***]

In addition, the trend is towards lower sugar content in consumer products. As a result, the cocoa sector is reinventing itself, and Elsy is stepping up the roll-out of its ranges of chocolate balls and low-glycemic index bars. [***]

4.4 Environmental challenges in the cocoa sector

Thecocoa industry faces many environmental and social challenges.

Climate change not only affects weather conditions, and good or bad harvests, as we saw above, but also the spread of diseases such as black pod virus and swollen cocoa shoot. These diseases have devastated crops in the main production regions, resulting in lower yields and higher production costs.

As a result, some brands are using cocoa and trying to make it more sustainable.

The giant Lindt wants to preserve the habitat of the titi monkey in Peru with Lucky Monkey: it is launching a range of bars made with Peruvian cocoa that will help finance an association for the protection of biodiversity. [***] The Mondelez group proposes more sustainable wheat and cocoa sourcing programs through its Cocoa Lifeprogram. [***]

The cocoa sector is also trying to make itself more inclusive through a number of projects.

Indeed, there are real inequalities in thecocoa industry .

In Ghana, the paltry incomes of cocoa farmers have fallen by an average of **% since the start of the pandemic, while the confectionery profits of the four largest listed companies in the chocolate sector have, on average, soared at exactly the same rate[***]

Up to **% of Ghana's cocoa farmers do not ...

5.1 Chocolate legislation in France

Cocoa- and chocolate-based products are governed by European Directive ****/**/EC, on which the French decree of July **july **, **** (***) and labeling rules.

The main categories of cocoa-based products

Cocoa products

Cocoa powder: must contain a minimum of **% cocoa butter, but when it is "low-fat", the level must not exceed **%. Chocolate powder: must contain sugars and a minimum of **% cocoa powder, or **% cocoa powder when called "sweet cocoa".

Chocolates

Chocolate: the "chocolate" designation alone corresponds to a product containing a minimum of **% cocoa solids, including not less than **% cocoa butter and more than **% dry non-fat cocoa. Dark chocolate: for legal purposes, dark chocolate is fine or "superior" chocolate, containing a minimum of **% cocoa solids, including at least **% cocoa butter and **% dry non-fat cocoa. Couverture chocolate: must contain at least **% cocoa solids, including at least **% cocoa butter and *.*% dry non-fat cocoa. Milk chocolate: contains a minimum of **% cocoa solids, **% milk powder and **% fat (***). Fine" or "superior" milk chocolate: slightly richer in cocoa, it must contain more than **% cocoa solids, including no less than *.*% non-fat dry cocoa and **% milk products (***). Household milk chocolate: must contain at least **% cocoa solids and **% milk products (***). White chocolate: must contain at least **% cocoa butter and **% milk products (***), including *.*% milk ...

5.2 VAT: regulations vary

Cocoa has a rather complex VAT status in France. Food products are generally subject to reduced VAT(***), dubbed the "Cocoa-Chocolate Decree", in line with European Parliament Directive ****/**/EC on cocoa and chocolate products.

Chocolate products subject to the standard rate (***) are as follows:

Milk chocolate White chocolate Filled chocolate Chocolate a la taze Chocolate familiar a la taza

Chocolate products subject to the reduced rate (***) are as follows:

cocoa beans and cocoa butter; products in the "household milk chocolate" category, given their traditional packaging; products in the "chocolate" category, whatever their presentation; chocolate products in the "chocolate candy" category.

In the case of chocolate-based products, which are very common on French supermarket shelves, it comes down to the product's ability to define itself other than through its chocolate composition: for example, "Mon Chéri" chocolates are labelled "Fruits enrobés" (***) and therefore qualify for reduced VAT, whereas a classic milk chocolate Easter bunny would qualify for normal VAT.

The consequences of this allocation of normal VAT for a large proportion of chocolate products are numerous: chocolate products are overtaxed in relation to similar or related products whose packaging and sales conditions are virtually the same. This puts them at a major ...

5.3 The main labels on the French market

A label uses a symbol on the packaging to highlight the specific qualities of a product. It is associated with a product or an organization. Each label has collectively defined specifications. A system is then put in place to verify that practices comply with these specifications. This system generally relies on the services of guarantee professionals such as certification bodies. [***]

Labels and their guarantee systems are essential to the buyer's choice when he or she has neither the time nor the means to ensure that the promises made are actually respected. These systems are designed to reassure them on this point.

Fair trade labels focus on production methods and exchanges within the supply chain. Over the past twenty years, the creation of fair trade labels has enabled responsible consumption practices to grow. These labels enable consumers to identify and purchase products that correspond to their values.

Some apply only to products whose ingredients come from developing countries (***): this is the case of the Fairtrade/Max Havelaar label and the SPP - Symbol of Peasant Producers label. Others can be applied to all kinds of products, whatever their geographical origin: WFTO, BioPartenaire, Fair for Life, ATES for tourism.

The International Guide to ...

5.4 Cocoa sector bills

The proposed sugar tax

In ****, a proposal to levy a surtax on processed foods containing sugar was submitted to the Assembly. These include chocolate, which contains at least **-**% sugar.

Chocolate, like soft drinks and industrial ready-made meals, would therefore be among the products taxed. While current VAT rates already vary from *.*% to **%, depending on sugar content and product size, this new tax would restrict already limited margins. It's a decision far from welcomed by artisan chocolate-makers, who are just recovering from their post-Covid indebtedness and the rising cost of energy, sugar and cocoa.

Structured in two tiers, it imposes a first level of taxation at €** for products containing between * and * kg of sugar per quintal (***) of processed products, and a second at €** for those exceeding * kg of sugar. Inspired by the British soda tax model, these levels encourage manufacturers to reduce the sugar content of their recipes to stay below the defined thresholds, thereby minimizing their tax burden. [***]

European Zero Imported Deforestation Rule

from January ****, the European Union Deforestation Regulation (***) will come into force, requiring cocoa importers to provide proof that their products do not come from deforested plots after December **, ****.

To enter the European Union, cocoa will have to ...

6.1 Segmentation

• Jeff de Bruges
• Savencia Fromage & Dairy groupe
• Cémoi (Sweet Products)
• Mars Group
• Roger & Cie
• Bonnat chocolatier
• Cabosse & Associés (Chocolat Alain Ducasse)
• Chocolatrie Janin
• De Neuville
• Des Lis chocolat
• Maison du Chocolat
• Never Dy
• Valrhona (Savencia Fromage & Dairy)