Comparative study on the distribution of value in European chocolate chains

FAO and BASIC (2020). Comparative study on the distribution of value in European chocolate chains. Paris. 234 pp

3 July 2020. This study by the Food and Agriculture Organization and the Bureau d’analyse sociétale pour une information citoyenne (BASIC) explores the distribution of value and costs along cocoa and chocolate supply chains. With a focus on the French market of dark and milk chocolate, confectionery bars and breakfast cocoa powder, it analyses cocoa grown in four producer countries: Côte d’Ivoire, Ghana, Ecuador and Cameroon.

Principally the report aims to estimate the distribution of value, costs and profits for different chocolate products from cocoa farmers to consumers and explore the influencing factors. It also compares the value accrued by farmers for the different products. Its main findings are that 70% of the total value are accrued by brands and retailers, the final two actors in the chain. At the opposite end of the chain, 18.6% of total value is accrued in cocoa producing countries.

A webinar was hosted on 30th of June by the Vice-President of the European Parliament, Ms. Heidi Hautala, and the welcoming remarks were made by Ms. Carla Montesi, Director at DG DEVCO, Mr. Mohamed Manssouri, Director at FAO Investment Centre and Mr. Harold Poelma, ECA Chairman. 

• The event was attended by 200 participants 
• It welcomed the following speakers: H.E. Abou Dosso, Ambassador of Ivory Coast to Belgium, H.E. Sena Siaw-Boateng, Ambassador of Ghana to Belgium, H.E. Pablo Ortiz García, Ambassador of Ecuador to Belgium, Mr. Antonie Fountain, Managing Director of VOICE Network, Ms. Awa Traoré Bamba, Managing Director of Cooperative CAYAT, and Mr. Aldo Cristiano, Chairman of CAOBISCO. 

This study investigates the French market of dark and milk chocolate tablets, as well as confectionery bars and breakfast cocoa powder sold in supermarket stores - made of cocoa beans grown in Côte d’Ivoire, Ghana, Ecuador, and Cameroon to provide better insight into the aggregate on value creation and cost along the various stages of the cocoa and chocolate chain. 

It shows that differentiation in value creation and cost takes place mainly in the two last stages of the chain. Main factors linked to downstream differentiation are product brand and reputation, and market segmentation, as well as other less tangible consumer product attributes. On the other hand, the research indicates that the value and costs associated with the stages from cocoa cultivation to chocolate couverture manufacturing are much more stable. 

The research also shows that, within producing countries, the main differences in value and costs distribution stem from three principal factors: the type of regulation and the State’s involvement in the sector; the agricultural practices impacting quality and productivity; and the evolution of cocoa world prices. Particularly in the cases of Côte d’Ivoire and Ghana, the study indicates that a key leverage lies in the guarantee of a homogeneous, stable and predictable quality of cocoa as well as the reliability of the supply.

Resources:

• 20200630_Webinar on ‘Comparative study on the distribution of the value in European chocolate chains’ – Agenda
• 20200630_Webinar on ‘Comparative study on the distribution of the value in European chocolate chains’ – Press Release
• ‘Comparative study on the distribution of the value in European chocolate chains’ – Full report
• ‘Comparative study on the distribution of the value in European chocolate chains’ – Executive Summary (EN)
• ‘Comparative study on the distribution of the value in European chocolate chains’ – Executive Summary (FR)