The European market potential for organic cocoa

Organic chocolate products are available across all price ranges in Europe, from low-end supermarket brands to premium and high-quality products. Demand for organic cocoa is expected to continue to grow, driven mainly by sustainability concerns and growing consumer interest in health and wellness.

1. Product description

This document focuses on cocoa beans, identified by HS code 180100 (cocoa beans, whole or broken, raw or roasted).

Organic cocoa

For cocoa to be certified as organic, it must meet the standards of an organic certification scheme. Organic farming standards restrict the use of synthetic fertilisers and pesticides. They also require specific methods and practices for plant protection and soil conservation that ensure traceability and transparency. Organic standards vary slightly worldwide, but generally aim to sustain the health of people, soils and ecosystems.

Companies have a variety of reasons for becoming organic-certified. These reasons might include environmental concerns, end-consumer demand, enhancing brand reputation and adding credibility to sustainability claims. All actors in the supply chain must be registered with a control agency or body for a final product to be certified as organic. The control agency or body is responsible for verifying that an actor acts in compliance with organic rules.

Organic certification standards

In order to market cocoa as organic in Europe, the product must comply with the European Union (EU) regulation on organic production and labelling. Obtaining the EU organic label is the minimum legislative requirement. In addition to the EU label, there are also official national organic labels and private organic standards. Examples of national organic labels are the German Bio-Siegel and the French AB mark. Examples of private-sector labels are Soil Association (UK), Bio Suisse (Switzerland) and Naturland (Germany).

Besides these national and regional labels, there are also more specific standards for smaller niche markets that go beyond organic certification and are not country-specific. Examples of these labels are Demeter, focused on biodynamic agriculture, and Regenerative Organic Certified.

2. What makes Europe an interesting market for organic cocoa?

Europe is the world’s largest cocoa market and the second-largest region for organic products. European imports of organic cocoa beans are increasing, and so is consumer interest in organic products. Interest in organic products is driven mainly by an increased interest in healthy living and a growing concern for sustainability issues.

Europe’s organic food market continues to grow

Europe was the second-largest region for retail sales of organic food and beverages in 2020, behind the United States of America. European organic retail sales reached €52 billion, corresponding to 43% of global organic sales. Using FiBL data, it was calculated that organic retail sales in Europe registered an average annual increase of over 11% between 2017 and 2020.

The growing interest in healthy living in Europe is one of the reasons for the increasing demand for organic products. In addition, the COVID-19 crisis led to an increasing demand for organics as it made consumers more conscious of quality and health. Consumers believe organic foods to be healthier and safer than conventional products.

The combination of consumer behaviour and market dynamics leads to organic market growth. Europe’s organic food and beverages market is expected to grow at an estimated annual average rate of 8.3% over the period 2021–2026.

Germany is Europe’s largest organic market. In 2020, German retail sales of organic products reached almost €15 billion, representing almost 29% of the entire European market. Germany is also the fastest-growing organic market in Europe, with a growth rate of more than 22% in 2020. The second-largest European organic market is France, whose organic retail sales amounted to almost €13 billion in 2020, followed by Italy with retail sales of €3.8 billion.

Denmark is the country with the highest organic market share in the world. About 13% of all food products sold in Denmark were certified as organic in 2020. Austria and Switzerland followed, both with organic retail sales shares of 11%. Although Germany has the largest organic market, the organic retail sales share in this country accounted for 6.4% of the entire German retail market.

European consumers are willing to spend more money on organic foods

Between 2018 and 2020, European per-capita spending on organic food increased from over €50 per person annually in 2018 to more than €63 in 2020. To compare, the world average per-capita spending in 2020 was a little under €16 per person.

In 2020, Switzerland registered the world’s highest per-capita spending on organic food with €418 per year per person. Swiss per-capita spending on organic food increased at an average year-to-year rate of 11% between 2016 and 2020. Denmark registered the world’s second-highest per-capita spending on organic food in 2020, with €384. Denmark’s per-capita spending increased at an average annual rate of 12% between 2016 and 2020.

Consumers aged between 20–40 years old buy most organic food and drive organic retail sales in markets like the Netherlands. In general, younger consumers with rising disposable incomes are more willing to spend more money on organic products and higher-quality products.

Growing imports of organic cocoa beans by EU-28

According to ITC Trade Map, EU-28 imported an estimated 2.0 million tonnes of cocoa beans in 2020. European Commission data show that total EU-28 imports of organic cocoa beans amounted to 76,000 tonnes that year, representing 3.9% of total cocoa bean imports. Organic cocoa bean imports by EU-28 registered 16% growth from 2019, when the share of organic cocoa beans amounted to 2.9% of total cocoa bean imports.

Netherlands is the largest cocoa bean importer, also when it comes to organic cocoa bean imports. Germany and Belgium follow as second- and third-largest cocoa bean importers, but not specifically for organic cocoa bean imports. After the Netherlands, Italy and France rank as the largest organic cocoa bean importers.

Figures show that organic is a niche market for cocoa. However, the global organic chocolate market is expected to grow at an annual average rate of 6.8% from 2021 to 2028, with the majority of the revenues coming from Europe, in particular France and Belgium. Coupled with the enormous size of the European cocoa market, this indicates that Europe will remain a prominent market for organic cocoa in the near future.

3. Which European countries offer most opportunities for organic cocoa?

The growing popularity of certified organic cocoa is in line with the dynamics of the general organic market in Europe. As such, countries with large organic cocoa import volumes, large organic markets, steep market growth and/or high consumption of organic food products provide interesting opportunities for the export of organic cocoa. This is the case for the Netherlands, Germany, France, Italy, Switzerland and Denmark. Note that Denmark is mainly an interesting end market for organic cocoa.

Table 1: Comparison of the organic markets of several European countries in 2020

Sources: ITC Trade Map, European Commission and FiBL

The Netherlands: Europe’s largest organic cocoa bean importer

The Netherlands is Europe’s largest cocoa bean importer, also when it comes to organic cocoa beans. According to European Commission data for 2021, an estimated 7.7% of total Dutch cocoa bean imports in 2020 were organic, amounting to 52,000 tonnes. Between 2018 and 2020, Dutch organic cocoa bean imports registered an average year-to-year growth of 25%. The Netherlands is an important importer of cocoa beans, both conventional and organic, as it is home to the world’s second-largest cocoa grinding and processing industry after  Ivory Coast. Several players are active in this segment, like Cargill, Dutch Cocoa and Theobroma. Another cocoa processor is Crown of Holland, part of organic Dutch trader Tradin Organic, which only handles organic cocoa beans. Dutch cocoa traders such as Daarnhouwer and Huyser Möller also have organic cocoa beans in their assortments.

The Netherlands has a considerable organic market. In 2020, it ranked as Europe’s tenth-largest organic market. Organic retail sales amounted to almost €1.4 billion. The organic retail market grew by 12% between 2019 and 2020. Further growth of organic retail sales in the Netherlands is expected, in part because of nationwide active efforts to promote organic products by consumer organisations and retailers.

Despite the absolute growth of the organic market in the Netherlands, the share of organic products in retail did not grow between 2019 and 2020. The share of organic products remained at 3.3% in 2020. Ekoplaza is an example of an organic retail shop in the Netherlands, with a diverse offer of organic chocolate products. Examples of Dutch organic chocolate brands include Chocolatemakers and Lovechock.

Germany: Europe’s largest organic market

Germany has been the largest organic market in Europe for years. In 2020, organic retail sales reached almost €15 billion, corresponding to 6.4% of total German retail sales. Despite the large size of the market, the German organic market is still registering growth. In fact, it registered Europe’s highest growth rate in organic retail sales in 2020, with an increase of 22% compared to 2019. One of the drivers of the fast growth was the growing health awareness, intensified by the COVID-19 pandemic.

Germany is Europe’s second-largest cocoa bean importer. However, when it comes to organic cocoa bean imports, it is a small player. Only 0.8% of the country’s total cocoa bean imports were registered as organic. Between 2018 and 2020, however, the demand for organic cocoa increased. According to European Commission data for 2021, German imports almost doubled in volume, from 1,767 tonnes of organic cocoa beans in 2018 to 3,335 tonnes in 2020.

Organic chocolate products are widely available in Germany and competition is strong. Like in most European markets, organic chocolate is available across all price ranges, from low-end and private label to premium. One of the most popular German organic chocolate brands is Vivani, sold all across Europe. Rapunzel is an example of a German chocolate maker working solely with fair trade and organic cocoa.

Although the organic market has moved from niche to mainstream in Germany, the market for organic chocolate is still considered niche. About 2.5% of chocolate sales in Germany is organic. Attempts by larger chocolate manufacturers in Germany, like Ritter, to convert their entire chocolate line to organic have failed due to a lack of consumer demand. Still, Ritter has a specific organic line, ‘Ritter Sport Bio’, in its assortment to cater for the growing interest in organic products.

Italy: Europe’s second-largest organic cocoa bean importer

Italy is Europe’s second-largest organic cocoa bean importer. European Commission data for 2021 show that Italian imports amounted to 8,700 tonnes of organic cocoa in 2020, good for 8.7% of total Italian cocoa bean imports. Between 2018 and 2020, organic cocoa bean imports decreased by an average year-to-year rate of -10%.

Italian confectionery company ICAM is a pioneer in the Italian organic chocolate market and one of the largest global manufacturers of organic chocolate. ICAM owns the premium organic chocolate brand Vanini. Another well-known brand on the Italian market that is driving organic chocolate sales is Altromercato, which is an ethical fair trade company. On its website, Altromercato reports that about 98% of its chocolate bars are organic-certified and over 4.3 million organic chocolate bars were sold in 2019.

Regarding the organic food market, Italy is Europe’s third-largest by retail sales value. According to FiBL data, retail sales amounted to €3.9 billion in 2020. Organic retail sales registered a growth rate of 4.0% between 2019 and 2020. Italians spent approximately €64 per capita on organic products in 2020.

France: organic chocolate market share is growing

France is the third-largest organic cocoa bean importer in Europe. Between 2018 and 2020, French imports grew strongly, from 1,325 tonnes in 2018 to 7,385 tonnes in 2020. About 4.6% of French cocoa bean imports in 2020 were organic.

Organic retail sales in the country have grown steadily in the past years due to the growing health consciousness of French consumers and their overall positive perception of organic food products. In 2020, organic retail sales amounted to nearly €13 billion, which represented an increase of 12% compared to the previous year. In 2020, organic retail sales held a share of 6.5% in the country’s overall sales. Per-capita consumption in France amounted to €188 in 2020.

In France, around 53% of chocolate products in supermarkets had an organic label in 2019. The most popular organic chocolate brand in France is Ethiquable. The brands Alter Eco and Kaoka are, like Ethiquable, ethical companies focused on organic and fair trade chocolate. The share of organic chocolate products on the French chocolate market grew from 6.6% in 2018 to 7.0% in 2020. In 2020, the lower-end chocolate brand Poulain also entered the organic segment with its organic milk chocolate bars. The sale of higher-quality chocolate products in combination with organic certification is expected to do particularly well in the French market in the coming years.

Denmark: home to Europe’s most well-developed organic market

According to FiBL data, Denmark has the highest organic market share in Europe, with 13% of its entire market being organic in 2020. Annual organic per-capita spending reached almost €384 in Denmark, the highest in Europe after Switzerland. Since 2015, organic retail sales in Denmark have grown at an average annual rate of 11%. Between 2019–2020, the country registered a growth of almost 13%, amounting to organic retail sales of €2.2 billion in 2020.

The reason why the organic market in Denmark is so well-developed is that the country has implemented ambitious policies to promote organic and sustainable consumption. Denmark was in fact the first country in the world to implement a state quality mark for organic products, known as the red Ø-label, which has been a driving force behind the widespread success of organic food sales in Denmark.

As a result, there has been an increase in organic product availability in Denmark, leading to an interesting product offer for consumers. Today, all the country’s major brands and retailers’ private-label brands have a range of organic chocolates. Some private-label brands, such as Coop Denmark, are even entirely dedicated to organic products.

Although Denmark offers interesting opportunities for organic products, note that the Danish cocoa and chocolate market is relatively small when compared to the market in other European countries.

Switzerland: growing turnover for organic-certified chocolate products

Switzerland has the highest per-capita consumption of organic products in the world, at €418 in 2020. Swiss organic retail sales amounted to €3.6 billion in 2020, which represented an increase of 19% compared to 2019. Organic sales in Switzerland represented 11% of total retail sales.

Turnover of organic chocolate amounted to about €34 million in 2020. About 3.3% of the total Swiss chocolate market is organic. This indicates that there is room for growth. In fact, the annual turnover of organic chocolate in Swiss retail grew at an average annual rate of almost 12% between 2016 and 2020. An example of a Swiss organic chocolate manufacturer is Stella Bernrain.

Like in other European markets, the combination of organic and fair trade certification is popular in Switzerland. Chocolate and cocoa products are the most popular fair trade sales category in Switzerland, accounting for 22% of total Swiss fair trade turnover in 2020. About 6,000 tonnes of fair trade-certified cocoa was sold in Switzerland in 2019, of which 11% was also certified as organic. Examples of traders specialised in sourcing fair trade and organic-certified cocoa are PRONATEC and Walter Matter.

4. Which trends offer opportunities on the European organic cocoa market?

There is an increasingly large market for organic cocoa in Europe, as supermarkets have expanded and diversified their range of organic products – often through their own private-label brands. There are also opportunities for organic cocoa in the higher-end segments, often in combination with the uniqueness and high quality of cocoa beans. These developments offers interesting opportunities for exporters of organic cocoa.

Organic chocolate widely available through retailer’s private-label brands

Environmental awareness has been an increasingly important concern for Europeans. Concerns about climate change and the environment have been driving up demand for organic products. As a reaction, European retailers have been actively promoting a more sustainable product offer in their shops, including an increasingly large organic assortment.

This organic assortment often consists of a retailer’s own organic private-label line. Examples of these include Edeka Bio (Germany), REWE Bio (Germany), Carrefour Bio (France), Bio Village (France), Waitrose Duchy Organic (United Kingdom) and Änglamark (Denmark). These private-label brands include organic chocolate lines. Some retailers have even launched their own organic chocolate brands. German retailer Lidl’s Moser-Roth chocolate is an example.

The growing offer of organic chocolate products and the growing visibility of these products have driven up the sales of organic chocolate products across Europe. By far, most organic chocolate is sold in supermarkets and hypermarkets. These private-label products are a popular category in organic chocolate sales, as they offer similar quality and characteristics as branded products, but at more competitive prices.

Organic certification finds its niche in the craft chocolate market

Sustainability practices are commonplace among buyers in the high-end segments. These practices often go beyond the principles of certification schemes and include the payment of higher prices, establishment of long-term relationships and sometimes even sustainability projects at source. As such, certification is not commonly used in the specialty cocoa sector and craft chocolate market.

The exception to this is organic certification. This is because organic farming and trading addresses aspects that are complementary to high quality, such as the prohibition of synthetic inputs, traceability and ethical trade practices.

Some European chocolate makers that are active in the bean-to-bar segment only work with organic cocoa beans. Examples are Zotter (Austria) and Original Beans (the Netherlands). These chocolate makers often market their organic products in combination with the uniqueness of the cocoa. Other chocolate makers in the high-end segment, although working with organic cocoa, do not promote the organic logo on their packaging. An example is Friis-Holm (Denmark).

This trend is interesting for cocoa exporters that offer high-quality and organic-certified cocoa, because the importance of organic certification within the craft chocolate segment is expected to increase further. This is because it combines elements of quality, health and safety, and ecological awareness, which are all increasingly important to European consumers. Organic certification is also used to safeguard traceability. Organic products have to be handled separately to avoid cross-contamination, making it necessary to track them throughout the supply chain.

The market for both organic and fair trade-certified cocoa is growing

According to the Cocoa Barometer 2020, around a third of all cocoa produced worldwide is grown under a sustainability label. By 2020, fair trade was the most trusted label by consumers, and about 67% of shoppers say they recognise the fair trade mark. Specifically, consumers have shown interest in fair trade-certified products that are also organic, as they seek products with high social and environmental standards.

Total fair trade-certified cocoa sales reached a volume of 175,000 tonnes in 2020. About 22% of this was both fair trade and organic-certified. This means that by 2020, sales of cocoa certified to both standards reached a volume of nearly 39,000 tonnes, which represented an increase of 14% compared to 2016.

Examples of consumer brands that offer both fair trade and organic-certified cocoa are AlterNativa3 (Spain), Chocolate and Love (United Kingdom), Cocoa Loco (United Kingdom), Belvas (Belgium) and Otto Chocolates (Italy).

An example of a cooperative working with fair trade certification is Cooperativa Agroindustrial Cacao Alto Huallaga (Peru). Examples of cocoa exporters that work with fair trade and organic-certified cocoa are Fedecovera (Guatemala) and Grupo Conacado (Dominican Republic).

Organic products, including chocolate, are increasingly promoted by governments

European governments also play an important role in the promotion of organic food consumption and production. This is driven by the Green Deal, which aims to increase the share of organic food and farming in Europe to 25% by 2030. The proposed actions include reducing the use of pesticides and fertilisers.

This brings opportunities for exporters of organic cocoa beans, since policy-level actions also have an impact on the private sector and on consumers themselves. Buyers are more likely to search for organic-certified cocoa to satisfy internal sourcing practices and consumer demand. Organic certification also guarantees traceability throughout the chain, which is another increasingly important legal criterion for the European market. For example, the European Council formally adopted a new regulation on the transparency and sustainability of the EU risk assessment in the food chain in 2019, which will become applicable in March 2023.

This study was carried out on behalf of CBI by ProFound – Advisers In Development.

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