The Spanish market potential for cocoa

Spain plays an important role in the European cocoa market, serving as a base for several multinational and national cocoa grinding companies. These companies drive the country’s growth in the cocoa and cocoa product sector, as well as its position as an important exporter of chocolate products. Spain’s domestic consumption volume is consistent, while the value of consumed chocolate products is growing, thanks to a growing demand for high-quality chocolate products.

1. Product description

This report focuses on cocoa beans (whole or broken, raw or roasted) under HS code 1801. Harmonised System (HS) codes are used to classify products and to calculate international trade statistics, such as imports and exports.

The cocoa tree (Theobroma cacao) grows in tropical areas between 15 and 20 degrees latitude north and south of the equator in Africa, Asia and Latin America. Cocoa pods grow directly from the trunk and thicker branches of the tree. After extraction from the pod, cocoa beans (which are in fact the tree’s seeds) are fermented and dried. A cocoa producing tree can deliver on average 7 kg to 9 kg of dry beans per year.

The three main varieties of the cocoa tree on the international cocoa market are the following:

1. Forastero is the predominant cocoa variety. It is mainly cultivated in Africa, but also in Central and South America. It accounts for approximately 80% of the global cocoa production. Forastero trees grow faster and produce higher yields than other cocoa varieties. These beans have a strong, earthy flavour. Generally, bulk cocoa beans come from Forastero trees. Well-known Forastero subspecies are Amelonado and Nacional. Nacional trees in Ecuador produce fine flavour cocoa.
2. Criollo is mainly grown in Central America, northern South America, the Caribbean and Sri Lanka. Criollo makes up approximately 5% of the global cocoa production. These beans have a delicate and sweet flavour. Criollo is often mixed with other varieties when making chocolate, given that it is scarce and expensive. Fine flavour cocoa beans are produced from Criollo cocoa trees. Well-known varieties are Chuao, Porcelana and Ocumare.
3. Trinitario is mainly cultivated in Central and South America, the Caribbean and Asia. These beans are a hybrid of the Criollo and Forastero trees. This variety represents 10%–15% of the global cocoa production. These beans have a floral, fruity flavour. The cocoa beans from Trinitario trees are classified as fine flavour cocoa. There are exceptions, however, such as Cameroonian cocoa beans, which are produced from Trinitario trees and classified as bulk cocoa beans. Well-known varieties are Carenero, Rio Caribe and Sur del Lago.

Our study on semi-finished cocoa products in Europe covers cocoa bean derivatives, such as cocoa paste, cocoa butter and cocoa powder.

2. What makes Spain an interesting market for cocoa?

Spain is the seventh-largest cocoa bean importer in Europe. A very large share of Spanish cocoa bean imports is directly sourced from origin, giving exporters in producing countries opportunities for more direct contact with buyers. Spain is an important player in the European cocoa industry, with several cocoa-processing companies active in the country. It is also home to a dynamic chocolate manufacturing industry, which is growing strongly in terms of exports.

Spain imports large shares of cocoa beans directly from origin

Spain is among the largest importers of cocoa beans in Europe: it ranks as the seventh-largest importer, behind the Netherlands, Germany, Belgium, France, United Kingdom and Italy. Spain’s total cocoa bean imports reached 98 thousand tonnes in 2020, at a value of €229 million. In comparison, Dutch imports amounted to 988 thousand tonnes, Germany’s 438 thousand tonnes, and Belgium’s 280 thousand tonnes. Spanish imports dropped -3.1% per year between 2016 and 2020, led mostly by declining supplies from Cameroon and Nigeria.

Spanish buyers sourced more than 90% of country’s cocoa bean imports directly from producing countries. The main ports handling the import of cocoa beans in Spain are the Port of Algeciras, the Port of Barcelona and the Port of Valencia. West Africa is the largest cocoa bean supplier to Spain. Ivory Coast supplied approximately 41% of total Spanish cocoa bean imports, followed by Ghana with 16% and Cameroon with 7%.

Spain’s direct import volumes remained stable between 2016 and 2020, however, the share of direct imports as part of the total cocoa bean imports increased by 11% over the same period, meaning that Spain is importing larger shares of its cocoa bean imports from origin.

Less than 10% of the cocoa bean volume that entered Spain in 2020 was sourced through other European countries. The largest European supplier of cocoa beans to Spain was France, which supplied 5.1% of Spanish cocoa bean imports, followed by the Netherlands with 2.6%.

Spain has the fourth-largest cocoa grinding industry in Europe

Spain’s cocoa-grinding industry required an estimated 90 thousand tonnes of cocoa beans in 2019/20. Spain ranks as the fourth-largest cocoa processor of Europe, accounting for 5.5% of total European cocoa grinding activities, behind the Netherlands (36%), Germany (26%) and France (8.6%).

The cocoa-grinding industry in Spain consumed about 100 thousand tonnes of cocoa beans in 2017/18. European cocoa grinding activities are gradually decreasing in a trend that is shifting grinding to producing countries.

Large players active in the cocoa grinding industry in Spain include Nederland SA and the large multinationals Olam and Barry Callebaut.

Exports drive growth of Spanish chocolate manufacturing industry

According to data from the Spanish confectionery association Produlce, Spain produced 212 thousand tonnes of cocoa and chocolate products in 2019, valued at €1.6 billion. Between 2016 and 2019, the production volume increased at an average annual rate of 1%. The value of these products grew at a higher rate at an average yearly growth rate of 4% over the same period.

Growth of the Spanish cocoa and chocolate manufacturing industry is mainly driven by exports. Domestic consumption volumes remained relatively stable between 2016 and 2019, reaching 241 thousand tonnes in 2019 at a value of €1.7 billion. Export volumes of cocoa and chocolate products produced in Spain, however, increased by almost 4.5% yearly over the same period. In 2019, Spain exported an estimated 92 thousand tonnes of cocoa and chocolate products.

Of these Spanish exports, approximately 74% was directed to other European countries. The largest destination market for Spanish cocoa and chocolate products was France, with export values amounting to €82 million, followed by Portugal (€49 million) and the United Kingdom (€44 million).

Among the largest chocolate manufacturers in Europe, Spain ranks behind Germany, Italy, United Kingdom (not an EU Member), Belgium, Poland and France.

The main chocolate manufacturers in Spain include the multinationals Ferrero, Nestlé, Mars, Mondelez and Lindt & Sprüngli. Spanish multinational cocoa and chocolate product manufacturers include Natra, Ibercacao and Idilia Foods. Natra, Ibercacao and Antiu Xixona are among the leading private-label chocolate manufacturers in Spain. Other Spanish chocolate manufacturers include Chocolates Valor, La Isleña, and Maruja.

3. Which trends offer opportunities or pose threats on the Spanish cocoa market?

Consumers in Spain are not the heaviest chocolate consumers in Europe. Nevertheless, they have increasingly opted for high-quality chocolates and healthier chocolate products in recent years. The bean-to-bar movement in Spain is also increasingly taking shape and finding its space in the market. In general, certification is less established in Spain than in north-western European markets, but the market for Fairtrade and organic certified cocoa products is growing steadily.

Consumers in Spain increasingly look for healthier chocolate products

Spain’s per capta chocolate consumption of 3.1 kg per year is lower than the European average of approximately 5 kg in 2019. Switzerland (9.9 kg), Germany (9.2 kg) and Estonia (8.0 kg) registered the highest per capita chocolate consumptions in Europe in 2019.

Hot chocolate and other chocolate drinks make up the most consumed category in Spain, taking nearly 38% of total consumption volume in 2019. Tablets follow with a market share of 28% in volume.

Chocolate consumers in Spain increasingly prefer high-quality dark chocolates, in contrast with chocolates that have more added sugar and milk. In 2019, dark chocolate product sales increased by 10%, more than double the growth that was registered by milk chocolate products. Sales of white chocolate only accounts for about 5% of total sales.

Consumption of dark chocolates is driven by consumer preferences for healthy products. Between 2018 and 2019, the number of consumers in Spain who are more focused on a healthy diet have increased by 20%–25%. As a result, chocolate products with low sugar content or with no added sugar are also gaining popularity.

Among the Spanish chocolate brands offering sugar-free options are Chocolates Valor and Trapa. The latter’s chocolate sales grew more than 45% in 2019, reaching a turnover of €12 million. This is in part thanks to the elimination of sugars, gluten, hydrogenated fats and trans fatty acids from its products throughout 2019.

Growing bean-to-bar movement in Spain

Although still a niche market, demand for bean-to-bar chocolate in Europe is growing. In Spain, the trend picked up a bit later, but the number of bean-to-bar makers in Spain is growing at a steady pace. In 2019, a diverse group of professionals launched the Association for the Incentive of Artisan Bean-To-Bar Chocolate Roasting (lose translation) in Spain, which promotes the development of the sector, in part by educating chocolate consumers in Spain about bean-to-bar chocolates and their superior quality in relation to mass-produced chocolate products.

The growing number of bean-to-bar makers active in the Spanish market includes Blanxart, Kaitxo, Kankel Cacao, Vallflorida Xocolaters, Casa Cacao, Utopick and Maychoco. The Club del Chocolate and Primos de Origen are online shops distributing a wide assortment of bean-to-bar products in Spain.

This segment was naturally affected by the COVID-19 pandemic in Spain and elsewhere in Europe, but the long-term recovery prospects of the bean-to-bar segment is positive. It is likely that in a potential recovery the bean-to-bar market may see a wider range of products, origins and consumer base. However, bean to bar will most likely remain a small niche market, while mainstream chocolate brands continue to dominate the Spanish chocolate market.

COVID-19 pandemic has driven up chocolate sales

Spanish consumers bought more chocolate products during the pandemic in 2020. Sales of chocolates went up especially in supermarkets and online, as much as 12% for chocolate tablets and 9% for snacks between June 2019 and June 2020.

Mainstream chocolate brands sold through supermarkets reported larger sales volumes during the pandemic, but most of these high-growth figures retracted to normal levels by the end of 2020. The private label brand of supermarket chain Mercadona, manufactured by Antiu Xixona, for example, recorded a 60% increase in chocolate bar sales in the first half of 2020. Sales of multinational Ferrero’s products, such as Ferrero Rocher and Kinder, also grew during the pandemic in Spain. While chocolate sales spiked in Spain during the pandemic, the sales of sweets did not, highlighting the preference for chocolate over other sweets in Spain.

Fairtrade-certified products consolidate their position in the Spanish market

Consumption of Fairtrade-certified products in Spain has grown at high rates over the past years. In 2019, Fairtrade retail sales reached €130 million in Spain, marking an average growth of 88% compared to 2018. It is important to note, however, that the size of the fair-trade market in Spain is still relatively small when compared to other European markets, such as Germany, where fair-trade retail reached sales of €2 billion in 2019.

Fairtrade-certified cocoa is one of the products that has grown rapidly, as much as 67% between 2018 and 2019. This growth is linked to the commitment of large multinational retailers present all over Europe, like Lidl and Aldi, to only source Fairtrade-certified cocoa for their private label products. The Fairtrade movement in Spain is not yet as consolidated as in other European countries, but growth is expected to continue. The growth in sales of Fairtrade-certified products can be explained by growing consumer awareness and willingness to purchase more responsible and ethical products.

Some of the Spanish brands that work with Fairtrade and organic certified cocoa include Chocolates Artesanos Isabel, Chocolates Solé and AlterNativa3. IDEAS is a Spanish fair-trade organisation selling organic and Fairtrade-certified products, and distributor of Ethiquable’s products throughout Spain.

The double certification of Fairtrade and organic on chocolate products is a general trend in the European chocolate market, including in Spain, which is Europe’s seventh-largest market for organic foods. Between 2018 and 2019, organic retail sales grew by 12%. Organic retail sales accounted for 2% of total retail sales, indicating that there is still room for growth.

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

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