Entering the French market for cocoa

The dominance of multinational players in France makes the mainstream market very concentrated. However, the expansion of the speciality cocoa market has opened up possibilities to more specialised players operating in niche markets. This trend creates openings for suppliers handling smaller volumes at higher qualities, as well as for more personal supplier-buyer relationships. The best option for farmers or farmers’ cooperatives with specialty or certified cocoa is to sell cocoa beans directly to specialised cocoa importers or chocolate makers.

1. What requirements must cocoa comply with to be allowed on the French market?

You can only export cocoa to France if you comply with strict European Union requirements. For a complete overview of these standards, refer to our study on buyer requirements for cocoa or consult the specific requirements for cocoa in the EU Trade Helpdesk.

Buyer requirements can be divided into the following:

1. Musts: legal and non-legal requirements you must meet to enter the market;
2. Additional requirements: those you need to comply with to keep up with the market;
3. Niche requirements: these apply to specific niche markets.

The highlights for these requirements are given below, specified for the French market where relevant.

Legal and non-legal requirements you must comply with

Legal requirements

You must follow the European Union’s legal requirements for cocoa. These mainly deal with food safety and hygiene. The legal limits for food contaminants are related to this, of which the most common are:

• Pesticides (consult the EU pesticide database for an overview of the maximum residue levels (MRLs) for each pesticide);
• Mycotoxins (ochratoxin A is of special relevance for cocoa);
• Polycyclic-aromatic hydrocarbons (PAHs);
• Microbiological contamination such as Salmonella (although cocoa is considered low-risk);
• Heavy metals such as cadmium (which is a particular problem for cocoa from some Latin American countries due to factors like volcanic activity and forest fires).

Quality requirements

If you want to access the French market for cocoa beans, you will have to meet your buyer’s quality standards. They are particularly high within the specialty segment for fine flavour cocoa beans.

Buyers in France and elsewhere currently assess the quality and flavour of cocoa beans in different ways and often use a combination of two or more methodologies. The Cocoa Beans: Chocolate & Cocoa Industry Quality Requirements guide provides recommendations on cocoa growing, post-harvest practices and quality evaluation methods that contribute to cocoa quality.

Other cocoa quality assessment methodologies and international cocoa standards commonly used by chocolate makers and cocoa traders include the following:

• ISO’s Standards on classification and sampling for cocoa beans;
• The cocoa sampling protocol and cocoa grading form of the Fine Cacao and Chocolate Institute (FCCI);
• Heirloom Cacao Preservation’s genetic evaluation of cocoa to identify and value cocoa and its flavour;
• Equal Exchange/TCHO’s quality assessment and tasting guide to assess the quality of cocoa along the value chain.

There are no harmonised international procedures, nor is there a specific terminology for assessing cocoa bean quality and flavour and its direct relation to high-quality chocolate for buyers and consumers. However, a working group, coordinated by the Cocoa of Excellence Programme, is currently developing international standards for assessing cocoa quality.

Labelling requirements

The labelling of cocoa beans exported to France should comply with the general food labelling guidelines of the European Union. The labelling should be in English and include the following to ensure traceability of individual batches:

• Product name
• Grade
• Lot or batch code
• Country of origin
• Net weight in kilogrammes.

If your cocoa is organic and/or fair trade-certified, the label should contain the name/code of the inspection body and the certification number.

Figure 1: An example of cocoa bean labelling
 
Source: Chocolate Cortés

Packaging requirements

Cocoa beans are traditionally shipped in jute bags, which can weigh between 60 and 65 kilogrammes. On the mainstream market, bulk shipment of cocoa beans has become more popular. This means cocoa beans are loaded directly into the ship’s cargo hold or in shipping containers containing a flexi-bag (see Figure 3). This mega bulk method is often adopted by larger cocoa processors, which handle cocoa beans of standard qualities.

In the specialty cocoa segment, jute bags are still commonly used. For very high-quality micro lots, vacuum-sealed GrainPro packaging can be used.

Figure 2: Examples of packaging for cocoa: jute bag, container-sized flexi bag and GrainPro

Sources: Osu.edu, Bls.bulk.com and GrainPro

Additional requirements to keep up with the market

Additional food safety requirements

You can expect buyers in France to request extra food safety guarantees from you. When it comes to production and handling processes, you should consider the following:

• Implementation of good agricultural practices (GAPs): the main standard for good agricultural practices is provided by GLOBALG.A.P. This is a voluntary standard for the certification of agricultural production processes that provide safe and traceable products. Certification organisations (such as Rainforest Alliance/UTZ) often incorporate GAPs in their standards;
• Implementation of a quality management system (QMS): a system based on Hazard Analysis and Critical Control Points (HACCP) is often a minimum standard required at the level of storage and handling of cocoa beans. If you export semi-finished cocoa products, some buyers will also expect you to have certification, such as International Featured Standards: Food (IFS) or British Retail Consortium Global Standards (BRC) certificates, for your manufacturing facilities.

Additional sustainability requirements

As corporate responsibility and sustainability are growing in importance in the French cocoa sector, it has become essential to adopt codes of conduct or sustainability policies related to environmental and social impacts. Leading companies on the French chocolate market such as Cémoi and Valrhona have sustainability policies highlighting their relationship with farmers, transparency in their operations, as well as their social and environmental impact at origin.

Certification standards like Rainforest Alliance/UTZ are important on the mainstream chocolate market. Over 110 traders, cocoa processors and chocolate manufacturers operating in France are Rainforest Alliance/UTZ-certified.

Niche requirements

In order to market your cocoa as organic in the French and European market, it must comply with the regulations of the European Union for organic production and labelling. EU Organic is the minimum legislative requirement for marketing organic cocoa in the European Union. Note that the EU organic regulation will apply some changes as of 1 January 2021; the website of IFOAM describes these changes in detail and highlights the implications for exporters.

An important change, already implemented as of February 2020, is that Certificates of Inspection (COIs) must be issued by control authorities prior to the departure of a shipment. If this is not done, your product cannot be sold as organic in the European Union and will be sold as a conventional product. COIs can be completed by using the European Commission’s electronic Trade Control and Expert System (TRACES).

There is no mandatory national organic label in France, but there is a widely-spread national organic logo: the AB mark, owned by the French Ministry for Agriculture and Food.

Regarding fair trade certification, the most common standards on the French market are Fairtrade , SPP (Small Producers’ Symbol) and Fair for Life. Équitable & Bio is a combined organic and fair trade label from France.

Before you can market your cocoa beans as Fairtrade and/or organic, an accredited certifier must audit your growing and processing facilities. Examples of accredited certifiers are Control Union, Ecocert, FLOCERT, ProCert and SGS.

2. What competition do you face on the French cocoa market?

The intensity of competition on the market is generally high for bulk cocoa with low added value. This segment is mainly dominated by major suppliers and cooperatives able to deliver large quantities so they can compete on price. It is difficult for small and medium-sized companies to compete with this segment. Rivalry is less intense in the specialty cocoa market. This segment has a stronger focus on quality, taste and sustainability.

Figure 3: Main suppliers of cocoa beans to France, in %, 2019

Source: Eurostat, 2020

French cocoa processors rely on supplies from West Africa

Most French direct cocoa bean imports come in the form of bulk cocoa of West African origin. Direct imports from Ivory Coast reached nearly 50 thousand tonnes in 2019, after an increase of 15% between 2015 and 2019. Ghana directly supplied about 39 thousand tonnes of cocoa beans to France, registering a decrease of 3.5% of direct exports between 2015 and 2019.

Both Ivory Coast and Ghana mainly produce Forastero cocoa beans and focus on the production of large volumes and lower quality. Together, these countries roughly produce up to two-thirds of the global cocoa supply. As large cocoa-producing countries, Ghana and Ivory Coast have well-established cocoa supply chains. Multinational processing companies (examples: Olam and Cargill), to which small cocoa producers and cooperatives are strongly linked, have a large presence in these countries.

The presence of these multinationals is also a driving force behind the growing cocoa-grinding industry in both countries. Ivory Coast was the world’s second-largest cocoa grinder in 2018/19, with 585 thousand tonnes or 12% of global grindings. Ivory Coast aims to grind 1 million tonnes of cocoa beans by 2022, almost doubling its current output. Ghana’s grinding industry consumed an estimated 300 thousand tonnes in 2018/19, accounting for 6.3% of global grindings.

Between 2015/16 and 2018/19, Ivory Coast and Ghana both registered growth in their grinding volumes, of 5.9% and 14% respectively. By grinding more beans at origin, cocoa-producing countries aim to increase the value of their exports and protect their economies from the volatility of the global cocoa market. Nevertheless, most grinders at origin are owned by multinationals such as Cargill, Olam and Barry Callebaut.

A large share of cocoa produced in Ivory Coast and Ghana is Rainforest Alliance/UTZ-certified. This is a common market entry requirement for large manufacturers and retailers operating in mainstream markets. About 46% of the total 4.1 million hectares of cocoa production in Ivory Coast were Rainforest Alliance/UTZ-certified in 2017. For comparison, about 18% of Ivory Coast’s cocoa production area was Fairtrade-certified in 2017.

Despite certification efforts, there are widespread sustainability concerns regarding the cocoa sector in Ghana and Ivory Coast. For instance, cocoa farming has been identified as a main driver of deforestation, which contributes to climate change. As a response, industry players, donors and the governments of Ghana and Ivory Coast launched the Cocoa and Forests Initiative. In addition, child labour in both countries is a returning concern, as an estimated 2.1 million children still work in the cocoa fields of Ghana and Ivory Coast.

In an attempt to tackle farmer poverty, the governments of Ghana and Ivory Coast have raised the minimum export prices for cocoa to USD 2,600 per tonne, with the addition of a fixed ‘living income differential’ on all their cocoa sales (at USD 400 per tonne), applicable from the 2020/21 crop.

Madagascar and Cameroon: important direct cocoa suppliers to France

Madagascar exported about 1.7 thousand tonnes of cocoa beans to France, registering an average annual increase of 6.3% between 2015 and 2019. According to ICCO, 100% of cocoa exports from Madagascar are classified as fine flavour cocoa. In 2019, Madagascar provided around 1.1% of the total French imports. About 26% of the cocoa bean harvesting area in Madagascar was organic certified in 2017, accounting for about 3.4 thousand hectares. Within Africa, the countries of DR Congo, Sierra Leone, Uganda, Tanzania, Sao Tomé and Principe and Ghana have a larger absolute area of organic-certified cocoa.

Cameroon supplied about 1.9 thousand tonnes of cocoa beans directly to France, marking an average annual growth rate of 6% between 2015 and 2019. Production volumes in Cameroon saw a general growth rate of 3.2% per year between 2014 and 2018. The Cameroonian government and cocoa producer associations have launched programmes to improve nationwide post-harvest techniques to improve cocoa quality. Although Cameroon mainly cultivates Trinitario, the Cameroonian type is classified as bulk cocoa. About one-third of cocoa exported by Cameroon is Rainforest Alliance/UTZ-certified.

Ecuador and the Dominican Republic are the main cocoa suppliers from Latin America

Latin America plays a significant role in French imports of cocoa beans, but in different volumes when compared to West and Central Africa. Latin American countries are known for their high shares of fine flavour cocoa in total production, as well as for the production of organic cocoa. In 2017, about 61% of organic cocoa was produced in Latin America.

Around 3.4% of the total imports were sourced directly from Latin America in 2019. Ecuador and the Dominican Republic were the largest suppliers, with 2.9 thousand tonnes and 1.1 thousand tonnes respectively. Both countries saw their supplies to France increase. Ecuador showed a modest average annual growth rate of 2.2% between 2015 and 2019. The Dominican Republic registered a higher year-to-year growth rate of 12% in the same period.

Ecuador was the world’s seventh-largest cocoa producer in 2018. As much as 75% of Ecuador’s cocoa exports are fine flavour, which makes it the world’s largest fine flavour cocoa producer. Ecuador is strongly promoting the origin of its cocoa beans. This is important, as chocolate products with cocoa origin claims attract a 51% higher retail price and higher consumer appreciation in the growing online retail space. Despite the growth in exports to France, Ecuador has been affected heavily by the European Union regulation limiting the maximum amounts of cadmium in cocoa products. Cadmium contamination is high in some cocoa-growing regions in Ecuador, which has already led buyers to source from alternative origins.

The Dominican Republic is an important supplier of organic cocoa. In fact, with about 82 thousand hectares certified as organic in 2018, the Dominican Republic is the world’s largest organic cocoa producer. A large share of organically produced cocoa from the Dominican Republic is also Fairtrade certified.

3. Through what channels can you put cocoa on the French market?

Cocoa and cocoa products are used for processing in four different industries: confectionery, food, cosmetics and pharmaceutical. This document focuses only on the confectionery industry, as this is the main segment for cocoa beans. In 2017, the confectionery industry alone represented up to about 43% of total global cocoa consumption. It mainly processes cocoa liquor and butter into chocolate products, such as bars, candy bars and bonbons.

How is the end market segmented?

The confectionery industry can be segmented according to the quality of the end products. For cocoa beans, the end products mainly consist of candy bars and chocolate bars (filled or otherwise). In France, chocolate bars accounted for over 35% of total sales volume in 2018. The chocolate confectionery industry in France reached a value of €2.9 billion in 2018, with sales volumes reaching 333 thousand tonnes.

Figure 4: Segmentation of the chocolate market based on quality

Low end: the low-end segment offers cheap chocolate products with lower cocoa content. The products are often produced by large chocolate manufacturers, using mainly bulk cocoa from West Africa (Forastero variety). Bulk cocoa is characterised by high volumes, low value and standard quality. Rainforest Alliance/UTZ-certified cocoa is often used to certify low-end products.

Lower-end chocolate products are usually mass-market products of big brands and lower-quality private label products from supermarkets. About 70% of all chocolates are sold in supermarkets. The market share of private labels in French supermarkets reached a market share of approximately 31% in 2019. The largest retailers in France are:

• E. Leclerc
• Carrefour
• Les Mousquetaires
• U
• Casino
• Auchan Retail.

Examples of brands and an indication of consumer chocolate prices (based on Carrefour retail prices in 2020) in French supermarkets for lower-end products are given below:

Middle range: the middle-range segment includes chocolate products of good quality, which are commonly sustainably certified. Storytelling and the origin of the cocoa beans are important in this segment, mainly for marketing purposes.

Middle-range products are mainly sold through supermarkets and are usually the high-quality category of retailers. Supermarkets also increasingly offer their own premium private label chocolate products. An example in France is the premium private label chocolate line from Carrefour Selection. These products offer similar quality and characteristics as branded products but are usually offered at more competitive prices.

The table below gives some examples of middle-range chocolate brands as well as an indication of consumer prices for these products (based on Carrefour retail prices in 2020):

High end: smaller, more specialised chocolate makers produce high-end chocolate products, mainly using fine flavour cocoa (usually Criollo and Trinitario varieties, and/or Forastero, to a lesser extent). These products are characterised by a high cocoa content. Single-origin cocoa beans are important, both for the taste and for the traceability of the cocoa. Bean-to-bar is one of the categories of the high-end chocolate market, with French brands such as Bernachon and François Pralus.

High-end products are mainly sold at chocolate events and in specialty shops. Examples of specialty shops in France include Choco Latitudes, La Balade Gourmande and Kosak Chocolat. The number of French high-end chocolate makers is large; the website of the Fine Cacao and Chocolate Institute provides a good list with examples of chocolate makers working with high-quality cocoa. Some examples and an indication of consumer prices for high-end chocolate products are given below (based on retail prices of Choco Latitudes in 2020):

For exporters, it is important to realise that trade prices and retail prices behave independently and are not directly linked. As the figure below shows, only 6.6% of added value goes to farmers. In general, cocoa bean export prices and the share kept by cocoa producers will depend on the cocoa bean quality, the size of the lot and the supplier’s relationship with the buyer. The largest shares are kept by chocolate companies and retailers.

Figure 5: Value distribution per actor in %, per tonne of sold cocoa

Source: Cocoabarometer

Through what channels does cocoa end up on the end-market?

As an exporter, you can use different channels to bring your cocoa to the French market, depending on the quality of your cocoa beans and your supply capacities.

It is important to realise that the European market is moving towards shortened supply chains. This means retailers and cocoa-processing companies are increasingly sourcing their cocoa beans directly. The figure below shows you the most important channels for cocoa beans in France.

Figure 6: The main channels for export of cocoa to France

Cocoa bean processors/grinders

Large processors/grinders source their cocoa beans directly from producing countries. They process the raw material into cocoa mass, cocoa butter and/or cocoa powder, which they distribute to the confectionery, food, cosmetics and pharmaceutical industries throughout Europe. Some cocoa processors also manufacture end products to supply directly to the retail or food service sector.

Examples of cocoa bean processors/grinders in France are Barry Callebaut and Cargill. Chocolate manufacturers Cémoi, Ferrero and Nestlé also have grinding facilities in France.

For whom is this an interesting channel?

If you are an exporter of high volumes of bulk cocoa beans, then your direct trading partner is usually a cocoa grinder/processor. These companies tend to buy high volumes of standard qualities. They usually have cocoa-buying stations in producing countries to which you can sell your cocoa beans directly.

Importers

Importers of bulk cocoa beans normally handle large quantities and have direct contacts with exporters in producing countries. In most cases, importers have long-standing relationships with their suppliers. Importers either sell the cocoa beans to companies in France or re-export them to other European buyers. However, re-exports of cocoa beans from France are not substantial.

Examples of large importers of cocoa beans and/or cocoa derivatives active in France are RockWinds, Sucden, Trading & Services SAS and Touton. Touton also has processing facilities in Ghana. The previously-mentioned Barry Callebaut, Cargill, Cémoi, Ferrero and Nestlé also import cocoa beans directly.

Importers active in the specialty segment usually handle smaller quantities and often work directly with producers and producer cooperatives. Examples of specialty trading companies in France focused on specific organic and/or fair trade markets are Éthiquable, Alter Eco, Kaoka and Artisans du Monde. These companies work on projects with cocoa-producing cooperatives in origin countries. They sell chocolate products under their own label on the French and other European markets.

Specialised importers could also be interested in value-added cocoa products processed in the country of origin, as described in our study on the European market for semi-finished cocoa products, or even in finished products like chocolate.

For whom is this an interesting channel?

For exporters working with high volumes of bulk beans from producers/cooperatives, large importing companies can serve as a gateway into the French market. If you deal with bulk cocoa, discuss certification possibilities with your buyer. Note that many specialised importers prefer to work directly with producers and/or cooperatives and not through exporters.

The best option for farmers or farmers’ cooperatives with specialty or certified cocoa is to sell cocoa beans directly to specialised cocoa importers. If you produce or have very high-quality cocoa beans and are working through an importer, it is best to discuss the possibilities for directly linking up with high-end chocolate makers. This is an interesting opportunity for those that have the financial means and technical know-how to access the market directly.

Large (private label) chocolate manufacturers

The largest industrial chocolate manufacturer worldwide is Barry Callebaut, which also has production and grinding facilities in France. Other large chocolate manufacturers active on the French market are Mars, Mondelez, Nestlé, Ferrero, Lindt & Sprüngli, Cémoi and Valrhona. These companies all have their own importing departments and source their cocoa beans directly from producing countries.

Private label manufacturers may also be an interesting entry point for your cocoa beans. Private labels are growing across Europe. The market share of private labels in France is about 31% of the entire market. Examples of chocolate manufacturers that also produce for the private label market in France are Cémoi, Chocolaterie de Bourgogne and Chocmod.

For whom is this an interesting channel?

Selling to these players is interesting if you have large volumes of cocoa beans of a standard quality.

Small chocolate makers

Especially in the specialty and fine flavour segment, cocoa beans are increasingly traded directly from farmers (or farmers’ associations and cooperatives) to chocolate makers. Although direct trade is growing, it still represents a very small part of the cocoa market. Not all chocolate makers are able to sustain direct trade and all the responsibilities that are usually outsourced to traders, such as logistics, documentation and pre-financing.

Direct trade can also happen with an importer as intermediary, acting as a service provider and contact point in the transactions between the producer and the chocolate maker. Importers can also safeguard traceability and communicate the story of the cocoa beans accurately along the chain.

Examples of specialised chocolate makers in France are plentiful and include Michel Cluizel, Grain de Sail and Le Cacaotier. There are over 90 small and medium-sized chocolate makers in France, of which many joined the French Confederation of Chocolate and Confectioners of France.

For whom is this an interesting channel?

Targeting specialty chocolate makers directly is recommended for producers and exporters dealing with specialty cocoa beans. This requires the financial means and technical know-how to organise export activities. You could also consider setting up local processing facilities to add more value to your cocoa beans. Our study on the European market for semi-finished cocoa products discusses this subject in greater depth.

Intermediaries/agents

Agents act as intermediaries between you, cocoa importers and chocolate makers. Some agents are independent, but others are hired to procure cocoa beans on behalf of a company. An agent acts as an intermediary and has the knowledge to evaluate and select interesting buyers for you. An example of an agent in France is Commodities Connexion.

For whom is this an interesting channel? 

If you have limited experience exporting to European countries, agents can play a very important role. Agents are also interesting if you have limited quantities of non-specialty cocoa or if you lack the financial and logistical resources to carry out trade activities. Working with an agent is also useful if you need a trusted and reputable partner within the cocoa sector. Be prepared to pay a commission for their work.

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

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