Cocoa: a bittersweet supply chain



From bean to bar, the cocoa supply chain is bittersweet. While the end product is something most of us enjoy, it also comes at a human cost.

Based on the amount of cocoa coming from West Africa, it is likely that most of the chocolates we consume contain a little bit of Ivory Coast and Ghana. the 130 billion dollars The chocolate industry depends on the cultivation of cocoa for the supply of the key ingredient in chocolate. Yet many cocoa farmers earn less than $ 1 / day.

The chart above maps the main cocoa trade flows and allows us to deepen its global supply chain.

From bean to bar: Stages of the cocoa supply chain

Cocoa beans go through several stages before being used in chocolate products.

  1. Harvesting, fermentation and drying
    First, the farmers harvest the cocoa beans from the pods on the cocoa plants. Then they are fermented in heaps and covered with banana leaves. The farmers then dry and pack the cocoa beans for domestic transport.
  2. Domestic transport, cleaning and export
    National transporters transport the packaged cocoa beans either to cleaning warehouses or to processing plants. The cocoa beans are cleaned and prepared for export to chocolate production centers around the world.
  3. Chocolate processing and production
    Processors winnow, roast and grind cocoa beans, then convert them into cocoa liquor, cocoa butter or cocoa cakes, which are mixed with other ingredients like sugar and milk to produce products. chocolate.

The cultivation and trade of cocoa is the backbone of the chocolate industry, and the constant supply of cocoa plays a vital role in providing us with reasonably priced chocolate.

So where exactly does all this cocoa come from?

Key nations in the global cocoa supply chain

Cocoa cultivation has specific requirements for temperature, water and humidity. As a result, the equatorial regions of Africa, Central and South America, and Asia are optimal for growing cocoa.

These regions are home to the largest cocoa exporters by value.

Rank (2019) Exporting country Value (USD, millions)
1 Ivory Coast $ 3,575
2 Ghana ?? $ 1,851
3 Cameroon ?? $ 680
4 Ecuador ?? $ 657
5 Belgium ?? $ 526

Côte d’Ivoire and Ghana are responsible for 70% of global cocoa production, and cocoa exports play a huge role in their economies. Although the majority of exporters come from equatorial regions, Belgium ranks fifth.

On the other hand, most main importers are in Europe, the Netherlands and Germany being the first two.

Rank (2019) Importing country Value (USD, millions)
1 Netherlands ?? $ 2,283
2 Germany ?? $ 1,182
3 WE $ 931
4 Malaysia ?? $ 826
5 Belgium ?? $ 719

In third place, the United States mainly sources cocoa from Côte d’Ivoire, Ghana and Ecuador. Mars, Hershey, Cargill and Blommer, some of the world’s largest chocolate manufacturers and processors, are headquartered in the United States.

Finally, it is not surprising that the largest importers of cocoa beans are among the largest chocolate exporters.

Rank (2019) The country Value of chocolate exports
(USD, millions)
1 Germany ?? $ 4,924
2 Belgium ?? $ 3,143
3 Italy ?? $ 2,100
4 Netherlands ?? $ 1,992
5 Poland ?? $ 1,834

Not only is the Netherlands the biggest importer of beans, but it’s also the biggest processor — grinding 600,000 tons annually and the fourth largest exporter of chocolate products.

Belgium is another key nation in the supply chain, importing cocoa beans from producing countries and exporting them across Europe. It is also home to the world’s largest chocolate factory, supporting its annual exports of valued chocolate $ 3.1 billion.

Disruption of the cocoa supply chain: who gets what

Without farmers, the cocoa and chocolate industries risk suffering from shortages, with domino effects on higher overall costs. However, they have little ability to influence prices at present.

Farmers are among the lowest earners from a tonne of cocoa sold, accounting for only 6.6% of the value of the final sale.

Low income also translates into many other problems associated with cocoa cultivation.

The bitter side of cocoa farming

The World Bank has set the extreme poverty line at $ 1.90 / day. Ghanaian cocoa farmers earn $ 1 / day, while those in Côte d’Ivoire earn around $ 0.78 / day—Both well below the extreme poverty line.

Farmers are often unable to bear the costs of growing cocoa due to their low income. In turn, they employ children who are out of school, are exposed to unsafe working conditions and receive little or no pay.

The country Cocoa farmers earn $ 1 / day or less Children in cocoa farming
Ivory Coast 600,000 891,500
Ghana ?? 800 000 708,400

To make matters worse, cocoa cultivation is primarily responsible for deforestation and illegal farming in Côte d’Ivoire and Ghana, adding environmental issues to the mix.

These interconnected issues call for action, so what is being done to combat them?

Fighting Cocoa Concerns

Mars, Nestlé and Hershey, among the largest chocolate manufacturers in the world, have produced several promises to eradicate child labor in cocoa farming over the past two decades, but have not achieved their goals.

In addition, organizations such as UTZ Certified, Rainforest Alliance and Fairtrade strive to increase traceability in the supply chain by selling ‘certified cocoa’, from farms that prohibit child labor.

More recently, Côte d’Ivoire and Ghana announcement a fixed premium of USD 400 / tonne on cocoa futures contracts, aimed at improving farmers’ livelihoods by creating a union for cocoa, also known as “COPEC” for the industry.

While these initiatives have had positive impacts, much remains to be done to successfully eradicate large-scale child labor and poverty among those involved in the bittersweet cocoa supply chain.



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