Can Africa milk chocolate?

Jul 24, 2018 | Emerging business models | 0 comments

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While Europe has long dominated chocolate, Africa supplies its most vital ingredient – cocoa, producing and exporting more than two-thirds of the world supply. Europe holds a global market share of 70% – the biggest consumer, producer and exporter of the addictive treat.

It’s not a total surprise that European companies maintain their grip on chocolate, as their innovations transformed the cocoa trade into the chocolate industry in the first place. But it’s perhaps a little surprising that Africa has had such limited involvement in over 200 years. From 1961 to 2016 when data is available, Africa’s share of global chocolate exports grew just 0.9%, and it’s not even considered a rival to Europe.

Europe’s biggest rival is Asia – in particular Indonesia – which has been growing cocoa and building an industry that has tapped into the growing Chinese middle-class. Indonesia can’t expand its cocoa production much more, cocoa is a labour-intensive crop, and costs in Asia are rising.

Chocolate has traditionally been a middle-class treat and it’s unlikely that Africa’s small but fast-growing middle-class will be any different.  They might also have a preference for locally-grown product. Africa’s population is set to double by 2050 and the African middle class will continue to grow. Some studies indicate only one low-income country will be left on the continent by 2050, an indicator chocolate consumption could increase.

Local African entrepreneurs and governments are getting serious about the opportunity to move further along the value-chain. Artisanal products are appearing in thriving west African cities that are 100% Ivorian and Ghanian chocolate. According to Yorm Ackuaku, the “gastro guru” behind esSense13 and chair of Ghana’s Accra Food Hack, “there has been a general resurgence in exploring local food and marketing it to the world. Chocolate is a natural extension of that… there’s pride in seeing quality products come from the country.”

Instant Chocolat was launched in 2015, and has expanded from 3.5t in its first year to selling 50t a month in 2016 – including to corporate clients like Air France and Citibank. In Ghana, the waning dominance of the state-owned Cocoa Processing Company and its signature Golden Tree Chocolate has opened the door to new luxury brands like ’57 Chocolate.

Both the Ivorian and Ghanian governments have launched initiatives to boost local processing. The Ivory Coast aims to process half of its raw cocoa locally by 2020, up from a third currently – implementing tax breaks for cocoa grinders and chocolate producers. Olam International, the world’s third largest grinder, opened a US $75 million factory in San Pedro, the nation’s second largest port in 2015. The 75,000t capacity factory has catapulted the Ivory Coast to be the world’s leading chocolate processor.

Ghana has taken measures to liberalize the purchase of cocoa beans, to boost production and diversification of cocoa exporters as well as the local chocolate industry. Local chocolatiers are highlighting Africa’s unique flavour profiles incorporating Ethiopia’s berbere spice or South African rooibois tea.

There’s still a long way to go, but Asia has shown what is possible in terms of developing a chocolate industry. If it means all of us have to consume more chocolate, we should all be willing to do our part!

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