The Philippines can evolve as a top-quality cocoa source and serve the needs of growing demand for chocolate in Asia, according to a start-up company trading beans in the market.
PhilCocoa is a new cocoa trading company in the Philippines that claims the quality of cocoa beans from the market via greater use of fermentation methods could prove attractive to chocolate manufacturers capitalizing on growing Asian consumption.
Supply and demand
The Philippines currently produces around 8,000 metric tons (MT of cocoa per year), while the domestic market uses 30,000 MT per year.
Speaking to ConfectioneryNews.com from the Philippines, PhilCocoa founder Aidan Bishop said that during the Eighties the Philippines had produced around 40,000 MT of cocoa per year, but land reforms led to diseases that whittled the crop down to 5,000 MT just five years ago.
Bishop and his business partner David Zulman, who runs private label chocolate company Asbury Chocolates in the UK, first looked at cocoa growing opportunities in Sierra Leone, but opted for the Philippines instead.
“It seemed something was happening here,” said Bishop. Mars and US-government funded organization ACDI-Voca were both involved resurrecting the cocoa crop to the glory days of the Eighties, he said.
Government endorsed crop boost
“Cocoa had also been labelled a high value cash crop by the Philippines government,” he added.
The national government is endorsing a target set by key stakeholders to increase the cocoa crop to 100,000 MT per year by 2020 and has included cocoa as part of its National Greening Program, an initiative to reforest the country.
Bishop and Zulman set-up trading company PhilCocoa in early-2011 and are set to begin selling to processors in Q2 this year.
Teaching farmers to ferment
PhilCocoa has partnered with Olam to build its first Agronomy Center that will open in a few days and will train 400 farmers. The company plans to build 20 Agronomy Centers in the next four years.
Bishop said that the Philippines could never match nearby Indonesia’s 500,000 MT volume per annum, so would take a different tact.
“One thing we are focusing on is quality,” he said. According to Bishop, the company wants to grow the reputation of cocoa grown in the Philliphines.
It plans to achieve this by encouraging farmers to ferment beans rather than leaving them to dry on the streets. “The challenge is the attitude of the farmers,” said Bishop.
He said the best way to encourage farmers to ferment beans was to show them that fermentation could lead to an additional $100-$200 per MT.
Bishop said it was plausible that chocolate from Philippine origin could become a sought-after product. US company Askinosie has uses Philippine cocoa beans for a single origin bar that was voted as one of the 10 best chocolate bars in the world British newspaper The Times, he said.
Growing chocolate market in Philippines
“What’s interesting about the Philippines is that it is one of the most developing markets in South East Asia…Consumption is certainly on the rise.” said Bishop.
According to Euromonitor International, the Philippines chocolate market is forecast to grow 13% by 2017 to $306.3m.
Bishop said that if the Philippines met its target, around half of its cocoa crop would be exported. He said that growing the domestic crop could help serve other emerging markets in the region. “The natural place would be China,” he said.
Child labor is also less prevalent than in West Africa, added Bishop, which could act as a further draw for companies to source from the country.