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Sustainable cocoa rise and compound chocolate shift: Cargill spells out trends after sales shakeup

By Oliver Nieburg+

28-Aug-2013
Last updated on 28-Aug-2013 at 15:46 GMT2013-08-28T15:46:04Z

Cargill is now selling by geograhic regions rather than product lines to help it spot trends in different markets
Cargill is now selling by geograhic regions rather than product lines to help it spot trends in different markets

Demand for sustainable cocoa is growing in mature markets and the Middle East is beginning to move away from compound chocolate, according to the head of Cargill Cocoa & Chocolate’s revamped sales team.

Cargill’s 75-man sales cocoa and chocolate sales team has stopped selling by product lines and is now selling to customers by region to help it better cater to demands in different geographies.

Sustainable cocoa in mature markets

Speaking to ConfectioneryNews, the head of the new sales structure Emiel van Dijk said that two such demands were a growing want of sustainable cocoa in developed markets and signs of a shift from cocoa powder to cocoa butter in the Middle East.

“The demand for sustainable cocoa product is growing fast. This growth is led by the demand in mature markets and multinationals. Our expectation is that this crop year between 10 – 15% of the beans is certified sustainable.”

The fair trade chocolate market

Hershey last year said that certified cocoa accounted for around 5% of the world’s cocoa supply.

According to Euromonitor International’s latest estimates the global fair trade chocolate market was worth $600m in 2009 and it is expected to have grown since then.

The UK is the largest fair trade chocolate market worldwide accounting for around 36% of all global sales in 2009, followed by the US (19%).

Cargill supplies sustainable products through three labels: UTZ Certified, Rainforest Alliance and Fairtrade International, but said it did not have data on which was selling the best.

Emiel van Dijk (center) with members of Cargill Cocoa & Chocolate's revamped sales team

Middle East slowly moving to ‘real’ chocolate

According to van Dijk, another trend his company is noticing is that Middle East customers are beginning to make the shift from purchasing cocoa powder for compound chocolate to buying cocoa butter and chocolate itself.

“We definitely see an increase in chocolate, butter and liquor [in the Middle East]. It’s in the very early stages but there is definitely substantial growth.”

This is not to stay that compound chocolate isn’t growing too. Demand for cocoa powder is rising particularly in developing markets, which are starting to up their chocolate consumption.

Cargill estimates volume demand of chocolate will rise up to 10% per annum in emerging markets over the next few years.

Cargill eyes Asia

One growing region Cargill has its sights on is Asia.

Cargill’s revamped geographical-arranged sales team has staff dedicated to the Middle East and Asia region. The company is also constructing a production facility in Indonesia, which will be operational by mid-2014

“That shows that we see potential in these regions,” said van Dijk.

We asked the sales chief if Cargill was looking to grow its portfolio with any merger and acquisitions after seeing Barry Callebaut overtake it as the world’s largest cocoa processor by volume.

He said that Cargill was always exploring options but would not comment on rumors.

Cargill has been linked to ADM Cocoa in recent months after ADM’s parent company announced it was in talks with an unnamed firm to sell its cocoa operations.

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