Natra grows Asian presence with new supply contract in China

By Oliver Nieburg

- Last updated on GMT

Related tags: China, Cocoa solids, Hong kong

Natra grows Asian presence with new supply contract in China
Spanish chocolate and cocoa processor Natra has signed a Belgian chocolate supply contract in China with an unnamed distributor that it says will boost sales in the market by 70% in 2012 and help it grow in Asia.

The deal comes off the back of soaring demand for Belgian chocolate in China as seasonal sales boom, according to Natra.

Premium chocolate demand in China

Speaking to Natra head of investor relations and communications Glòria Folch said of Chinese consumers: “They are not eating chocolate on a daily basis, but are beginning to consume chocolate on special occasions.”

Natra hopes to capitalise on the premium seasonal trend through an agreement with an undisclosed distributor to sell and market Natra’s cocoa-derived and chocolate products throughout China, excluding Hong Kong and Macao.

The company said its new partner had achieved annual growth between 30 and 40% since 1998, largely due to increased demand for Belgian chocolate in Asia.

Why China?

Asked why Natra has opted to begin its Asian expansion in China rather than the faster growing Indian chocolate market, Folch said: “China has higher purchasing power and consumers are ready to pay higher prices for premium products.”

She added that the cooler weather in China were more suited to chocolate consumption and said there were more developed retailers, including international players are already in China, such as Walmart, Carrefour and Tesco.

Lower import duties and more import facilities were also an attraction, she continued.

Chocolate confectionery in China grew 13% in 2011 to reach CNY 10.8bn ($1.7bn), according to figures from Euromonitor International.

Significant boost

Folch said that China accounted for just 1% of Natra’s sales last year, but revenues would be upped by 70% following the latest agreement.

The unnamed distributor is contracted to sell 1,000 tonnes of Belgian chocolate in the first year, with growth expected in the following two years. Natra's annual total Belgian chocolate capacity stands at 7,500 tonnes.

Belgian chocolate for the Chinese market will be produced from one of Natra’s two factories in Belgium.

“Sales would really need to boom to consider moving production,”​ said Folch, adding that the authenticity of Belgian chocolate would be lost if production moved outside Belgium.

Related topics: Markets, Emerging Markets, Outsourcing

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