Posted: April 1, 2014 |  AUTHOR: KEN FOX | CONTACT ME


Demand for chocolate is outpacing supply. The world’s cocoa production will see the largest shortfall in decades. Global chocolate sales are expected to climb to 7.5 million tons in 2014, the highest since at least 2008. Demand is increasing partly because China’s income levels are growing and they have more money to spend. Chocolate sales in China more than doubled in the past decade, outgrowing Western Europe, chocolates’ biggest customer. Chocolate is also know as an “affordable luxury,” even in tough financial times, individuals may put off spending for a new washing machine, automobile or other expensive item but be willing to spend for a box of chocolate.


Overall U.S. chocolate candy sales in 2013 grew 3.6% to almost $20.6 billion U.S. dollars, versus non-chocolate candy sales which grew of 2.7% to $10.3 billion in sales in the same period. The National Confectioners Association forecasts chocolate sales will grow another $4 billion U.S. dollars over the next five years (to 2019).

Chocolate is made from the seeds of a tropical cacao tree. The tree produces seeds or cocoa beans, from which all chocolate is made. Cocoa trees may grow as tall as 25 feet (7.6 meters) high. A cocoa tree takes about five years to produce its first beans, and reaches peak production in about ten years. It will produce a large number of fruit or “pods” for an additional twelve years. The trees produce leaves, flowers and fruit throughout the year. The ripe fruit or pods may be red, yellow, golden, pale green or a combination. Each pod contains 20-40 almond shaped seeds. These seeds are fermented and dried by machine or in the sun, and become commercial cocoa beans. Chocolate manufacturers will remove any shells, and grind different kinds of beans to get the desired color and texture. The natural fat of the cacao bean is called cocoa butter. A free flowing substance called chocolate liquor is generated which can be blended with sugar, chocolate and other ingredients to obtain the desired taste and texture.

Chocolate is produced in countries with hot and humid climates. West Africa produces 70% of the world cocoa, with the Ivory Coast and Ghana leading as global exporters. Cocoa is also produced, but in much lower quantities, in Indonesia and Brazil. Most of the cocoa bean grinding is done in Europe, with the Netherlands being the leader.


The supply of cocoa beans during the 2013-2014 crop year was projected to fall short of demand by 69,000 metric tons (source: the London based International Cocoa Organization). The shortfall is caused by poor harvests due to bad weather and disease, which causes crop loses that reach up to 30% of world’s production.


Another two trends driving increased chocolate demand globally are dark and white chocolate. Dark chocolate sales in the U.S. were $102 million in 2013, up 9% from the previous year, versus a 6% sales increase for milk chocolate in the same period. Who would have imagined dark chocolate may be good for your heath? Perception of dark chocolate’s benefits include: helps control blood sugar, full of antioxidants, helps harden teeth enamel (because it contains theobromine), cardiovascular benefits and contains minerals such as: copper, iron, potassium and magnesium.


White chocolate, once looked down upon, has also seen increased sales and interest. Chocolate manufactures realized the white variety is a neutral platform and more compatible for mixing flavors like strawberry, pistachio, almond and espresso. Perugina, a unit of Nestle SA, launched a Baci White in 2011. Baci White includes its popular hazelnut filled truffles enrobed in white chocolate. Some varieties of white chocolate have cocoa butter content that is 10 times as great as dark chocolate. However, Europeans customarily give white chocolate to children because of its very low caffeine level. Also, its flavor is mild compared with bitter dark chocolate, says a Perugina export manager, Giorgio Marrano.

The major chocolate candy manufacturers worldwide include:

Net Sales, 2013 in U.S. $ Millions
Mars, Inc (USA) 17,640
Mondeliz International (USA)* 14,862
Nestle (Switzerland) 11,760
Meiji Holdings Co, LTD (Japan) 11,742
Ferrero Group (Italy) 10,900
Hershey Foods Corp. (USA) 7,043
Arcor (argentine) 3,700
Chocoladenfabriken Lindt & Sprungli
AG (Switzerland) 3,149
Ezaki Glico Co. Ltd. (Japan) 3,018

*Mondelez includes: Oreos, Chips Ahoy, Cadbury, Toblerone, LU, Milka and Lacia
Note: The above chart does not include all chocolate candy manufacturers
Source: The Chocolate Industry,, February 2010


Most of us love chocolate but are unaware of the many steps to get it from the farmer to a packaged candy bar or baking ingredient. There is a current shortage of cocoa, especially from West Africa. This is due to a very fragmented market comprised of sourcing from small farmers who are dealing with old cocoa trees, infestation from plant disease and periodic poor weather conditions that limit output. The West Africa farmers often live in poverty, and only recently havs the government or industry stepped up to help.

Scientists and companies such as Nestle are offering funding to benefit the industry. One such effort is the development of an insect resistant tree that grows quicker. Such a tree variety has been developed in the Ivory Coast. It is claimed this newly devel0oped tree will produce cocoa fruit in 18 months instead of the typical 3-5 years. The other issue being addressed is consistent quality. So enjoy your chocolate, but appreciate the many steps it takes to get to you.

Chocolate Sales Seen Outpacing Non-Chocolate Candy for Nest 5 Years, NCA, Wall Street Journal, March 3, 2014
European’s Appetite for Chocolate Sweetens Cocoa Market, Wall Street Journal, January 15, 2014
Chocolate High, Barron’s, February 24, 2014.
White Chocolate, a Blank Slate for Flavor, Wins Converts, Wall Street Journal December 26, 2013.
Chocolate Eaters Drive Record Cocoa-Output Deficit: Commodities, Bloomberg New, December 17, 2013.
6 Health Benefits of Dark Chocolate,, (date not available).
Cocoa Market Update, World Cocoa Foundation, March 2012
Fairtrade and Cocoa, Commodity Briefing, Fairtrade Foundation, London, August 2011
Failing Cocoa Yields in Ivory Coast, Financial Times Magazine, May 28, 2010

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©2017, The Global Galaxy blog is produced by The Soundings Group, LLC, Charleston, South Carolina, USA, The company is an international business consulting firm, specializing in new market assessments, market entry strategies and marketing guidance. The scope of Global Galaxy is to cover timely international trends, issues and business building ideas. Its purpose is to educate, inform and stimulate thinking for business opportunity analyses.