Cocoa Bean Value Chain Analysis - Growth, Trends, COVID-19 Impact, and Forecasts (2021 - 2026)

A typical cocoa bean value chain system involves the operation of five major segments - cocoa bean production, sourcing and trading, marketing, processing, distribution, and retailing to the final consumers.

Market Snapshot

cocoa bean
Study Period: 2016-2026
Base Year: 2020
CAGR: 1.2 %

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Market Overview

The cocoa bean market is projected to grow at a CAGR of 1.2% during the forecast period (2021-2026). Côte d’Ivoire is one of the key producers of Cocoa and accounted for around 40% of global cocoa production in 2018. Therefore, any challenge faced by Côte d’Ivoire’s exporters due to Covid-19 reflects those of the global economy. Disruptions in international supply chains affected cocoa export from the country. To address the economic consequences of the pandemic, in April 2020 the government released fund CFA250bn (USD 429.8million) to support major agricultural export crops, including cocoa.

The cocoa sector is an important source of livelihoods, providing revenue for many farmer across the countries. Therefore, cocoa is of economic importance for both producing and consuming countries as it generates export revenues, income and employment. Demand for cocoa products is also increasing especially in emerging economies such as China, India, Brazil, etc. Cocoa is an important ingredient in the confectionery, and food and beverage industries, and, more recently, in the pharmaceutical and cosmetics industries. Therefore, ensuring sustainability in cocoa production has been the focus recently. 

Although the cocoa sector growing significantly, there are various important risks on the cocoa supply side that can limit the potential expansion of the industry. Price volatility, income disparity across the value chain remains a persistent challenge in the sector. These challenges can be addressed by coordinated efforts between industry participants, including governments, standard setting bodies, development organizations and private companies to ensure the benefits from the continued growth in cocoa demand is equitably shared across the value chain.  

A typical cocoa bean value chain system involves the operation of five major segments - cocoa bean production, sourcing and marketing, processing, distribution, to the final consumers. The major stakeholders comprise cocoa producers, marketers of cocoa, cocoa processors, traders and retailers. The cocoa sector is a very large maket, still it remains highly concentrated at the global level, with only a few players accounting for a major share in the market.

Scope of the report

The value chain of raw cocoa beans has been considered. The report defines the market in terms of traders, who procure beans to supply to the retail distribution channel for end consumers. Exporters and Importers are also considered as stakeholders in the value chain.

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Key Market Trends

Sustainable Sourcing to Improve Economies for Stakeholders

Cocoa bean production faces a number of social and environmental sustainability risks. These include forced and child labor, unfavorable labor conditions, conflict over land rights, and the growing of cocoa in protected forests which needs to be addressed. 

Also, the complexity of human rights and environmental issues including poverty, child labor, forest destruction, and soil contamination have been identified among cocoa farmers, who are mostly smallholders. Therefore, industry participants shifted their focus towards responsible or sustainable cocoa sourcing policy to undertake activities to support cacao farmers. This includes enhancing the productivity and quality of cacao beans and improving farmers' standard of living and by providing farming support and education. UTZ Certified, Rainforest Alliance, Fairtrade, and Organic are the main Voluntary sustainability standards (VSS) in the cocoa sector

The largest cocoa-consuming companies (traders, grinders, and manufacturers) purchased 6 million metric tonnes of cocoa in 2016, of which 2.2 million metric ton were sustainably sourced. Barry Callebaut’s cocoa bean suppliers committed to source cocoa which is compliant with the “Cocoa and Forest Initiative (CFI)”, signed by Barry Callebaut and members of the Cocoa industry in November 2017.

Cocoa Bean Value Chain Analysis

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Concentration in the Global Cocoa Bean Value Chain

The complexity of the cocoa market is characterized by corporations’ ease of access to resources and achieving economies of scale. This has led to increased vertical and horizontal integration in the industry. As a result, a limited number of large trading and processing companies control a significant share of global and local cocoa markets. The three biggest cocoa trading and processing companies Berry Callebaut, Cargill, and ADM traded about 50 to 60 percent of the world’s cocoa production in 2015. In terms of cocoa processing, four transnational corporations control more than 60 percent of world cocoa grindings.

Concentration in these industries contributes to a better allocation of resources and economies of scale along its value chains. These ultimately increase the cost efficiency along the chain, which will finally be passed onto various stakeholders across the chain. Consolidations in cocoa processing over the past few years have been driven primarily by the boom in commodity prices. The industry has also well integrated vertically, expanding activities from sustainable sourcing beans to producing cocoa-based products products

Cocoa Bean Value Chain Analysis

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Table of Contents

  1. 1. INTRODUCTION

    1. 1.1 Study Assumptions & Market Definition

    2. 1.2 Scope of the Study

  2. 2. RESEARCH METHODOLOGY

  3. 3. EXECUTIVE SUMMARY

  4. 4. MARKET DYNAMICS

    1. 4.1 Market Overview

    2. 4.2 Supply Chain Analysis

      1. 4.2.1 Detailed Supply Chain Structure

      2. 4.2.2 Issues with Supply Chain Structure

    3. 4.3 Value Chain Analysis

      1. 4.3.1 Detailed Value Chain Structure

      2. 4.3.2 Issues with Value Chain Structure

  5. 5. MARKET OPPORTUNITIES AND FUTURE TRENDS

  6. 6. AN ASSESSMENT OF COVID-19 IMPACT

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Frequently Asked Questions

The Cocoa Beans Value Chain Analysis market is studied from 2016 - 2026.

The Cocoa Beans Value Chain Analysis is growing at a CAGR of 1.2% over the next 5 years.

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