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Adding value to spanish exports


26 DE junio DE 2019

Cocoa, the foundation of chocolate

Ángel Marqués Ávila. Journalist

Data in the most recent annual report (2017) from Produlce, the Spanish Confectionery Association, reveals that volume increased by 0.6% to 285,103 metric tons and value by 1.1% to 1.749 billion euros, according to its General Secretary, Rubén Moreno. This trend is due to domestic market performance, which accounts for 76% of total production and reflects growth of 0.2% in volume (217,242 metric tons) and 2.1% in value (almost 1.3 billion euros).

Products with more cocoa

The chocolate sector in Spain and the rest of the world is reinventing itself to weather the serious crisis resulting from overproduction. Consumption has been stagnant for several years, but the price of cocoa has fallen. In Spain, despite everything, the chocolate industry is optimistic. With this in mind, Spanish companies are committed to increasing the percentage of cocoa in its products to increase quality.

Looking at domestic consumption in terms of value, chocolate bars are Spaniards' favorite product, accounting for 35% of all sales. They're followed by powdered cocoa (24%), bonbons (17%), snacks and impulse purchases (16%) and, lastly, spreads (8%). The good performance of the sector's various product lines responds to its great capacity to adapt to consumers' needs and preferences.

A sector in good standing

Pending new data, we expect that production continued to increase its added value in 2018, especially through the sector's commitment to innovation. In 2019, with respect to volume and sales, the market in Spain is very stable, with annual growth of around 1-2%, with the expectation that the trend will continue on its positive path during the coming months.

Josu Andrés, Client Manager for Nielsen in this industry, reports that the situation at present is positive in terms of chocolate sales (bonbons, countlines and bars), as the improvement in the Spanish economy has boosted sales of chocolates.

In the short term, this performance is expected to continue, and producers are developing new products that meet consumer demands, such as chocolate without sugar, organic chocolate, new flavors, etc. In the medium- and long-term, this market will be affected by the impact of the Spanish economy, as well as the cost performance of raw materials, as has occurred with other products such as coffee.

Consumers of chocolate like to indulge and do not want to give up the chance to enjoy this product. In terms of trends, there are more options that take into consideration health preferences and which are not slowing down consumption.

The trends also align with society's demands for products that are environmentally friendly. It's also worth noting that producers also look for specific dates to connect with consumers, such as Easter, Halloween, Valentine's Day, etc. At the end of the day, they are special occasions that we all celebrate, and chocolate is a good way to share those moments.

Consumers want the best

According to Moreno, Produlce is aware that consumers are increasingly demanding about the countless products on offer, with the result that they want products that are surprising, which have added value, and which adapt to their preferences, needs and lifestyles. For example, premium products are increasingly well received.

Moreover, consumers of premium products are curious and they like to try new, surprising textures and flavors, like the inclusion of citrus fruit, salt, guindilla peppers, etc. Along these lines, RDI departments and companies' efforts to implement new technologies during production are allowing companies to experiment with chocolate.

If we look at trends, and especially consumer profiles, we see that adults are the group with the greatest scope for growth, with the result that they remain the main focus of attention for companies, which are clearly committed to quality.

Exports in the spotlight

For Moreno, agrifood exports, in general and according to institutional data, are in good health.

In 2017, exports increased by 2.1%, to 67,861 metric tons, although in value they slipped by 1.6% to 451 million euros. A total of 80.3% headed to EU countries, 6% to Asia and 4.6% to America, while the remaining 9.1% was exported to other markets.

The sector has multiple objectives for the coming years. This includes continuing to work with our partners, such as FIAB Caobisco, to strengthen the industry's image and its products vis-a-vis consumers, the media, the administration, and opinion leaders, in Spain and in Europe. We want to continue to help our companies and society, so that we all work tirelessly to meet their expectations.

Five companies control the market

According to DBK Informa, this is a highly concentrated industry, since five companies control 60.5% of the market, where 125 companies operate.

Catalonia is home to most of the companies, accounting for 40% of the total. It's followed by Valencia and Madrid, each with 15%.

DBK expects growth in the value of the sector of 4.6% in 2018, noting in its study: "In view of the positive performance of the consumption of cocoa products, certain companies are investing to expand and improve their facilities," and that "in the coming years, it expects international growth policies to be strengthened."

Innovation has become a defining feature of the chocolate industry, and has contributed to an increase in value of 17% and an increase in average fees of 12% in the retail segment since 2001, according to data from Nielsen. The development of products and formats have acquired a central role in strategies by producers and determines financial policies and industrial investments.

In the last year, the decline and stabilization of the price of cocoa have given producers some breathing space, while sales in the retail market have increased by 1%—due to snacks, bonbons and bars—while the value increased by 3.7%.

100% sustainable cocoa improves farmers' lives

The International Center for Tropical Agriculture warned about this in one of its recent studies: by 2050, temperatures will increase by 2ºC in Ghana and the Ivory Coast, where 53% of the world's cocoa is produced, which will reduce the area where this product is harvested. The cocoa plantations not only have to weather the consequences of climate change,  they're also being replaced by other crops, like corn and rubber, which offer a higher return.

"We're fully aware that we play an important role in a system that cares for people and the environment, which is who brings our brands to life. Social responsibility is crucial for the farming communities in the Ivory Coast and also for the quality of our products," said Sandra Martínez, Head of the Strategic Chocolate Unit at Grupo Nestlé.

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