World Production (Supply)

The world’s total raw output of cocoa is estimated at 4 million tonnes. The largest cocoa-producing countries are Ivory Coast, Ghana, and Indonesia with respective annual outputs of 2 million, 1 million, and 500,000 tonnes. Nigeria’s dramatic decline from about 300,000 metric tonnes in the sixties and seventies to 160,000 tonnes in the current dispensation is pathetic indeed. Despite Nigeria’s declining output, Africa still remains the largest cocoa supplier, with 75% of the world’s raw cocoa supply. Hence, cocoa cultivation represents an important source of income for the small cocoa farmers in villages across West Africa. 

Cocoa Consumption (Demand)

Traditionally, cocoa is cultivated in producing countries and sold for export in the form of beans. Importing countries then process the beans, transforming the raw goods into finished or semi-finished products (cocoa butter, cocoa liqueur, cocoa powder, etc.). In recent years, in an effort to increase the value of exports, some producer countries, such as the Ivory Coast, Ghana, Nigeria, and Brazil, have developed their own facilities for grinding the beans. 

World consumption is estimated at 2 800 000 tons per year. The largest cocoa importers are Europe (more than 1.2 million tons per year) and the United States (0.4 million tons per year). The largest importers are Holland, the US, Germany, Britain, and Brazil.

European countries are the largest consumers of cocoa and chocolate. Per Capita consumption is highest in Switzerland, Belgium, and the UK. Each country has its own preferences and style of chocolate, the popularity of different products varying according to national taste. On average, the Swiss munch approximately 10.55 kg of chocolate per person per year. As a nation, Great Britain consumes more than 500,000 tons of chocolate per year. In France, the average consumption per person is 6.8 kg per year, with the New Year and Easter celebrations being the most important occasions for tasting and offering chocolate gifts. Eastern European countries are considered an important emerging new market and would remain so in the foreseeable future.

Americans too! According to one study conducted in the United States, 52% of Americans considered chocolate their favorite flavor for desserts and confections. Historically, Americans have demonstrated a clear preference for milk chocolate, although appreciation for dark chocolate appears to be increasing, particularly among baby boomers. The average consumption is 5.68 kg per person per year.  

The rest of the world, Asia in particular is also developing into a major chocolate market. Japan has experienced a significant increase in chocolate consumption during the past decade. Demand in China increased to 9,000 tons in 2000, an increase of more than 90% from the previous year! 

Cocoa beans, Cocoa butter, and cocoa powder are traded on two world exchanges: the NYSE, Euronext, and Intercontinental Exchange (ICE). The London market is based on West African cocoa and New York on cocoa predominantly from South East Asia. Cocoa is the world’s smallest soft commodity market. The future price of cocoa butter and cocoa powder is determined by multiplying the bean price by a ratio. The combined butter and powder ratio has tended to be around 3.5. If the combined ratio falls below 3.2 or so, production ceases to be economically viable and some factories cease extraction of butter and powder and trade exclusively in cocoa liquor. Cocoa Beans can be held in store for several years in bags or in bulk, during which the owner can change several times as the cocoa is traded much the same as metal or other commodities, in order to gain profit for the owner.

Key factors that influence demand

If you know the nutritional and medicinal values of this wonderful product, you will no longer wonder why the oyibos most especially like to eat the products derived therefrom. Chocolate and cocoa contain a high level of flavonoids, specifically epicatechin, which have a beneficial cardiovascular effects on health.  The ingestion of flavonol-rich cocoa is associated with acute elevation of circulating nitric oxide enhanced flow-mediated vasodilation, and augmented microcirculation. Prolonged intake of flavanol-rich cocoa has been linked to cardiovascular health benefits, though it should be noted that this refers to raw cocoa and to a lesser extent, dark chocolate since flavonoids degrade during cooking and alkalizing processes. Milk chocolate’s addition of whole milk reduces the overall cocoa content per ounce while increasing saturated fat levels, possibly negating some of cocoa’s heart-healthy potential benefits. Nevertheless, studies have still found short-term benefits in LDL cholesterol levels from dark chocolate consumption.


Processing of Cocoa-beans into Chocolate 

To make 1 kg (2.2 pounds) of chocolate, about 300 to 600 beans are processed, depending on the desired cocoa content. In a factory, the beans are roasted. Next, they are cracked and then de-shelled by a “winnower”. The resulting pieces of beans are called nibs and are ground, using various methods, into a thick creamy paste, known as chocolate liquor or cocoa paste. This “liquor” is then further processed into chocolate by mixing the cocoa butter with sugar and sometimes vanilla; with lecithin serving as an emulsifier. The resultant mixture is then refined, smoothened, and hardened. Note that it is the nibs that are coated, smoothened, and packaged in colorful sachets as Smarties, which turns out to be a very strong international brand of candy.

Alternatively, the pieces of cocoa (the nibs) are ground and separated into cocoa powder and cocoa butter using a hydraulic press or the broma process. This process produces around 50% cocoa powder and 50% cocoa butter. Standard cocoa powder has a fat content of approximately 10–12 percent. By this method, after deriving the Cocoa powder, the Cocoa butter is further processed to obtain chocolate.

Some cocoa processing countries distill alcoholic spirits using liquefied pulp.

Cocoa beans in a cacao pod; and Cocoa beans before roasting

Chocolate in the process of production

Adding an alkali produces Dutch-process cocoa powder, which is less acidic, darker, and richer in flavor than what is generally available in most of the world. Regular (non-alkalized) cocoa is acidic, so when cocoa is treated with an alkaline ingredient, generally potassium carbonate, the pH increases. This process can be done at various stages during manufacturing, including during nib treatment, liquor treatment, or press cake treatment.

Another process that helps develop the flavor is roasting. Roasting can be done on the whole bean before shelling or on the nib after shelling. The time and temperature of the roast affect the result: A “low roast” produces a more acid, aromatic flavor, while a high roast gives a more intense, bitter flavor lacking complex flavor notes. 

Flavoring with vanilla and spices chocolate leads the product to be creamed into a froth that dissolves in the mouth. 

Consider a small to medium scale factory that could simultaneously process three lines of cocoa products, namely;

  • Cocoa butter (chocolate)
  • Cocoa Pieces(Nibs or Pops)
  • Cocoa powder

The factory will utilize about 240,000 beans (with provision for wastages) to produce 200kg of chocolate bars, 100kg of nibs (smarties), and 200kg of cocoa powder in an hourly shift

On this basis, in one day comprising eight hours, the factory will utilize 1,920,000 beans to produce 1600kg of chocolate bars, 800kg of nibs, and 1600kg of cocoa powder. 

Progressively, in one year comprising an average of 10 months or 300 days, the factory will utilize 5,760,000,000 beans to produce 480,000 kg of chocolate bars, 240,000 kg of nibs, and 480,000 kg of cocoa powder.  

If each of the three forms of the cocoa product is packaged/ wrapped, more or less in a 100-gram container or packet or foil or sachet, then, the factory will generate:

  • An anual output of 4800 wraps of chocolate bars; and given that 100-gm wrap of chocolate bar costs about $1.70 in the international market (the equivalent of N850 in the local market), this will translate to an annual turnover of $8,160.
  • An annual output of 2400packet of nibs (Smarties); and given that a 100-gram packet of nibs or smarties costs about $2.50 in the international market (equivalent of N1,250 in the local market), this will translate to an annual turnover of $6,000.
  • An annual output of 4800packets of cocoa powder; given that a small 100-gram package of cocoa powder is priced for around 0.40 Cents in the international market (the equivalent of N200 in the local market), will translate to an annual turnover of $1,920.

Total turnover from all 3 production lines/ income streams will be $16,080 (the equivalent of N8,040,000 in the domestic market).

For a large-size factory, production output will be increased up to double what obtains in the small business previewed above. 

For a larger export-bound cocoa production business, it would be necessary to ensure that first and foremost, the output far exceeds what obtains in a medium-size business; and more importantly, that the quality would be of international standard.

Details of the production process, where to procure the plant and machinery, process flow, appropriate packaging methods, market links, channels, export procedures and documentation, and all other essential information, will be embodied in a bankable feasibility report for interested entrepreneurs.


Outline of the Investment Spending
Cost details Chocolate Plant, single (N) Cocoa Nibs/ Pops Smarties (N) Cocoa-powder Plant, single (N) Integrated Plant  combined (N)
Prelim/ Preoperational 350, 000 350,000 350, 000 500, 000
Factory Space (3-yr. prepaid) 4, 500,000 4,500,000 4, 500,000 8, 500, 000
Machinery & Equip. 7, 800, 000 6,500,000 4, 000, 000 14,250,000
Working Capital 6, 500, 000 6,000,000 5, 000, 000 15, 000. 000
19,150,000 17,350,000 13,850,000 38,250,000
The Integrated plant (combined at point of sale as a single unit) at the recommended scale could be procured for about $28, 500 (CIF).


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