Trends and Developments on Asian Cocoa and Chocolates Market Gricha Safarian Managing Director Puratos Grand-Place Vietnam

Asian Cocoa

Asia: 12% - Americas: 16% - Africa: 72%

Source: ICCO

Asian Cocoa A new producing region

Indonesia: 410,000 tons Papua New Guinea: 40,000 tons Others: 46,000 tons

Source: ICCO

India 9,000

Malaysia 28,000

Vietnam 4,000

Indonesia 410,000

Philippines 5,000

Asia Cocoa More as a Grinding than Producing region

496

872

Production Grinding

2013/2014 forecast

000 tons

Source: from ICCO

Grinders

• BT cocoa

• JB Cocoa

• Guangchong

• ADM

• Olam

• Barry Callebaut

• Cargill (new comers)

Indonesia: import tax forces local grinding activity

Asian Cocoa Effort for quality is limited

Asian beans (Indonesian) = cheap & low quality

Fermentation expertise: Pay more attention to fermentation process

Effort for quality: - Vietnam - Java (1% of Indo) - Papua New Guinea

Asian Cocoa Trends

Trend on Single origin in Asian mature markets (Japan,

Hongkong, Korea, Singapore)

Trend on Certification is not

really strong vs Europe or USA

Asian Cocoa Opportunity

Double Digit Growth in Chocolate

Consumption in Asia

Shortage is foreseen in

global supply

Land availability + labor resources +

household agriculture

Asian Cocoa Surplus/Deficit forecast

Asia Cocoa Sustainability challenges

Yield improvement

Transfer of technology

Farmers income (same as

other agricultures)

Pest control (VSD, cocoa pod borer)

Vietnam Cocoa A unique case of new producing country

• Output - 4,000 tons (est. 2013/2014)

• A strong agricultural culture (world 2nd in coffee, 2nd in rice, strong in rubber, pepper, cashew)

• A potential replacement for Coffee and Rubber

• A perfect inter-cropping solution

• Small holder farmers

Vietnam Cocoa Road map

Quality

Price

London Stock 2700 usd

Unfermented Bulk cocoa

Fermented Bulk cocoa

Good Flavor cocoa

DISCOUNT

PREMIUM

INDONESIA

410,000 MT

GHANA 800,000

MT

IVORY COAST

1,475,000 MT

VIETNAM 4,000 MT

VIETNAM

50,000 MT

BRAZIL 200,000

MT

Ecuador

120,000 MT

SUPER PREMIUM

Fine Flavor cocoa

MADAGASCAR

10,000 MT

TRINIDAD

5,000 MT

VENEZUELA

30,000 MT

REP.DOM

20,000 MT

Vietnam Cocoa PGPV approach

Cocoa beans

Semi-finished products

Liquor Butter

Powder

B-B chocolate

Consumer products

Producing countries

Added value thru vertical integration in cocoa producing country

Processing countries

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ASIA CHOCOLATE

Asia Chocolate Overview

Compound

• China

• Vietnam

• Thailand

• …..

Chocolate

• Japan

• Korea

• Hongkong

• ……

• Chocolate hasn’t traditionally a sweet of choice • A market of +/- 500,000 tons with double digit

growth

Asia Chocolate Trends

DECORATION TASTE

Vs

Compound is being replaced by Chocolate

Compound as key opener (thru industrial application); Chocolate (thru artisan for more taste, flavor)

Asia Chocolate Trend in distribution

Small scale convenient stores (7/11, Circle K, Shop&Go…) with retail chocolate products

In young markets, a booming for European

type Bakery chain

Asia Chocolate Trend in application

• Application is closer to Europe/USA with much lower consumption

Mature region (China/Korea/Japan)

• Application is mostly used in Ice Cream - Cookies (chips) - Enrobed snacks (Chocopie) - Candy Bars - Cakes (Bakeries)

Young region

(South East Asia)

Conclusion

Win for the

Farmer

Win for Chocolate industry

Win for Producing

country

Win for Consumer

+ + +

No future for Chocolate if Cocoa Farmers are deep root in poverty

• Pod

• Beans Farmers

• Liquor

• Butter

• Powder

Grinders • Chocolate

• Compound

Chocolate

manufacture

Chocolate confectionary

End consum

ers