All You Could Want To Know About Chocolate

The most demand for chocolate comes from Europe.

More precisely, per person, Switzerland tops the list at 19.4 pounds a year. Next, in the top five, we have Germany, then Ireland and the U.K. At #5, Luxembourg is at the “low” end. There, the average is 16.5 pounds a year or a whopping 111 calories a day, just from chocolate.

Meanwhile, on the supply side of chocolate markets, West Africa grows 70 percent of the world’s cacao (the tree that cocoa comes from). At the top of the list with more than 2 million tons, we have Ivory Coast. Then, Ghana and Indonesia are a distant second and third.

From here I would like to take a leap into questionable statistical territory.

Chocolate Production: São-Tomé and Principe

Having read where Mars sources some of its chocolate, I assume that at least some Snickers Bars are made with Ivory Coast chocolate. However, we can be sure that Snickers Bars contain no cocoa from West African growers in Sao Toma and Principe. The reason? They produce the world’s highest quality best tasting chocolate.

São-Tomé and Principe are located just 23.25 miles north of the equator, off the coast of West Africa:

After a 1990s crash in the price of cocoa, São-Tomé and Principe lost many of its growers. One remaining group commissioned a study that concluded they could create their own market niche by going organic. Some also created cooperatives and established a processing facility that let them export a fermented product with higher margins.

It all worked.

Our Bottom Line: Chocolate Markets

An economist would say that São-Tomé’s cocoa farmers had strengthened their pricing power.  Too similar to perfect competition, São-Tomé’s farmers’ market structure had no product differentiation. In perfectly competitive markets, prices are set by supply and demand. With the market the boss, the producers have no ability to earn more. However, fair trade and organic certification moved them to the right on a competition scale. Moving closer to oligopoly, into monopolistic competition, they were able to differentiate their products and charge more:

Like me, you might be checking right now where to buy single origin São-Tomé chocolate.

My sources and more: Thanks to my Bloomberg Opinion email and to the BBC for a past and current chocolate markets report. Please note also that for chocolate consumption, I created my own top five list from stats that had excluded Luxembourg. Then, on the supply side, the most up-to-date numbers I could find came from scienceAg  but I could not confirm accuracy. I should note also that a 2019 Reuters article indicated Mars sources from Ivory Coast.