From July 22-24, Cargill’s team attended the Indonesia International Cocoa Conference (IICC) in Yogyakarta to showcase support for a stronger business in Indonesia and the Asia-Pacific region, according to a company press release which highlighted strong consumer demand for sustainably and locally grown cocoa products.
“Asian consumers show strong familiarity with chocolate and cocoa ingredients across confectionery, desserts, bakery, and dairy. In Indonesia, 76% of consumers prefer to buy locally grown food all or most of the time and 91% prefer food and beverages produced in a socially and environmentally responsible manner,” according to the release.
Multiple factors may be supporting Indonesian cocoa from plantation to chocolate bar.
For one, Indonesia is aiming to replant 7,000 hectares (17,297 acres) of cocoa plantations over this year and the next to reverse shrinking production, reported Reuters in an article that cited the deputy minister for food affairs.
At the same time, traceability has been at the center of cocoa trade, as the European Union’s deforestation regulation (EUDR) is set to take effect by the end of 2026. Plus, US Section 301 tariffs target forced labor and excess manufacturing capacity with deforestation noted.
It’s not clear if such barriers to cocoa trade may influence more origin-country value addition, and cocoa/chocolate manufacturing. However, it seems that Cargill’s team is investing in that possibility.
“Indonesia has a powerful cocoa story and an even stronger opportunity ahead. For Cargill, the country is central to our cocoa growth strategy in Asia Pacific. We remain focused on supporting Indonesia’s next chapter through farmer partnerships, investment in more responsible sourcing, local processing and customer-led innovation,” said Kashan Rashid, Vice President & Managing Director, Cargill Food Southeast Asia, Australia, and New Zealand.
So, there may be more opportunities for origin-linked cocoa, domestic processing, and differentiated products. Plus, more than 7,800 farmers are part of Cargill’s Rainforest Alliance-certified program and received about Rp38.8 billion in premium payments this year, alongside nursery support, seedling distribution, and traceability efforts.
Weather Conditions, Volatility Keep Downside Pressure On
Despite investment and efforts from large agri-food companies like Cargill, it’s not clear if adverse weather conditions related to the strengthening El Niño pattern could offset any gains in Indonesia’s cocoa production.
Potential future impacts from El Niño conditions are difficult to forecast, according to Expana’s Senior Manager of Cocoa Analysis who talked about Indonesian cocoa production during a recent webinar.
“In Indonesia, impacts are more difficult to forecast, and it depends on the weather between now and the onset of stronger El Niño conditions later this year,” said Moriarty on the webinar. “Southeast Asia is looking at a possible reduction of 20,000 metric tons, or a bit above 5% of production.”
Separately, Cargill’s team is also investing in cocoa alternatives, something they are calling NextCoa which reflects manufacturers’ push for flexibility amid cocoa market volatility.
“NextCoa™ confectionery alternatives to chocolate are designed for food manufacturers looking for more flexibility in how they deliver chocolatey-like indulgent experiences across bakery, snacks, ice cream and confectionery applications,” according to Cargill’s Senior Product Line Specialist, Mia Divecha, after Expana’s team reached out for comment via email.
The plant-based ingredient (made from upcycled grape seeds) is intended to create value from materials that might otherwise go unused. The ingredients will be supplied to manufacturers for use in granola bars, cookies, ice cream inclusions, and snack coatings.
“Cargill is supplying the ingredient to manufacturers, so consumers will see NextCoa™ products incorporated into finished products rather than sold as a standalone retail brand,” said Divecha.
“The launch comes at a time when food manufacturers are looking for more flexibility, predictability, and resilience amid ongoing cocoa-market volatility, climate pressures, and evolving sourcing expectations… NextCoa™ products provide a new option to help future-proof supply… Voyage Foods’ patented approach using plant-based ingredients… have made it possible to pair innovation with operational scalability. The partnership reflects how Cargill is [helping] customers adapt to a changing food system while continuing to support cocoa as a critical ingredient globally.”
To catchup on our recent El Nino webinar, click here.
Image source: Adobe
Written by Ryan Gallagher
