Indonesia’s Ministry of Industry is implementing a national policy on downstreaming the domestic cocoa processing industry. The development of the downstream cocoa processing industry is directed at producing cocoa powder, cocoa butter, food and beverages from chocolate, cocoa-based supplements and functional foods, as well as the development of artisanal chocolate.
Presently, only 20% of processed cocoa products are further processed domestically, while the remainder is exported to more than 96 countries. The export of these intermediate products has made Indonesia a global chain supplier with a contribution of around 9.17% of world demand.
The Ministry of Industry is committed to the national policy of downstreaming the domestic cocoa processing industry in order to increase added value, strengthen the industrial structure, and create social welfare.
Indonesia has great potential, as it is the 3rd largest cocoa processing country in the world producing various processed cocoa products such as cocoa paste/liquor, cocoa cake, cocoa butter and cocoa powder.
Director General of Agro Industry at the Ministry of Industry, Putu Juli Ardika said the increase in the value of processed cocoa exports is supported by a number of investments by multinational companies due to the government’s favorable export duty policy.
Prior to these investments, the installed capacity of the cocoa processing industry was only 560,000 tons per year, but since then it has increased to 739,250 tons per year. Meanwhile, exports of (less processed) cocoa beans dropped from 188,420 tons worth US$446 million in 2013 to just 24,603 tons (US$6.4 million) in 2022. On the other hand, exports of processed cocoa products increased from 196,333 tons (worth US$654 million) in 2013 to 327,091 tons (worth US$1.1 billion) in 2022.
Indonesia has now become a global player in processed cocoa, with its cocoa butter export ranked 2nd just after the Netherlands, said Mr Ardika.
In addition, domestic processed chocolate production into finished goods like chocolate snacks and beverages have increased, from 15% five years ago to 20% of Indonesia’s intermediate processed cocoa production. This signifies the growing trend towards downstreaming to add value to cocoa.
Most of the chocolate products produced, however are consumed domestically. Per capita consumption of chocolate in the country has increased from 0.37kg in 2018 to 0.49 kg in 2022. Exports of chocolate products have also increased from US$45 million in 2018 to US$77 million in 2022. There is huge growth opportunity in Indonesia processed cocoa products industry. One of the major growth sector is the ‘Artisan’ or ‘Craft’ chocolate segment which now boasts of 31 players with an annual capacity of 1,242 tons. As Indonesia is growing in popularity as a tourist magnet, craft chocolate products which identified itself with the unique tastes of Indonesia deriving from specific regions like for example Ransiki (Papua), Berau (East Kalimantan), or Jembrana (Bali) will be in strong demand from both tourists and the upper middle income consumers.
Artisanal chocolate bean to bar products have the highest added value ranging from 700 to 1,500%, while other chocolate products range from only 100% to 300%. Indonesia has tremendous opportunity to grow the artisanal chocolate category as the country is supported by up to 600 aroma profiles that can be used as the basis for innovation and variations of artisanal chocolate products. Artisan chocolate producers need premium quality fermented cocoa beans, while other processed cocoa producers can still process random cocoa beans.