By Michael Taylor
JAKARTA Dec 19 Arriving in Indonesia just
a little over a decade ago, Belgium chocolatier Thierry
Detournay was dismayed at the lack of quality chocolate on offer
in the world's third-largest cocoa producer.
But now, less than seven years after launch, his luxury
Chocolate Monggo bars can be found in many of the gigantic and
glitzy malls of downtown Jakarta.
As Southeast Asia's largest economy goes from strength to
strength -- highlighted by a return to investment-grade status
by Fitch Ratings this month -- Indonesia's Willy Wonka is one of
many tapping into a growing Asian market for luxury chocolate.
"When I started to make chocolate in Indonesia, I realized
there was no good chocolate," said Detournay, who began by
converting a pink Vespa into a stall and selling home-made
chocolate goodies at local markets.
Yogyakarta-based Chocolate Monggo now employs 50 people on
the production side, sources cocoa beans from Javanese, Sumatran
and Celebes plantations, and churns out as many as 75,000
chocolate bars per month.
"While I'm doing this business, I can see the tastes of
Indonesian people changing," he added. "Now more and more people
-- young and middle class adults -- are looking more for dark
chocolate, and quality."
Chocolate consumption in Indonesia has plenty of scope to
grow -- annual cocoa demand is estimated at only 0.2 kg per
person, versus 0.6 kg in neighbour Malaysia and 10 kg in Europe.
Indonesia has said it wants to triple domestic cocoa
consumption over the next three years.
Chocolate Party was a recent business-government joint event
in the country's capital that hoped to help hit this target.
As well as a giant chocolate fountain, there were also
stalls by Nestle's Milo, Dunkin' Donuts,
Indonesian consumer firm GarudaFood and Jakarta-based Chocolate
"Five years ago, people in Indonesia knew about chocolate
through chocolate drinks, but now people know about praline,
chocolate bars with peanut or ginger," said Christina Erawati,
principal at the school, which teaches chocolatier skills.
Started about two years ago, students at Chocolate School
work with premium chocolate, and go on arranged trips to cocoa
plantations and processing factories.
"The biggest portion of our students are entrepreneurs --
people who want to make their own business in chocolate -- maybe
they want to build a chocolate shop or restaurant or bakery,"
ASIAN QUALITY CONTROL
The growing taste for high quality chocolate in emerging
markets -- especially in Asia -- will help boost global
chocolate sales 2 percent to $81.8 billion in 2011, according to
Chocolate sale in China are forecast to rise 19 percent to
$1.2 billion this year, and in India by 7 percent to $633
million, with Indonesian sales likely to jump 25 percent to $1.1
billion, data from the market research firm showed.
"From a consumer standpoint in China, chocolate is a
relatively new taste," said Marcia Mogelonsky, global food
analyst at Mintel.
"The taste that took off first in China wasn't low quality
chocolate ... so they have a complete population that has been
educated and imbued with a much higher taste barrier."
She added that Indonesian chocolate sales would hit $1.9
billion in 2015.
As economies in Europe and the United States slow,
rising populations and wealth levels in Asia will combine with
improved logistics to speed consumption of better quality
Towns will become cities, logistics will improve and
consumers will no longer have to rely on lower-quality products
based on cocoa powder, which cope better with high temperatures
than cocoa butter-based products.
"There are now over 600 air-conditioned shopping malls in
India, which is a place where a lot of chocolatiers are setting
up premium chocolate boutiques," added Mogelonsky.
Indonesian cocoa grinders and major overseas investors have
spotted the potential in Asia and are expanding rapidly.
The country is attracting companies such as U.S.
agribusiness giant Cargill and Barry Callebaut
, the world's top chocolate maker, which plan to invest
almost $150 million in cocoa grinding plants in Sulawesi.
But it looks increasingly likely that the growing Indonesian
middle class won't be eating only chocolate from home-grown
cocoa in the future.
Bean output in Asia's second-largest grinder after Malaysia
is likely to fall to a seven-year low in 2011 because of bad
weather and disease, while quality is also an issue.
"There is still a very big problem about the quality in
general, about the beans," said Chocolate Monggo's Detournay.
Smallholder cocoa farmers, who own about 90 percent of
Indonesia's total plantation area, are also switching to crops
like rubber, coffee and palm oil, which can offer bigger
"The next three to five years, no farmer will want to plant
cocoa and some will replace," said Zulhefi Sikumbang, chairman
at cocoa producers association Askindo, who runs his own 1,200
hectare cocoa plantation in West Java.
In an effort to combat the decline, the Indonesian
government launched a $350 million programme in 2009 to boost
cocoa production to more than 600,000 tonnes within five years.
It has yet to show results, with bad weather, failure to
follow advice on planting techniques and mismanagement working
against the campaign. The cocoa association sees production this
year of just 430,000 tonnes, from a 2006 peak of 650,000 tonnes.
"It's not good for the new investors coming," said
Sikumbang. "They will be unhappy actually ... they will have to
import -- some from PNG (Papua New Guinea), some from Ghana and
In October, Askindo forecast that Indonesia would need to
import 100,000 tonnes of cocoa beans in the next two to three
years to meet its expanding grinder needs.
West Africa, which accounts for 70 percent of global cocoa
supply, looks set to feed new grinders' needs.
Indonesian grinding capacity is likely to rise to more than
600,000 tonnes in the next two years, up from 400,000 tonnes of
beans in 2012, according to industry players.
"They will probably stop producing and change to other crops
which have more demand," said Lynette Tan, an analyst with
Phillip Futures in Singapore, who added that within the next
five to ten years there may not be any Indonesian cocoa
"For the past two or three years, it has been a recurring
problem, and given that cocoa is not easy to produce and farmers
can choose to shift to other crops -- even for coffee they make
more money than cocoa."