Germany is voted as the largest exporter of ready
to eat chocolates globally. With a grossing of USD 9.7 billion and a quantum
bracing a million tonnes it is truly remarkable for her to steal the thunder
from erstwhile competitor Swiss Chocolate. Yet, there is bewildering internal
structure.
This blog accompanies you unravelling this
bewildering structure of German chocolate saga under FASA denoting facts, analysis, synthesis and decision.
Facts
1. Once favourite, Switzerland as chocolate giant has faded away and new entrants gleamed in. Top of the billing goes to Germany, Belgium, Poland and in that order. Others include Italy, Netherlands and France. This is as regards to ready to eat chocolates. But the devil is in the details.
2. The fifth placed Netherlands, however has delivered a hat trick. She exports much more than what Germany does. German total value of chocolate exports is round € 11.4 billion whereas Netherlands grosses € 12.4 Billion. How comes? It is not as simple as it appears. Whereas Germany concentrates on finished chocolates, Netherlands supply the world’s largest quantity of chocolate butter & cocoa powder. In fact, these stuff amount to 2/3rd of the Dutch exports
3. Top rung companies Alfred Ritter has annual turnover of USD 833 Million, and August Storck KG, ranges between 2 to 2.5
USD Billion, where major part of their manufacture is consumed within Germany.
Analysis
1. Alfred Ritter GmbH & Co. KG sells the most popular brand within Germany called “Ritter Sport” whereas the widely popular “Milka” both in Germany and across Europe is manufactured by the German subsidiary of Mondelez International of USA reaching more than 1.1 million tonnes, valued at over USD 6.2 Billion
2. Germany imports raw cocoa from African countries like Cote d’lvoire & Ghana amid wide spread protests in these countries as cultivation of cocoa leads to deforestation therein
3. German share of world’s chocolate exports hovers
around 11% while imports of cocoa and semi-finished goods such as cocoa butter
& powder accounts for about 9.7%. Please note, major part of imports is sourced from Netherlands.
Synthesis
1. Domestic consumption is increasing steadily resulting in quantum of finished chocolate available for export is seen dipping over time
2. The exploitation by multinational company Mondelez International of USA using Milka as captivating brand both domestically and abroad is detrimental to the German Chocolate industry as a whole
3. Unlike in the case of Netherland whose industry
structure favours manufacture and export of semi-finished products in the form of
cocoa butter & powder, German manufacturers are too pre-occupied with ready to eat chocolate
stunting growth in export volume.
Decision
1. The concept of chocolate as optional & indulgent treat need be re-assessed
2. Structural changes are brought in the chocolate
industry to enhance growth of both ready to eat chocolates and semi-finished products
levelling at 50:50.
Navigating strategy amid geoeconomics mandates
German administrators look at their chocolate industry with fresh mind!
Cheers!
Muthu Ashraff
Strategy Adviser
Mobile: + 94 777 265677
E-mail: cosmicgems@gmail.com
Blog: Strategy Adviser
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