Asia's real chocolate shift slowed by rising costs, says Aalst

26-Oct-2015 - Last updated on 27-Oct-2015 at 11:12 GMT

Aalst Chocolate says Asia to favor quality compound coatings as real chocolate costs set to rise

Asian chocolate players are expected to opt for compound coatings over real chocolate in 2016 due to the rising costs of cocoa, says supplier Aalst.

Singapore-based Aalst Chocolate supplies both real chocolate and compound to the global market.

Real chocolate ‘getting more expensive’

"Right now we are 50-50 [compound and real chocolate sales]," Richard Lee, founder and CEO of Aalst Chocolate told ConfectioneryNews. “I think for next year's market conditions compound will be growing. Real chocolate will be getting more expensive in 2016 we've projected."

Compound coatings use vegetable oil and cocoa powder and require less cocoa than real chocolate, which is made from chocolate liquor and cocoa butter. Cocoa prices averaged $3,278 last month, according to the International Cocoa Organization (ICCO), relatively flat year-on-year, but up 25% from September 2013.

"With the weakening of all the Asia dollars in most of the countries right now, I don’t think many customers can afford the higher price for the chocolate,” said Lee. “Asia is quite flexible - if today real chocolate is a problem they will shift to compound,” he continued.

Regulatory standards for compound

aalmost compound resized — Aalst claims its compound coatings come close to matching real chocolate and expects regulators will demand higher compound standards

Radouane Hamidi, regional business development manager at Aalst Chocolate, said: “The compound does not need to be tempered so most of the industry and large users prefer compound for the flexibility of using it” adding that real chocolate was also more prone to melt in Asia’s hot climate.

He said he expected markets in Asia, particularly in the Middle East, to develop standards to regulate compound coatings.

“The local manufactures will probably have to step up,” he said. “This will benefit us, because we have high quality compound. “

Competing with industrial chocolate big guns

Aalst Chocolate Factory — Aalst Chocolate added a new line to its factory in Singapore this year bringing its annual capacity to 30,000 MT.

Aalst Chocolate began business in 2003 with a capacity of 7,000 metric tons of chocolate and compound per year from its factory in Singapore. It now produces 30,000 MT annually and serves confectioners, baker, biscuit and ice cream producers in 45 markets.

"Our strategy is more towards the mid-sized and the growing companies that need more innovations and more support,” said CEO Lee.

According to the Aalst Chocolate owner, there’s space in the open industrial chocolate market that is dominated by Barry Callebaut and Cargill.

"The world market is so big; you can’t have a single supplier to cater for the whole market. Nobody wants to have that. If I'm a customer I'd like to see two or three comparisons,” he said.

The company claims it is small and agile and in tune with consumer needs in Asia.

“So what you are big - the culture there is different. Not all buyers are able to work with the multinational staff and culture that they want to - so we can fill in the gaps,” said Lee.