The Shift Toward Sustainable Chocolate in Asia

Retailers and Customer Behavior

Retailers in Asia are rapidly realizing the value of sustainability in attracting and retaining customers. Despite studies showing a desire to pay more for sustainable items, customer behavior frequently differs. For example, a Boston Consulting Group (BCG) survey from 2022 found that while 80% of respondents were concerned about sustainability, however, less than 7% were willing to pay a premium for such products. This disparity shows the difficulty in translating consumer intentions into actual purchases.

However, there are some significant outliers. The example of the British grocery chain Waitrose, which experienced high sales growth after introducing responsibly sourced chocolate bars, priced at £2.20 for two bars, demonstrates merchants' capacity to influence change. As a result, Asian retail enterprises could benefit from increased awareness and demand for ethical items.

Major sustainable chocolate brands in Asia include Malaysia's Chocolate Concierge, which partners with indigenous tribes for sustainable cocoa bean sourcing, uses black ants for natural pest control, and offers unique Malaysian-inspired flavors. Benns Ethicoa, one of Malaysia's oldest chocolate brands that work directly with farmers across Asia, eliminates intermediaries and pays farmers above market prices. In India, Mason & Co. focuses on single-origin Indian chocolate from small farms, employing minimal processing and adhering to sustainability and ethical practices. Indonesia's Pipiltin Cocoa produces single-origin chocolate from local beans, collaborating directly with farmers to maintain sustainability and quality. Thailand's Xocoaltl emphasizes Thai-inspired flavors and sources cacao beans from local farmers, maintaining a solid commitment to sustainability and social responsibility.

Figure 1: Malaysian Chocolate Concierge

Source: Tatler

Nestlé's Sustainable Chocolate Initiatives

One of the world's largest chocolate companies, Nestlé, has launched several sustainable chocolate initiatives in Asia. For example, the Nestlé Cocoa Plan is a 15-year-old program focused on better farming, better lives, and better cocoa. It has positively impacted over 170,000 families. Another program is Nestlé's Sustainably Sourced Cocoa plan, a new travel retail-exclusive range made with Rainforest Alliance-certified cocoa sourced through the Nestlé Cocoa Plan, featuring personalized chocolate bars and recyclable packaging. In recent events, the first KitKat made with fully traceable cocoa was launched in 2023. It was made with cocoa from farming families supported by Nestlé.

Figure 2: Kitkat Made with Sustainable Cocoa

Source: FoodBusinessAfrica

Suppliers and Ethical Sourcing

Suppliers are essential in the sustainability narrative, particularly in the chocolate business. Cacao cultivation, a fundamental ingredient in chocolate, presents significant environmental and socioeconomic concerns. Industry experts underline the considerable impacts of chocolate production on the environment, such as greenhouse gas emissions, biodiversity loss, and labor violations. Asian suppliers are increasingly scrutinized to ensure ethical operations, and those promoting fair labor and environmental standards can be distinguished in the marketplace.

Experts also point out that the rise of self-educated consumers is boosting demand for supply chain transparency. Consumers are becoming more conscious of the effects of their purchases, and they seek products that reflect their values. This trend is especially noticeable in Asia, where social media platforms like TikTok serve as powerful consumer education and activism tools.

E-commerce Platforms and Market Dynamics

Asia's e-commerce platforms significantly impact consumer behavior and market trends. The region's digital economy is thriving, with platforms like Alibaba, JD.com, Lazada, and Tridge leading the way. These platforms are retail behemoths and crucial in promoting sustainable products. At the same time, e-commerce platforms are perfect for educating consumers about sustainability since they can reach a large audience while providing specific product information. The digital economy in Southeast Asia alone is predicted to be worth USD 300 billion by 2025, according to Alizila. Platforms such as Lazada have experienced significant development, with an increase in both buyers and orders, reflecting the region's rapid digitalization and growing middle class. Lazada now has over 100 million active monthly users and has doubled its quarterly order volume for three years running. Tridge, on the other hand, includes initiatives like reducing food waste, supporting plant-based food markets, and implementing eco-friendly packaging solutions through its Analysis and Opinions. Furthermore, the "scrimp and splurge" habit identified by Brett Townsend is also visible in Asian markets. Consumers may reduce spending in certain areas but are willing to invest more in sustainable items. A desire for clean ingredients, health benefits, and ethical considerations drives this behavior. In particular, the chocolate industry in Asia has seen a rise in demand for products that align with these values, reflecting a broader trend towards conscientious consumption.. E-commerce platforms may benefit by providing diverse products that appeal to value-conscious and premium-seeking customers.

Market Dynamics and Trends

There is a clear shift in Asian consumer purchasing habits toward more sustainable and environmentally friendly chocolate goods. This transition is especially noticeable in China, where consumers are increasingly ready to pay a premium for sustainable products. For example, premium chocolate brands have seen price increases of up to 15% in the past year, reflecting the growing demand for ethically sourced products. While premium chocolate brands often emphasize quality and unique flavors, they do not always equate to ethically-sourced products.

Increased knowledge of sustainability and a desire for healthier, more ethical eating habits drive this trend. In 2023, the volume of ethically sourced cocoa imported into Asia climbed by 20%, demonstrating a substantial shift in trade dynamics.

The plant-based movement is also transforming Asia's food and beverage industry, offering a compelling alternative to traditional dietary options. This trend already gained traction in 2024, driven by customer desire for ecological and ethical products. As a result, plant-based and sustainable chocolate product retail sales grew by 18% year-on-year (YoY) in 2023, reflecting this growing consumer preference. Additionally, a report by the Plant-Based Foods Association indicated that the overall market for plant-based foods in Asia increased by 20% in 2023, with chocolate products being a significant contributor. Major brands like Meiji, Lotte, and Royce have introduced new plant-based chocolate lines, catering to health-conscious and environmentally aware consumers. Furthermore, a survey conducted by Nielsen in 2023 found that 65% of Asian consumers are willing to pay more for food products that are sustainably produced, highlighting the potential for continued growth in this segment. This movement is reshaping the industry's landscape, pushing companies to innovate and meet the rising demand for sustainable and ethical food choices.

Market Outlook

The interplay between retailers, suppliers, and e-commerce platforms in the Asian chocolate industry is shaping the future of sustainable consumption. While there are issues in translating customer intentions into purchases, success stories, and increased awareness indicate a favorable trend. Retailers and suppliers who value openness and ethical practices, supported by the reach and influence of e-commerce platforms, will thrive in this shifting landscape.