Introduction

St. Lucia is one of the prime cocoa growers in the Caribbean. However, the island exports
most of its cocoa whilst very little is kept on island for manufacturing. Larger scale
manufacturing of its own cocoa would help St. Lucia by creating more employment and
stimulating a greater flow of income into the economy. Therefore, the expansion of a cocoa
processing sector is an option that the island should consider pursuing.

The title of this study is “What is the viability of establishing a cocoa processing sector in
St. Lucia?” Research questions to be answered include:

 About how much cocoa does St. Lucia produce on a yearly basis?
 What are the products that can be produced with cocoa?
 What would St. Lucia need to increase the quality and quantity of its cocoa processing?
 What would be the benefits of expanding the cocoa processing industry in St. Lucia?
 What are the possible drawbacks of, or difficulties with expanding the cocoa processing
industry in St. Lucia?

The results of this study would be useful to other Caribbean territories that grow or can grow
cocoa and are looking at the possibility of establishing their own cocoa processing industry. The
information would also be useful to territories with fledging cocoa industries (such as Grenada)
who may want to expand their cocoa industry.

Literature Review

1
Based on my research, not one full study has been done on the viability of expanding a cocoa
processing industry in a country. The only literature which focuses on this topic comes in the
form of brief papers and online articles. Nevertheless, the topic is one that has been discussed to
varying degrees in Nigeria, Trinidad &Tobago and St. Lucia, as my sources will reveal.

The article ‘Where’s The Local Fine Chocolate?’ by UWI (2009) examined the idea of
producing chocolate in Trinidad & Tobago. It noted two contrasting opinions on the topic.
Although some people believe that there is potential for an established cocoa processing industry
in Trinidad, others thought that such a venture would not be as lucrative as the traditional
practice of growing cocoa for export. The article also discussed two possible methods by which
Trinidad could engage in chocolate production, those being; acquiring small scale machinery to
produce chocolate on a small scale or entering into processing agreements with established
foreign chocolate producers. Similar to this article, my study will seek to collect opinions on the
idea of producing a cocoa product and will examine the viability of doing so. However, it will
not only deal with chocolate but several other products made from cocoa.

The study by Maximay (2009) entitled ‘The Assessment of the Cocoa Industry in St. Lucia’
sought to ‘assess the production/marketing/distribution system for the cocoa industry in St.
Lucia. Though it was not solely focused on cocoa processing, it makes some key points that can
contribute to my research. The study suggested that chocolate and cocoa sticks are two products
that can make up the core of a cocoa processing industry on the island. My study will also look at
the viability of producing these products.

‘Thinking Value Adding’, a paper by Dr. Sikora (2010) discussed several developments in the
cocoa industry which boded well for the expansion of cocoa processing in Trinidad. However,
my study will not only look at factors which portend well for a cocoa processing industry on the
island but also factors which may hinder its development.

‘The Case for Cocoa Value Addition in Nigeria’ by the online newspaper This-Day-Live (2013)
explored the idea of producing cocoa products in Nigeria. It pointed out several potential benefits
of establishing a cocoa processing industry such as the creation of employment and the
stimulation of economic growth. However, it also noted a major challenge that a Nigerian Cocoa
processing industry could face – the huge taxes that Europe place on cocoa products entering

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their shores. Just like this article, my study will also seek to explore the potential benefits and
challenges of establishing a cocoa processing industry.

Though an extensive study on the expansion of a cocoa industry could not be found, much
literature (albeit brief in length), has been published on issues related to the topic. These
literatures share some similarities with how I will approach my topic but they have their
differences as well.

Data Collection Sources

1. Interview
A total of three interviews were conducted. The first two interviews were conducted with
an employee from each of two hotels namely Boucan and Anse Chastanet. These hotels

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 were chosen because they are widely known to sell cocoa products. The interviews were
geared at gaining a deeper understanding of the hotels’ cocoa processing operations.
The third interview was originally intended to be conducted with the Permanent Secretary
of the Ministry of Agriculture but the person in question directed the interview to an
agricultural extension officer who had more expertise in the field of cocoa. This interview
was geared at understanding the cocoa industry on a national scale and gaining an expert
opinion on the prospect of expanding the cocoa processing industry.

2. Questionnaire
A questionnaire was conducted using 30 upper six students of Sir Arthur Lewis
Community College as a representative sample of the St. Lucian population. This survey
hoped to discover the attitudes that exist towards local and foreign produced products and
also to identify the consumers’ purchasing patterns of the two.

Interview with Boucan Employee

‘Boucan’ is a hotel that is known for its cocoa estate and its chocolate products. It is actually
owned by a U.K company called ‘Hotel Chocolat.’

Preliminary research revealed that the hotel sold chocolate as well as chocolate cookies.

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One of the hotel’s employees, Mr. Methodius Faucher was interviewed to get to know more
about the hotel’s cocoa processing.

1. What is the hotel's yearly output of cocoa beans?

Yearly output of cocoa beans is 8 tons; we also purchase 12 tons from farmers on the
island.

2. Does the hotel export any of its cocoa beans? If so, how much (what percentage?)

The hotel exports 99.6% of all beans

3. Apart from chocolate and cookies, what products does the hotel make from its cocoa
beans? )

 Spa products (e.g. Warming body masks, Hand and body washes, Hand and body
lotions, Body polish and Body butter.)
 Cocoa Stick

… So are these products produced in St. Lucia or are they manufactured in the UK
and sent back to St. Lucia?
Besides cocoa sticks all other products are made in the U.K.

… How much cocoa stick does the hotel produce yearly?

2000 cocoa sticks.

… So does the hotel have plans to establish its own processing facilities so that it can
manufacture its own chocolate, spa products etc. instead of importing them from the
parent company in the UK?

Yes the company is constructing a FACTORY in St Lucia at RABOT Estate. Plans for this
are at an advanced stage. Stage 1 of the factory is actually completed, which is roads,

5
 parking, drainage and retaining walls. They are now moving into stage two which is the
construction of the actual plant [buildings].

4. Are the hotel's products only available at the hotel or does the hotel distribute any
of its products to local retailers?

Products are only available at the hotel and other company shops in Europe, products
are not sold to local retailers.

… Why aren’t these products sold to local retailers? Don’t you think that it would
be a viable opportunity to further infiltrate the St. Lucia market?

These products are made for the high end of the market. The company is engaged in
NICHE marketing. We don’t cater for every consumer, only the more AFFLUENT ONES.

5. Does the hotel export any of its products?

No, the hotel only exports raw cocoa beans.

6. Apart from making cocoa stick and exporting cocoa beans, what else does the hotel
do with its cocoa beans? For example does it sell beans to local consumers or
producers?

The hotel does not do anything else with its beans. We do not sell beans to local
consumers.

Interview with Anse Chastanet Employee

Anse Chastanet is another hotel which grows and processes cocoa. The Director of Pastry –
Wouter Tjeertes – was interviewed to find out more about the hotel’s cocoa operations.

Preliminary research revealed that the hotel used its cocoa for pastry making.

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1. Does the hotel make its chocolate from scratch?
Yes.

... Where are the cocoa beans sourced from? Are the beans bought or are they
grown on a hotel estate? If they are bought, who are they bought from?
They are grown on our own estate ‘Emerald Estate’ located in the Soufriere Hills.

2. Apart from pastries, what else is the chocolate used for?

The chocolate is used for amenities, tours, workshops, showpieces, bonbons, decorations,
eliminating the need to buy expensive chocolate from overseas whilst using higher quality
homemade product which is good for marketing purposes.

3. Does the hotel make any other cocoa products?

 Chocolate Bars
 Health Products
 Chocolate Coated Nuts

... What are their cost, prices and yearly production amounts?
On average we sell 5700 bars per year. A bar is sold at 12 us$ whilst it costs
approximately $1.30 US to produce. The health and snack items have just been launched
so data is not yet available.

4. About how many employees are engaged in cocoa processing? Are these employees
solely devoted to the task of processing cocoa?
Three employees are engaged in cocoa processing. However, this is not their only
responsibility; they are also engaged in guest contact moments e.g. tours and workshops.

… Only 3 employees? I find that number kind of small.

It is small but truly all we need. Rational working is key to success.

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5. To what extent does the hotel use technology and machinery for cocoa processing?
How much do these machines and technology cost? Also, how much expenses do
they incur throughout a year? (i.e how much electricity, maintenance costs etc.)

We use low tech machinery. In total, it costs about $15,000 US. They generate about
$1500 US in expenses per year.

6. Are any of the hotel's cocoa products sold in retail/wholesale outlets on the island?
Not yet. We are working on website sales and looking into island sales; demand has been
evident.

… Would people from foreign countries be able to order the hotel’s cocoa products
from its website?
Our main focus at this point is to facilitate guest requests to purchase bars after
departure from their homes, but we are also opening up our product to the rest of the
world.

… What about the island sales, can you expand a bit more on it?
After a successful exhibit last year we became intrigued by the possibility of island sales.
However, the main focus is still the website for now.
Interview with Agricultural Extension Officer
1. About how much cocoa does St. Lucia produce on a yearly basis?
Saint Lucia currently has an approximate seventeen hundred acres of cocoa established.
Most of the crop is grown on estates on the southwestern part of the island.
An estimated 42 tons were produced in 2014 and of this 33 tons (79%) were exported.
Major exporters are Union Vale Estate and Hotel Chocolat.

2. About what proportion of that cocoa is exported? To whom?

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 Union Vale Estate exports its cocoa to the USA (World’s Finest Chocolate Company)
The Hotel Chocolat exports its cocoa to the UK.
Currently all the cocoa produced and procured from other farmers by these two exporters
is sold internationally.
The Anse Chastanet hotel has recently set up a chocolate laboratory to develop custom
made chocolates for its clientele. A visit to the facility is scheduled for April 2015 to
obtain more details on the operation.
Some amount of cocoa produced locally is exported to the French Antilles but this is an
informal arrangement and the data is only anecdotal. The opportunity is there to
formalize this arrangement.

3. The cocoa that is not exported – how is it used?

Cocoa is processed locally in some estates into traditional cocoa sticks and sold as
souvenirs with recipes attached. Some of the estates offering this service include Fond
Doux Estate and Morne Coubaril Estate in Soufriere.
The Fond Assau Processing facility also facilitates processing of cocoa into cocoa sticks
for sale.

4. What are the products that can be produced with cocoa?

This information is available online

5. What cocoa products does St. Lucia produce? Are any exported? If so, to where are
they exported?
Products include chocolate, cocoa sticks, beverages and ground cocoa. These are largely
consumed locally and some exported to the French Antilles

6. What would St. Lucia need to increase the quality and quantity of its cocoa
processing?
Standardized processes, standardized equipment

7. Do we have an adequate quantity and quality of labor?

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 Labor is available. The quality of labor may need improving

8. Do we have appropriate and adequate equipment or do we need to purchase more

and better equipment?
9. Do we have enough capital to make the appropriate investment?
The above questions (8 and 9) may be better addressed to potential investors in the
industry.

 What would be the benefits of expanding the cocoa processing industry in St. Lucia?
Retention of a larger share of returns from investment locally
High value products locally with potential to increase export earnings

 What are the possible drawbacks of, or difficulties with expanding the cocoa
processing industry in St. Lucia?
A vibrant cocoa processing industry would require significant private sector investments.
The volumes of cocoa required for year round operation may not be consistently
available cocoa being a seasonal crop.

NOTES

Saint Lucia has the opportunity for development of a vibrant cocoa industry with much emphasis
of a value chain approach that seeks to shift value adding to a local processing industry with the
intention of increasing profitability to producers and processors.

The department of Agricultural Services provides needed technical support services related to
production. However, significant investments are required for development of a processing
industry. The recommendation is for a focus on high value niche markets.

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11
 Graph Illustrating How Important Consumers
View Certain Factors When Purchasing A Product
25

22
20

17 Price
15 Quality
Brand
14 Other
12
10

5 6
5
4
3
2 2
0 1
1 (most important) 2 3 4 to 6 (least important)

Consumers were asked to rank which factors played the most important role in their decision to
purchase a product with the number ‘1’ representing most important,‘2’ less important etc.
Twenty-two (22) people ranked quality as the most important factor, while twelve (12) people
ranked price as most important and 4 people ranked quality as most important. For the second
most important factor, fourteen (14) people chose price, six (6) chose quality and ‘5’ chose
brand. For the third most important factor seventeen (17) people chose brand and three (3)
people chose price. Finally for the least important factors, two (2) people each chose brand and
‘other’ whilst one (1) person chose price.

From the above data it is clear that respondents view quality as the most important factor with a
mean ranking of one point two (1.2). The above data also reveals that respondents view price as
the second most important factor and brand as the third most important factor with mean
rankings of one point eight (1.8) and two point six (2.6) respectively.

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 Proportion of Consumers Who View Local/
Foreign Products As Better Quality

Lo-
cally
Prod
ucts
13%

Foreign Products
87%

The graph above illustrates which group of products that respondents believe is of a better
quality. The majority of respondents (26) believe that foreign products are of a better quality
whilst only four (4) respondents believe that local products are of a higher quality.

13
 Consumers' Views on Which Product (Local or
Foreign) is More Affordable

Foreign Local
50% 50%

The above chart illustrates which group of products that respondents believe is more affordable.
Fifteen (15) people believe that foreign made products are more affordable and the same number
believes that locally made products are more affordable.

14
 Consumers' Views on Which Set of Products
(Local or Foreign) Is Better Value For Money

Local
17%

Foreign
83%

The above chart illustrates which group of products that respondents believe is better value for
money. The majority of respondents (25) believe that foreign products are better value for money
whilst five (5) respondents believe that locally made products are better value for money.

15
 Group of Products (Local or Foreign) That
Consumers Prefer

Local
31%

Foreign
69%

The above chart illustrates which group of products that respondents prefer. The majority of
respondents (20) prefer foreign made products whilst nine (9) respondents prefer locally made
products.

16
 Group of Products That Consumers Purchase
More Of

Local
43%

Foreign
57%

The above chart illustrates which group of products that respondents purchase more of.
Seventeen (17) respondent purchase more foreign made products whilst thirteen respondents (13)
purchase more locally made products.

17
 Respondents Who Believe That St. Lucians
Should Buy More Local Products
30

25
25

20

15

10

5
5

0
Yes No

The above chart illustrates the numbers of respondents who believe that St. Lucians should buy
more locally made products. The majority of respondents (25) believe that St. Lucians should
buy more local products whilst five (5) respondents believe otherwise.

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 Respondents Whose Households Purchases Local
Cocoa Stick

No
13%

Yes
87%

The above pie chart illustrates the proportion of respondents whose households purchase locally
made cocoa stick. The majority of respondent households (26) purchase the local product whilst
only four (4) do not.

19
 Respondents Who Are Satisfied With The Qual-
ity of Local Cocoa Stick
30

25

24

20

15

10

2
0
Satisfied Not Satisfied

The above chart shows the number of respondents who are satisfied with the quality of the
locally made cocoa stick. Twenty four (24) respondents are satisfied with the quality of local
cocoa stick whilst two (2) respondents are not satisfied.

20
 Respondents Who Believe That The Price of
Cocoa Stick Matches Its Quality
25

21
20

15

10

5
5

0
Price Matches Quality Price Does Not Match Quality

The above graph illustrates the number of respondents who believe that the price of local cocoa
stick matches its quality. The majority of respondents (21) believe that the price matches its
quality whilst only five (5) believe that the price doesn’t match the quality.

21
 Respondents Who Purchase Cocoa Products
Made By Foreign Companies
30

28

25

20

15

10

2
0
Purchase Do Not Purchase

The chart above illustrates the number of respondents who purchase foreign made cocoa
products. An overwhelming majority of respondents (28) purchase foreign made cocoa products
whilst only two (2) respondents do not purchase.

22
 Respondents Who Would Purchase Local Sub-
stitutes to Foreign Cocoa Products
25

22

20

15

10

0
Would Purchase 0 Purchase
Would Not Depends on Certain Factors

The above chart illustrates the number of respondents who would purchase local substitutes to
foreign made cocoa products. The majority of respondents (22) would only purchase ‘depending
on certain factors’ whilst eight (8) indicated that they would purchase.

Discussion of Findings

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During 2014, St. Lucia exported the majority of its cocoa. The year saw the island produce 42
tons of cocoa of which 33 tons (79%) were exported.

Cocoa can be used to make myriad of products including chocolate bars, chocolate chips, cocoa
butter and spa products amongst many others. However, St. Lucia only manufactures a handful
of cocoa products, most of them being produced on a very small scale. The main cocoa product
that St. Lucia produces is cocoa stick. A few other cocoa products are produced by local hotel
‘Anse Chastanet’ but production is very small scale and products are limited to the hotel’s
guests.

Why Export Versus Manufacture?

Why does St. Lucia export most of its cocoa instead of manufacturing it? The article by ‘UWI
Today’ titled ‘Where’s The Local Fine Chocolate?’ suggests a possible explanation for this.
Caribbean islands like St. Lucia have traditionally been exporters rather than manufacturers and
there have been several arguments to back up this tradition. One such argument is that traditional
exporters like St. Lucia “should only focus on producing high quality cocoa for export in the
most efficient manner possible and leave any further processing to be done at the traditional
manufacturing countries. Any local value-added production will distract from the local cocoa
production task at hand and will potentially divert valuable cocoa production to less lucrative
local enterprises,” the argument continues. In other words, countries like St. Lucia have not seen
large scale cocoa processing as a sufficiently feasible economic alternative to mass exportation
of cocoa.

How Can St. Lucia’s Cocoa Processing Sector Be Expanded?

According to Mr. JnBaptiste St. Lucia needs standardized processes and standardized equipment.
He also acknowledged that while we have an adequate quantity of labour, we may need to
improve the quality of such labour.

Is It Feasible to Expand St. Lucia’s Cocoa Processing Sector?

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There is clearly a demand for cocoa products as the results from the questionnaire have shown.
Ninety-three percent (93%) of respondents purchase cocoa products made by foreign
manufacturers. Moreover, Wouter Tjeertes from Anse Chastanet says that demand from locals
for their cocoa products “has been evident.”
However, demand is not the only factor that potential cocoa processers should take into account.
Competition also has to be closely scrutinized. The St. Lucian market is inundated with foreign
produced cocoa products. How would local producers get citizens to buy their products over
these foreign made products?

Based on the results of the survey, it can be concluded that in order for local producers to
compete with foreign producers, they would have to produce goods which can compete in both
quality and price. This conclusion is based on the fact that respondents considered quality and
price as two very important factors which affect their decision to purchase a product.

Niche Markets
Instead of looking to compete with the ‘big guns’ in the cocoa processing market, potential St.
Lucian processers can focus on niche markets instead. This sentiment is also shared by Mr.
JnBaptiste who says that the focus of a St. Lucian cocoa processing industry should be on ‘high
value niche markets.’
Focusing on niche markets may pose a smaller risk than competing in saturated markets filled
with established foreign producers.

Potential Benefits of Expanding St. Lucia’s Cocoa Processing Industry

The most obvious benefits of expanding the cocoa industry in St. Lucia are the creation of jobs
for and increase in skills of citizens. Mr. JnBaptiste also recognized two other potential benefits.
Firstly, a larger cocoa processing industry would see a larger retention of returns from
investments locally. Second, it can help to increase export earnings if the products are exported.

Hindrances to the Expansion of St. Lucia’s Cocoa Processing Industry

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According to Mr. JnBaptiste, it may be difficult to get investors who would be willing invest the
significant funds that are required for cocoa processing. Second, Mr. JnBaptiste also stated that
sufficient cocoa may not be available year round due to the crop being seasonal.

Conclusion
St. Lucia exports the majority of cocoa that it produces. However, the island has the opportunity
to divert some of its cocoa exports into raw materials for local manufacturing. There is a
widespread demand for cocoa products in St. Lucia. However, certain markets are saturated with
established foreign producers. Hence it may be more feasible for St. Lucian cocoa processers to
discover niche markets to enter.

The expansion of the cocoa processing industry would require several things namely,
standardized equipment, standardized processes and better quality labour. Such an initiative can

26
reap several benefits for the economy including the creation of employment, larger retention of
investments and increased export earnings. However, there are several factors which can hinder
the expansion of the cocoa processing industry, namely difficulty in obtaining funding for
equipment and the seasonality of cocoa.

Recommendations
1. The government should work in collaboration with Anse Chastanet and Boucan to
expand their local cocoa processing since both hotels already have some infrastructure in
place. Anse Chastanet already processes cocoa products on a small scale, whilst Boucan
is currently constructing a cocoa processing factory. One of the possible hindrances to
expanding the cocoa processing industry mentioned was difficulty in acquiring
equipment. However, since these hotels already have some equipment and more than
likely have the funds to acquire more equipment, it will be easier for them to engage in
cocoa processing. Hence the government should seek to help them in any ways possible.

27
2. Anse Chastanet and Boucan should look extensively for niche markets. Such markets
would be easier to penetrate and pose a lower capital risk than saturated markets.

3. The government should work with farmers to ensure that cocoa is available in sufficient
amounts year round. This would aid a potentially larger cocoa processing industry to
supply adequate products all throughout the year.

Limitations
1. The sample of respondents chosen for the survey may not be fully representative of the
entire St. Lucian population. The sample consisted of 30 upper sixth students of Sir
Arthur Lewis Community College. Hence their answers may be age biased.

2. It was very difficult to obtain literature which was directly related to the topic. Not much
literature was available via public platforms such as the internet and libraries. Instead, the
majority of literature was sourced via individuals who are knowledgeable on the topic
and who have access to more relevant literature.

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 Appendices
A. Questionnaire
Dear students,

I would like to thank you all in advance for taking your time to answer this questionnaire
constructed by myself; Ronaldo Degazon. This survey seeks to compare the attitudes to and
consumptions patterns of locally produced products versus foreign made products. Your
feedback is valued as it will contribute to the overall success of my research so please answer as
well as you can. Most of the questions can be answered by placing a tick in the bracket
provided. Specific instructions are given where necessary.

Yours sincerely,
Ronaldo Degazon

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1. How important do you consider each of the following factors when purchasing a
product? (Place a number in each bracket to rank the factor, with ‘1’ being most
important.)

Price ( )

Quality ( )

Brand ( )

Other ______________________________________________________________

2. In general, which set of products do you believe are of a better quality?

Locally Produced ( ) Foreign Produced ( )

3. In general, which set of products do you believe are more affordable?

Locally Produced ( ) Foreign Produced ( )

4. In general, which set of products do you believe are better value for money?
Locally Produced ( ) Foreign Produced ( )

5. In general, which set of products do you prefer?

Locally Produced ( ) Foreign Produced ( )

6. Which set of products do you purchase more of?

Locally Produced ( ) Foreign Produced ( )

7. Do you believe that St. Lucians should buy more locally produced products over foreign
made products?
Yes ( ) No ( )

30
8. Does your household purchase locally produced cocoa stick?
Yes ( ) No ( )

9. If yes to the above question:

i) Do you think that the cocoa stick is of a satisfactory quality?
Yes ( ) No ( )
ii) Does the price match the quality?
Yes ( ) No ( )

10. Do you purchase cocoa products made by foreign companies? (Chocolate, Cocoa
Powder, Cocoa Butter etc.)

Yes ( ) No ( )

11. If local firms and entrepreneurs were to produce their own brand of such products,
would you purchase them?
Yes ( ) No ( ) Depends on Certain Factors ( )

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 Bibliography

University of the West Indies. (2009). Where’s The Local Fine Chocolate? UWI Today. Retrieved
from http://sta.uwi.edu/uwitoday/archive/april_2009/article3.asp

The Executive Officer, Banana Industry Trust and Steve Maximay, PLANTPRO Associates Ltd.
(2009). The Assessment of the Cocoa Industry in St. Lucia. SERVICE CONTRACT No:
BIT/2005/007/0910 FOR EUROPEAN COMMUNITY EXTERNAL ACTIONS. St. Lucia

Sikora, Dr. (2010) Thinking Value Adding.

This Day Live. (2013) The Case for Cocoa Value Addition in Nigeria. Retrieved from
http://www.thisdaylive.com/articles/the-case-for-cocoa-value-addition-in-nigeria/157985/

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