The largest cocoa producer in Asia has a chocolate problem

The largest cocoa producer in Asia has a chocolate problem.

Cocoa production of the 130-year-old Indonesian industry is expected to decline for the third consecutive year as farmers shift to other crops. According to estimates by Euromonitor International, half of neighboring Malaysia weighs only 11 ounces (300 grams).

It may well be about to change, thanks to a thousand-year-old reimagination of the Milo chocolate and malt beverage. the favorite treats of the region – in Es Kepal Milo, which translates to "Milos on round ice."

The craze for Es Kepal Milo – a mixture of Milo poured on crushed ice to make a kind of chocolate snow cone – has spawned over 17,000 "how-to" videos of the world. Indonesia alone, with millions of visits to YouTube.

He also created a new sales empire for entrepreneurs such as Emanuel Agung, 34, owner of Es Kepal. Milo Viral.

In addition to assisting Nestlé's Nestlé sales, this could increase overall chocolate confectionery sales in Indonesia and the fortunes of PT Mayora Indah, the country's second largest food company, which manufactures sticks Choki Choki chocolate, as well as PT Kaldu Sari Nabati Indonesia, which manufactures Richoco wafers.

"The demand is incredibly high," said Agung, who buys 1 ton of Milo a day to power his 150 Es Kepal Milo stands. "Nestlé has been overwhelmed by our orders in the first few weeks of sales, but now the supply is stable."

Agung, who learned how to make sweets in Malaysia, opened his first store in Jakarta in March and the franchise is Nestle, based in Vevey, Switzerland, has recently started selling frozen brand ice cream like Kit Kat, Crunch and Milo in Indonesia. Switzerland has a lot to teach Indonesia about chocolate – it is leading the world with consumption of about 10 kilograms a year

"We are delighted to learn that people have found creative ways to create recipes with our products., Nestlé's Director of Legal and Corporate Affairs in Indonesia, said in an e-mail answering questions. "Nestlé pointed out that while most of the cocoa coming from from Indonesia is destined for its international market, it sells some local cocoa products.

The challenge for producers is to transform the demand for chocolate into demand for cocoa. Indonesian cocoa production is expected to fall 275,000 tonnes this year, up from 290,000 tonnes in 2017 due to aging trees and the shift to more profitable crops such as palm oil, according to the Indonesian Cocoa Association in February. The price of cocoa fell 11 per cent in New York last year and dropped 34 per cent in 2016 due to increased supplies from major Ivorian and Ghanaian producers, before climbing by 34 percent this year. year. The futures contract for delivery in September rose 1% to $ 2,538 per ton Monday

While per capita consumption remains low, demand for confectionery rose by 10% in 2017 thanks to a wide distribution, aggressive marketing and promotion strategies. For a developing country like Indonesia, where the market was worth about $ 1 billion in sales last year, affordability is still topping the list for many households when they buy indulgent products.

Millions of Indonesians survive Less than $ 2 a day and traditional snacks like banana fritters and coconut milk cookies are their first choice to indulge themselves.

Chocolate is considered a luxury food according to Sony Satari, president of the Cocoa Industry and Chocolate Association. Indonesians prefer cheaper chocolate that contains vegetable oil rather than more expensive varieties made from cocoa butter, he said. "Paying 25,000 rupiah ($ 1.70) for a chocolate bar is expensive for many Indonesians," says Satari.

For Agung of Es Kepal, who has more than three years of experience in the culinary sector, to attract buyers, not the price. He says that he sells Es Kepal Milo for 20,000 rupees per cup mainly to millennia aged 14 to 26.

"Milo has a strong brand image, as long as we maintain quality, using only Milo pure, then the customers will accept it, "Mr. Agung said." It's beyond my expectations: people from the lower to middle class and higher in cars were lining up in my stores . "