analysis and outlook of chocolate supply chain

1. Analysis and Outlook
of Supply Chain of
Chocolate Bar
Haifiz Farrukh Saeed 22033356
Raheel Iqbal 21070842
Nasir Khan 21080148
Muhammad Abdul Khader 22017456
Khan Salar Perviaz 21062033
Dhruvkumar Mukeshkumar 21088586

2. Introduction
Chocolate producers
1. Switzerland
2. Germany
3. Austria
4. Ireland
5. United Kingdom
6. Belgium
7. Denmark
8. Sweden
9. Norway
10. Netherlands
Cocoa producers
1. Ivory Coast
2. Ghana
3. Indonesia
4. Nigeria
5. Cameroon
6. Brazil
7. Ecuador
8. Malaysia
9. Dominican
Republic
10. Peru
Manufacturing process of chocolate and more importantly the supply chain aspect of the two critical raw
material which are sugar and milk
Production of milk seemingly simple is a complex process. milk procurement, the rapid and secure
acquisition of milk from the farmer is essential for commercial operations in the dairy industry in which
transportation is crucial.
Pandemic, severe weather events around the world, conflicts, energy crises, problems with transportation
logistics
Disruption, the supply of ingredients for food and beverages is uncertain and unstable
It is more crucial than ever to select supply and distribution partners who can ensure continuity and deliver
goods on schedule, as specified, and in full.

3. Chocolate Manufacturing
• The first step in chocolate manufacturing is the enzymatic
fermentation of cocoa beans to achieve the desired color
• After 48 hours, the cocoa beans change color and undergo
modern fermentation in boxes with holes
• Modern fermentation helps to ensure uniform fermentation and
proper aeration
• The fermentation process helps to bring about a chemical
change in the cocoa beans (PMG, 2023)

4. Chocolate Manufacturing
• After fermentation, the next step is winnowing, where the cocoa bean is removed
• Roasting and grinding of cocoa beans is done, followed by the blending of chocolate liquor,
cocoa butter, and vanilla beans
• Conching is done to achieve the desired smoothness of the chocolate
• Tempering and molding are done to provide uniform crispness
• Chocolate is stored at 15 to 17 degrees Celsius
• The final step is packaging to create the end product

5. SECTION ONE: Supply Chain
Analysis

6. • This section discusses the manufacturing process of two
key ingredients - sugar and milk - in the selected product
of Chocolate Bar
• To manufacture sugar, sugar cane is washed and sliced into
cossettes (French fries)
• The juice is extracted from the cossettes and pumped into
tanks using suppression machines
• The juice undergoes a purification process using chemicals
such as sulfur dioxide, calcium carbonate, and sulfite
(McHugh, 2020)

7. • The milk used in chocolate production is cross-checked with
the Food Standards Code to ensure proper composition
• Milk undergoes centrifugation to remove remaining cream and
ultrafiltration to retain fats and calcium complex compounds
• Reverse and ultra osmosis are performed to add water, salt, and
lactose to the milk
• Spray drying is used for powdered milk, while flavored milk is
created by adding flavors and sugar
• The process of permeate involves additional filtration
• Milk is packaged and supplied to chocolate factories based on
their demand and requirements (Dairy Australia, 2022).

8. • The first step is to clean the beans and other ingredients to be
added in the chocolate bar
• The ingredients are roasted to add moisture and aroma
(Chocolate Month Club, 2019)
• The ingredients are ground to create a paste, and chocolate
liquor is prepared
• Other ingredients like caramel or nuts are added to the paste
• The paste is kneaded, heated, and cooled repeatedly until it
has a consistent shape
• The liquor is pressed into molds to give it the shape of a bar
• The final step is to package the bar

9. Section 2-Sourcing Strategy

10. • Procurement is a vital part of the supply chain
• It involves sourcing, acquiring, and purchasing goods from suppliers (BusinessWire, 2019)
• When procuring sugar, key factors to consider include quality, authenticity, traceability,
negotiation, cost, and delivery
• As an example, Hershey company sources sugar from 15-20 suppliers in the US and Mexico
• They obtain sugar cane and sugar beet directly from their suppliers (Hershey, 2023)

11. • Milk traceability is crucial for monitoring supplier manufacturing processes and compliance
with animal safety and sustainability standards (Dairy Australia, 2022)
• Cost negotiation is important for both suppliers and buyers
• Logistic capability is important for procurement to understand if supply is possible

12. Section 3-Recommendation

13. • Germany is selected as the supplier for key raw materials (sugar and milk) assuming
chocolate bar business is situated in UK
• Germany is the second-highest global producer of sugar (Statista, 2022)
• The country is also among the largest producer of dairy products and milk (Destatis, 2023)
• Milk standards in Germany are strict and guided by QM Milch Standards (dairyreporter,
2022)

14. • Germany's high production of sugar and milk allows for sourcing of raw materials without
market dependence (Aron, 2018)
• The country has natural resources such as sugar cane, sugar beet, and natural farms for milk
production, reducing production costs
• Germany's supply chain is digitally advanced and incorporates technological advancements

15. • Challenges within the supply chain of sugar and milk in Germany include competition,
with entry barriers possibly posing a challenge
• Strict and constantly updating milk standards in Germany could pose compliance
challenges (dairyreporter.com, 2022)

16. Section 4-Future Outlook

17. • Sourcing key raw materials from Germany i.e., milk and sugar is predicted to have a positive
impact in the future due to sufficient resources, logistics capability, and ease in sourcing and
supply developments
• However, choosing among the many suppliers in Germany and monitoring their sustainable
compliance may pose short-term challenges

18. • Understanding and complying with Germany's milk and sugar standards may be a complex
task in the short term
• In the long term, compliance will become an understood and championed area, and the
sourcing process will become long term
• Long-term supplier relationships make it easier to negotiate and establish trust in sustainable
procurement standards

19. Conclusion

20. • Germany's advantages in supplying sugar and milk include high production rates and
availability of natural resources for production
• Sourcing raw materials from Germany eliminates the need for sourcing from external
markets, reducing costs and increasing efficiency

21. REFERENCES
• Amt, A. (2022). Germany and the United Kingdom: Bilateral relations. German Federal Foreign Office. https://www.auswaertiges-
amt.de/en/aussenpolitik/united-kingdom/218892
• Aron, G. (2018). Market power in the German dairy supply chain. In AgEcon Search. https://ageconsearch.umn.edu/record/276233/?ln=en
• BusinessWire. (2019, October 21). Sugar Market Procurement Intelligence Report | Sugar Market Price Trends, Sugar Suppliers Selection Criteria and
Regional Spend Segmentation Insights Now Available from SpendEdge. Www.businesswire.com.
https://www.businesswire.com/news/home/20191021005396/en/Sugar-Market-Procurement-Intelligence-Report-Sugar-Market-Price-Trends-Sugar-
Suppliers-Selection-Criteria-and-Regional-Spend-Segmentation-Insights-Now-Available-from-SpendEdge
• Chocolate Moth Club. (2019). How to Make Chocolate - Chocolate Making Process | Chocolate of the Month Club. The Gourmet Chocolate of the Month
Club. https://www.chocolatemonthclub.com/the-chocolate-making-process
• Dairy Australia. (2022). How Milk is Made & The Milking Process | Milk Pasteurisation & Homogenisation. Www.dairy.com.au.
https://www.dairy.com.au/products/milk/how-milk-is-made#:~:text=Cows%20are%20milked%20using%20vacuum
• dairyreporter.com. (2022). Germany introduces new milk production standards. Dairyreporter.com.
https://www.dairyreporter.com/Article/2020/01/07/Germany-introduces-new-milk-production-standards
• Destatis. (2023). Germany largest EU milk producer - German Federal Statistical Office. Www.destatis.de.
https://www.destatis.de/Europa/EN/Topic/Agriculture-forestry-fisheries/Milkproducer.html#:~:text=Germany%20is%20the%20largest%20EU
• Enermilk. (2023). CORDIS | European Commission. Europa.eu. https://cordis.europa.eu/article/id/236677-innovative-technologies-for-a-sustainable-
dairy-industry
• Hershey. (2023). Responsible Sugar Sourcing | The Hershey Company. Www.thehersheycompany.com.
https://www.thehersheycompany.com/en_us/home/sustainability/sustainability-focus-areas/responsible-sourcing/priority-ingredients-and-
materials/sugar-sourcing.html
• Kelly, F. (2022, May 19). Manufacturing chocolate: sugars role beyond flavour. Ragus. https://www.ragus.co.uk/manufacturing-chocolate-sugars-role-
beyond-flavour/
• Mangla, S. K., Kazancoglu, Y., Ekinci, E., Liu, M., Özbiltekin, M., & Sezer, M. D. (2021). Using system dynamics to analyze the societal impacts of
blockchain technology in milk supply chainsrefer. Transportation Research Part E: Logistics and Transportation Review, 149, 102289.
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