SIC 2066 Chocolate and Cocoa Products

Contenidos

• NAICS CODE(S).
• INDUSTRY SNAPSHOT.
• ORGANIZATION AND STRUCTURE.
• BACKGROUND AND DEVELOPMENT.
• CURRENT CONDITIONS.
• INDUSTRY LEADERS.
• FURTHER READING.

SIC 2066

Included in this industry classification are establishments primarily engaged in shelling, roasting, and grinding cocoa beans for the purpose of making chocolate liquor from which cocoa powder and cocoa butter are derived and in the further manufacture of solid chocolate bars, chocolate coatings, and other chocolate and cocoa products. Also included is the manufacture of similar products, except candy, from purchased chocolate or cocoa. Establishments primarily engaged in manufacturing candy from purchased cocoa products are classified in SIC 2064: Candy and Other Confectionery Products.

NAICS CODE(S)

311320

Chocolate and Confectionery Manufacturing from Cacao (Cocoa) Beans

INDUSTRY SNAPSHOT

The chocolate and cocoa products industry has traditionally been subject to significant fluctuations in demand. Chocolate products tend to be seasonal in nature, with demand increasing sharply during the holidays. Typically the third and fourth quarters reflect the highest sales. In addition, several consumer trends have had an impact on demand. These include rising sales of premium-priced chocolates and the growing interest in medical research news concerning either health risks associated with high fat milk chocolates or, ironically, health benefits associated with dark chocolate and premium cocoa that contain antioxidant flavanols.

According to the U.S. Census Bureau, approximately 148 establishments operated in this category for part or all of 2004. Industry-wide employment totaled approximately 8,982 workers receiving a payroll of nearly $383 million. Companies in this industry tended to be smaller in size with nearly 70 percent employing less than 20 workers while only 11 percent have greater than 500 employees. The Annual Survey of Manufactures reported that the industry was valued at $4.2 billion in 2005. Additionally, a total of 6,028 employees worked in production in 2005, putting in more than 12 million hours to earn wages of about $245 million. The U.S. Department of Labor's Bureau of Labor Statistics showed slight losses in expected employment for the sugar and confectionary product manufacturing industry as a whole by 2014 after substantial losses were experienced from 1994 to 2004; a small increase is anticipated in output between 2004 to 2014.

Dun & Bradstreet reported in 2006 that the industry's estimated 631 establishments posted annual sales of nearly $7.1 billion with about 17,179 employees. Pennsylvania dominated with nearly $5.4 billion in sales followed in a distant second by New York with $907 million in sales and California in third with $157.5 million in sales. Comprised of 12 different specialties, the primary segment was chocolate and cocoa products (nearly $5.2 billion in sales) with solid chocolate candy in the second position (about $1.0 billion).

ORGANIZATION AND STRUCTURE

All cocoa beans processed by U.S. manufacturers must be imported by direct purchase or through the services of a broker, as cacao trees require a tropical climate to flourish. Growers are paid for the beans at market price, which is determined primarily by the quality and availability of the crop worldwide. A testament to cocoa's importance as a commodity is the existence of cocoa exchanges, similar to standard stock exchanges, in New York, London, Hamburg, and Amsterdam. The beans are then processed to make chocolate liquor, which is in turn used to further manufacture such products as cocoa, chocolate syrup, and solid chocolate chips and baking bars. The chocolate liquor is also often sold to other manufacturers that combine it with additional ingredients to produce confections, bakery items, and dairy products.

Manufacturers roast, shell, and grind the beans to produce unsweetened...