It’s a ‘Hot Topic’: The Supply Chain Journey of Hot Cocoa

A mug of hot cocoa with marshmallows
Photo by Erik Mclean

Hot cocoa is a creamy and delightful hot drink often served during the winter months to warm the bodies and souls of countless festive families and friends. Originating from Mexico, this rich hot beverage is one that is beloved by all. As early as 500 BC, the Mayans were drinking chocolate made from ground-up cocoa seeds mixed with water, cornmeal, and chili peppers (as well as other ingredients). Now, this drink can be found in powdered form on the shelves of grocery stores nationwide. But, where does hot cocoa come from, and how is it transformed from a pod on a farm into a festive drink that brings smiles to the faces of thousands?

As part of the new supply chain journey series by Stimulus, we’ve chosen to break down the entire journey of hot cocoa from pod to mug to show exactly how much time and quality control goes into every drop of this creamy holiday treat. Without further ado, let’s analyze this delightful drink and see what makes it so incredible below.

Growing

Cocoa, the main ingredient of hot cocoa, begins on a farm, typically in West Africa, Latin America, or South East Asia. There, the trees grow under the shade of other plants such as banana trees and depend on rainfall for more yield.

Cocoa is usually grown by smallholder farmers on farms averaging 2 to 4 hectares in size. Despite the massive demand for cocoa worldwide, these small farms manage solely based off consistent yields and dedication during the harvesting season.

Harvesting

Next, the pods of the cocoa tree are harvested by farmers and opened in order to extract the wet beans inside. This process must be done quickly before the bean is able to germinate.

During a harvest, the trees flower and produce in two cycles of six months.

According to seasoned farmers, the best way to open pods is to use a wooden club which, if it strikes the central area of the pod, causes it to split into two halves. It is then easy to remove the beans by hand.

Drying

Once this is complete, the cocoa beans are then stored in boxes and covered with mats or leaves to ferment and dry in the sun. This process typically lasts three to seven days for the fermentation and five to seven days for the drying process.

This step is highly important to the quality of the cocoa as poorly fermented cocoa beans develop little cocoa flavor while over-fermented beans produce an acidic taste. Neither of these options will help the farmers to sell their product making it crucial that the drying step is done correctly for profit’s sake.

Marketing

Once dried, the beans are packed into jute sacks and sold using supply chain marketing and networking tactics to suppliers and companies across the world. The sacks are then transported to exporting companies, checked for quality, and sent out to buyers.

Sometimes, cocoa beans are sold directly to exporters by cooperatives, or even directly exported. Direct sourcing enhances traceability, proximity, trust, and efficiency in the supply chain.

Shipping

Once cocoa beans have been graded and loaded into cargo vessels, they are shipped in new jute bags or in bulk to suppliers and companies across the globe.

In recent years, shipment of cocoa beans in bulk has been growing in popularity because it can be up to one third cheaper than conventional shipment in jute bags. However, relying on local suppliers is an even more viable and cheap solution that is spreading in the cocoa manufacturers community.

Processing

Once the suppliers and companies receive the beans, they must still process them and grind them into a fine powder like the cocoa powder found in stores.

The cocoa can be pressed even further during this process to make cocoa liquor and cocoa butter. However, for the sake of hot cocoa, the powder is best. This powder is also often mixed with powdered sugars and other mix-ins to positively affect the flavor of the hot cocoa as we will elaborate on further below.

Manufacturing

To create the hot cocoa we find in stores, cocoa powder is mixed with other ingredients including sugar, powdered milk, mini marshmallows, and vanilla extract.

Then, it is finally ready to be delivered from suppliers to retailers, companies, restaurants, and consumers.

To create chocolate, cocoa liquor and butter are mixed with inputs such as sugar, vanilla, emulsifying agents, and milk. Some hot cocoa mixes require this process first as they are sold in a liquid concentrate form or as ‘hot chocolate drops’ in stores.

Feeling Festive

The final step of the cocoa supply chain includes packaging, commercial marketing, and retailing. Hot cocoa is sold through grocery stores, wholesalers, and online. However, every drop ends up in the cozy cups of happy festive friends and families at the end of this long and merry journey!

Stay tuned for more supply chain journeys to come, and feel free to watch the ‘How It’s Made: Hot Cocoa’ episode below to see some more of this journey in action:

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Stimulus, Inc.

Stimulus, a relationship intelligence software that helps companies build more valuable vendor and supplier relationships.