Is This The End Of Chocolate As We Know It?

Many of you will have seen in recent news reports that the cocoa market is in a state of turbulence with prices climbing to record highs and no sign of things slowing anytime soon. The last 3 months alone has borne witness to the price of cocoa per tonne escalating from $4275 to $10476, an eye watering increase of over 140%

This is largely due to the effects of climate change disrupting the supply chain and increased geopolitical bureaucracy. One of the biggest 21st century issues facing cocoa farmers (besides many not being paid fairly for their crops) is that cacao trees are weather susceptible. The severe and unforeseeable weather patterns seen in recent months, including the El Nino phenomenon hitting South America and prolonged droughts in West Africa, both key cocoa growing regions, have decimated cocoa plantations. Trees have become weaker, increasing their susceptibility to fast spreading pests and disease which in turn has made them less productive, reducing farmers yields come harvest and leading to the loss of delicate specialty varieties. For those farmers whose plantations do survive the unpredictable weather then presents further challenges, indirectly affecting the post harvest fermentation and drying processes and forcing farmers to rapidly adapt to continuous and prolonged outputs to prevent further loss of crops.

Many people believe these price increases will translate into better benefits for the farmers with them finally getting paid what they should for their cocoa beans but sadly that is not the case. So called 'Fairtrade' purchasing contracts only extend to usable cacao which can be resold, and so poor harvests see farmers having to absorb the unexpected costs of selling and distributing poorer quality beans and replenishing damaged or diseased tree stock alone. This approach to cocoa farming and the high risk of little or potentially no financial reward for the farmers hard labour is unsustainable and sees many abandoning cacao farming altogether in favour of more promising and profit yielding crops. Those who choose to operate in a more sustainable manner or work with high quality cacao at the forefront of their farming and business model are often further burdened with high certification costs and in the future this may see them turning to lesser quality-higher productivity hybrids which would have dire consequences for those of us who value rare cacaos and their exquisite flavour profiles.

However, we can't blame the weather entirely. A surge in consumer demand also has its part to play where chocolate has, for many years, found its way into the daily diets of western society having been transformed into an easily accessible, lower quality, affordable product by large corporations who value profit over people. That demand comes at a cost though which we are now paying the price for and the perfect storm has been brewing right under our noses which will see this unprecedented market volatility continue well into 2025 and beyond with chocolate likely to return to the once luxury item it was and specialty products becoming even less affordable.

The destructive effects of climate change on cocoa farming will undoubtedly get worse and, when coupled with increasing consumer demand, corporate greed and corrupt governments who weaponize food as bartering tools in their wars and political agendas, will likely see dire implications for the cocoa industry which without significant international change has a very uncertain future.

So how will chocolate companies adapt and what can we do to help?

Chocolate producers, both big and small, will all be feeling the pinch of the recent hikes in pricing structures which are simply unsustainable for any business. It is therefore inevitable, just as we've observed with other goods and services during the cost of living crisis, that some of that increase will need to be passed on to the consumer in order for businesses to continue operating.

Larger, profit driven producers such as Mondelez, Nestle and Callebaut, with their high overheads and share holders expectations to meet, are more likely to opt for expanding their portfolio of plant based chocolate alternatives, decreasing the size of cocoa based products (yes that's right people, get ready for another shrinkflation where like magic your regular Mars bar will to be reduced to the size of one from the Celebration box!) or compromising further on quality by increasing the content of undesirable ingredients such as palm and vegetable oils and milk powders to reduce production costs.

On the other hand smaller chocolate artisans and bean to bar producers, with lesser overhead costs and no shareholders to keep sweet (pun intended!), are used to making strategic decisions to maintain our position in the market and will always be transparent with consumers about what affects our business and the difficult decisions we face. 

Whilst we cannot promise our customers that they wont see some increases in our prices over the coming months we will always first seek to reduce costs in other, more creative ways such as simplifying packaging and will only increase prices, having exhausted all other possibilities, with the aim of maintaining quality products you can continue to enjoy without compromise and to protect the future of cocoa farming and specialty cacao production.