Already high-value, cocoa prices have exploded amid global supply shortage and long-term agricultural challenges — a trend expected to continue.
The cocoa crisis, which many expected to stabilize this year, shows no signs of slowing down, and the impact is being felt across the entire industry — from chocolatiers and businesses to global cocoa suppliers and consumers. While cocoa investors and those benefiting from rising prices may find reason to rejoice, the news isn’t as sweet for most cocoa enthusiasts. The exception lies with consumers looking to reduce their sugar and chocolate intake, who may see this as an opportunity to cut back. Experts emphasize that it’s crucial to practice mindful consumption and prioritize quality over quantity, reducing cocoa use where possible but not turning to less nutritious, poorly made chocolate products.
Cocoa prices hit an all-time high, breaking the price of $12,000 per metric ton and registering a growth of nearly 500% from the $2,000 tag recorded in 2022. Fueled by crippling harvest shortages in West Africa, nations like Ivory Coast and Ghana — the globe’s two largest cocoa producers — continue to battle extreme weather, aging crops, plant diseases, and more phenomena.
Industry experts warn that this isn’t a momentary blip or short-term spike. It’s rather the beginning of a longer, more volatile cycle, with prices expected to stay high or even rise further through the year. For chocolatiers, this means escalating costs and difficult decisions. For consumers, it could soon translate into higher prices at the checkout, smaller and reformulated products on store shelves, or lower cocoa content in products and reduced quality of goods.
Is cocoa turning into a luxury?
Chocolatiers around the world struggle with a key product in their business: cocoa. The price of this good spiked last year so much to the point where a “dozen family-owned chocolatiers” got shut down across Europe the same year, according to Bloomberg. Companies like Lindst, Nestle, and Hershey managed to survive the storm – thanks to their massive market standing – and brands using cocoa from reputable suppliers like OFI, partly because of the superior quality of their products.
European consumers are directly affected by the phenomenon, with chocolate prices up 35% since 2020. But it’s not all doom and gloom, though. Friedel Hütz-Adams, a SÜDWIND Institute researcher, exclaimed that large chocolate manufacturers across Europe have managed to confront the spicy cocoa prices through all sorts of practices, and some have even registered higher profits during the downfall. These mammoths have mainly resorted to cranking up goods’ prices, among other techniques.
Consumers remain willing to buy chocolate
Cocoa is associated with luxury, and for ages, it has been considered a recession-proof food. People consume related products for their own happiness. The same researcher points out that chocolate consumers have been absorbing price spikes successfully and have been able to maintain their chocolate purchases, a trend that’s expected to continue.
There’s a glimmer of hope. Due to the higher prices, human rights violations across supplying countries could decrease in the future. However, chocolate companies have to invest in cocoa farms and farmers and support the implementation of good agricultural practices. Right now, farmers lack the resources necessary for their enforcement. Some see higher cocoa prices as a potential lifeline.
The European Union – the biggest consumer
The European Union leads the pack in chocolate consumption and is only followed by the U.S. as the second-largest consumer. Indulgence promotes chocolate consumption in Europe, seeing four in ten consumers turning to these goods for this experience. Trends like “me-time” that provide a sense of reward and relaxation are in full swing and create demand for cocoa, hence the price increase and the maintained acquisition rates. Products grown sustainably and prioritizing the quality of cocoa ingredients support this drive. Europeans look beyond indulgence and into products made in alignment with their values, especially in terms of ethical sourcing and sustainability.
Brands are intensifying their efforts to procure cocoa and use it according to the highest standards. Products with natural ingredients and clean labels, as well as health-oriented claims like added fiber, higher protein, and reduced sugar, continue to attract European consumers.
Bold combinations are redefining the market
European customers seek to broaden their tasting experiences by breaking into exotic flavors and combinations of tastes from various cultures. Flavors like ginger, knafeh, and pistachio encounter rising prevalence in the market, especially in the holiday season. Christmas markets were filled with chocolates featuring all sorts of special flavors, from cinnamon and latte macchiato to chocolate with crackers and bonbons. At the same time, brownie-flavored treats hold strong appeal, with 47% of consumers favoring them.
While some prefer common flavors, others are embracing the rise of adventurous chocolates — herbal, spiced, and often unexpected.
Innovative solutions are key
Future-oriented brands can devise alternative solutions to combat cocoa scarcity and meet consumers’ needs. A leading example is Blue Strips’ use of all cocoa fruit, aka upcycling. Historically, brands have only consumed 30%, losing out on a great source of minerals and vitamins, including antioxidants and calcium. The whole cacao pod is a great superfruit, and its benefits are spread across all parts, from the shell to the fruit and the bean.
This ground-breaking approach laid the foundation for the creation of products like cacao gummies, dried cacao fruits, granola, and cacao water, which appeal thanks to their punch of functional perks. For instance, they could help retain more of the dietary fiber found in the shell and transform the fruit’s unrefined sugar into a healthy sweetener.
Farmers can boost revenues by upcycling crop waste without needing to add extra trees. Many use shells and fruits to develop nutritious and tasty goods that maximize the cacao fruit crop’s worth instead of letting it rot on farms.
Conclusion
The cocoa market is experiencing unprecedented transformation, from price shocks and supply shortages to shifting consumer preferences and sustainability demands. Higher prices indeed cause serious challenges for chocolatiers, farmers, and consumers alike, but they also open the door to well-needed changes in an industry that struggles with volatility and human rights concerns.
Innovation, ethical sourcing, and responsible investment are keys to successfully reshaping cocoa’s future.
