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Dwindling crops, dry winds, consumers devouring chocolate industry

The cocoa and chocolate industries have seen highs and lows over the last year, from decreased supply and increased demand to health initiatives, sustainability efforts, and product innovations. Here's a glance at the state of this sweet treat and its primary ingredient around the world.

The dwindling cocoa supply

Due to weather conditions, tree diseases, farming methods, and a significant increase in global consumption, the world's cocoa supply has taken a beating. In late 2013, the International Cocoa Organization (ICCO) predicted that in the year that ended October 1, 2014, cocoa use may overpower output by about 70,000 metric tons.

Data from a later survey reported in January 2015 confirmed that "world cocoa bean stocks fell to 1.508 million metric tons, as at the end of the 2013/2014 cocoa year (30 September 2014) – a figure 19,000 metric tons lower than the previous year. This means that demand may have slightly outpaced net production in the 2013/2014 season," according to the ICCO.

According to that 2013 ICCO prediction, that deficit is likely to continue until 2018, which could end up being the longest-running deficit on record since such data recording began in 1960. Data from Mars Inc. and Barry Callebaut shows that by 2020, that deficit could increase to 1 million metric tons and could reach 2 million metric tons by 2030.

Ghana’s cocoa crop output may see up to a 9% decrease due to the dry season's hot, dusty winds, and Cote d'Ivoire saw its own dry spells hurt cocoa crops. Diseases have also wreaked havoc on the cocoa supply, as frosty pod, a debilitating fungal disease, has decimated between 30% and 40% of global cocoa production, The Washington Post reported.

Not surprisingly, cocoa and chocolate prices have been affected. According to the ICCO, the current price of cocoa, about $3,000 per ton, has been steadily increasing the past five years. Hershey, for example, raised its prices by 8% to compensate for cocoa supply issues.

However, while cocoa prices have been rising, the ICCO says that claims about extreme price increases are overstated. In the last 10 years, the ICCO says there have been five years of surplus and five years of deficit. In a November 2014 release, the organization said, "As far as the ICCO's current projections are concerned, there is no immediate cause for concern about the supply of cocoa for the next five years. While our projections show that supply deficits are likely to occur during the next several years, stocks of cocoa beans should cushion this development before production growth accelerates. There is no threat to the supply of cocoa for chocolate manufacture.

Chocolate goes au naturel

Chocolate companies are responding to consumers’ desires for healthier foods by using more natural ingredients in their products. In February, Nestle pledged to discontinue the use of artificial flavors and colors in more than 75 of its recipes by the end of the year, and a few days later, Hershey echoed with its own pledge to return to simpler, more natural ingredients for some of its staple recipes.

In addition to natural ingredients, the chocolate and confectionery industries are moving toward sourcing sustainable cocoa for their products. Hershey in particular is standing by its promise to exclusively use 100% certified, sustainable cocoa by 2020, as the company is actually ahead of schedule for its efforts.

Another hip chocolate industry trend, the bean-to-bar movement, is an additional way to naturalize the production of chocolate. A manufacturer sources cocoa beans directly from a farmer and produces a chocolate bar using that single source of beans alone. In other words, the chocolate is single-origin instead of blended. Cocoa bean producers are rewarded with higher payouts for higher quality beans, and consumers benefit from a growing range of flavors as chocolatiers experiment with extraction techniques for the beans they purchase.

The bean-to-bar initiative has also helped expand the craft chocolate movement. Like craft beer and craft coffee before it, more independent producers, and now even consumers, are procuring cocoa beans to create small batches of inventive chocolates.

Milking the chocolate craze

Sometimes considered a watering down of chocolate's actual flavor, adding more milk to cocoa—thus producing milk chocolate instead of dark chocolate—is a new trend again under the craft chocolate banner. In reality, milk chocolate has never really gone away. Take a look at the candy section at the grocery store, and it becomes clear that milk chocolate is still alive and well, in the U.S. at least. 

Even on the other side of the pond, Cadbury’s Dairy Milk was the leading chocolate bar sold in the UK in the year leading up to August 2014. And if the uproar over Cadbury replacing Dairy Milk with a “standard cocoa mix chocolate” in its Crème Eggs was any indication, milk chocolate is still all the rage among many chocolate lovers. This shows that while dark chocolate is a widespread favorite, particularly among chocolate purists, plenty of people still love all different forms of chocolate, from dark and semisweet to milk and white.

While currently mass-produced milk chocolate typically has a 10% to 30% cocoa content, the new and improved milk chocolate movement prefers a stronger cocoa percentage to reduce sweetness. Chocolatiers do still use cocoa butter to keep the product creamy. Some manufacturers are calling their product “dark milk” bars.

Chocolate and cocoa demand is on the rise, and with the industries facing current cocoa supply issues, chocolate may be headed for extinction if the problems can't be resolved — a situation that leaves consumers, food companies, and farmers alike feeling uneasy, to say the least. 

Filed Under: Manufacturing Corporate
Top image credit: SKopp