We’re In The Throes Of A Chocolate Crisis, And Shortages May Not Be Resolved Anytime Soon

ACROSS AMERICA — We don’t mean to sour your day. But savor that bite of chocolate until it melts completely away. Chocolate, once a delicacy for the elite, could become so again.

Farmers in West Africa, along the Ivory Coast and in Ghana, where roughly two-thirds of the world’s cocoa supply originates, face a new threat, on top of deep systemic issues and climate change. Virus-spreading mealybugs are attacking trees and chomping at the cacao seeds, or beans, needed to make the world’s most popular sweet treat.

For chocolatiers and confectionery businesses, it’s an existential threat to their industry, according to FoodNavigator, a food and beverage industry news site.

Already higher retail chocolate prices are expected to rise by as much as 8 percent more over the next few months as cocoa suppliers pass their costs on to their customers, according to FoodNavigator. Suppliers who bought beans in advance may be able to hold off on price hikes, but experts say they’ll eventually have to raise them or exit the industry.

Some major African cocoa plants have stopped or reduced processing because they can’t afford to buy beans, various news outlets have reported.

And that means chocolatiers in the United States and other parts of the world may not only have trouble finding cocoa, but paying for it.

“When you need roughly 200,000 pounds a month, it changes that whole scenario as far as even [being] able to get the beans,” Bill Sarris, the CEO of specialty candy maker Sarris Candies in Canonsburg, Pennsylvania, told news station WTAE.

Sarris has already raised candy prices by 25 percent.

“You’re going to raise prices,” Sarris told the news station. “You have to, to maintain your base, and you start looking for efficiencies.”

Pelham, Alabama, chocolatier Susan Notter has been able to hold off on price increases because she doesn’t get the cocoa for her Elizabeth Moore Chocolates from the Ivory Coast.

But Notter knows the sticker shock may be coming for her customers as “people start to buy up everything, which creates more shortages, which pushes the prices up as well,” she told news station WBRC.

Even though she gets her cocoa from Switzerland, she’s already seeing price increases of 5 percent to 15 percent as other cocoa producing regions face more demand.

“Another supplier, we’ve had some stuff back-ordered,” Notter told the news station. “Then I got an email that they could not fulfill the back orders now. So it’s gonna change. Just keep an eye on the pricing.”

Long-Range Outlook Isn’t Good

Cocoa prices have been increasing for the past year, setting new records. The massive shortage and soaring cost of long-term contracts for beans are strangling the cocoa industry. Costs are more than $3,000 more per ton than a year ago.

In New York, cocoa prices reached an all-time high of $12,000 a ton in April. News of rain in West Africa brought prices down to $9,000 a ton.

“But,” Financial Times commodities correspondent Susannah Savage wrote Tuesday from London, “traders say the rollercoaster moves are putting [the] most strain on longer-term futures contracts, with traders increasingly fearing that both Ghana and Ivory Coast will not be able to deliver the beans they have promised.”

The mealybugs aren’t the only problem.

Deep-rooted structural issues are also at play, according to J.P. Morgan Research. The crop is largely cultivated by subsistence farmers who struggle to make a living and have no money left over to plant new trees and make additional reinvestments in their land, which translates to lower yields over time.

Nicko Debenham, the former head of sustainability at the chocolate giant Barry Callebaut, told The Atlantic’s Yasmin Tayag that “climate change is definitely a challenge” because it makes rainfall, which cacao trees need to grow, less predictable. Also, he said, rising temperatures and more frequent droughts could make some cocoa-growing regions unusable.

Illegal gold mining on farmland poses an additional threat.

‘Every Trick In The Book’

That imperfect recipe for disaster means chocolate as we know it could change.

For one thing, candy bars could shrink in size or start tasting differently as manufacturers add more fruit and nuts to decrease the amount of cocoa content. “They’ll try and use every trick in the book to keep the consumption levels up,” Debenham told The Atlantic.

“Shrinkflation,” a response to inflation, has already reduced the size of popular candies people pick up at the grocery store or gas station, and even smaller packages may be coming.

For example, The Hershey Co. has already shaved a couple of ounces off its 18-ounce bag of dark chocolate Kisses.

Hershey CEO and President Michele Buck told analysts in a February earnings call that the company expects to raise prices to offset the record-high cocoa prices.

“Given where cocoa prices are, we will be using every tool in our toolbox, including pricing, as a way to manage the business,” Buck said.

Candy bars and some other mass-produced commercial chocolates don’t contain much cocoa to begin with, and some confectioners are already making adjustments with chocolate-like ingredients such as cocoa butter equivalents, cocoa extenders and artificial cocoa flavors.

Under Food and Drug Administration standards, 10 percent of a product’s weight must be cocoa to be labeled as chocolate.

‘Massive Demand Destruction’

Can Americans’, and the world’s, appetite for chocolate be ‘unwetted’? That may be what it takes to get the situation under control, some experts believe.

“We need massive demand destruction to catch up with the supply destruction,” Tropical Research Services’ Steve Wateridge, a world expert on cocoa, told Reuters in March.

Enter fake chocolate.

The startups producing it say it looks and tastes like chocolate but doesn’t depend on cultivating or harvesting cocoa beans. The business news site Crunchbase said investors are increasingly interested in alternatives to chocolate.

At least four businesses developing lab-grown “cocoa-free” treats have been funded in the last year — to the tune of about $110 million, most of the money raised during the last few quarters as the cocoa crisis grew.

The most heavily funded of the four, Oakland, California-based Voyage Foods, has secured $63 million in funding in its three years. Its cocoa-free chocolates are part of a product line that includes chips and wafers whose top three ingredients are vegetable oil, sugar and grape seeds.

Agricultural giant Cargill recently announced a partnership with Vogage Foods to increase its production of “more sustainable alternatives to cocoa-based products.”

Is This Really So Terrible?

Not everyone sees that as the worst thing that could happen.

“Overall, this is beneficial for everyone,” according to a piece published in The Conversation in March. “The demand for cocoa has resulted in mass deforestation and significant carbon emissions, issues that are likely to worsen due to climate change.

“Moreover, the push for cultivation has led to various forms of [labor] abuses,” the piece continued. “Exploring cocoa alternatives is certainly part of the solution.”

There’s more. The chocolate shortage is a double blow for people who like to savor it with a cup of joe.

Coffee could also become a casualty of rising temperatures associated with climate change, according to the Fairtrade Foundation’s Endangered Aisle 2023 report. Along with cocoa and coffee farmers, tea and banana growers report similar problems that could make these household staples unsustainable by 2050.

A recent study of the coffee-producing region of Kenya found that more than 90 percent of coffee farmers in the area are experiencing the effects of climate change, The CEO Magazine reported.