Cocoa prices are on the rise, experiencing a moderate increase last Friday, 3 January, as reported by Barchart, a stock and commodity tracking firm. This surge in prices aligns with widespread concern over declining cocoa production due to severe weather conditions impacting key cocoa farming regions, particularly in West Africa. Harmattan winds affecting countries like the Ivory Coast and Nigeria are exacerbating problems for cocoa trees, resulting in yellowing leaves and withering cocoa pods, alongside heavy rainfall that is contributing to increased bud mortality and a risk of disease, ultimately reducing bean quality.
In Ghana, the forecast for the 2024/25 cocoa harvest has been adjusted downwards by 5% due to ongoing weather-related challenges, with the country recording its lowest harvest in 23 years for the 2023/24 season. The International Cocoa Association (ICCO) projects a significant cocoa deficit of -478,000 metric tonnes for the 2023/24 season, marking the highest shortfall in over six decades. This projection comes in contrast to mixed reports elsewhere, with cocoa grindings increasing in North America by 12% and Asia by 2.6%, while Europe experienced a decline of 3.3%.
Amid persistent supply difficulties, weather adversities, and global stock shortages, cocoa prices are expected to remain elevated. Experts are cautioning that if current climate trends continue, cacao plants may face extinction by 2025, further fuelling an increasing demand for cocoa alternatives. "With rising grocery prices, companies are increasingly seeking alternative sources of cocoa to secure supplies amid challenges such as unpredictable weather, deforestation, and aging cacao trees," stated Sukanya Nag, a consultant and cocoa expert at FutureBridge.
There has been progress in the development of cocoa alternatives. In 2021, German manufacturer Planet A Foods introduced ChoViva, claimed to be the first cocoa-free chocolate alternative utilizing locally sourced crops that can thrive without a tropical climate. The innovative product made from oats and sunflower seeds has already launched in Germany, Austria, and Switzerland, with plans to expand into the UK and France after completing a successful $30 million funding round in December 2024, which will enable a significant scale-up in production from 2,000 to over 15,000 tonnes annually.
Furthermore, in April 2024, Cargill announced a commercial partnership with Voyage Foods, a company dedicated to creating nut-free and vegan alternatives to traditional cocoa-based products. Cargill aims to incorporate Voyage Foods’ cocoa-free ingredients into its recipe formulation processes for various categories, such as bakery and ice cream.
Additionally, Mondelez has invested in Celleste Bio, an Israeli biotech start-up focused on sustainable cocoa sourcing through advanced technology. The company's innovative method extracts cocoa cells from just 1-2 beans to yield approximately one tonne of cocoa butter. A Mondelez spokesperson highlighted the investment as part of a broader strategy to create a more stable and reliable supply chain for high-quality cocoa to meet growing global demand.
Late last year, Tate & Lyle also made strides in the plant-based ingredients space by investing in BioHarvest Sciences to develop new proprietary plant-based molecules aimed at enhancing the sweetness of products while reducing environmental impact. Abigail Storms, Senior Vice President for Tate & Lyle, expressed the company's focus on collaborating on technologies that ensure great taste and healthier options while being cost-effective and environmentally sustainable.
Sukanya Nag shed light on the emerging trend of lab-grown cocoa, stating that while cultured ingredients are gaining traction, it is doubtful they will entirely replace traditional cocoa. She explained, “While lab-grown cocoa has the potential to alleviate some of the supply pressures, it is unlikely to fully replace traditional cocoa. Instead, it may serve as a valuable supplement." Nag drew parallels with the diamond industry, where lab-grown diamonds have made significant inroads without displacing natural diamonds entirely.
As developments in alternative cocoa sourcing and production technologies continue to unfold, stakeholders in the food and beverage industry remain focused on balancing consumer demand with sustainability efforts amidst the ongoing challenges posed by climate change.
Source: Noah Wire Services