• The chocolate industry is facing a major new challenge: the rising price and shortage of cocoa powder, an essential ingredient for the taste and color of chocolate.
After prices for cocoa butter, responsible for chocolate's creamy texture, reached record levels, producers are now also having to deal with a significant increase in the cost of cocoa powder, which is approaching an all-time high, according to Bloomberg, quoted by Agerpres.
Cocoa powder, used in many food products, is increasingly hard to come by due to tight supplies. In the U.S., prices have risen about 16 percent in the past year to nearly $9.000 a ton, according to consulting firm KnowledgeCharts. In Europe, the situation is even worse, with prices exceeding $10.000 a ton, close to a record high in May.
This global cocoa market crisis has hit the profits of major chocolate manufacturers hard, and Mars Inc. and Hershey Co. have adopted measures such as reducing bar sizes, incorporating alternative ingredients such as nuts, or promoting products without chocolate content.
Artisanal producers are also affected. Raaka Chocolate Inc., a New York company, pays three times as much for cocoa powder. "All quantities entering the country have already been contracted. It is extremely difficult to procure cocoa powder now", said Nate Hodge, co-founder of Raaka, which sources from Peru.
Alternatives to cocoa powder
The problem has been exacerbated as the industry has tried to replace more expensive cocoa butter with vegetable oil-based alternatives. However, these are less flavorful, which has led to a greater demand for cocoa powder to compensate for the taste and color. In this context, substitutes for cocoa powder have also emerged. The German company Doehler Group SE launched an alternative based on carob powder, and Ardent Mills LLC has developed a wheat powder, which could reach the market in 2026. However, these substitutes cannot fully satisfy demand, and cocoa powder remains indispensable.
Cocoa shipments continue to decline, and processing of the ingredient has seen a significant decline. In Europe, the world's largest market, processing fell by 3,7% in the first quarter of the year, reaching its lowest level since 2017. A similar trend was observed in North America. "As a result of this situation, we expect cocoa powder prices to remain at the level they are at", said Kojo Amoo-Gottfried, director of production for North America at Cargill Inc., one of the world's largest cocoa processors.
This crisis is not only affecting producers, but also consumers, who are paying more for chocolate or receiving smaller portions. In the absence of a rapid recovery in supplies, the chocolate industry will continue to look for solutions to deal with this shortage.
Article written by Gabriela Dan, Editor-in-Chief Arta Albă
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