You may have noticed higher chocolate prices over Valentine’s Day and Easter, and that’s not a coincidence. The cost of cocoa has increased numerous times over the last two years, with the most recent price surpassing the record from 1977 when it was CAD 7,305.97 per ton.

‍

The current going rate for cocoa is CAD 7,606.14 per ton, and it’s expected to continue on its upward trend. From Hershey and Mondelez (makers of Cadbury) to private chocolatiers, everyone feels the effects of the rising cost of cocoa.

‍

You may ask if the highest price recorded was 47 years ago, what’s driving the price hike now?

‍

It’s a culmination of factors ranging from climate change to damaged and diseased crops. We’ll discuss the cause, consumer impact, other affected crops, and what food manufacturers are doing to adjust to these components.

‍

The Not-So-Sweet Affect On Food Manufacturing

We mentioned that climate change and damaged and diseased crops are to blame for the price hike of our beloved chocolate treats, but it’s more than just bad weather and an unlucky harvest.

‍

60% of cocoa production is in West Africa, and they’re experiencing the consequences of climate change. Climate change has made the region’s weather and seasons unpredictable.

‍

The West African region doesn’t necessarily have four defined seasons like most North American climates. Its seasons are categorized by the rainy and growing seasons. Unfortunately, climate change is drastically throwing off the delicate balance between them.

‍

West Africa has been hit with a barrage of heavy rains followed by long periods of torrid and arid weather conditions. This means that the two seasons farmers and manufacturers depend on the most for their crops and supplies are shortened.

‍

These conditions put a strain on agricultural production and water resources. Cocoa isn’t the only crop impacted by climate change. Other crops are expected to see a decline in output over the next few years:

‍

• Potatoes - Production predicted to decrease by 9% by 2025

• Coffee - Could lose up to 25% of its yield as soon as 2030

• Bananas & Plantains - Production has already decreased by 43% over the last 20 years due to rising temperatures, but that’s not all…

‍

Crop disease significantly contributes to the decline in the production of bananas and plantains. Cocoa is in the same boat. Many cocoa harvests have been infected with black pod disease.

‍

Crop diseases can spread faster and further in hotter temperatures, making this a prime contender as temperatures continue to rise. So, what will food manufacturers do to combat the challenges of climate change?

‍

Adjusting For Climate Change

Canadian food manufacturers are taking several steps to compensate for the shortcomings of climate change. One of the tools in their arsenal is shrinkflation, which is meant to be inconspicuous because consumers don’t have to pay more.

‍

However, it’s hardly unnoticeable. Manufacturers are reducing the portions of their cocoa-based products to keep them at the same price point.

‍

Real-life examples:

‍

• Cadbury eggs have gone from 39 grams to 34 grams. That’s a 12.9% reduction.
• Toblerone bars used to be 400 grams, but now they weigh in at 360 grams.
• Hershey’s Chipits have been reduced by 10%.
• M&Ms had the steepest size reduction, reducing their 1kg bag to 800 grams—a 20% reduction!

‍

Another cost-saving tactic is skimpflation. Manufacturers are reformulating their cocoa-based products with cheaper ingredients and using artificial flavors as cocoa alternatives. It’s not as noticeable as a smaller serving, but don’t think every consumer can be fooled.

‍

Being Cautious of Consumer Awareness

Canadian consumers can’t turn a blind eye to a smaller chocolate bar, and even though they may not notice the change in the ingredient list, they are becoming more aware of how and where their food is sourced.

‍

Almost 75% of consumers desire to understand where their food comes from and if it’s sustainably produced. We discussed what manufacturers were doing to combat low-yielding cocoa, but didn’t mention what the farmers were doing. Believe it or not, consumers are also very concerned with what farmers are doing.

‍

Sustainability is a critical trend in 2024

‍

Farmers are pressured to grow more cocoa to counteract the predicted loss. They’ve cleared out large swaths of rainforests and other ecosystems to make room for more cocoa cultivation. Large portions of West African rainforests have been completely wiped out to grow more cocoa.

‍

This is the type of information that consumers use as a determining factor when choosing what to buy. The manufacturer may not grow the cocoa, but consumers want to know where manufacturers are sourcing their ingredients and supplies.

‍

Food manufacturers will need to consider this as they seek alternative ways to address climate change and rising prices.

‍

‍

Like climate change, the price hike of cocoa isn’t expected to go away anytime soon. To solve the real problem, all levels of the supply chain will have to work toward sustainability.

‍

That’s from the agricultural and manufacturing levels all the way to the consumer. That’ll require new and innovative ways to accomplish things, and you never know; you might be at the forefront of evolution.

‍

R&D specialists, supply chain professionals, food scientists, and many more positions are needed to usher in a more sustainable food manufacturing industry.

‍

Create an account with QTalent to discover food manufacturing job opportunities in Canada. You won’t find jobs in any other field, but this one. The employers we work with value your skills and experience. That’s why they’re looking for someone with expertise like you.

‍

Sign up today!

‍