Achi news desk-
The Easter season is underway at The Chocolateria Toronto, where the walls are lined with bunny-shaped chocolate treats, colorful foil-wrapped chocolate eggs, and delicate “smash” eggs paired with a chocolate hammer small
If only the main ingredient wasn’t so expensive: cocoa prices have tripled in the last 12 months due to the spread of bean disease among cacao crops in West Africa, where more than 70 percent of the world’s cocoa supply gets produce it.
The resulting cocoa crisis is putting pressure on chocolate makers who, during the typically busy Easter holidays, are trying to maintain business – and sweet-toothed customers who are trying to rein in spending.
“We’ve seen constant price increases for our raw materials, which makes it harder for us to keep our prices down,” said Priscilla Tallo, manager at The Chocolateria.
“There are some people who have made it clear that they can no longer afford it,” he added. “Most of our customers have been understanding. They see that everything is going up. So they understand why our prices are increasing. ” One of the shop’s chocolate suppliers increased its prices by 11 per cent in the past year.
The global chocolate industry is said to be worth more than $100 billion US. But with cocoa prices hitting an all-time high of US$10,000 per metric ton on Tuesday, it’s likely that your Easter treat could look a little different this year, as major chocolatiers look for creative ways to make chocolate less, well , is chocolate.
Cocoa harvesting threatened by disease, weather
Cocoa production is down about 30 percent this year, largely due to atypical weather patterns, according to Sophia Carodenuto, an assistant professor at the University of Victoria who studies the cocoa supply chain.
“Too much rain, not enough rain, unpredictable weather patterns, but also disease,” Carodenuto said.
“Cacao is a very sensitive tropical tree,” and is prone to diseases such as black cyst disease and swollen shoot virus.
WATCH | Poor cacao harvests mean chocolate prices are rising:
Poor cocoa harvests – the key ingredient in chocolate – have driven up prices for the raw material, and it is appearing on shop shelves this Easter.
Three years of poor cacao harvests have affected production in Ghana and Ivory Coast. Processing plants, which transform cacao beans into the substance used to make chocolate, are increasingly unable to afford the raw material.
Farmers may be trying to plant more of these trees now, but the fruits of their labor may not be ready for some time. New trees will probably be harvested in three to five years, Carodenuto said.
Apart from some areas that produce cocoa on an industrial scale, the cocoa is usually produced in a smallholder system, which means that its main producers are small farmers.
“These smallholder farmers are very vulnerable,” Carodenuto said. “When you see these price hits, it’s highly unlikely that that trickles down to the farmer and arguably the actor in the supply chain would need this money the most.”
How will your Easter treats change?
“I think for those who haven’t bought candy since, say, Halloween, the price of chocolate on store shelves could be a bit of a surprise,” said Billy Roberts, senior food and beverage analyst at CoBank.
Cocoa futures – a type of trade agreement that allows an investor to buy or sell a commodity at a predetermined price at a future date – have grown “dramatically in recent months, all due to lower than expected harvests producers expected in West Africa,” said Roberts.
“Long story short, their production last year was significantly lower than expected, and this year doesn’t look much better.”
Chocolate makers will likely offer more snack-sized products, trimming the size of their candy bars to account for higher costs without having to charge more at the retail level, Roberts said.
Brands may also adjust their packaging – and could shift their focus to developing chocolate recipes with a lower cocoa content, such as using white or milk chocolate instead of dark.
Major chocolate makers stockpiled some cocoa last year to shelter from rising prices, and some companies are still doing well: Swiss chocolatier Lindt posted an increase in annual profits earlier this month.
But the outlook has taken a bitter turn elsewhere. Companies such as Hershey and Cadbury owner Mondelez reported that their sales volume, or the amount of product sold, fell in the fourth quarter after raising their prices to cope with the cocoa crisis.
“Given where cocoa prices are, we will use every tool in our toolbox, including pricing, as a way to manage the business,” Hershey CEO Michele Buck said in February.
Hershey’s has introduced a series of non-chocolate Easter treats, such as cookies and cream treats, lemon KitKat bars and gummy bear mixes in its variety bags, although a spokeswoman said these additions are not linked to rising cocoa prices.
Back at The Chocolateria in Toronto, Tallo says it’s not just cocoa that affects her bottom line. The store buys sugar, flour, butter, dairy products, nuts, cookies, marshmallows and dried fruit for its products – and some of those items are getting more expensive too.
The Chocolateria is trying to eat the costs where it can by rethinking packaging and quantities, and paying back on expensive ingredients, Tallo said.
But the challenge is with its star ingredient, first and foremost.
“It forces us to look at our product differently, try to see how we can do things differently while keeping the quality the same.”
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