Cocoa Shortage

Demand is Pushing up the Price of Chocolate

Worldwide shortage of cocoa could threaten the future of chocolate bars

When we hear cocoa beans we automatically think of chocolate but the cocoa bean has a variety of other common uses. The most visible use is in chocolates and drinks; however there is also cocoa butter which is used for pharmaceuticals, not to mention mulch, soap and many other uses for cocoa bean shells and their husk.

The cacao tree is a native of the Amazon basin, West Africa and other tropical areas, with Ivory Coast the source of almost half of the world’s cocoa beans. Many farmers do not have enough money to invest in new trees and pesticides causing a lot of trees to either be diseased or become very old. Newly planted cacao trees need 4 to 5 years to produce beans and can take up to 10 years to reach their peak.

Growing Demand

Due to growing demand in emerging markets and climactic conditions in major cocoa producing countries, the price of cocoa beans has rocketed by over 30% in the last 12 months to over $3,000 per ton, according to the International Cocoa Organisation.

Impact on Chocolate

The increase in the cost of cocoa butter has caused the average cost of a bar of milk chocolate to rise by 25% in the last 12 months. Manufacturers are therefore faced with the dilemma of whether to absorb the cost increases, or increase the price for their customers. They may even consider changing their products to reduce cocoa content in exchange for more nuts, caramel or other ingredients. Nestle have stated that price increase for their buyers is their last resort. Some have already started to take action by reducing the size of their chocolate bars (in effect a price increase), such as Cadburys, who are reshaping their chocolate by rounding off the corners which is more attractive but reduces quantity.

With the price of cocoa beans expected to continue to increase as demand increases by 30% by 2020, it is a problem which will not go away.

Yield

As chocolate becomes ever more precious, recovering as much as possible during the manufacturing process becomes ever more important.

HPS are helping several chocolate manufacturers, including Mondelez, Blommer Chocolate, Ghirardelli, Masterfoods and Nestle become more efficient by implementing Product Recovery Solutions.

Product recovery systems, often known as pigging systems, reduce wastage, thereby increasing product yield and profits for our clients. Product residue which remains in the pipe would normally be flushed to a drain, waste treatment or collection area. HPS automated pigging systems send a projectile through your pipework, forcing the remaining product to the destination filler or tank. This means you recover additional product to sell while cleaning the pipeline at the same time. Further benefits of HPS Product Recovery Solutions include reduced changeover times and reduced waste processing costs, again benefiting the bottom line while also being better for the environment.