Cocoa prices are still rising, seeing a moderate lift last Friday (3 Jan) according to stock and commodity tracking firm Barchart.
Key areas for cocoa farming like West Africa have been hammered by challenging weather conditions. Harmattan winds in the Ivory Coast and Nigeria are said to be causing tree stress, with yellowing leaves and withering cocoa pods. Heavy rains have increased bud mortality, disease risk and reduced bean quality.
Ghana revised its 2024/25 cocoa harvest forecast down by 5% due to weather concerns and recorded a 23-year low harvest in 2023/24.
The International Cocoa Association (ICCO) forecasts a 2023/24 cocoa deficit of -478,000 MT, the largest in over 60 years, and lowered production estimates by 13.1% year-over-year.
There have been mixed signals across different associations, with Q3 grindings rising in North America (+12%) and Asia (+2.6%), but falling in Europe (-3.3%).
Persistent supply issues, weather challenges, and global stock deficits continue to support higher cocoa prices, despite rising exports from the Ivory Coast and Nigeria.
Furthermore, with experts warning that cacao plants could cease to exist by 2025 due to warmer temperatures and dryer weather conditions, the demand for cocoa alternatives has been on the up.
“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,” explained Sukanya Nag, consultant and cocoa expert at FutureBridge.
Several companies have already started making strides in cocoa alternatives.
In 2021, Germany manufacturer Planet A Foods created what it claimed was the first cocoa-free chocolate alternative made with locally sourced crops that ‘don’t need a tropical climate’.
The chocolate, named ChoViva, is created using precision fermentation and made with oats and/or sunflower seeds.
Planet A Foods has launched products in Germany, Austria and Switzerland so far and is set to debut in the UK and France this year, following a successful $30m funding round in December 2024. The investment will enable the company to scale production from 2,000 to more than 15,000 tonnes annually.
We have also seen more recent moves made by ingredients and confectionery giants alike, as they explore the alternative cocoa space.
In April 2024, ingredients company Cargill announced a new commercial partnership with Voyage Foods – a business specialising in nut-free and vegan alternatives to cocoa-based items.
At the time, Cargill said that the Voyage Foods’ cocoa-free ingredients range will be used in the recipe formulation process for categories such as bakery, ice cream and confectionery, with the firm keen to expand its existing chocolate portfolio through the addition of more sustainable alternatives.
And just last month, confectionery giant Mondelez injected funding into cocoa-tech start-up Celleste Bio through its corporate venture capital hub SnackFutures Ventures.
The Israeli tech company uses biotech, agtech and AI to produce ‘100% natural cocoa’, extracting the cocoa cells from 1-2 beans to create approximately 1 ton of cocoa butter.
A Mondelez spokesperson told Food Manufacture its investment into Celleste is part of ongoing efforts to make cocoa sourcing more sustainable.
“To meet growing global demand for chocolate, we’re exploring a wide range of tools and opportunities to help create a more stable, reliable supply of high-quality cocoa,” the company spokesperson said.
“We met Celleste a few years ago and saw great promise in their technology and the role it could potentially play in the cocoa supply chain of the future. Since our first investment in 2022, the Celleste team has demonstrated scientific capability and marketplace fit. Now it’s time to focus on scaling production. While it’s still in the early stages, we’re excited about the potential opportunity to use this technology in some of our products.”
The end of last year also saw Tate & Lyle invest into BioHarvest Sciences to develop the next-generation of proprietary plant-based molecules to create sweeteners.
“Food and drink companies worldwide are looking to strengthen supply chain resilience and reduce their carbon footprint in the face of the climate crisis. Our customers and their consumers also want ingredients that deliver great taste and mouthfeel while being cost effective, healthier, and, preferably, nature derived,” Abigail Storms, SVP for Tate & Lyle global fibre and sweetener platforms, explained.
“As an innovation partner to the world’s leading food and drink brands, we are actively looking for technologies and collaborations that deliver these benefits, and our partnership with BioHarvest is a prime example of this. Through this partnership we will pioneer the development of the next-generation of proprietary plant-based molecules to deliver all the benefits of specific plant-based ingredients, initially in our sweetener portfolio, without having to grow the plant.
“The resulting ingredient solutions will be more affordable to the food and beverage industry while using a fraction of the land and water required in traditional extraction and land-based growing practices, important at a time when the food industry is trying to reshape itself to feed a growing population while working towards net zero emissions.”
Speaking with FutureBridge’s Nag further on the topic of lab-grown cocoa, she said such cultured ingredients are “gaining traction” but added she’s doubtful it’ll replace traditional cocoa entirely.
“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, enabling manufacturers to reduce their reliance on natural cocoa while still delivering the flavours consumers expect,” Nag explained.
“To draw a parallel, we can look at the diamond industry, where lab-grown diamonds now represent nearly 10% of sales without completely displacing natural diamonds. This historical context suggests that both traditional and lab-grown products can coexist in the market, providing consumers with diverse options while addressing sustainability challenges. As we navigate this evolving landscape, it is crucial to recognise the potential for innovation in meeting consumer demand responsibly.
“Given these advantages, it is essential to develop cell culture methods that are highly competitive and capable of overcoming regulatory challenges for market entry. This will involve accelerating product development and enhancing scalability.”
