Kerry navigates soaring cocoa costs with solutions to reduce quantity mass while delivering authentic taste
29 May 2024 --- Over the past year, cocoa bean prices have skyrocketed by 300% with no signs of stabilizing, creating significant challenges for companies in the F&B industry. Kerry is ramping up action to support businesses that must mitigate rising costs and navigate the current economic landscape while maintaining product integrity, consumer trust, and satisfaction.
Climate-induced drought, broader biodiversity issues and disease are ravaging cocoa crop yields in key growing regions in West Africa — and this is impacting market dynamics and pushing up prices globally.
A return to the pricing levels of 2023 is not anticipated for at least another three to four years due to enduring stock shortages, which means a wide range of products, from chocolates to beverages, will be affected and manufacturers and consumers will continue to be impacted by price spikes.
Road to recovery
Kerry agrees that the compounding variables affecting the cocoa industry indicate a long-term and complex recovery. Furthermore, these insights and projections underscore the need for manufacturers to implement new strategies today to ensure longevity and affordability.
Francis Decampos Ferre, global taste portfolio director, Cocoa Extracts & Chocolate Flavor, explains how companies can navigate the current economic landscape while maintaining product integrity, consumer trust, and satisfaction.
“The world is facing a significant challenge in cocoa production, with predictions by the International Cocoa Organisation (ICCO) indicating a substantial stock shortfall of 11% in 2024. This deficit is being driven by shortfalls in key producing countries like Côte d’Ivoire and Ghana, which together produce approximately 54% of the world’s cocoa.,” he tells Food Ingredients First.
Climate-induced drought, broader biodiversity issues and disease are ravaging cocoa crop yields in key growing regions in West Africa.“These supply constraints present challenges for manufacturers, affecting the availability of cocoa raw materials and the ability to maintain consistent quality. For example, Ghana’s beans are prized for their unique aromatic profile, a critical component that cannot easily be replaced by beans from other countries. Switching to beans from different countries would necessitate rebalancing product formulations to ensure consistent taste for consumers.”
“Due to these stock shortages and supply challenges, cocoa prices have increased dramatically over the past year, placing immense pressure on manufacturers and suppliers. These rising costs are bound to impact the overall recipe costs, forcing manufacturers to seek cost-effective cocoa solutions to avoid price increases for consumers.”
Alleviating current external pressures
Decampos Ferre highlights how Kerry’s solutions help alleviate the current external pressures facing the industry by enabling manufacturers to reduce the quantity of cocoa mass in their products while still delivering indulgent, authentic cocoa and chocolate taste experiences.
“This helps alleviate price and supply challenges without compromising on the authentic cocoa experience consumers seek,” he says.
“Leveraging the expertise of Kerry’s food scientists, flavorists, sensory and application teams, we can help navigate the complexities of product recipe adjustments. This collaborative approach ensures manufacturers achieve desired outcomes while alleviating cost pressures, all without compromising on the authentic cocoa taste that consumers desire.”
“By providing invaluable insights and closely collaborating with manufacturers, we uphold and enhance the sensory qualities of products despite supply chain restraints, such as those related to cocoa sourcing. Ultimately, our commitment is to help companies survive and thrive in challenging economic environments, positioning them for sustained success and growth by aiding in the preservation of product integrity and, in turn, consumer trust.”
According to the ICCO February 2024 report, the world faces an 11% shortfall in cocoa supplies by 2024.The chocolate market is projected to be worth US$202.33 billion by 2032; therefore, finding cost-effective alternatives is critical for sustaining growth and profitability.
“Looking ahead, we remain dedicated to exploring the many ways in which we can support manufacturers in tackling cocoa challenges. With Kerry’s scientific expertise in cocoa, we are uniquely positioned to continue innovating in this space to provide solutions that enable manufacturers to reduce their exposure to the cocoa commodity market while preserving the authentic cocoa taste consumers desire.”
Positive response
The cocoa crisis remains one of the most critical issues in F&B currently. According to the ICCO February 2024 report, the world faces an 11% shortfall in cocoa supplies by 2024.
This has led to a round of innovations and initiatives from industry players who, like Kerry, are sharpening their focus on mitigating measures and plotting a course through difficult price and supply pressures.
Companies are developing novel ways to mitigate the current challenges, with several firms innovating cocoa alternatives, bio-based technologies and boosting regenerative agriculture practices.
Cocoa and chocolate giant Barry Callebaut recently announced plans to create a fully scalable, sustainable and profitable cocoa farming model for the industry called The Future Farming Initiative. FFI will develop technology and R&D capabilities, which could be a catalyst for others to invest in farming and create partnerships with farmers to modernize sustainable cocoa farming at scale.
Cargill’s cocoa collaboration also got off the ground earlier this year with Voyage Foods partnership to scale alternatives to cocoa-based products to meet consumers’ indulgence needs. The collaboration will also provide food manufacturers with nut spreads produced with no nut or dairy allergens used in the recipe formulation.
By Gaynor Selby
