The cocoa market crisis: how is it affecting production, prices and consumption?

The global cocoa market is going through a deep crisis affecting both production and prices. Factors such as climate change, crop diseases and competition for land use are causing a significant fall in production, especially in West Africa. These circumstances have led to record prices and a shortage affecting several food industries. Ethical and sustainability issues are compounding the situation, influencing consumers' purchasing decisions. Against this backdrop, innovations and alternatives are being explored to ease the cocoa crisis.

This situation can be summarised in the following points:

1. Rising prices and shortages:

Cocoa prices hit record highs in April 2024, reaching €11.46/kg, because of falling production in West Africa driven by extreme weather, crop diseases, ageing trees and competition for land use. Global cocoa production has fallen by almost 11% this year.

2. Impact on the food industry:

The cocoa shortage will affect multiple product categories: 42% of global dessert and ice cream launches, 32% of bakery products and 25% of breakfast cereals contained cocoa ingredients over the past five years.

3. Consumer reactions:

Faced with higher prices, consumers are cutting their chocolate consumption: for example, 54% of Canadians and 52% of French consumers have reduced the amount they buy because of financial concerns.

4. Ethical and sustainability issues:

Cocoa production is affected by ethical problems such as child labour and deforestation. For example, 30% of chocolate buyers in Germany have stopped buying brands that treat their workers unethically, and 47% feel let down if products do not provide information on their environmental impact.

Deforestation and child labour remain persistent problems in Côte d'Ivoire and Ghana, which together account for around 65% of the world's cocoa supply.

5. Innovations and alternatives:

Pressure on the cocoa industry is driving the search for alternatives such as lab-grown cocoa and other synthetic ingredients, which aim to replicate cocoa's flavour and texture while addressing sustainability and ethical concerns.

6. Regulations and substitutes:

Regulations also influence decisions about cocoa butter alternatives. The European Union has introduced rules banning ingredients linked to deforestation, affecting the use of palm oil and other ingredients in chocolate confectionery.

Impact on product categories

The cocoa crisis affects several product categories: desserts, ice cream, bakery products and breakfast cereals. Brands are raising prices, shrinking product sizes or reducing the amount of chocolate. This is driving innovation in lab-derived ingredients and cocoa alternatives, such as cell-cultured cocoa. Faced with higher prices, consumers are cutting their chocolate consumption or buying smaller products.

Long-term outlook for the cocoa market

The long-term outlook for the cocoa market is not optimistic. Production has fallen significantly because of factors such as climate change, crop diseases, ageing trees and competition for land use. Price volatility is expected to continue because of these persistent problems. Climate change will continue to threaten global cocoa production, as the trees are vulnerable to extreme weather events.

Consumer views on smaller chocolate product sizes

Consumers are accepting smaller chocolate product sizes for several reasons:

• To control calorie intake and maintain a healthy diet.
• Financial concerns and rising cocoa and chocolate prices.
• A preference for smaller products rather than price increases.

In conclusion, the cocoa crisis poses major challenges for the global food industry, with significant economic and ethical implications. Falling production and rising prices are transforming the market, forcing brands to innovate and look for sustainable alternatives. Consumers, for their part, are adapting their buying habits in response to these changes. Despite efforts to mitigate the problems, the long-term outlook for the cocoa market remains uncertain. Global collaboration will be needed to tackle the many factors contributing to this persistent crisis.

How is the cocoa crisis affecting Catalan fine food?

The fine food sector is the second largest agri-food export sector in both value and volume, but also the largest importer, highlighting the scale of Catalonia's agri-food processing industry and its marketing and export capacity and potential. 

Catalonia has a strong tradition in the world of chocolate, one of the most prized and sought-after products worldwide, which also has a long history in Catalan cuisine with highly regarded professionals.

More than 150 Catalan companies import between 180,000 and 200,000 tonnes of cocoa and cocoa products a year to supply Catalonia's chocolate manufacturing industry. This figure has remained very stable over the past 10 years, although the price per kg has risen from €2.50/kg to €3.57/kg in 2023. And with the latest available 2024 data (to April), the price has shot up to €3.89, an increase of more than 7.6% in four months. Even so, the July price has fallen and, together with the fact that most supply contracts are medium-term, the final import price has largely been contained.

Côte d'Ivoire is Catalonia's main supplier , with 28.5% of total imports, followed by Germany 13.5%, France 12.7%, the Netherlands 8.1%, Belgium 6.3% and Ghana 5.5%. These 6 markets account for almost 75% of the total. The remaining 25% is made up of 92 markets.

This is a sector that, alongside tradition, craftsmanship and exclusivity, is also undergoing its own transformation, driven by new consumption trends and, inevitably, the arrival of new technologies, with the aim of responding to the needs and concerns of buyers both at home and across the 126 markets to which these products are exported, worth €420.5 million, with France the main destination at 14.6% of the total. It is followed by Italy (9.9%), Portugal (8.9%), the United States (6.9%), Germany (5.4%) and Belgium (4.3%).

The figures provide a snapshot of the chocolate sector, which accounted for 2.75% by value of all Catalan food and drink exports in 2023, making it Spain's largest exporter with 42.58% of the total. Prodeca regularly promotes Catalan producers' presence at sector fairs such as ISM, the international benchmark for confectionery, where Catalonia has its own stand that serves as a highly valuable showcase.

Source: Prodeca's Knowledge and Strategy Area, based on Mintel and data from the Spanish Tax Agency (AEAT) and Euromonitor International Ltd.

If you would like to know about other activities promoting confectionery and fine food products internationally, you can write to Maria Pla at mariapla@gencat.cat