“That costs HOW MUCH now?!” The price shock is now a wearily familiar one, whether it’s during the nightly call to suppliers, or after checking out your basket at the supermarket till. But why?! Well, it’s complicated. These rising costs are increasingly challenging to disentangle: big business, climate change, farming practices, supply chain disruptions and economic instability are all reflected in the growing complexity of global food chains and the prices of our shopping; and nowhere is this better exemplified than in the soaring chocolate prices that we are currently experiencing – some chefs we have spoken to report that they are seeing a fivefold increase in their couverture prices.

For all of us in hospitality the rising costs of any ingredients are particularly concerning. Margins, already razor-thin, are being squeezed even further, and customers who are already grappling with the cost of living crisis are less willing to absorb these price hikes. This puts businesses in an impossible position, and one which it is hard to resolve.

Phillipp Kauffmann of Original Beans argues that, rather than panic and hand-wringing, this difficult moment presents an opportunity for reflection – and that the impossibility of the position is part of the resolution. He explains the decades-long global journey that has resulted in the situation that we now find ourselves in – showing that this is not just the story of chocolate, but of so many of our ingredients.  These price shifts remind us of the true cost of food and the urgent need for more sustainable, equitable practices across the supply chain. By understanding the factors driving these changes we equip ourselves to navigate the challenges ahead, while embracing solutions which truly benefit our food systems, our planet and ourselves.

By Philipp Kauffmann, Founder and Chairman of Original Beans

Pastry chefs will know this well: cocoa world market prices have quintupled during the past year, and are rising weekly. For over 50 years they have hovered around $2.50 per KG. Now they exceed the $10 mark. With a delay due to buffer in stocks, chocolate prices are on the rise, too. As a seasoned craft chocolate entrepreneur who has built the world’s most sustainable chocolate brand and now finds himself dragged into market turbulence brought about by unsustainable competitors, I write this article to explain what’s happening, why, and how this might be a boon, not a bane, for us all. Even for those very few of us who are not into chocolate.

Chocolate is a brilliant food – we need to treat it that way

Here is the bottom line: Chocolate is a brilliant food derived from thousand years old agro-culinary traditions. It can heal our bodies and our world. One hundred years ago, it got turned into an ultra cheap, ultra processed candy which Big Candy, the large corporations that sell it, calls chocolate, but – looking at the main ingredient – might more honestly be labelled “sugar”.

That current prices for cocoa are rising will kick-off two trends: 1) Ever more sugar and supplements will be processed into candies called chocolate. 2) Real, great chocolate will get relatively cheaper as prices for cheap cocoa level with those for excellent “cacao”. So, the choice between unsustainable candy and sustainable craft chocolate will become more obvious. The chocolate industry itself gets a unique chance to correct cocoa prices upwards towards a long-term price that includes fair trade, land regeneration, and climate adaptation to make chocolate future proof. In doing so, chocolate could lead the way among food sectors into a better future.

Commodity chocolate is bad for the climate

Most commodity cocoa, including all the cheap couvertures for food professionals, is grown in monocrop fields with so little diversity above and below the ground that no healthy nutrient flow circulates. The impoverished cacao trees are exposed to full sunlight which stresses them out. And while this may boost their productivity over several years, it starts killing them after just their first decade (whereas wild cacao trees are known to fully produce for more than a century). Since Big Candy cocoa farmers earn no more than a third of the minimum wage that families need to survive, they rank among the poorest people in the world. Often, they hire out their own children for work on other farms, just to make ends meet.

Given their extreme underpay, they have little interest in going the extra mile on food quality or hygiene, which makes rotten cocoa beans a main liability in cocoa warehouses the world over. In the fields – with tropical heat and humidity all around – these cocoa farmers prefer to avoid the painstaking work of pruning trees, composting soils, grafting younger shoots, and in other words regenerating their farms. When production needs to increase, cutting and burning a new field out of the forest may be the easiest option. In this way, West Africa has lost many of its important rainforests to cocoa (which, ironically, is a rainforest tree). Industrial dark chocolate is nearly the next worst thing to industrial beef when it comes to CO2 emissions.

Rising chocolate prices are the result of unsustainability

While the chocolate industry was fully aware of this depressing and downward spiralling situation, many customers may not have been. Public media reports on child exploitation in chocolate and the pleas of a fair trade movement may not have reached us. We may never have heard of the true price calculations that bore out a realistic price of chocolate four times higher than going market rates. Mondelez, one of the world’s leading Big Candy companies, never promoted their 2020 report stating that we chocolate consumers would have to transfer an additional $10 billion per year on top of our purchase prices to allow for the majority of the 5 million cocoa farmers to earn a minimum income of around $2 per day. But only the bravest of companies stuck a flag in the ground to guarantee their growers ‘living incomes’, the expert term for the bare minimum to keep their families and their farms going long-term.

Television productions, expert conferences, government reports: none of them got the message across as long as prices didn’t reflect the message. And they didn’t. The system was set up to run on cheap imports and the true costs, in the form of harrowing exploitation, were pushed to the weakest links: farming families in remote tropical regions and nature.

As Bob Marley put it: “Every day the bucket a-go a well, one day the bottom a-go drop out.” The incredibly high cocoa prices of 2024 are in no small way a direct debt repayment for past decades of cheap chocolate consumption. Chocolate’s exploitation of tropical forests, soils, cocoa trees and farming communities has come to a predictable dead-end. For the fourth consecutive year, the global cocoa harvest has been far too low for rising demands. Extreme weather related to climate change, and the very deforestation cocoa is causing, has played its role to dry out then flood the crop. Global buffer reserves are at an all-time low and the fight for the beans is on.

Cheap chocolate will not be back soon…

The drama unfolding in the cocoa trade, where firms with badly timed contracts already went bankrupt, will now play out in the chocolate market. Trade and manufacturing buffer stocks of beans and chocolates are dried up. Prices are hiking. Even some large organic brands desperately buy overpriced non-organic cocoa simply to stay in business. Other chocolate brands are reducing cocoa in their products by decreasing weight per unit and changing recipes – expect new candy recipes with “even more caramel”. Any serious chocolate maker will need to increase prices. Expect many products, such as snack bars or cookies, that use chocolate as a cheap filler, to disappear from the shelves. Already, we witness battles between Big Retail and Big Candy about who takes the price hit, how and when.

The era of cheap chocolate inputs may be over. That’s a choice for all of us to make. Imagine a situation in which the prices of an industrial chocolate and one of its finest and the world’s “#1 most sustainable” chocolate become comparable. Would you change your brand, your wholesalers, your recipes?

My team and I are not proud to have predicted the crisis. But we are proud to have always acted according to our mission: together regenerating what we consume. The living world is our home. It is not an industrial resource. We simply cannot keep on extracting and short-selling nature and human communities to pay investor dividends. And now chocolate shows us why: trees, soils, and farmers are empty, exhausted, weak to the bones. They simply cannot keep up with our ever-increasing demands. We are not only gambling our chocolates away, but our society, if we think we can shortcut nature. On this planet, she rules.

… and that is a good thing.

Rising chocolate prices are our straight talking messenger from the future. The message is simple: regenerate before it is too late. Put the restoration of life at the centre of every business and consumption decision you take. Restoring nature’s diversity is the fastest, most robust route back to a climatic stability. On the path to this new equilibrium, we need the alliance between tropical smallholder farmers at the edge of the world’s remaining large rainforests, many of whom grow cacao, and food makers at the edge of today’s culinary culture, many of whom use chocolate. We should look at them as our future’s stewards.

When the cocoa prices shifted in early summer 2023, industry experts predicted a three to six month normalisation period. As I write this, we are one and a half years into it. Meanwhile, geographies with hopes to expand their cocoa production are expanding, some by cutting down old forests. The market responds as if on autopilot, listening to the panicked noise of economic growth, rather than the voice of Mother Earth.

What will our chocolate future look like?

What could change look like? It will come from all directions. Most importantly, nature is giving us direct feedback by making cocoa more expensive, so all agricultural and social costs become fairly included into the price of chocolate. Meanwhile, public opinion and policies are demanding higher transparency and traceability of food products. In fact, at the very moment when high cocoa prices risk pushing cocoa expansion into pristine rainforests, the EU’s Deforestation-free products Regulation (EUDR) is planning to exclude products causing deforestation from European markets. So, the costs for traceability and sustainability, which companies like Original Beans and our customers have always shouldered as an extra responsibility, will finally be factored in as the normal costs of doing business. The playing field is levelling, and culinary professionals will get the chance to switch more easily from industrial chocolate to craft.

For consumers, the choices on the shelf will change. Higher cocoa prices will widen the gap between expensive chocolate and cheap candy. The latter category will be forced to further reduce cocoa content and discontinue filler chocolates. At some point, retailers should play their role and separate the shelves between chocolate and candy so that finally, consumers can recognise real chocolate and use the remaining price differentials to distinguish chocolate quality and provenance.

Already, we can see some big companies direct their strategies towards a more sustainable and thus more costly chocolate future. Much will rely on their willingness to do what’s good for the world in the long run, rather than what seems good for investors in the short term. If companies like Nestle, Mars, Mondelez, or Callebaut can envision a future which looks more sustainable and regenerative, then chocolate could lead the way to show that food can heal the future rather than stealing it. Nothing demonstrates better than the current cocoa crisis that we must regenerate what we consume. Together, we can make it happen.