Navigating the Crunch as Cocoa Bean Prices Skyrocket

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It’s been all over the headlines, chocolate prices are skyrocketing with no end in sight. What is going on? Many things all at once. Weather is the biggest. Almost three quarters of the world's cocoa beans come from trees in four countries: Ghana, Ivory Coast, Nigeria and Cameroon. In the last three years the trees in these countries have suffered torrential rains, severe winds, dust storms, rotting and finally drier weather from El Nino. All of these have dramatically reduced the crop yield. In fact, the 2024 crop forecast is at a 14 year low. Both Ghana and the Ivory Coast have already asked for delays in fulfilling existing cocoa contracts. There is also a question as to whether climate change is making this the new normal. Some have speculated that Côte d'Ivoire and Ghana may become too hot to grow cocoa by 2050. Others aren't sure.

Simultaneously, countries such as China that have not traditionally consumed much chocolate are developing bigger cravings for it. This is the third season in a row that supplies of cocoa beans have trailed demand. This year the shortfall is estimated to be 374,000 metric tons! Compounding these shortages are financial speculators trading in the cocoa markets who are driving the prices up even further. Cocoa prices are now the highest they have ever been in history. In 2023, US stores (not Top This Chocolate) charged 11.6% more than in 2022 and this year prices have continued to rise an additional 4% to date, surging faster than Bitcoin. While cocoa supply price hikes are having an impact across the board, it should be noted that they are much more dramatic (30%) for products like Chips Ahoy that use cheap waxy chocolate chips derived from lower quality cocoa beans. The premium, silky, 100% cocoa butter, fair trade chocolate that we use at Top This Chocolate has not risen as much (12% in 2023) because we were already paying premium prices for quality and to compensate farmers fairly. Sugar prices have risen as well and are expected to keep rising.

With all these factors at play, could our daily chocolate fix become an occasional luxury in the future?

Top This Chocolate hasn’t raised the price on our sizable chocolate bar since 2022 even though the price of the high end lines of chocolate I source keeps rising. Our chocolate is made by Guittard Chocolate Company, an artisanal gourmet chocolate maker with a 150+ year history in the San Francisco bay area. Guittard manufactures over 100 different lines of chocolate. Before opening Top This Chocolate, I selected the milk, white, dark, ultra dark and sugar free chocolate from the French style lines available after extensive taste testing.

Several different restaurant suppliers in Southern California can source and deliver chocolate lines from Guittard. My current distributor recently tried to hit me with a surprise price hike of 8% on an order after it was delivered. Besides it being a poor business practice not to notify a customer of a price increase a the time of order, 8% is a lot great than this year’s increase from Guittard itself. After a drawn out argument resulting in a one-time partial credit, I immediately started comparison shopping distributors to see how much I could minimize any new increases. I did find a new distributor whose increases were only 2%. After a trial run, I have decided to make the switch. The downside is that my previous distributor had a convenience factor. I could be running low on milk chocolate, order at 6 pm on any weekday and have a delivery by noon the next business day. The new distributer needs an order of all chocolate varieties three weeks in advance. Not only is this more difficult in terms of coming up without large amounts of cash for larger orders but also forecasting how much chocolate I will need weeks in advance is incredibly difficult. Traffic in store fluctuates wildly depending on the sun, the wind and the activities going on in the harbor and in town. This winter was particularly challenging with five straight Saturdays of rain. Then sometimes on a random day will be very busy and scratching our heads wondering why everyone suddenly decided that it was a great day for a chocolate outing? So it’s going to be stressful trying to keep stocked with such unpredictable demand. Hopefully I will still be able to get an emergency order from my previous distributor if I’m in a real pinch, though their prices are sky high.

Since I was able to keep my increased cost to a minimum, Top This Chocolate is not raising prices for the moment. The future is unpredictable so please enjoy the current pricing for as long as I can make it last. According to sales data, consumers in the United States have not been cutting back on chocolate despite the having to pay more. With how good chocolate makes us feel, it’s no wonder we are all continuing to enjoy our favorite food. There is a word for it…Chocoholic.

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